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AMCHAM AND THE FTA CHALLENGE
Our AmCham Egypt meetings may not always take place
on board an aircraft, touring the nation’s airports as we did
last year, or on the lawn of Egypt’s Smart Village, to admire
one of the private sector’s significant achievements. But in
2006, we’ll keep striving to be creative to capture members’
attention – and protect their and Egypt’s interests. The
year holds promise for our organization, as we deepen our involvement
in Egypt’s economic life and civil society. The Middle East
and North Africa (MENA) AmCham Council will soon be launched in
earnest, which will encourage regional cooperation between our business
communities.
Another important AmCham endeavor will also begin operating this
year, namely the Trade Information Center. AmCham has long advocated
an FTA with the US, and the board of directors realized the necessity
of such a center some two years ago, so we’re proud that it’s
become a reality. Since official FTA negotiations will most likely
be announced in the coming months, the center will provide timely,
crucial services.
Free trade is a cornerstone of a market economy and the direction
Egypt chose some years ago. Moving away from central planning and
protectionist strategies means greater openness and market access
worldwide. An export economy relies on this access, and the resulting
competition demands high-quality goods and services to succeed.
Our trade agreements with the WTO, the European Union, with COMESA
countries, and most recently with Turkey all contribute to improving
our standards and our economy, by creating investment opportunities
and much needed jobs. But free trade doesn’t mean a free for
all. There are rules and regulations that determine the winners
and losers.
The Trade Information Center was designed to supply us with the
data we need to stay in the running of a fast-moving game. It will
provide training courses, a help desk to answer questions and assist
in problem solving, and awareness-raising meetings, some of which
will focus on the experience of other countries whose success or
mistakes can be instructive. As we approach these FTA discussions,
it’s worth remembering that while both governments are the
official participants in FTA negotiations, the private sector has
an important role to play. We need to be in a position to provide
input to government regarding the terms of our agreement. When the
US was negotiating NAFTA, business leaders from Mexico, Canada and
the US in every sector were close by serving as advisers, making
sure their local interests were protected. Free trade doesn’t
mean we can’t defend our market and arrange the most favorable
terms.
The trade center will help us acquire knowledge in these matters,
especially since the rules are always changing. The global trade
scene is evolving – not fixed – and we must stay appraised
of developments so as not to risk losing opportunities. This means
we have the responsibility to inform ourselves, and taking advantage
of the AmCham Trade Center is a good place to start. Once the ground
rules are laid, everyone must respect them. If a representative
of one sector abuses the agreement, other sectors may suffer the
consequences. So we need to act as a community, in full knowledge
of our possibilities and limitations.
Trade rules are designed to keep things fair between countries,
but they have important implications for us domestically. An FTA
agreement with the US will be “WTO-Plus,” a “deep”
as opposed to shallow trade agreement. This mean the US can impose
conditions beyond those required by the WTO. It can ask Egypt to
respect certain standards, not just of production but regarding
labor and environmental laws, as well as political reform. This
will have an impact on local legislation, and while this is positive,
the necessary improvements will require the commitment of both government
and private sector alike. There will be little room for half measures.
Indeed, without the proper understanding of our rights and obligations,
an FTA could backfire.
The FTA is one of the challenges Egypt faces this year, a serious
business worth entering with our eyes wide open. AmCham plans to
be at the forefront of the issue, by informing our members and making
our voices heard. The stakes are high, but if we do it right and
work together, all the people of Egypt can benefit and share in
the global wealth for generations to come.
TAHER HELMY
President, AmCham Egypt
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