Egypt and the United States are seeking ways to promote a greater reciprocal market access for agricultural and industrial goods following the latest talks of the Trade and Investment Framework Agreement (TIFA) which took place in Washington, DC in April, the Minister Counsellor for Economic Affairs at the US embassy in Cairo, James Boughner, said.
“Our two governments agreed to keep pushing for additional progress ahead of the next TIFA meeting to be held in Cairo in 2020,” Boughner noted, adding that there is a growing number of American companies considering doing business in Egypt.
Daily News Egypt interviewed Boughner to learn more about the updates of the US-Egypt business relations, including the size of trade exchange, investment, and the cooperation in development projects, the transcript for which is below, lightly edited for clarity:
What is the size of Egypt-US trade exchange in the first quarter (Q1) of 2019? And the expected trade exchange by the year-end?
The two-way trade between Egypt and the US reached $2.2bn in Q1of 2019. In particular, Egyptian exports increased from $465.6m to $692.9m, with a 39% increase in Egyptian non-petroleum exports. The products include textiles, ready-made garments, salt, sulphur, stones, iron and steel, aluminium, wood, vegetables, and fruits.
DNE reported in July 2018 that US-Egypt trade exchange reached $5.6bn in 2017, seeing a 13% increase over 2016. The textile and petroleum sectors have the lion’s share in Egyptian exports to the US.
Given the efforts that the Egyptian government has exerted to improve economic conditions with America and the strong interest from US companies in doing business in Egypt, we are optimistic that the growth will continue and even accelerate, DNE’s 2018 report added.
What are the updates of the expected trade agreement with Egypt? Any upcoming meetings to discuss the matter?
The latest TIFA talks took place in Washington, DC in April. Our two governments discussed a range of trade and investment issues and noted positively the increase in bilateral trade during 2018. We focused on seeking ways to promote greater reciprocal market access for agricultural and industrial goods. Our two governments agreed to keep pushing for additional progress ahead of the next TIFA meeting to be held in Cairo in 2020.
What about the US companies showing interest to operate in the Egyptian market? What are their target sectors?
US companies are interested in several sectors, including energy, ICT, infrastructure, defence, healthcare, agriculture, and others. They bring proven technology, knowhow, and new ways of doing business at a price that offers the best value.
How many US companies are operating in Egypt? And what are the latest estimate of their investments?
There are over 1,200 US firms operating in Egypt, ranging from large petroleum companies to small service companies. The stock of US direct investment in Egypt is over $22bn.
By November 2019, Egypt’s IMF-backed economic reform programme will be completed, how do you see the programme and its impact on the Egyptian business climate?
As the largest shareholder in the IMF, the US has strongly supported the IMF’s Extended Fund Facility (EFF) and the related Egyptian reform programme from the outset. We view Egypt’s economic reforms as a positive and necessary step to macroeconomic stability, building up the private sector, and putting the economy on a path to sustainable higher growth. We see Egypt’s attractiveness to foreign investors continuing to improve.
How do US companies look at the Egyptian market currently? What are your recommendations to attract more foreign direct investments (FDIs) to the market?
We are seeing a growing number of US companies considering doing business in Egypt. Their interest reflects a range of positive factors, including the improving economy. Egypt’s large and growing market size, its educated workforce, and, of course, the country’s strategic location, makes the country an ideal site for basing both local and regional operations. The Egyptian government is also working hard to attract FDIs through legal and regulatory reform and a general willingness to make it easier to do business here.
From your point of view, what are the main problems facing US companies and possible ways to solve them?
International investors attach a high value to the Egyptian government’s commitment to macroeconomic and structural reform, and they have responded positively to developments to date. Going forward, maintaining this commitment is important to sustain investors’ interest in Egypt’s capital markets. Foreign investors seek not only opportunities but also an environment that allows for the straightforward entry and exit of investments, a quick start-up, flexibility, and autonomy in running business operations.
What about the visits of US business delegations to Egypt in 2019?
We have no information at this time about a particular business delegation visiting Egypt, but there are, no doubt, many individual representatives of our businesses coming to the country on a regular basis and looking for trade and investment opportunities. Interestingly, the American Chamber of Commerce Egypt (AmCham Egypt) in conjunction with the US Chamber of Commerce (USCC), the US-Egypt Business Council (USEBC), and the Egypt-US Business Council (EUSBC),organised a major US Business Mission during the period from 23 to 25 October, with more than 110 business leaders representing 44 companies participating, according to past media reports in October 2018.
When do you expect the next meeting with Egyptian and Israeli officials regarding the QIZ?
The Egyptian and Israeli government participants in the QIZ agreement normally meet on a quarterly basis. The most recent meeting took place in Israel in April. The next meeting in Cairo is expected in the near future.
What about the cooperation between the USAID and Egyptian government entities? What are the main areas of cooperation? Any new plans for the next five years?
The United States Agency for International Development (USAID) has a long history of partnering with the people of Egypt to build a prosperous future. On behalf of the American people, the USAID has invested over $30bn in Egypt over the last four decades, tangibly improving the lives and livelihoods of millions of Egyptians. The USAID works in partnership with the Egyptian people to increase access to economic opportunities, improve linkages between education and the private sector, and supplement social service delivery to make Egypt more prosperous for all. Current economic growth projects focus on agriculture, entrepreneurship, tourism, and water.