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Al-Ahram Weekly 21 - 27 October 1999 Issue No. 452 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 21 - 27 October 1999 Issue No. 452
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Cooperate or else?
By Aziza Sami
The coming four months will witness the implementation of what US Secretary of Commerce William Daley calls an ''aggressive plan of action'' aimed at preparing a "blueprint" for economic cooperation in the region. The US hopes to present the new plan at a conference on Middle East-North African (MENA) regional integration in the spring of next year.
William Daley
The US idea is to encourage the private sector, via the American Chambers of Commerce in the Arab countries and Israel, to lobby their governments for freer trade in the region.
"Regionalism must be private sector-led," said Daley. "[You cannot have] governments telling you what to do, or governments forcing this to happen."
Daley finished his fourth tour to the area this week. It included Israel, Jordan, Palestinian self-rule territories in Gaza and Egypt, followed by a trip to Saudi Arabia and the United Arab Emirates. In Abu Dhabi, the secretary met with representatives of the six Gulf Cooperation Council (GCC) states.
During his visit to Egypt, which was described by the US Embassy as ''historic", Daley oversaw what he called "the first multilateral meeting of its kind," bringing together in Cairo representatives of the American Chambers of Commerce of Egypt, the Palestinian Authority, Jordan, Lebanon, Tunis, Morocco, the United Arab Emirates and Israel.
''As far as I know there has never been a coming together like this of the [American] chambers [of commerce] in any region of the world," said Daley. Chamber representatives have "agreed to establish a regular dialogue between them," said Daley, and to work with local businesses throughout the region to come up with an aggressive action plan by 30 March, which they will present to me as a blueprint of the reforms needed to create a regional market."
This American initiative would presumably sidestep the condition set by Arab governments, and by Egypt in particular, which is that regional economic integration and expanded trade between the Arab countries on one hand and Israel on the other must run parallel to serious progress in the peace process.
Impediments such as Israeli settlements, the future of final status negotiations between Israel and the Palestinian Authority, and progress on the Syrian and Lebanese tracks still obstruct the smooth implementation of the peace process.
But the American view, as stated by Daley, is that "trade barriers in the Arab world have to come down (as do barriers) between the Arab world and Israel. The day will come when a new chapter of peace will be written in Lebanon and in Syria. What happens then? Do we leave those countries economically isolated?" he asked.
Daley, who met with the ministers of trade from the Palestinian Authority and Israel before coming to Cairo, said that he sensed a more optimistic atmosphere "than that of a year ago. The two ministers were talking and trying to solve their problems".
The view in Cairo on the eve of Daley's visit was carefully worded. Egyptian Foreign Minister Amr Moussa said that "if progress continues in the peace process, then it will be suitable to hold a (MENA) conference sometime in the first half of next year."
For its part, the US is currently establishing a pattern of relations with a number of countries in the region, such as Egypt, Jordan and Turkey, by which tariff-exempted commodities can flow from these countries to the US via Israel.
Turkey, like Egypt, is facing problems establishing a free trade area with the US. Nevertheless, it enjoys a free trade arrangement with Israel which allows it to export products to the US market. Initiatives are also being undertaken by Israeli businessmen to set up feeder industries in Turkey's South Anatolia development project. This would allow products to be exported to markets in Central Asia through joint Israeli-Turkish ventures.
Jordan has also signed two agreements with Israel for the operation of two Qualified Industrial Zones (QIZ's), with a third in the pipeline. These were discussed during Daley's visit to Jordan. Commodities produced in these zones would enter the US tariff free.
Daley's tour, timed to take place at a critical juncture before the new round of World Trade Organisation (WTO) talks scheduled to start in Seattle next November, also focused on lobbying governments in the region for more privatisation and liberalisation. The US is especially concerned about Jordan and Saudi Arabia which have not yet joined the WTO.
The US has promised that some $5 billion worth of investments will be directed to the region once its countries fully open up their markets to foreign investors.
In Egypt the telecommunications and pharmaceuticals sectors are being eyed by US investors on condition that they undergo more liberalisation. Daley, whose accompanying business delegation included the president of the pharmaceuticals giant Merck, raised the issue of early implementation of the GATT intellectual property rights laws in the drugs industry when he spoke to the American Chamber of Commerce. Reform of the pharmaceuticals sector remains a contentious issue on both sides. Egyptian manufacturers insist that they be given the grace period allowed by the General Agreement on Tariffs and Trade (GATT), scheduled to end in the year 2007, in order to strengthen their position so that they can compete with multinational investors.
During the visit, Daley and his Egyptian counterpart Minister of Economy Youssef Boutros Ghali also signed a joint statement on electronic commerce, with the understanding that more American investment in this domain would be forthcoming when the Egyptian telecommunications sector becomes "competitive" and fully liberalised.
On the issue of bilateral Egypt-US ties, the usual questions about trade and its heavy tilt in favour of the US came up once again. Although the establishment of a free trade area between Egypt and the US has long been requested by Egyptian exporters, the idea faces political opposition in the US. Congressional approval for its implementation is not likely to happen in the near future. Egyptian textile manufacturers still have as a sole option raising their export quotas to the United States by agreeing to joint ventures with Israel, a recommendation made time and again by US officials in their talks with leaders of the Egyptian textile industry.
Daley also met with the newly appointed Egyptian Prime Minister Atef Ebeid and twice with Minister of Economy and External Trade Youssef Boutros Ghali. Daley told reporters that during his meetings with Egyptian officials he sensed what he described as "a very aggressive attitude about privatisation and the need to have Egypt move more quickly (into) the global economy".
