US expert: Cairo-Washington economic relations suffer due to politics, human rights
|Thursday, February 11,2010 23:17|
|By Mohamed Abdel Salam|
An American expert in economics warned that American and Egyptian economic relations pay a hefty price because of the tensions that mar the relationship between Cairo and Washington. Barbara Kotschwar said that the differences on political and human rights issues in Egypt adversely affect the economic ties between the two nations.
Kotschwar, an expert at the Peterson Institute for International Economic Studies – a research center in Washington DC – said that there were a number of issues that contributed to the lack of development in the discussions toward inking a free trade agreement between the two countries, “including political and human rights issues in Egypt, in addition to US domestic policies.”
Her comments came at a seminar hosted by the Peterson Institute to discuss her book “Reengaging Egypt: Options for US-Egypt Economic Relations” released in January.
Kotschwar said that Egypt is one of the most important political and strategic partners of the United States in the Middle East, but in spite of that, the relations in trade and foreign direct investment between the two countries remains “relatively weak.”
Kotschwar explained in the seminar, which was reported by America in Arabic News agency, that Egypt is a source for only two percent of US imports from the Middle East and North Africa.
She said that trade between the two countries by the end of 2008 had a total of $8.4 billion, and US direct investment in Egypt, which represents 20 percent of American investments in the Middle East and North Africa, reached $8.8 billion.
She continued: “These small sums of money in the light of US economic relations with the Middle East and North Africa, but it can certainly increase.”
She said that Egypt and the United States had large economic ties but most of them through American political support for Egypt.
She said that there were several initiatives to open trade and investment relations and talks for a free trade agreement, “but they fell from the radar screen in 2005.”
While she expected that things do not look good enough for signing a new free trade agreement, however, she continued that “it is noteworthy that some steps have been taken by the end of 2004, as the US Trade Representative together with Egypt and Israel endorsed the QIZ agreement, the Program of the Qualified Industrial Zones.”
Kotschwar said that opening the US market further to the Egyptian commodities actually helped Egyptian companies to continue to compete.
“So, for example, you can see that there are a lot of children’s clothing manufactured in Egypt, in a prominent American stores,” she said.