Identifier
Created
Classification
Origin
05CAIRO2487
2005-03-30 08:05:00
CONFIDENTIAL
Embassy Cairo
Cable title:  

CODEL SMITH MARCH 21-24 VISIT TO CAIRO: MEETING

Tags:  OREP ETRD PREL KIRF EG 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 002487 

SIPDIS

E.O. 12958: DECL: 09/18/2015
TAGS: OREP ETRD PREL KIRF EG
SUBJECT: CODEL SMITH MARCH 21-24 VISIT TO CAIRO: MEETING
WITH PRIME MINISTER NAZIF

Classified by Acting DCM Michael Corbin for reasons 1.4 (b)
and (d).

-------
Summary
-------

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 002487

SIPDIS

E.O. 12958: DECL: 09/18/2015
TAGS: OREP ETRD PREL KIRF EG
SUBJECT: CODEL SMITH MARCH 21-24 VISIT TO CAIRO: MEETING
WITH PRIME MINISTER NAZIF

Classified by Acting DCM Michael Corbin for reasons 1.4 (b)
and (d).

--------------
Summary
--------------


1. (C) In a cordial March 23 meeting, Senator Smith and
Egyptian Prime Minister Nazif discussed political reform,
bilateral trade, religious freedom, and Iraq. The Senator
welcomed President Mubarak's move to open the field for
competitive presidential elections, congratulated Egypt on
the QIZ agreement, and urged further economic reform that
could build toward an eventual free trade agreement with the
U.S. Smith regretted the tenuous status of the Church of
Jesus Christ of Latter Day Saints (LDS) in Egypt and
cautioned that issues such as religious freedom could impact
bilateral progress on other fronts. Nazif endeavored to look
into the LDS issue and affirmed that the GOE would continue
to press forward with political and economic reforms. End
summary.

--------------
Political Reform
--------------


2. (C) Senator Smith praised the steps President Mubarak had
taken in calling for multi-candidate presidential elections,
noting that Egypt was the center of the Arab world and
Mubarak,s steps would have a big effect throughout the
region. Mubarak would likely be re-elected, and be even more
powerful as a result of winning a real election, Smith
opined. He noted that legitimacy comes from a hard fought
election campaign and victory. Nazif agreed and said that
Egypt took seriously President Bush,s comments in the State
of the Union address. Egypt was now leading the way on
political reform in the Middle East, just as it had led the
way on peace. Egypt,s last parliamentary elections were the
best in its history, free and fair, as certified by
international observers. He believed that holding a
multi-candidate presidential election this year would foster
further political development throughout the region and help
Mubarak be seen as a wise leader. According to Nazif,
Mubarak saw eye to eye with President Bush that political
reform was key to overall development and the fight against
terrorism. He noted that democratic development takes time
and that a major challenge would be getting eligible voters

to the polls.

--------------
Trade
--------------


3. (C) Senator Smith congratulated Nazif on signing the QIZ
agreement. Nazif replied that signing the agreement was not
an easy step for his government, as relations with Israel
were not ideal. He believed that taking steps such as
signing the QIZ agreement could move the relationship with
Israel toward closer ties. He pointed to other steps Egypt
had taken to advance the peace process, such as returning its
ambassador to Israel and sponsoring the Sharm el Sheikh
conference. The Sharm conference would help the Palestinians
see the benefits of making peace with Israel. The meeting of
Palestinian factions in Cairo the prior week and the London
conference were also important components of this
multileveled approach to the peace process. The London
conference was particularly important, he said, as funding
was needed for development.


4. (C) On the issue of a Free Trade Agreement (FTA),Nazif
affirmed that the U.S. was an important economic partner for
Egypt, just as Egypt was an important partner for the U.S.
He thanked Smith for U.S. assistance on economic reform,
noting that Egypt wanted to move from aid to trade. Egypt,s
economy was diversified and had a great deal of capacity, but
further development was needed. An FTA would be a key
component in fostering further economic development. Nazif
noted that the Minister of Foreign Trade had just returned
from the U.S., and Nazif said he would be visiting the U.S.
himself in May. He added that he hoped FTA negotiations
could be opened soon.


5. (C) Smith replied that he was on the Senate Finance
Committee and was in a good position to support an FTA with
Egypt. He agreed that trade was important for development,
especially growth of the middle class. Nazif agreed and
noted that Egypt still faced challenges, such as high
unemployment and religious extremism. Despite extremism, he
believed that religion was, in general, a positive force for
the country.


6. (C) Smith said that he wanted to keep Egypt and the U.S.
working together on the whole range of issues facing the two
countries. Nazif agreed and said he was optimistic about the
future of the bilateral relationship. He noted that not
everyone in Egypt was behind the reforms his government had
taken. He joked that recent tariff and tax cuts had caused
his administration to be seen as Republicans, and the effect
of those cuts was a large decrease in revenue. Smith replied
that reducing taxes and tariffs ultimately increases revenues
and pointed to the example of Europe,s economy, which had
high tariffs and taxes, yet was running a higher deficit than
the U.S.


7. (C) Smith observed that Europeans wanted to increase the
efficiency of their economy and were now using the U.S. as a
model. He noted that people, not corporations, ultimately
pay taxes. Corporations were just conduits for people, who
would lose jobs if corporations had to pay high taxes. Nazif
said that although his government,s reforms were beginning
to work, it would take 18-20 months for the economy to turn
around. History was also against his government,s reform
efforts. Egypt had always had a big government and it was
difficult now, with high unemployment, to cut back on
government. A social safety net was still needed. Smith
noted that despite stereotypes, Republicans, as well as
Democrats, understand the need for a social safety net.

--------------
Iraq
--------------


8. (C) Turning to Iraq, Smith shared insights from his recent
trip to Baghdad and Kirkuk, and noted that Iraqis with whom
he met did not want the U.S. to leave. He said that the U.S.
would only leave Iraq after ensuring that the Iraqi security
forces could maintain stability. The U.S. would, however,
pull back in the next year and a half, in order not to be
perceived as occupiers. He stated that the U.S. would also
put the necessary funds behind rebuilding Iraq.


9. (C) Nazif agreed that building Iraq,s political
infrastructure was the most important objective, and that all
factions in Iraq needed to have a stake in the political
process. He agreed that the U.S. should not pull out until
the job was finished. He noted that Egypt had its own battle
with terrorists starting in the 1990s. Despite its success
in combating terrorism since 1997, the risk of new incidents,
such as the Taba bombing in October 2004, was always present.

--------------
Religious Freedom
--------------


10. (C) Turning to a matter of personal interest to the
Senator, Smith expressed to Nazif concern about the status of
the LDS Church in Egypt, which is allowed to operate but not
legally recognized. Smith advised Nazif that the LDS Church
in Cairo has been forced to turn away Egyptians who wanted to
participate in services, out of concerns that allowing
Egyptians to participate would prompt intervention by
Egyptian State Security. Nazif replied that the Egyptian
constitution ensured religious freedom and said he would look
into it. Smith noted that when things like FTA legislation
come before the Senate, seemingly small issues like this one
could be brought up and impede the process. He said he did
not want that to happen to an FTA with Egypt and noted that
he would ask the same favor for any religious group. Nazif
said that he had visited Utah, which not a lot of Egyptians
had done.


11. (C) Also on the theme of religion, Smith noted that he
had met with religious leaders at Al Azhar, and was impressed
with their views, which he saw as the true face of Islam.
Nazif agreed with this assessment, but pointed out that Al
Azhar needed to work on its public relations. Smith noted
the U.S. also has more work to do in the area of public
diplomacy.


12. (U) CODEL Smith did not have an opportunity to clear this
message before departing Egypt.


Visit Embassy Cairo's Classified Website:
http://www.state.sgov.gov/p/nea/cairo

You can also access this site through the
State Department's Classified SIPRNET website.

GRAY