Issue No. 607
Economy
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10 - 16 October 2002 Issue No. 607 Economy |
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| Published in Cairo by AL-AHRAM established in 1875 | Recommend this page | ||
Still no FTA?
EGYPT'S economic policy-makers had a busy schedule in Washington last week as Minister of External Trade Youssef Boutros-Ghali met with US Trade Representative Robert Zoellick to discuss ways to expand economic ties between their two countries. The issue of Egypt's economic reform programme was high on the agenda.
The talks were held as part of the US-Egypt Trade and Investment Framework Agreement (TIFA), which was formed in 1999 to overcome obstacles to free trade on both sides. They also come in the wake of the US announcement late last month to set up a Free Trade Agreement (FTA) with Morocco.
Ghali also headed up an Egyptian delegation to the Egypt- US Business Council. This was the Council's first meeting since its reformation earlier this summer.
Ghali pressed upon US officials to "enter soon" into free trade negotiations with Egypt. He also said that a free trade agreement between the US and Egypt would enable the latter to follow a timetable for economic reform within ten years.
Ghali stressed that Egyptian products were losing their "comparative advantage" within the US market, because of FTAs the US had concluded with other countries in the Middle East and sub-Saharan Africa. He highlighted the case of Jordan, "whose economy is one-tenth that of Egypt's", adding that if Egypt is to remain a strategic partner for the US, then an Egyptian economic presence inside the US needs to be maintained.
However, US trade officials expressed their preference for negotiating trade ties through TIFA. "Egypt's efforts to further reform the economy and [its] support for further trade liberalisation via the ongoing Doha trade negotiations are important signs that Egypt is focused on economic development. The US stands ready to work with Egypt as they move forward," said Zoellick.
The two sides agreed to form working groups to facilitate rapid progress on trade and investment issues. These include customs administration, government procurement, and issues related to agricultural trade. They discussed expanding US-Egypt cooperation on issues related to the Doha Development Agenda agreed at the November 2001 WTO ministerial meeting.
Ghali and Zoellick also discussed problems affecting US firms and investors in Egypt. They agreed to try and meet again in spring 2003 and maintain "senior-level discussions in order to accelerate progress on trade and investment issues".
Egypt is the US's 44th largest trading goods partner. In 2001, Egyptian exports to the US stood at $882 million, while those from the US to Egypt stood at $3.6 billion. Egypt is also one of the world's biggest importers of US corn and wheat. They purchased $786 million worth of these products in 2001.
In Washington, Ghali, minister of finance, Medhat Hassanein and Central Bank of Egypt governor, Mahmoud Abul Oyoun, also took part in a two-day IMF/World Bank annual board of governors meeting.
A cry for fair trade
EGYPT, eleven other Arab countries and the Maldives have called upon the developed countries of the world to open up their markets to exports from developing countries. The request was made in a speech delivered on behalf of these countries by Mohamed Khirbash, the United Arab Emirates' minister of state for finance and industry during the IMF (International Monetary Fund)/World Bank's annual boardmeeting.
Khirbash highlighted the uncertainties surrounding the future of the world economy, and the Middle East's particularly bad position. He pointed to the region's worsening security situation, as well as weak demand for oil and reduced tourism, both symptoms of a drop in global activity. "All over the region, policy formulation has clearly been encumbered and shaped by the security situation."
Addressing the International Monetary and Financial Committee meeting, Khirbash also stressed the issue of decreased private capital flows to developing countries. He said that the present global economic situation has drawn attention to the many risks accompanying increased financial market integration. Additionally, he called upon the IMF to stop claiming that global financial integration increases international trade flow significantly, especially in light of the fact that the largest markets remain "virtually closed to the products in which they are competitive".
According to Khirbash, "experience has shown that financial market liberalisation, particularly to short-term capital, has become a risky proposition for developing countries, especially when they are not already strong exporters." He thus stressed that the IMF needs to provide "more detailed and critical analyses of trade policies in industrial countries".
Vodafone and MTC tie the knot
VODAFONE, one of the world's largest telecommunications companies, recently signed a partnership agreement with Mobile Telecommunications Company (MTC). This long-term strategic partnership is the first of its kind with an operator in the Middle East. It follows agreements with European operators in Denmark and Finland, according to Thomas Geitner, chief executive of global products and services at Vodafone.
MTC is Kuwait's leading mobile operator, with more than 600,000 customers, dominating the corporate market with an 84 per cent market share. Under the terms of this joint agreement, MTC will have access to Vodafone's international products and services in Kuwait, such as Eurocall, virtual home environment, prepaid roaming. As part of this relationship, MTC will undergo a complete re-branding of it's name, to MTC-Vodafone, which will help to identify MTC as a Vodafone partner. The agreement is expected to significantly strengthen the Vodafone brand name in the Middle East.
Cleaning up the buses
LAST week, Egypt's Social Fund for Development signed an agreement on electric bus technology with the US Trade and Development Agency (TDA). According to the agreement the TDA will provide $33,000 as a grant to partially fund training related to electric and hybrid-electric bus technology in Egypt. It is hoped that this technology will then be implemented in Egypt.
The agreement stated that the US's George Washington University will provide operational and technology training to engineers and technicians selected by the Egyptian government. The project is expected to reduce mass transport related pollution in major cities and historic sites, and reduce the long-term costs of low-emission bus systems.
The TDA promotes the US private sector and provides funds for technical assistance in developing countries that represent significant export potential for the US.
Spreading the information
IN A BID to reap the rewards of the technological revolution, the Trade Information Centre (TIC), affiliated to the Ministry of Communication and Information Technology (MCIT), recently launched a pilot project to enhance Egypt's abilities in the area of e-commerce. "The project is based on two components: information technology and human development based on training," said Sherif Batisha, head of the TIC. He added that the TIC, launched in 2001, is expected to complete the project by 2003.
According to Batisha, the TIC will lay down an e- commerce infrastructure in Egypt using a variety of tools. "Egyptian traders will be registered and connected to the Internet. A full database of commercial and industrial activities in Egypt are now being collected and sorted out. Information on investments in Egypt will also be included," said Batisha.
Cooperation with the Federation of Chambers of Commerce is also underway. "The aim is to connect the 26 chambers using the Internet for availability of information. We started with a pilot project that includes the chambers of Giza, Assiut, Sharqiya and Alexandria governorates," said Batisha.
In the meantime, the TIC is carrying out a number of training programmes for decision makers and businessmen. These will introduce them to the benefits of e-commerce, ways to upgrade and introduce technology to their business.
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