- The Washington Times - Monday, January 17, 2005

Egyptian free trade

Egyptian Ambassador Nabil Fahmy is eager for his government to reach a free-trade agreement with the United States, but he knows that Egypt first must make significant economic reforms.

Mr. Fahmy told a recent forum on Middle East trade that Prime Minister Ahmed Nazief has been promoting private investment over government jobs and cutting taxes, tariffs and customs duties since President Hosni Mubarak appointed him in July.

“This government that came in six months ago very openly came out and said, ‘We have no government jobs. Our objective is to create investment, to empower the private sector. To do that, the money has to go back to the people who produce it,’” the ambassador said.

“While I’m not here to make an announcement, I can tell you very openly we will be very interested in listening very carefully to our American counterparts this year on seeing how far we can go on this and when it can get started.”

Mr. Fahmy said the government expects a $3 billion budget deficit this year but hopes the lower taxes will spur growth in the future. He said the Egyptian economy needs to grow by 7 percent to 8 percent a year to achieve “our own developmental requirements.”

“One of the main reasons why we are interested in [a free-trade agreement] is frankly to generate and energize our own reform process back home,” he said.

The Bush administration is promoting bilateral free-trade pacts to create a broader Middle East free-trade area by 2013.

Rep. Phil English, Pennsylvania Republican who sponsored the free-trade agreement with Morocco, told the forum that Egypt needs reforms in its banking and industrial sectors. It also needs to reduce taxes on imports, improve workers’ rights and eliminate child labor, he said.

“These are areas where Congress pays particularly close attention and where reforms will be necessary to advance future trade agreements,” said Mr. English, a member of the House Ways and Means and Joint Economic committees.

He said the reforms adopted so far indicate a “clear commitment to move in the right direction.”

EU regulation

The proposed constitution of the European Union is a blueprint for more government regulation and less national sovereignty, according to a conservative Washington think tank that promotes free markets and low government spending.

The American Legislative Exchange Council (ALEC) is supporting members of the European Parliament who oppose the draft constitution, which must be approved by the 25 EU member states before it is adopted.

“The draft EU constitution will centralize power and erode the national sovereignty of its member states,” said Sally McNamara, the council’s EU project director.

“This undermines the historic and strategic alliances between these nations and America and fundamentally extends European governance.”

She called the proposed constitution a “major distraction at a time when Europe should be concentrating on fundamental economic reform and completing a free trans-Atlantic market.”

Unemployment averaged 8.9 percent last year in the EU countries, from a low of 4.3 percent in Ireland to a high of 18.4 percent in Poland. The jobless rate among adults younger than 25 was a staggering 18 percent. Inflation averaged 2.2 percent.

ALEC endorsed a position taken by Roger Helmer, a conservative British member of the European Parliament who is leading a small group of European lawmakers trying to defeat the draft constitution.

“This is the constitution that sets the cap-stone on the construction of a country called Europe, in which individual member states such as Britain will be no more than offshore provinces,” he said in Brussels last week.

Call Embassy Row at 202/636-3297, fax 202/832-7278 or e-mail jmorrison @washingtontimes.com.

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