The American Chamber of Commerce in Egypt held its monthly luncheon at the Grand Hyatt Hotel on March 2 with key speaker US secretary of commerce Carlos Gutierrez, who was in Egypt on a multi-leg tour of the Middle East.

“We must tear down the walls that separate the developed and the developing world,” said Gutierrez, who believes countries should work together to sustain momentum towards achieving “global trade.” He sees this happening at both the global and regional level. On the global level, the World Trade Organization (WTO) recently reached an agreement to end all farm export subsides by 2013, while on the regional level the AmCham MENA council is promoting interregional trade in the Middle East. “There is nothing more that we can do for another nation than to trade and do business with them,” he said.

Gutierrez acknowledged the significance of the trade relationship between Egypt and the US, where bilateral trade exceeded $5 billion in 2005, a 25-percent increase over the previous year. He said American companies have invested over $4 billion in Egypt and US president George W. Bush is committed to expanding trade and commercial relations throughout the region where Egypt is a “vital” partner. Liberalizing trade promotes economic growth and prosperity, and in Egypt’s case, will open the door for 72 million Egyptians to consume American products and 295 million Americans to consume Egyptian goods, he said.

Moving on to the issue of the long-awaited Egypt-US free trade agreement (FTA), for which negotiations were set to begin last month but lost momentum after the US voiced its displeasure at the pace of Egypt’s reform, Gutierrez would only say that the trade agreement would take place “when the time is right.” He urged the Cairo government to continue its political and economic reforms, stressing that liberalizing the economy would create an attractive business climate for investors.

He highlighted the recent success of the qualifying industrial zones (QIZ) agreement, noting that in the first eight months of 2005, companies located in Egyptian QIZs exported more than $100 million to the US, “This growth is causing all major Egyptian QIZ exporters to expand capacity and to attract greater outside investment. All of this activity will stimulate more growth and create more jobs.”

Gutierrez also commended Egypt’s recent custom reforms, income and corporate tax reforms, reduced energy subsidies, and banking and industrial privatization as steps in the right direction and signs of “great progress for Egypt.” However, he noted several areas where Egypt could make some improvement, particularly when it comes to intellectual property rights (IPR). He said that in order to create an environment that is more conducive to investment and which protects IPR, the US Commerce Department will soon post a regional intellectual property attaché in Egypt to assist businesses, advocate US intellectual property policy, and conduct training for Middle Eastern law enforcement, prosecutors, judges and customs officials.

The floor was then open for questions. The most obvious question on everyone’s mind was why the Egypt-US FTA has stalled despite Egypt’s substantial economic reform measures over the past year. Gutierrez downplayed the political angle by reiterating the recent comments made by Secretary of State Condoleezza Rice. “We feel that we have a responsibility to all of us that when we decide together that the time is right that we will be successful. I have no doubt that the time will come, but we should wait for the right time.” He went on to add that the stalled FTA in no way reflects on Egypt as a trade partner and asked Egyptians for “a bit of patience.”

Gutierrez also addressed questions about the controversy over a deal that would allow a Middle East firm to run US seaports, as well as the perception that the US insists there is only one road to democracy. In response, Gutierrez said that President Bush has stressed that every country has to find its own path to democracy. “This is not about Americanization, it’s about recognizing that wanting to be free is a fundamental characteristic of every human being in the world. The American way is one way that we have found works in the US. We’re just encouraging countries to find their own way.”