ABSTRACT
Any Middle East trade regime will be based on the participating countries' present economic realities which cannot be expected to change drastically in the short term. It will have to take into account the extreme diversity characterizing the region's economies, which vary in size, distribution of resources and of income, level of economic development and industrialization, importance of foreign trade, availability of foreign exchange, economic organization, degree of government control, as well as size and role of the public sector. Two factors—proximity and economies of scale – are likely to have a profound influence over the variety and complexity of the transactions facilitated by the peace process. Egypt's textile and clothing industry has been the country's leading industry employing over 350,000 workers at the beginning of the eighties, who accounted for about one third of industrial employment. Over two-thirds of the output was accounted for by spinning and weaving, mostly by state-owned enterprises.
