WTO-SPECIAL: Egypt Cottons On To Its Interests

By Adam Morrow Reprint | | Print |

Adam Morrow

CAIRO, Dec 2 2005 (IPS) - Like other countries in the region, Egypt has much to sell but runs into barriers. And like others, it wants something to emerge from the trade ministers meeting in Hong Kong later this month to break those barriers – amidst doubts that this will happen.

As one of the G20 group of developing nations bargaining collectively – and strongly – for a fair deal for the developing world, Egypt is looking for markets, not just to become a market itself.

Membership of the G20 has varied since its inception at the time of the Cancun meeting of trade ministers in Mexico two years ago, but it has remained anchored by such economic heavy-hitters as China, India, Brazil and South Africa. The G20 is estimated to represent roughly 65 percent of the global population.

“Egypt is following an export-oriented strategy of growth and wants to build its market access,” Khaled Sewelam, a Cairo-based economic analyst told IPS. “If trade barriers are eased, it will provide Egypt with major opportunities.”

At the 2003 trade ministers meeting, talks broke down when developing nations insisted on greater access to the rich markets of the west. At the same time, the developing countries protested the use of massive agricultural subsidies, particularly in the European Union and the United States, which they said distort free trade in agriculture products.

“Trade barriers remain a major issue, as well as the removal of domestic support for subsidies,” Waleed El Nozahi, head of the Central Department for the WTO at the Egyptian Ministry of Foreign Trade and Industry told IPS.

For Egypt, the traditional breadbasket of the region, the issue of agricultural trade is of particular importance. “The big problem with this round has had to do with agriculture, as for the rest of the G20,” said Simon kitchen, a Middle East analyst at the New York-based political risk consultancy, the Eurasia Group.

Egypt is also concerned over domestic U.S. subsidies for its cotton growers; cotton has been a staple Egyptian export for centuries. These subsidies have kept the U.S. market inaccessible to Egyptian cotton producers and exporters.

“The particular kind of long-staple cotton grown by U.S. farmers is the primary competitor for Egyptian cotton in the U.S. market,” said Sewelam. “And other countries of the G20 have had their strategic agricultural goods frozen out of the market because of similar trade distortions and barriers.”

Egypt is looking to speak in Hong Kong for itself and also for African states. Egypt is the strongest economy among the group of north African Arab countries.

Minister for foreign trade and industry Rachid Mohamed Rachid told media earlier that Egypt hoped to play an active role in promoting the African position in WTO issues.

Agriculture is central to the concerns of other African states as well, he said. “Agriculture is crucial to development, poverty reduction and food security in Africa,” he said.

Official sources in Cairo are not optimistic about the Hong Kong meeting, but are planning to stick to strong bargaining for an outcome next year, or even 2007. “We’re looking for reciprocity,” said El Nozahi. “We’re looking for a balanced agreement that reflects the interests of all.”

Sewelam said there were also “political and bilateral economic considerations” for Egypt when negotiating alongside fellow G20 states. A Free Trade Agreement (FTA) with the United States, sought by Cairo for years, could be in jeopardy if Washington feels alienated by Egypt.

“If Cairo pushes the U.S. too hard in Hong Kong on trade issues, like what happened at Cancun, it could pay for it with the loss of an FTA,” Sewelam told IPS. “It’s all part of the equation.”

Egypt has long lobbied for a trade agreement with the United States to no avail. Other, smaller countries in the region such as Bahrain and Morocco have been rewarded by Washington with bilateral FTAs.

Within the WTO Egypt has become a paragon of compliance, Sewelam said. “Egypt has met most of its WTO commitments. Recent customs reductions have now brought us down to levels entirely in line with WTO regulations.”

Regardless of proffered western concessions, many Egyptians hold a bleak view of prospects in Hong Kong, and about the WTO itself.

“The launch of this new round will only mean the imposition of more free trade rules on the goods and services of third world countries,” Dina Heshmat, member of the Anti-Globalisation Egyptian Group (AGEG) told IPS. The group is planning a series of lectures on Egypt’s position on WTO issues and its implications for the local economy ahead of the Hong Kong summit.

“The new round will be a flop, like Cancun and Seattle,” Heshmat said. “Not just because of the anti-globalisers, but because of the domestic, economic problems associated with free trade.”