Al-Ahram Weekly Online   9 - 15 February 2006
Issue No. 781
Economy
 
Published in Cairo by AL-AHRAM established in 1875

No stick and carrot

In North Sinai's Al-Arish, Gamal Essam El-Din speaks with US Ambassador to Egypt Francis Ricciardone about the current crisis in American-Egyptian relations

Francis Ricciardone

A week ago the US surprised many in Egypt by putting on hold talks towards finalising a bilateral FTA? Does this reflect a crisis in Egyptian-American relations?

Absolutely not. There is no crisis in American-Egyptian relations. The US has long been interested in concluding an FTA with Egypt. The US just wants to start negotiations on this FTA when the right time comes. The US believes that this agreement should be of mutual benefit to both sides. It is by no means a carrot and stick matter. It should not also be viewed as a present offered from one side to another. The agreement should secure the bilateral interests of the two countries.

Before the current US administration begins new negotiations for a free trade agreement with any country it wants to be sure that it will be able to push this agreement forward to our Congress. The US administration hopes it will be able to do so with Egypt.

Besides, the two countries are now watching some political developments . Some people in Egypt believe that opening up the economy to globalisation is a negative policy. Even in America there are a lot of people who object to free trade agreements. More recently we had the CAFTA (Central America Free Trade Agreement) and we made this through the Congress with two votes only and one of these votes was the vote of the vice-president. The judgment of when to go to Congress to begin negotiations is a very careful political judgment on the part of President Bush. We believe we have accomplished all the technical requirements. The two sides understand what the issues are: intellectual property rights, labour legislation, environmental considerations and other different aspects of that. We think we know how to organise the negotiations technically. So all we are considering now are the political dynamics of informing Congress of our intentions to begin negotiations. And do not forget beginning negotiations is not the same as concluding negotiations because at that stage you have to go to the Congress again to present the negotiated agreement and that will be at least a year after we begin the negotiations. There is a political dimension but it is not the same as saying we are imposing political standards or requirements on Egypt. This is a trade agreement and the issues are fundamentally trade issues and not political issues but the climate in which we negotiate and the climate in which we approach our Congress and the climate in which you approach yours is a political climate.

The last two weeks saw the exclusion of Egypt from any negotiations on this matter while the US moved towards concluding negotiations with other Arab countries, most recently Oman, which is why it seems political conditions are playing a role...

Yes, we are concerned to support the course of democratic opening in this country. We think that Egypt made great progress in 2005. Egyptian officials tell us they are proud of what the country has accomplished. There were some shortfalls in the exercise of democracy that President Mubarak and the prime minister have recognised. These have made headlines around the world and sometimes these headlines were negative and obscured the larger reality I experience every day which is a very positive reality. I think the time will be right for us to go back to the Congress to start FTA negotiations again.

But some still believe delaying negotiations was due to two factors: the imprisonment of liberal political activist Ayman Nour and US dissatisfaction with Egypt's mediation between Syria and Lebanon.

Although the imprisonment of Ayman Nour is an internal political case it left a negative impact outside. The truth in Egypt is larger than one case. It is very positive. It is a country Americans find beautiful to visit. It is a country that is opening up politically and economically. President Mubarak himself told the People's Assembly two months ago let's open up to the outside world. It is a country transiting to greater democracy every day and there is progress. So, the case of Ayman Nour does not represent a step towards democracy and of course this leaves an impact on the outside world. So, we must remain focused on the greater picture. Our view is that Egypt is a friend to us and is making great progress in the world. On the second part of the question, I want to say that America is very proud of Egypt's role not only in mediating between Syria and Lebanon but also Egypt's roles mediating between the Palestinians and the Israelis, in Iraq, in Sudan and even in Iran. Egypt is advocating peace in the Middle East and we are keen to coordinate with Egypt all the time. A case in point of this close coordination is that Lieutenant General Keith Dayton, who replaced Frank Word as the American security coordinator in Palestine and Israel, was in Egypt on a recent visit. He came directly from the Quartet's meeting in London to coordinate with officials here.

How do you evaluate USAID assistance to Egypt after 30 years of their presence?

First let me say that American -- or any foreign -- economic assistance should not be seen as the ultimate panacea for the economic ills of any country. The panacea in my view is encouraging the private sector and foreign investment. We as an American government encourage foreign investment in Egypt in terms of free trade agreements and initiatives such as the QIZ (Qualified Industrial Zones).

As for USAID, it has made a significant contribution to Egypt. I am proud to say that US economic assistance through USAID has totaled $26.6 billion since 1975, with another $1.034 billion budgeted for 2006. I know that from time to time USAID in Egypt faces criticisms but I think that large sectors of Egyptian society and the economy view USAID very positively. Whenever I go on a visit to a certain governorate officials tell me that the role of USAID in Egypt has been great and ask that this role be boosted.

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