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Study: Egypt, US Would Benefit from Free Trade

Washington's non-government research agency, the Institute for International Economics, Wednesday unveiled a new study outlining the benefits of a proposed U.S. free trade agreement with Egypt.

The report says a free trade agreement would produce strong benefits for both countries. Co-author Robert Lawrence, an institute fellow and professor at Harvard University, says expanded trade with the United States would give a strong boost to the reform efforts of the Egyptian government.

"A trade agreement that would try to deal with non-tariff barriers, try to encourage more transparency within the Egyptian system, a more open system, a simpler system, these are all going to confer benefits to Americans who seek to compete in the Egyptian market as well as to other entrepreneurs in Egypt as well," he said.

While there has been talk of a bilateral free trade agreement for some years, the Americans have been reluctant to move forward, saying the pace of reform in Egypt was too slow. That view may be changing. Washington has concluded a bilateral deal with Morocco, its first free trade agreement with an Arab country, and is opening negotiations with Oman and the United Arab Emirates.

Egypt's reformist trade minister, Rashid Mohamed Rashid, is eager to start bilateral negotiations. He agreed with Mr. Lawrence that it would give a strong boost to the market-based reforms that were strengthened seven months ago. Beyond that, Mr. Rashid says Egypt and America need each other to promote their own foreign policy objectives.

"When we look at the national interests of the United States today there is no doubt that we find that at the top of the list we find security and fighting terrorists, and of course stabilization in hot areas of the world, specifically the Middle East. When we look at the top of the list for Egypt, we are talking about reform and change in the status quo, and delivering a much better life for Egyptians in the years to come," said Mr. Rashid.

Also speaking at the economics institute Wednesday, the head of the American Chamber of Commerce in Egypt said a free trade deal would spur U.S. investment in the most populous Arab nation. The institute researchers say a free trade deal with Egypt probably would be compatible with the broader Middle East Free Trade Agreement (MEFTA) that is favored by the Bush administration.