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It’s now time to move on The possibility of an Egyptian free trade agreement (FTA) with America has made news – for a number of reasons – lately, underlining something we’ve known for a long time: politics and economics go hand in hand. The fact is, a stable economy is convincing proof that a country is not only doing well, but also knows what it’s doing. The last thing Washington needs now is to insinuate otherwise, by lashing out at a leading, moderate country – and a close friend – because of a faux pas. Admittedly, the resolution of the GM foods dispute should have been left to the principal parties involved, namely the US and the EU. But, with continuing instability in the region, we should look at the larger picture. We should deal with the more urgent challenges that must be overcome to bring peace and stability to the people of the US, the Middle East and the world. We must persevere. The war against terrorism, resolution of the Palestinian-Israeli conflict and the restoration of stability in Iraq should be our priorities. Egypt has played key roles in the war against terrorism and in putting the Palestinian-Israeli negotiations back on track. And, with its leading position in the region, Egypt will undoubtedly play an increasingly important role with Iraq in the future. Squabbles, therefore, should be set aside. The US has made its point loud and clear, and I’m sure it didn’t fall on deaf ears. It’s now time to move on. While the political benefits of an FTA – to both the US and Egypt – have been clearly established, the economic benefits, too, have been supported by numerous studies, all of which conclude that trade benefits in the billions of dollars would accrue to both nations. Announcing the need for further feasibility studies – as some on the Egyptian side are suggesting post-GM debacle – sends conflicting signals, and will simply delay matters further. The Egyptian government and private sector have been calling for an FTA for years. Why the sudden change of heart? We have always supported free trade. Egypt is the
leading WTO member within the region and has just concluded an FTA
with Europe. Wouldn’t an FTA with America, the largest consumer
market on the planet, bring at least as many benefits as these existing
commitments? Which needs to come first – the FTA, or the reform? My belief is that an FTA would open the economy up by ensuring a more regulatory, business-friendly environment, boost competitiveness and raise employment levels. The launching of FTA negotiations would, in my opinion, act as a catalyst to reform as well as consolidate advances already made. Egypt has passed new banking, labor and intellectual property rights laws, is active in the WTO and is a member of the Basic Telecommunications Agreement – all FTA prerequisites. Once established, an FTA would provide a framework for additional reform, which consecutive governments in Egypt would be obliged to respect. Thus, an FTA implies continuity of purpose, the benefits of which would eventually penetrate every stratum of society. Indeed, it’s hard to see how Egypt will achieve its economic objectives – which include the creation of jobs for some 600,000 new job seekers annually and the promotion of more export-targeted activity – without fresh momentum being given to the reform process. Egypt is more than capable of initiating significant economic reforms on its own – not merely to meet a series of “conditions” set by the US, but because Egypt, too, wants to share in the fruits of a globalized economy. Still, a delay in FTA negotiations could convey diminished confidence, which could, in turn, slow the flow of urgently needed foreign direct investments. Economics and politics may be two sides of the same coin, but one thing remains true: a stable economy means a stable government, and a stable, productive Egypt is good news for everyone. Peace, stability and productivity have always been
our goals, with or without an FTA. Nevertheless, the US can help
us achieve these vital objectives through trade negotiations –
and help itself by staying close to its moderate friends within
the region at this crucial juncture. Taher S. Helmy |
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