US restarts Egypt trade talks

21 February 2005

U.S. restarts Egypt trade talks

By Jeffrey Sparshott

THE WASHINGTON TIMES

The Bush administration in its second term is continuing its drive for closer economic ties with the Middle East, restarting trade-related talks with Egypt this week and formally opening free-trade agreement negotiations with Oman and the United Arab Emirates next month.

The effort builds on recent pacts with Jordan, Morocco and Bahrain, and is part of President Bush’s strategy to create a Middle East Free Trade Area by 2013.

The United Arab Emirates, the United States’ third-biggest trade partner in the region, and Oman especially would bolster the network of free-trade partners near the Persian Gulf, U.S. trade officials said.

"I think we are making rapid progress in the Gulf," said Catherine Novelli, the assistant U.S. trade representative negotiating the deals.

The meetings in Egypt, the most populous country in the region, are the first bilateral trade talks since mid-2003, when a push to open free-trade agreement negotiations soured after Egypt backed out of a multinational effort to press Europe to open its markets to genetically modified crops.

The administration at the time also had concerns about Egypt’s opaque regulations and commitment to opening its economy.

Egypt since has begun a series of economic reforms, appointed a new trade minister, and in December signed a pact with Israel that allows duty-free exports to the United States of products made with Egyptian and Israeli materials.

"We are very excited about meeting with the new economic team" in Egypt, Ms. Novelli said.

The new round of talks, in Cairo, are not formal free-trade negotiations, but part of a formal mechanism to discuss trade and investment issues. Egypt considers the meeting a step toward a free-trade deal.

When asked whether Egypt would emerge as a candidate for a free-trade agreement, Ms. Novelli said: "That’s the ultimate goal with all the countries in the Middle East."

The diverse region stretches from Morocco, in northern Africa, to Iran, east of the Persian Gulf.

Much of the Middle East has fast-growing populations but is stagnant economically.

Mr. Bush, as part of a broader post-September 11 strategy, in May 2003 proposed a Middle East Free Trade Area "to bring the Middle East into an expanding circle of opportunity, to provide hope for the people who live in that region."

Many of the region’s more populous, wealthy or politically influential nations still are far from signing on to the proposal.

Iraq faces myriad challenges as it rebuilds after Saddam Hussein’s rule and a U.S. invasion to topple him. Libya is only slowly normalizing commercial relations with the world as it emerges from its terrorist past.

Iran and Syria are considered state sponsors of terrorism, and Saudi Arabia has not joined the World Trade Organization, a prerequisite for free-trade talks.

Tunisia, Algeria, Kuwait, Qatar and Yemen, like Egypt, have trade and investment agreements, which create a formal framework for talks with the United States about commercial issues.

The United States’ oldest free-trade agreement is with Israel. Jordan formalized a pact in 2001.

Congress approved a deal with Morocco last year and is expected to approve a deal with Bahrain this year.

The administration highlights the Jordan pact, which helped boost two-way trade from $301 million in 1999 to $1.7 billion in 2004, as an example of successful trade policy.

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