Egyptian factories that use products from Israel under a U.S.-sponsored trade deal have resumed work, overcoming disruptions caused by the power struggle in Cairo, an Israeli official said on Saturday.
Israelis worry that the fall of Egyptian President Hosni Mubarak could erode the countries' landmark 1979 peace accord, which Washington shored up by waiving American import duties on textiles manufactured in Egypt with help from Israel.
Gabby Bar, head of the Middle East department at Israel's Industry and Trade Ministry, said supplies to Egyptian factories had been halted during the February upheaval in Cairo, which saw widespread curfews, worker strikes, and bank and port closures.
"Everything is back on track," Bar told Israel Radio.
"Indeed, we are seeing today a desire by Egyptian firms which are very interested in continuing to operate in this manner, as it allows them to stand competitively in the American market, because they are selling with a full customs waiver."
The Israeli-Egyptian cooperation, known as the Qualifying Industrial Zones (QIZ) deal, was instituted in 2005 and mirrors a similar accord between Israel and Jordan from the late 1990s.
Bar said banking operations had yet to be fully restored in Egypt and that employees at some factories were still on strike.
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