An Egyptian delegation was in the US last week to lobby for closer economic cooperation between the two countries. Gamal Essam El-Din reports A high-profile Egyptian delegation concluded on Saturday a one-week visit to the United States. The visit, led by Gamal Mubarak, the 39-year-old son of President Hosni Mubarak and chairman of the ruling National Democratic Party's (NDP) Policy Secretariat, aimed at conveying Egypt's point of view on the latest developments in the region and their impact on US-Egypt business and economic relations. The 10-member delegation, in the US from 21 to 28 June, visited both Washington DC and Chicago. Meeting with senior Bush administration officials, members of Congress, leaders of think tanks and media members, the delegation discussed several issues of mutual concern, focussing primarily on two points: Egypt's prospects for a Free Trade Agreement (FTA) with the US and building stronger Egypt-US ties in the area of telecommunications and information technology (IT). In addition, it explored cooperation prospects between Egypt's and Chicago's markets. According to Foreign Trade Minister Youssef Boutros Ghali, discussions are underway to determine when official negotiations on an Egypt-US FTA will start. Addressing a meeting at Chicago's World Trade Organisation's (WTO) headquarters on 25 June, Ghali said the two countries are currently focussing on creating the institutions necessary to ensure the sound implementation of an FTA. "Creating these institutions is part of Egypt's economic openness and market-led reform programme," Ghali said. The delegation's hopes for an early official start to negotiations with the US were, however, dashed last week when Robert Zoellick, the US trade representative, sharply criticised Egypt's pace of reform. Outlining the new US Middle East initiative at a World Economic Forum meeting in Jordan on 23 June, Zoellick said: "We see glimmers of light [in Egypt] but I'm not going to sugar-coat it for people. Egypt has some work to do," adding that "we know Egypt is the traditional heart of the Arab world, but this isn't going to be handed to them just because it is a big and important country." Zoellick pointed in particular to Egypt's failure to modernise its customs system and said he had a list of American businesses that were threatening to walk out of the country. Zoellick singled out three countries as candidates worthy of FTAs with the US: Jordan, Morocco and Bahrain. US trade officials said on Sunday that the US suspended its plans to advance free trade talks with Egypt in response to Cairo's decision not to join the US in a world Trade Organisation Complaint against Europe on genetically modified foods (GMF). In Chicago, Boutros-Ghali said it would be difficult to impose a certain economic system on a certain country at a certain pace. "Economic reforms must be adopted at the proper tempo in order for them to be fruitful, especially if they are aimed at switching the country from a centrally planned economy to a market-driven one," he said. Ghali said Egypt is currently undertaking measures aimed at overcoming bureaucratic obstacles. "These, for example, include marginalising the role of some of the old and bureaucratic institutions and replacing them with new modern ones," Ghali said. "Another measure is developing human resources in accordance with the requirements of economic reform." Before his departure to the US, Gamal Mubarak told NDP's Higher Council for Policies that one of the ruling party's strategic goals is to reach an FTA with the US. "We know we have to adopt a certain package of reforms before a US-Egypt FTA can be reached," he said. "We are going to adopt it because this FTA will be of major benefit to our economy." Zoellick's sharp criticism of Egypt provoked the ire of many in economic circles. An official statement by the Foreign Trade Ministry on 27 June said Zoellick intentionally ignored an important number of facts regarding the positive developments in the Egyptian economy. "These include the passing of essential economic legislation, Egypt's constructive membership in the WTO, its economic openness and parliament's endorsement of an EU-Egypt partnership agreement," the statement said. Many Egyptian economists also found Zoellick's statements about Egypt "obtuse". Said El-Alfy, chairman of parliament's economic committee, told Al-Ahram Weekly that Zoellick's statement was not only "undiplomatic", but was also in contradiction with statements he made last May in which he said the US hopes to launch free trade negotiations with Egypt and Bahrain by early next year. Leftist economists, such as former planning minister, Ismail Sabri Abdallah, think that an FTA with the US will come at a political cost. "They are tying it to political pressure to integrate Israel in the Arab world," Sabri said. Finance Minister Medhat Hassanein said we cannot accept everthing the Americans ask for. "We accept only what is suitable for our economic conditions even if this brought us criticism." Some, however, conceded that Egypt has to do more in some areas to deserve an FTA. Faiqa El-Rifa'i, deputy chairperson of parliament's budget committee, told the Weekly that Egypt needs to reform its customs and tax systems in order to make them more compatible with those in the advanced world. "We have to phase out bureaucratic obstacles, enhance transparency and modernise administrative systems," she said. Recent American Chamber of Commerce (AmCham) in Egypt statistics reveal that Egypt's exports to the US registered a constant increase over the last few years, going from $888 million in 2000 to $1.35 billion in 2002. Meanwhile, imports from the US dropped from $3.3 billion in 2000 to $2.8 billion in 2002. Economists expect that an FTA with the US will increase Egyptian exports to the country to $3.7 billion, but argue that an FTA could also increase imports to $8.1 billion. Prospects for an FTA with the US must be at the forefront of Egypt's economic policies, the chamber said, "because of its expected role in modernising the domestic export sector and raising its competitiveness". The AmCham study also pointed out the successes achieved by USAID in Egypt over the past 25 years and underlined the continued importance of aid, given the negative impact of current regional tensions on the Egyptian economy. In terms of telecommunications and IT, the delegation urged American IT companies to invest in Egypt and participate in joint projects with Egyptian IT companies. Minister of Telecommunications and IT Ahmed Nazif opened the Egyptian Marketing Services Centre at the General Dynamics Corporation premises in Virginia, which aims at familiarising US IT companies with investment opportunities in Egypt. Nazif also discussed the possibility of providing young Egyptians with opportunities to receive training in American IT companies. Cooperation in this area began three years ago when President Hosni Mubarak launched in Chicago the start of cooperation between Egypt and the Microsoft Corporation. The Future Generation Foundation (FGF), an NGO led by Gamal Mubarak, joined Microsoft's scholarship programme for IT professionals, which will allow young Egyptians to receive the highest level of training required in today's IT market. On 18 June, US Ambassador to Egypt David Welch said Egypt's future will largely depend on how successful it is preparing good leaders in all spheres of Egyptian life. He was addressing the closing ceremony of a three- day conference that brought together Egyptian public and private sector leaders. The conference, co-hosted by FGF and USAID and entitled "First Egyptian Leadership Forum", offered leadership training to 50 participants from a number of sectors, including IT and communication. The FGF has also signed protocols with other US institutions such as the Harvard Business School, Stuart Family Foundation and the Institute of International Education (IIE).
