AMB MEETING WITH TRADE MINISTER RACHID,

UNCLAS CAIRO 004338

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E.O. 12958: N/A
TAGS: ETRD EG EAGR FCSC
SUBJECT: AMB MEETING WITH TRADE MINISTER RACHID,
U.S.-EGYPTIAN BUSINESS COUNCIL


1. (SBU) SUMMARY. On June 28, Ambassador met with Trade
Minister Rachid and the U.S.-Egyptian Business Council.
Topics included the future of FTA, QIZs, U.S. policy toward
Egypt and the bilateral economic relationship. Ambassador
called for an active business council while Minister Rachid
praised the U.S.-Egyptian trade relationship and called for
an agenda that does not focus solely on the FTA. END SUMMARY.


2. (SBU) Ambassador met with Trade Minister Rachid and the
U.S.-Egyptian Business Council (USEBC) on June 28. The
Ambassador emphasized the importance of the U.S.-Egyptian
business relationship and the role of the newly revived
USEBC. Minister Rachid's participation in the upcoming
Strategic Dialogue will present an opportunity for both sides
to revive momentum in trade relations that slipped since the
FTA process was suspended. He noted QIZs have helped increase
Egyptian exports to the U.S. and asked the Council members to
provide specific recommendations regarding promotion of trade
and investment in both directions.


3. (SBU) Galal El-Zorba (Chairman, Federation of Egyptian
Industries and President of the Egyptian side of the USEBC)
spoke for Council members. Zorba said the FTA's "failure" was
a setback and a huge disappointment for the Egyptian business
community. He complained about political linkages in the FTA
process, and charged that many U.S. policies were unrealistic
or short-sighted. For example, he said that he could not
understand the U.S. preoccupation with Ayman Nour. He also
expressed frustration with some USG positions, such as on the
delay of municipal elections, which did not matter to the
Egyptian people.


4. (SBU) Zorba said that without an FTA to move toward, he
and his colleagues could not develop a meaningful agenda for
the Council in time for their previously planned June 28
meeting in Washington, D.C. Despite the postponement, he
added, the Council would work through the summer to develop
ideas for an agenda to present in September.


5. (SBU) Minister of Trade Rachid tempered Zorba's
complaints and urged the Council to take a more positive
approach. Rachid stressed that even short of an FTA, the
U.S.-Egyptian economic relationship is strong. There is still
a healthy trading environment. Rachid said that the Egyptian
business community should not focus solely on the FTA -- the
private sector should put forth other issues through the
senior policy attention the two governments had always
offered both private sectors through the USEBC and its
predecessor council. Responding to a question regarding
intellectual property rights (IPRs),Rachid explicitly
refused to implement what he called "TRIPS Plus" outside of a
comprehensive trade negotiation process.


6. (SBU) Agriculture Counselor Asif Chaudhry listed examples
of USG trade concerns to the Council, namely restrictions on
importing U.S. poultry and meat. Commercial Counselor Amer
Kayani highlighted non-Agriculture barriers facing U.S.
export, including violations of IPRs, pharmaceuticals and
overly burdensome regulations in Egypt. The meeting concluded
with an agreement to meet before September, and to develop a
clear proposal from the Egyptian side for a possible meeting
of the full Council in Washington, D.C.

RICCIARDONE