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The reborn US-Egypt Business Council is firmly focussed on a Free Trade Agreement. Nevine Khalil looks at the steps taken so far
The US-Egypt Business Council met in Cairo last week for a second round of talks. It is hoped that these will pave the way for more trade and investment between the two countries, eventually leading to a Free Trade Agreement (FTA).
"Our ultimate goal is to attain a US-Egypt [FTA] because we believe it is in the best economic interest of both countries," announced Steve Farris, co-chairman of the US-Egypt Business Council. "We recognise that the FTA negotiation process may be long and difficult, but we are committed to assisting to the extent we can in achieving this goal."
The Egyptian co-chairman Galal El-Zorba said he hoped that Washington and Cairo would begin negotiations on an FTA in 2003. El-Zorba told a joint press conference on 22 January that an FTA is a "politically-driven" process and relies heavily on technical trade issues.
"We encourage the government and support it in negotiating these technical issues," he said. "Our role is to help them utilise the tools to get these issues out of the way and create the opportunity for an FTA." This is being done in light of the detailed discussions within the Trade and Investment Framework Agreement (TIFA).
The first meeting of the two sides of the Business Council took place in Washington last October and more meetings will be scheduled during this year. "We adopted an FTA as the cornerstone of what our Council will be about, and we've had a lot of discussions about a lot of difficult issues," said Farris.
According to El-Zorba, there has been a "very good understanding of each other's views", culminating in a three-point plan to develop trade, investment and technology transfer (especially its application in Egyptian industry, manufacturing and services).
The two sides have also identified the main impediments facing their work, such as customs and tax reforms in Egypt. According to El-Zorba, these problems are "nothing new", since they are already a part of Egypt's economic policy reform programme. "We wanted an update and [understand] their approach to making these reforms," he said.
Other issues addressed included pharmaceuticals and soft drinks. However, "we approached it from a policy [perspective] not according to individual corporate issues... and we put the information in front of the government for their consideration," said El-Zorba.
The council has also worked out a "road map" towards an FTA, dealing with the issues that need to be addressed, solutions to problems and how to present them to both governments to start negotiating. "We identified key problems and suggested solutions to enable the government to open the way to an FTA, attract American investment and develop trade and technology transfer," said El-Zorba.
President Hosni Mubarak was "very positive" about the council's efforts to bring about an FTA between the two countries.
For their part, the US side is in contact with the US administration, urging it to begin FTA negotiations with Egypt as soon as possible. According to Farris, Washington has been "very positive about the efforts which Egypt is making in a number of areas". But, he added, in the end, the American members of the council, "are businessmen, we don't make policy". Nonetheless, the Egyptian side is encouraged by the efforts of their American counterparts. "They showed the US administration how important [an FTA] is to complete the strategic partnership between Egypt and the US," said El-Zorba. "We feel our US counterparts were very understanding and supportive of our positions."
Throughout last week, members of the US- Egypt Business Council met with top Egyptian officials, including President Hosni Mubarak, Prime Minister Atef Ebeid, Minister of Foreign Trade Youssef Boutros Ghali, Minister of Foreign Affairs Ahmed Maher and Minister of Finance Medhat Hassanein.
The meetings were also an opportunity for the Americans to see first hand the mechanisms of Egyptian economic policy. "Reform is in the air," asserted Farris. "I'm very encouraged by what I saw."
They also met with Gamal Mubarak, the head of the policy committee of the ruling National Democratic Party (NDP), who is also one of the founders and former spokesman of the Presidents' Council -- the predecessor to the Business Council.
The Presidents' Council, which was overseen by President Mubarak and then US Vice President Al Gore, was created in 1995 but disbanded when a new US administration came to power under George W Bush.
Today's US-Egypt Business Council serves under Ghali's Ministry of Foreign Trade and Don Evans's US Department of Commerce, and includes 13 business leaders from Egypt and 14 from the US. Its mandate is to inform and advise both governments of private sector views, needs and concerns regarding business development in Egypt. The US side includes General Electric, General Dynamics, Eli Lilly, Hewlett-Packard, Motorola, Pfizer and Coca-Cola; the Egyptians include Al-Ahram Beverages, Ezz Industrial Group, Ghabbour Company, Artoc Group, Shalakany Law Firm, Microsoft Middle East and Mansour Group.
At the end of last week's meetings, the Council also endorsed a proposal to create an entity responsible for promoting Egyptian Information Technology (IT) exports, which will identify target countries and/or markets for Egyptian IT exports, promote Egypt as an IT outsourcing destination, and work to remove barriers that hinder the development of Egypt's IT export industry.
