From Baghdad to Beirut, the Middle East has seen a series of unprecedented popular demonstrations for democracy. There were, however, two street protests in December that got virtually no coverage, but were just as important, if not more. One took place in the Egyptian Nile Delta town of Mahalla and the other in the Suez Canal city of Ismailiya. Both of these raucous Egyptian demonstrations, which involved marches, strikes, denunciations of the government and appeals to Parliament, were triggered by President Hosni Mubarak's decision to sign the first substantial trade agreement with Israel since Camp David. That decision brought Egyptian workers from both areas into the streets. They were furious. They were enraged. Why?
They were not included in the new trade deal with Israel.
Now, that's a new Middle East. On Dec. 14, Egypt, Israel and the U.S. signed an accord setting up three Qualified Industrial Zones (Q.I.Z.'s) in Egypt. The deal stipulated the following: Any Egyptian company operating in one of these Q.I.Z.'s that imports from an Israeli company at least 11.7 percent of the parts, materials or services that go into the Egyptian company's final product can then export that finished product to the U.S. duty free. This is a big deal for Egypt, which, unlike Jordan and Israel, does not have a free-trade treaty with the U.S.
I don't know about Friedman's closing argument, a free-trade agreement with Egypt to help it democratize, but the idea of linking economic incentive to Israeli-friendly behavior in Egypt and Lebanon is worth a second look.