RACHID REVIEWS UPCOMING TRIP TO WASHINGTON

UNCLAS CAIRO 000418 SENSITIVE SIPDIS STATE FOR USTR E.O. 12958: N/A TAGS: ETRD ECON EINV PREL EG SUBJECT: RACHID REVIEWS UPCOMING TRIP TO WASHINGTON Sensitive but unclassified. Please handle accordingly. ¶1. (SBU) KEY ISSUES: -- Minister of Trade Rachid will spend March 22-25 in Washington with the goals of restarting a bilateral economic and trade dialogue and re-engaging with U.S. business. -- Rachid believes the Washington trip may be an occasion for a public roll-out of the recently agreed QIZ expansion to Beni Suef and Minya. -- The minister has asked for a range of meetings in Washington, but does not plan to go to the State Department or the NSC, apparently in deference to the recent visit of Gamal Mubarak. ¶2. (SBU) The Ambassador and Minister of Trade Rachid Rachid met March 8 to discuss his upcoming trip to the US, scheduled for March 22-24. Rachid said he understood that key economic positions in the new Administration have not yet been filled, so he will focus on restarting an economic and trade dialogue with the U.S. ¶3. (SBU) Rachid noted that another major goal for the trip is to re-engage US business. He believes business has a role to play in the improving bilateral relationship, and thinks it is important that the dialogue not be just government to government, and not be focused just on political issues. Egypt has business councils with Italy and France, for example, he said, and they play a useful role in broadening the discussion beyond Gaza and the Middle East peace process. He commented that the American Chamber of Commerce in Egypt, although a very active and influential organization, does not have many U.S. business officials on its board. Rachid noted that for example, Omar Mohanna, the current AmCham president, has no U.S. business interests at all. (In 2008, Mohanna was fined $1.87 million after being found guilty of price fixing, in a case brought by the Ministry of Trade. His company, Suez Cement, was fined an additional $1.87 million.) The minister said he has encouraged AmCham Egypt to recruit more Americans for its board, but that the need remains for another more U.S.-focused business group, such as the U.S. Egypt Business Council. ¶4. (SBU) The Ambassador also asked when the GOE might be ready to "roll out" the recent expansion of the QIZ in Egypt to the industrial zones of Beni Suef and Minya. Rachid noted the timing of the original decision was awkward, during the Israeli military operations in Gaza, but suggested he might use the occasion of his upcoming visit to make a public announcement. He also commented the announcement would be a good time to review the nature of the QIZ program in Egypt. QIZ is an important program for Egypt, he said, there may be some misperception in the US about the size of the QIZs and their potential. Rachid does not expect Egypt to turn into "another China or India," and does not expect major new investments in the next few years. He believes it might be worth reminding interested parties in the US about the relatively small size of the operations in Egypt. (According to Ministry of Trade QIZ officials, Egypt has been able to use the QIZ to maintain its textile exports to the U.S. after the end of the international textile agreement, but has not significantly expanded them.) The Ambassador noted we are still working to verify the names of the companies covered by the expansion, explaining the list we received appears to have been somewhat out of date. He promised to cooperate. ¶5. (SBU) COMMENT: Last week, at the request of the Egyptian Embassy, FCS Counselor met with the heads of economic and commercial section at the Egyptian Embassy in Washington, D.C. to discuss Rachid's visit. Egyptian officials confided that the Foreign Ministry did not want Rachid to hold any meetings at State or NSC. During the three day visit, Rachid hopes to meet with USTR Kirk, National Economic Council Chair Summers, Council of Economic Advisers Chair Romer, Congressional leaders including Rangel, McDermott, Waxman, Levin, Dodd, Baucus, Rockefeller, and Landrieu. Rachid is also scheduled to meet with private sector representatives including heads of the National Association of Manufacturers, National Retail Federation, US Chamber, and the Center for American Progress, as well as the editorial board of Washington Post. Rachid will not/not join AmCham members in their meetings in Washington. However, he plans to attend a luncheon hosted by AmCham. SCOBEY