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18:41, 30 October 2014 Thursday
11:59, 19 September 2012 Wednesday

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Israel-besieged Gaza asks free trade zone with Egypt
Israel-besieged Gaza asks free trade zone with Egypt
(File Photo)

Gaza officials asked Egypt to consider alternative trade routes, such as a free trade zone, a direct deal that could boost tax revenues in the Israel-besieged Gaza.

World Bulletin / News Desk

Egypt's crackdown on tunnels along its border with the Gaza Strip is making shortages ever tighter and has forced the Gaza rulers to consider urgent alternatives.

Gaza officials asked Egypt late on Monday to consider alternative trade routes, such as a free trade zone, a direct deal that could boost tax revenues in the Israel-besieged Gaza.

Egypt started closing the tunnels after the Aug. 5 attack in Sinai when gunmen killed 16 Egyptian soldiers.

On Saturday, hundreds protested at the Gaza border, demanding that Cairo stop sealing tunnels, chanting: "Closing the tunnels is a death sentence for Gaza."

Israel has imposed a blockade on Gaza since 2007.

Last year Egypt allowed more people to cross at the border with Gaza in the town of Rafah but it is used only for travel, not goods. Officially, goods enter Gaza only through Israel.

Maher Al-Tabbaa, a Gaza-based economist, said that 30 percent of Gaza's goods come from the tunnels. Tunnellers say 80 percent of food sold in Gaza comes through the tunnels.

"If tunnels are closed there will be a complete collapse in Gaza. It would suffer an economic catastrophe," he said.

"The tunnel business is drying up and Egyptian security forces are working day and night to seal the tunnels. In one area along the border 180 tunnels have been closed," tunnel owner Abu Abdallah told Reuters.

He said that the clampdown had led to a rise in food prices in the territory and that construction materials such as cement and steel had also become more expensive.

"The construction boom in Gaza will come to a halt soon as all tunnels that used to bring in gravel have been blocked by Egyptian security," said Abdallah, who employs 40 people.

Ali, a tunneller for the past five years, said the import of building materials was becoming impossible because Egyptian suppliers were raising their prices, while Hamas was not allowing them to follow suit.

"A tonne of cement now costs 400 shekels (about $100) but Hamas forces us to sell at 370 shekels, which means I will lose even before paying the workers who pull the goods through the tunnel," Ali told Reuters.

"I and many others have stopped working because Hamas regulations do not take our losses into account," he said.

Jihad Abu El-Kass, whose family owns a Gaza City supermarket, said dairy products were in short supply.

Hamas officials have urged Egypt to allow Rafah crossing to be used for goods also.

Gaza's Hamas Prime Minister, Ismail Haniyeh, mooted setting up a free trade area between Gaza and Egypt at a meeting on Monday night with Egyptian Prime Minister Hisham Kandil, a Hamas government official told Reuters from Cairo.

"We explained the concept in detail ... the idea is to alleviate the economic hardship in Gaza," Taher al-Nono said.

An Egyptian official told Reuters that the proposal was made at the meeting but that it was too early for a response.



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