EGYPT. Bilateral trade between the US and Egypt is on the rise, with first quarter results surging 19%, said US Ambassador to Egypt Margaret Scobey this week.
Scobey did not confirm her country’s stance on signing a free trade agreement with Egypt.
“In 2007, bilateral trade between Egypt and the United States was more than US$7.7 billion, a 75% increase in just three years. So far in 2008, growth has continued. First quarter figures from 2008 show an increase of an almost 19% in bilateral trade from the same period last year,” she said.
Recent data shows that US exports to Egypt have grown 74%, while Egyptian exports to the US soared 85%. “The United States remains Egypt’s largest trading partner, buying 33% of everything Egypt exports to the world,” she added.
US exports to Egypt - which soared to almost US$5 billion in 2007, up from US$4.1 billion in 2006 - are mainly agricultural products (19%), transportation equipment (21%), IT and electronic products (10%), chemicals (6%) and fabricated metal products (5%).
On the other hand, top Egyptian exports, totaling more than US$2.5 billion in 2007, are textiles (34%), oil and gas (42%), as well as iron and steel (14%).
In 2007, Scobey said, Egypt was the 62nd largest exporter to the US out of 233 countries. In the last ten years, Egypt’s exports to the US soared 262% while Egyptian textile exports increased a hefty 400%.
“We aren’t just trading, but we are also investing. Since 2002, private US direct investment in Egypt has nearly doubled to US$6 billion a year,” she said.
Based on embassy records, the US tops the list of countries investing in Egypt. It is the largest petroleum and second largest non-petroleum foreign direct investor in the country.
One of the latest American investment projects in the country is the US-based Ripplewood Holdings, which acquired an 18.7% stake in Commercial International Bank and Citigroup Venture Capital and invested US$459 million in Amoun Pharmaceuticals.
Meanwhile, Ambassador Scobey could not reveal whether the US would sign a free trade agreement with Egypt, a move investors and officials have been pushing for.
“I cannot predict what the next US president will do, but over the past years, both democrats and republicans have recognized the value of free trade,” she said. “Free trade brings in great advantages to US citizens and citizens of partner countries, so my [guess is] it will be signed with Egypt.
“Regionally, we anticipate the pursuit of free trade will be a hallmark of US policy because it is the right course to pursue,” she added. “We are firmly on the path from aid to trade.”
Scobey commended Egypt on its pursuit for economic reforms and growth, however, she stressed the need to ensure that benefits of trade and economic expansion spread more broadly so that “all members of society have a stake in these reforms.”
“This is not an abstract ideal, but a practical necessity. Despite the strong economic performance of recent years, the World Bank estimates that 17% of the Egyptian population - mainly in Upper Egypt and rural areas - live on less than a dollar a day.
“The soaring inflation of recent months makes their plight all the more difficult, while persistent unemployment erodes their hope for better days,” Scobey explained. “This is the crossroad.”