"The United States and Egypt: Global and Regional Partners"
Address by Ambassador C. David Welch before the American Chamber of Commerce in Egypt
Conrad Hotel, November 7, 2001

November 6, 2001, (As prepared for delivery)

Mr. Mansour, Mr. Fahmy, Honored Guests,

I'm very pleased to appear today before the American Chamber of Commerce for my first major policy address as ambassador to Egypt. I am delighted to deliver it to the first American Chamber of Commerce in the Middle East, and among some of America's closest friends. For nearly 20 years you have been doing a superb job of advancing Egyptian business interests in the United States, and American business concerns in Egypt. I look forward to continuing our fruitful partnership during my tenure in this country.

I would also like to thank the Conrad Hotel for having us here today. The Conrad put on an impressive display last Friday night when it hosted our annual Marine Corps Ball. It was a splendid event, and I want to thank General Manager Mark Elawady and the Conrad staff on behalf of the Marines and the entire U.S. Embassy community.

My friends, we have had some very busy and eventful months since my arrival in August, to say the least. The events of September 11 ushered in a new era not only for the United States but for the international community as well. We have all been forced to take a new look at our priorities. Some things that seemed important prior to September 11 seem secondary now. But the importance of the U.S.-Egyptian bilateral relationship has never been more evident. As the campaign against the Taliban and Osama bin Laden's Al-Qaida organization proceeds, it is clear who our friends are. Like President Bush, I am gratified that we can count Egypt as one of our strongest supporters.

But at the same time Egypt and the U.S. confront the threat of terrorism together, we are continuing to advance our bilateral relationship along a broad-based front - political, diplomatic and economic. We are truly partners in the global sense, working together to advance important global and regional goals.

Before I talk about that in a bit more detail, I would like to bring you up to date on where we stand now in the international campaign against terrorism. It's important to note here that the attacks of September 11 were not just an attack against the United States, but against all our friends and allies who oppose terrorism and the terrorists' agenda of violence against innocent people for political gain. Citizens of some 80 countries, including Egypt, were senselessly murdered that day. Because of this, we have worked hard to bring together all those who share our determination to confront and destroy the threat of terrorism.

As our strategy has taken shape, we have consulted closely with our friends and allies, including President Mubarak. We have listened carefully to our friends' advice, and it has been reflected in our actions. We have gone the extra mile to address several concerns expressed by our Muslim friends ever since the start of the crisis. We have not acted precipitately. Our response in Afghanistan was carefully considered, our actions were undertaken on the basis of firm evidence, and launched with a compelling international mandate.

I won't go into detail here about Al-Qaida's involvement in the September 11 atrocities, except to note that some very specific information we developed, as well as the similarity of the attacks to other Al-Qaida operations, pointed conclusively to Al-Qaida's responsibility for the attacks. The British have also published a 70-point paper that provides more detail on Al-Qaida's connection to terror; it makes very interesting reading.

Where doubts about the evidence once were commonplace, I get the sense that the world has moved on. Any remaining questions about Al-Qaida's guilt seem to have been answered by bin Laden himself in his taped remarks released after the beginning of our military operations on October 7, with his threats to undertake further terrorist attacks. I am gratified to note that his exultation of these attacks has been met with disgust by many, including here in Egypt.

We also appreciate Egypt's public statements refuting bin Laden's self-declared right to represent the face of Islam to the world. As Foreign Minister Maher so rightly noted in Damascus earlier this week, after bin Laden released his latest verbal assault - which broadened to include Nobel Peace Prize winners Kofi Annan and the United Nations - this is not a war of religions, but a war between bin Laden and the world. The Grand Imam of Al-Azhar, Sheikh Tantawi, and other religious notables in Egypt and abroad have also condemned the September 11 attacks and rejected characterizations of our actions in Afghanistan as a war against Islam.

I think the Arab and Islamic world, which I have always known to be enlightened, is determined to cleanse itself of those like bin Laden who would attempt to hijack a great religion for extremist political purposes.

With regard to our legal right to respond as we have, our actions are fully justified and authorized by international law and the Security Council. Article 51 of the UN Charter grants all nations the right of self-defense. Our allies in NATO explicitly endorsed this right when they invoked Article 5 of the North Atlantic Treaty, which states that an attack on one NATO member is an attack on all. Moreover, the UN Security Council has passed two resolutions in the aftermath of these attacks calling for states to combat terrorism by all means and reaffirming the inherent right of states to self-defense. The General Assembly adopted a similar resolution at its first plenary session on September 18. I would also recall for you that the Security Council has had obligatory resolutions in effect since 1999 that specifically call for bin Laden to be brought to justice - outside Afghanistan.

We have come in for some criticism lately from people who are unclear about what we are doing now in Afghanistan and where this war might lead. So let me be clear about what this campaign is about, and what it is not about.

We have a very straightforward goal: the elimination of the Al-Qaida network and the Taliban leadership that shelters it. We will also work to root out terrorists and their networks wherever they may be found.

As I said earlier, this is not a war against Islam or Muslims. President Bush spoke very eloquently to this point when he said, "We are friends of almost a billion worldwide who practice the Islamic faith. The United States is an enemy of those who aid terrorists and of the barbaric criminals who profane a great religion by committing murder in its name." Indeed, we have worked closely with many Muslim countries in the aftermath of September 11. After all, the violent extremism of Al-Qaida and like-minded fanatics is a deadly threat to moderate Arab governments such as Egypt that have strongly opposed them in the past and continue to do so now.

This is not a war against Afghanistan, either. We remain strongly committed to helping the Afghan people, who after all have suffered the most from the Taliban's misrule. The U.S. remains the single largest donor to humanitarian relief efforts in Afghanistan, having provided close to $1 billion in assistance over recent years. U.S. assistance to the Afghan people for our 2001 fiscal year totaled nearly $184 million in food, health care, water and sanitation efforts, and shelter. President Bush has also announced an additional $320 million for new humanitarian aid to make sure the people of Afghanistan are fed and their medical needs met. We are working with the UN High Commission for Refugees, the International Committee of the Red Cross and other NGOs. We are providing U.S.-origin food assistance for displaced persons in Afghanistan and refugees in neighboring countries. We will work closely with the international community to meet the needs of Afghans as winter approaches.

And let me correct one other misperception: that we are bombing the very same people we are trying to help. I want to make it clear that the United States is trying to avoid striking any civilians or civilian facilities. Sometimes, despite our best efforts, civilian casualties do occur. These are deeply regrettable. The safety of the Afghan people is of great importance to us, by contrast with the Taliban, who have a well-documented history of deliberate attacks on civilians. I find it ironic that the Taliban and their Al-Qaida allies are the ones who understand this best of all. Why else would they be hiding troops and equipment within mosques and in civilian neighborhoods if they didn't trust the United States to do its very best to avoid hitting these targets?

Just as we understand the importance of helping the Afghan people while we continue to fight the Taliban and the foreign terrorists they harbor, we understand that military means alone will not win this fight. Every means must be brought to bear, including diplomatic, political, intelligence, law enforcement and financial. In close cooperation with our friends around the world, this is exactly what we are doing now.

As Secretary Powell and others have noted, different countries will have different things to offer in the fight against global terror, based on their political and historical circumstances. Some will provide diplomatic support; some will help politically; others will assist militarily and in other ways. And we appreciate the many ways in which Egypt is helping.

President Mubarak's words of support following the start of the military campaign were warmly welcomed. So too have been Egypt's approval of overflight clearances for U.S. military aircraft, its grant of transit rights through the Suez Canal for our warships and its determination to carry out the biennial Bright Star exercise as planned. Indeed, Bright Star is an enduring symbol of the U.S.-Egyptian partnership for peace and stability, a symbol that holds special significance today.

Egypt has pledged its cooperation with global anti-terrorism efforts in other ways, too. It is providing excellent cooperation with elements of the United States government as we seek to destroy terrorist networks and investigate the crimes of September 11. The government is actively seeking out terrorist financial assets wherever they may be found. It is working to strengthen Egypt's money-laundering laws to make it harder for terrorists to move money. EgyptAir and the Egyptian Civil Aviation Supervisory Authority are fully implementing new civil-aviation security requirements to make air travel safer.

Egypt, in other words, as a close friend and ally, is doing what close friends and allies do when their help is needed. And it is doing it effectively. Whatever you may have heard or read in the media, this is the official view of the United States government.

The point I want to emphasize here is that what Egypt and the United States have done together since the start of this campaign is possible because the U.S. and Egypt have worked for many years to build a deep, stable, mature and multifaceted relationship. And although we are now focused on the threat of international terrorism, Egypt and the United States continue to pursue a broad-based political and economic agenda.

We are consulting with Egypt on ways to end the violence in Israel and the Palestinian areas, reestablish security through the Tenet Plan, implement the Mitchell Report and get the parties back to the negotiating table. The United States is firmly committed to the achievement of a just, comprehensive and lasting peace in this part of the world based on Security Council Resolutions 242 and 338. And, as President Bush said on October 2, "The idea of a Palestinian state has always been part of a vision, so long as the right to Israel to exist is respected." We welcome and appreciate the active role Egypt is playing in helping to get the negotiating process back on track.

We are also working closely with the Egyptian government on advancing peace and stability in Sudan. The president's special envoy for Sudan, Senator John Danforth, will be coming to Cairo in the next few weeks to meet President Mubarak, and Senator Danforth's advance team held a series of wide-ranging talks with the foreign minister and many other senior Egyptian officials this past week. Our goal is to pursue a just peace in Sudan with Sudan's neighbors, a peace that addresses their many interests as well as the needs of the Sudanese people.

On the economic front, Egypt and the United States are looking to the future as we support Egypt's efforts to build a prosperous, free-market oriented economy and to identify ways to cope with the difficult economic period we face now. Because of the Egyptian government's commitment to serious reforms since the early 1990s, the Egypt of today is in a better position to face the global economic downturn and the post-September 11 shocks than it would have been 10 years ago.

While the impact of September 11 on Egypt's economy is severe, especially in the tourism sector, this is not the time to slow the reform process. Instead, this is the time to accelerate the kind of reforms that will position Egypt to take better advantage of the global rebound when trade, tourists and investors start moving again. In fact, I would note that the U.S. trade representative, Robert Zoellick, told Minister Boutros-Ghali he is interested in the possibility of initiating discussions on the elements of a potential U.S.-Egypt Free Trade Agreement.

We have a robust policy dialogue with the government. Here's our outline:

• First, define the dimensions of the problem. A World Bank team will arrive here next week to work with the government on projections of the potential impact on all sectors of Egypt's economy. We will cooperate closely with this mission, as well as ministers Boutros-Ghali and el-Darsh, and are prepared to offer U.S. advice and expertise if needed and requested.
• Second, share ideas on what to do about the problem. We have some, the GOE has some, and I am sure we will agree on a positive, forward-looking agenda.
• Third, what is done now is profoundly important to position Egypt for the future.

We are encouraging the government to press ahead with its agenda of key reforms that could substantially improve Egypt's investment climate. These key reforms are: passage of a money-laundering law; a TRIPS-consistent IPR law and its implementation; a labor law; adherence to one or both of the WTO agreements on Basic Telecommunications and Information Technology; completion of a public -expenditure review; a competition law; and corporate tax, sales tax and customs reform. Nearly all of these reforms are in progress and achievable. Several of them are on the fall agenda of the People's Assembly.

At the same time, our two governments are discussing steps we both can take to address the economic impact of the war on terrorism. We are urging the Government of Egypt to consider using all of the monetary tools at its disposal, including both a flexible exchange-rate policy and prudent deployment of its substantial foreign-exchange reserves, as it seeks ways to address the expected foreign-exchange revenue shortfall from the crisis. All these subjects were on the agenda during Minister of Economy & Foreign Trade Boutros-Ghali's visit to Washington just last week.

Despite worries about present trends in the global economy, though, the fundamentals of the U.S.-Egyptian economic relationship are sound.

The United States is by far Egypt's largest bilateral trading partner, and that trade has been growing. Egypt's exports to the U.S. grew by 44 percent from 1999 to 2000, and continued to increase, totaling over half a billion dollars in the first six months of 2001 alone, up another 22 percent over the same period in 2000. And, no matter what you have heard, that trade continues.

Our two countries cooperate closely on multilateral trade issues; in particular, the World Trade Organization and the ministerial meeting in Doha that begins in two days. We are working towards launching a new round of negotiations to liberalize trade further. The case for a stronger international trading system is even more compelling today than before September 11 - agreement to open a new round of negotiations would help us to restore confidence in the global economy. As chairman of the Federal Reserve Alan Greenspan said recently, "A successful trade round would lead to a stronger global market system. A successful round would not only significantly enhance world economy growth but also answer terrorism with a firm reaffirmation of our commitment to open and free societies." Egypt plays a key and active role in negotiations for a new trade round, to promote its own interests and its role as a leader of the developing world.

With regard to the investment picture, there is some good news. The U.S. is the second largest foreign investor in Egypt, thanks to many of you here in the audience - and that investment is growing. Apache Oil, Procter & Gamble and Chrysler are just three examples of major American companies that expanded their investments here in the past year. As I speak, another American company, Guardian Industries, has its representatives here doing research work in preparation for a bid on an upcoming privatization. American investments in almost every sphere of the economy provide jobs, exports and tax revenues to the Egyptian economy.

Meanwhile, our economic cooperation program in Egypt remains USAID's largest worldwide, at $655 million for our 2002 fiscal year. It supports the Egyptian goal of a globally competitive economy that benefits all Egyptians. Much of our assistance is directed at efforts dear to your hearts as businessmen: tax reform, improved protection of intellectual-property rights, foreign exchange to support imports of key industrial inputs, reduction of customs and other bureaucratic red tape. Other projects help build the phone, power, water, educational and administrative structures that both help the common Egyptian and will make Egypt a more attractive destination for foreign and domestic investors. Those efforts also will continue.

And I want to add that in all of this the United States Embassy is enthusiastic, dedicated and positive. We are open for business and are working every day to build the U.S.-Egyptian partnership.

The embassy continues to function and provide the full range of services to Egyptians and American citizens living in Egypt.

While mindful of the regional security picture, the embassy has been assuring Americans in Egypt that it is all right to stay, invest, do business and pursue their careers here. Egypt is not a "war zone."

We have helped Cairo Airport upgrade its security to ensure the continued safety of air travel into and out of Egypt.

We are also helping and encouraging Egyptians who need to travel to the U.S. Our visa section was back in operation 48 hours after the events of September 11. Extra appointments were added to assist those who missed theirs during restricted embassy hours. We have been reassuring people that their current visas remain valid and that no revalidation is necessary.

So, as you can see, many things have changed since September 11, but many others have not. The inherent strength and value of the U.S.-Egyptian relationship is a constant. We will continue our work together to confront and defeat the threat of terrorism, bring peace and stability to this region, and build a better future for Egyptians and Americans.

Thank you.

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