Mission Report

Continuing an annual tradition, AmCham Egypt sent a DoorKnock delegation to Washington, DC in March to highlight Egypt-US trade and economic ties, and lobby on behalf of the Egyptian business community. The mission included nearly 100 meetings and events with US officials, policymakers, think tanks and business leaders. The DoorKnock delegates used the opportunity to raise awareness about the positive developments of the Egyptian economy and correct erroneous perceptions about the country.

This year’s mission took place during a period of uncertainty and change in US politics. Policymakers and the media in Washington were preoccupied by two major foreign policy issues – the debates over an exit strategy for US military forces in Iraq, and Iran’s controversial nuclear energy program. Many delegates noted that officials in Washington appeared to be suffering from “Iraq fatigue,” with little attention or energy to focus on other international or domestic issues.

On the domestic front, the Democrats’ victory in the November 2006 congressional elections has resulted in a new dynamic in Washington. Several congressional committees have launched investigations into the administration and its policies, both domestic and foreign. This shift in political power appears to have distracted many administration officials, forcing them to spend time defending themselves and their policies, and leaving very little energy for new initiatives or dramatic new policies that would require tough political fights.

One issue that is on their mind, however, is trade. The new Democratic Congress is more skeptical of FTAs and leading Democrats have indicated that they will push for more labor and environmental standards in any FTAs that come before Congress. Most trade-related discussion on Capitol Hill has focused on whether Congress will extend Trade Promotion Authority (TPA) to President Bush beyond its June expiration date.

TPA allows the administration to negotiate trade deals and present the full agreement to Congress without congressional involvement in the specific terms of the agreement. Congress may only vote to approve or disapprove the agreement as negotiated by the administration. The most likely outcome is that Congress will grant limited TPA authority to Bush to allow for a vote on certain bilateral FTAs, such as with Korea, Peru and Colombia, and on the World Trade Organization (WTO) Doha Round. If broader TPA authority is not granted, no additional FTAs will be approved during this presidential term, which means negotiations for an Egypt-US FTA will remain on hold until at least 2009.

Unlike previous visits, AmCham delegates noted that administration officials were less concerned with Egypt’s political reforms than they have been during previous visits. While some members of Congress raised the issue, most seemed content to know that Egypt remains a friend of the United States, and assured delegates that Egypt is still viewed as a partner of the United States.

Delegates were assured by a number of people – both inside and outside of government – that Egypt’s aid program would continue as is this year. While there was no mention of cutting Egypt’s aid, AmCham members did, however, encounter a number of people in Congress who mentioned the need to eventually “graduate” Egypt out of the US aid program.

Another major issued that dominated the meetings with officials in Washington was the success of Egypt’s economic reforms. The DoorKnock were genuinely surprised to discover that few people – especially in Congress – were aware of Egypt’s tremendous success with economic reforms. While western media has closely scrutinized Egypt’s political reforms, very little has been written about Egypt’s impressive economic growth.

Delegates made it a priority addressing the huge gap between perception and fact. They provided extensive economic data as well as individual success stories demonstrating Egypt’s economic growth in recent years. Most importantly, delegates emphasized that this success was the result of broad economic reforms and a highly diversified economy. This success was the result of difficult and often painful reforms that cut across many sectors.

As stated earlier, US officials emphasized that the delay of FTA negotiations had little to do with the Egypt side of the equation and was more a result of the current political situation in the US and partisan politics. With that in mind, delegates explored ways to advance the US-Egyptian trade and commercial relationship outside of the FTA context. There was a conclusion that even short of an FTA, it is extremely important to keep pushing for other agreements that will deepen the investment and trade relationship. This is particularly true in light of the fact that the entire FTA concept is under question in the United States. Possibilities include a new bilateral investment treaty, expanded Qualifying Industrial Zones (QIZs), and negotiated tariff reductions on individual products or product categories.

Finally, members repeatedly emphasized the continuing importance of the US aid program – in both its military and economic components – as well as the need to maintain the linkage with Israel’s aid program. Members noted that Egypt’s continued success in attracting American investment and expanding trade with the United States depends on a close and meaningful bilateral relationship.