Egyptian protesters burn an Israeli flag during a protest in front the of Israeli embassy in Cairo (Photo: AP)
Israel's exports to Egypt have fallen 18 per cent in the first seven months of the year, totalling US$78 million, the Israel Export and International Cooperation Institute said on Monday.
Imports from Egypt for the seven-month period reported stood at $137 million, a drop-off of 16 per cent.
As a result, the Israeli government has begun allowing state insurance agency Ashra to issue policies to cover short-term trade with Egypt against political and business risk, according to the Israeli business newspaper The Marker.
The move came after the private insurance companies began restricting their policies.
According to an Egyptian newspaper report, the closure of the Ouja border crossing and trading point between Egypt and Israel in Central Sinai has led to the halt of Israeli imports to Egyptian factories operating within the Qualified Industrial Zones (QIZ) Protocol signed between the two countries.
QIZs are designated geographic areas within Egypt, that enjoy a duty free status with the United States. Companies located within such zones are granted duty free access to the US markets, provided that they satisfy the agreed upon Israeli component, as per the pre-defined rules of origin.
There are currently 15 such industrial zones, with nearly 700 qualified companies, reportedly amounting to more than $1 billion in annual revenues. The majority are textile and fabric producers.