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Deal Could End Protests in Port Said - 2002-01-07

The head of the chamber of commerce in Port Said, Egypt, says a deal has been worked out with the government that could end days of protests by the city's merchants that turned violent on Sunday. The merchants are upset over a government decision to raise tariffs on imported clothing.

Stones were thrown at restaurants, tires were set ablaze in the streets, and three cars were damaged by protesters angry over the government's decision to raise tariffs on imported, ready-made, garments. Reports say police arrested 14 people.

The violence broke out at the end of a march through the Mediterranean port city that sits at the mouth of the Suez Canal. Some demonstrators carried a coffin with the words, "free trade zone." Others chanted anti-government slogans.

In 1976, then-President Anwar Sadat granted Port Said duty-free status to commemorate the city's efforts in battles against the British, the Israelis and others.

Since then, the city's main source of income has come from visitors who come to Port Said to get bargains on such items as shoes and clothing.

The head of the city's chamber of commerce, Mohamed Abdel Fattah el Masry, told VOA the violence broke out when shoppers, after learning from customs officials they would have to pay increased taxes, attempted to return the merchandise and were demanding full refunds.

Mr. Masry said a deal has since been worked out with the government. "To give an allowance for every person who is going out from Port Said to go out with six pieces of garments free of custom duty, but they have to pay a sales tax," he said

A 10 percent sales tax will be added to the cost of duty-free ready-made clothing in Port Said.

The average imported suit in Egypt costs anywhere from $800 to $2,000, compared with about $200 for an Egyptian-made suit.

Before the new agreement was reached with the government, many merchants in Port Said had closed their shops in protest, saying with the Egyptian economy already weak, the government decision would have driven them out of business.