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Report Calls For US-Egypt FTA

by Leroy Baker, Tax-News.com, Washington

19 December 2011


A report prepared by the Center for Strategic and International Studies (CSIS), with support from the United States Chamber of Commerce (USCC) affiliate, the US-Egypt Business Council (USEBC), has emphasized how a potential free trade agreement (FTA) could create jobs in both countries.

The report noted that the US has a history of providing economic aid to Egypt and has earmarked roughly USD250m each year since 1999 across a variety of trade, economic, health, and education activities. This total is among the largest of all US assistance programmes.

According to the Office of the United States Trade Representative, Egypt was the 33rd largest market for US goods exports in 2010. US goods exports to Egypt last year were worth USD6.8bn, up 30.1% from 2009, and up 140% from 1994.

It is pointed out by the CSIS that, with Egypt now facing the prospect of a long transition “from authoritarianism to democracy”, it would be natural for the US Congress to adopt a more circumspect and hesitant policy. However, it is suggested instead that a bolder policy would be to express support for the resumption of negotiations for an FTA, which would be preferable to hundreds of millions of dollars in economic aid.

As is highlighted in the report, an FTA would be a budget neutral, economic approach to support a key strategic ally; while as an interim step, consultations could begin immediately on updating the bilateral US-Egypt investment treaty.

Applauding the views expressed by the CSIS, the USCC’s vice president of Middle East and North Africa Affairs, Lionel Johnson, said: “As the US continues to pursue its goal of doubling exports by 2014, it must look towards countries that will be integrating into the global economy. This report is simple in its message: closer trade relations between the US and Egypt can bring growth and jobs for both countries.”

“The American businesses that make up the US-Egypt Business Council are put at a disadvantage because their competitors in the European Union enjoy the benefits of the EU-Egypt FTA,” added Khush Choksy, executive director of the USEBC. “US engagement in FTA negotiations with Egypt not only makes sense for US business interests, it will initiate a new economic dialogue between both countries.”

TAGS: tax | investment | business | free trade agreement (FTA) | law | investment treaty | agreements | Egypt | United States | trade | business investment

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