-Caveat Lector-
>From http://www.ahram.org.eg/weekly/1999/452/ec1.htm
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Cooperate or else?
By Aziza Sami
William Daley
The coming four months will witness the implementation of what US Secretary of
Commerce William Daley calls an ''aggressive plan of action'' aimed at
preparing a "blueprint" for economic cooperation in the region. The US hopes to
present the new plan at a conference on Middle East-North African (MENA)
regional integration in the spring of next year.
The US idea is to encourage the private sector, via the American Chambers of
Commerce in the Arab countries and Israel, to lobby their governments for freer
trade in the region.
"Regionalism must be private sector-led," said Daley. "[You cannot have]
governments telling you what to do, or governments forcing this to happen."
Daley finished his fourth tour to the area this week. It included Israel,
Jordan, Palestinian self-rule territories in Gaza and Egypt, followed by a trip
to Saudi Arabia and the United Arab Emirates. In Abu Dhabi, the secretary met
with representatives of the six Gulf Cooperation Council (GCC) states.
During his visit to Egypt, which was described by the US Embassy as
''historic", Daley oversaw what he called "the first multilateral meeting of
its kind," bringing together in Cairo representatives of the American Chambers
of Commerce of Egypt, the Palestinian Authority, Jordan, Lebanon, Tunis,
Morocco, the United Arab Emirates and Israel.
''As far as I know there has never been a coming together like this of the
[American] chambers [of commerce] in any region of the world," said Daley.
Chamber representatives have "agreed to establish a regular dialogue between
them," said Daley, and to work with local businesses throughout the region to
come up with an aggressive action plan by 30 March, which they will present to
me as a blueprint of the reforms needed to create a regional market."
This American initiative would presumably sidestep the condition set by Arab
governments, and by Egypt in particular, which is that regional economic
integration and expanded trade between the Arab countries on one hand and
Israel on the other must run parallel to serious progress in the peace process.
Impediments such as Israeli settlements, the future of final status
negotiations between Israel and the Palestinian Authority, and progress on the
Syrian and Lebanese tracks still obstruct the smooth implementation of the
peace process.
But the American view, as stated by Daley, is that "trade barriers in the Arab
world have to come down (as do barriers) between the Arab world and Israel. The
day will come when a new chapter of peace will be written in Lebanon and in
Syria. What happens then? Do we leave those countries economically isolated?"
he asked.
Daley, who met with the ministers of trade from the Palestinian Authority and
Israel before coming to Cairo, said that he sensed a more optimistic atmosphere
"than that of a year ago. The two ministers were talking and trying to solve
their problems".
The view in Cairo on the eve of Daley's visit was carefully worded. Egyptian
Foreign Minister Amr Moussa said that "if progress continues in the peace
process, then it will be suitable to hold a (MENA) conference sometime in the
first half of next year."
For its part, the US is currently establishing a pattern of relations with a
number of countries in the region, such as Egypt, Jordan and Turkey, by which
tariff-exempted commodities can flow from these countries to the US via Israel.
Turkey, like Egypt, is facing problems establishing a free trade area with the
US. Nevertheless, it enjoys a free trade arrangement with Israel which allows
it to export products to the US market. Initiatives are also being undertaken
by Israeli businessmen to set up feeder industries in Turkey's South Anatolia
development project. This would allow products to be exported to markets in
Central Asia through joint Israeli-Turkish ventures.
Jordan has also signed two agreements with Israel for the operation of two
Qualified Industrial Zones (QIZ's), with a third in the pipeline. These were
discussed during Daley's visit to Jordan. Commodities produced in these zones
would enter the US tariff free.
Daley's tour, timed to take place at a critical juncture before the new round
of World Trade Organisation (WTO) talks scheduled to start in Seattle next
November, also focused on lobbying governments in the region for more
privatisation and liberalisation. The US is especially concerned about Jordan
and Saudi Arabia which have not yet joined the WTO.
The US has promised that some $5 billion worth of investments will be directed
to the region once its countries fully open up their markets to foreign
investors.
In Egypt the telecommunications and pharmaceuticals sectors are being eyed by
US investors on condition that they undergo more liberalisation. Daley, whose
accompanying business delegation included the president of the pharmaceuticals
giant Merck, raised the issue of early implementation of the GATT intellectual
property rights laws in the drugs industry when he spoke to the American
Chamber of Commerce. Reform of the pharmaceuticals sector remains a contentious
issue on both sides. Egyptian manufacturers insist that they be given the grace
period allowed by the General Agreement on Tariffs and Trade (GATT), scheduled
to end in the year 2007, in order to strengthen their position so that they can
compete with multinational investors.
During the visit, Daley and his Egyptian counterpart Minister of Economy
Youssef Boutros Ghali also signed a joint statement on electronic commerce,
with the understanding that more American investment in this domain would be
forthcoming when the Egyptian telecommunications sector becomes "competitive"
and fully liberalised.
On the issue of bilateral Egypt-US ties, the usual questions about trade and
its heavy tilt in favour of the US came up once again. Although the
establishment of a free trade area between Egypt and the US has long been
requested by Egyptian exporters, the idea faces political opposition in the US.
Congressional approval for its implementation is not likely to happen in the
near future. Egyptian textile manufacturers still have as a sole option raising
their export quotas to the United States by agreeing to joint ventures with
Israel, a recommendation made time and again by US officials in their talks
with leaders of the Egyptian textile industry.
Daley also met with the newly appointed Egyptian Prime Minister Atef Ebeid and
twice with Minister of Economy and External Trade Youssef Boutros Ghali. Daley
told reporters that during his meetings with Egyptian officials he sensed what
he described as "a very aggressive attitude about privatisation and the need to
have Egypt move more quickly (into) the global economy".
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