VZCZCXYZ0000
OO RUEHWEB

DE RUEHEG #1550/01 2220632
ZNY CCCCC ZZH
O 100632Z AUG 09
FM AMEMBASSY CAIRO
TO SECSTATE WASHDC IMMEDIATE 3379

C O N F I D E N T I A L CAIRO 001550 
 
SIPDIS 
 
DEPT PLEASE PASS TO USTR/CHRIS WILSON AND MARK MOWREY 
 
E.O. 12958: DECL: 08/10/2019 
TAGS: ETRD ECON ELAB EINV PGOV EG
SUBJECT: A/USTR WILSON'S MEETINGS WITH MINISTRY OF TRADE 
AND INDUSTRY 
 REF: CAIRO 1522 Classified By: ECONOMIC COUNSELOR STEPHEN P. O'DOWD FOR REASONS 1.4 (B) AND (D) 1.Key Points --(SBU)A/USTR Chris Wilson met with Ministry of Trade and Industry (MoTI) senior advisors over a two day Cairo visit and discussed in detail a USTR-drafted work plan to elaborate the U.S-Egypt strategic economic partnership on trade-related and investment issues established by USTR Kirk and Minister for Trade and Industry Rachid in May 2009. --(SBU)MoTI responded positively throughout the talks but noted its desire for more focus on near term objectives in the document as well as an explicit USG commitment for technical assistance in customs, standards, and IPR activities. --(SBU)Despite USTR interest in engaging on labor, environment, and investment issues, MoTI seeks TO limit activities under these topics to discussion only, with no prominent near-term action.downplayed these areas and sought to postpone discussion on them. --(C)MoTI indicated an interest in restarting a US-Egypt Business Council and asked A/USTR Wilson for assistance in doing so. Wilson advised taking their issue up with USDOC DAS Vineyard during her August Cairo visit. --(C)Discussions about Egypt's Qualifying Industrial Zones (QIZ) revealed disagreements over expansion of the current program. --------------------------- STRATEGIC ECONOMIC DIALOGUE ---------------------------
2.(SBU) A/USTR Wilson met August 2-3 with a MoTI negotiating team lead by Dr. Samiha Fawzy, chief assistant to Minister of Trade and Industry Rachid Mohamed Rachid, to establish the framework of the strategic economic parternship on trade and investment Rachid had established with USTR Ron Kirk in late May. A/USTR Wilson noted the last several years had witnessed a "dormant period" for US-Egypt bilateral trade discussions and looked forward to reviving them.

3.(SBU) Fawzy welcomed USTR's draft work plan and stated Minister Rachid's desire to "capitalize on a new stage of trade relations." However, she noted the draft lacked some details, explaining that MoTI wanted a concrete plan on deliverables for 2009-2010. She asserted MoTI required technical assistance and human capacity building in three key areas: trade facilitation; distribution and logistics services; and IPR enforcement.

4.(SBU) MoTI concerns about trade facilitation focused on ensuring Egyptian standards meet international regulations in the textile, garments, cosmetics, and detergents industries. Fawzy stated that MoTI seeks advice on how to carry out regulatory reforms in relation to distribution and logistics services in Egypt. Regarding IPR, MoTI required guidance on stronger IPR enforcement measures as well as instruction in improving trade mark and industrial design registration. Fawzy explained that technical assistance in these key areas would reduce trade and investment barriers for businesses in Egypt and the United States. ------------------------------- POSTPONEMENT ON KEY TRADE ISSUES -------------------------------

5.(SBU) Throughout the talks, MoTI noted its reluctance to commit to specific actions beyond discussion and information sharing in several areas contained in the U.S. draft: environment, labor, and investment. In fact, a MoTI counter draft, put together after the first day of meetings, explicitly listed these issues as areas for an "exchange of views" only. A/USTR Wilson replied that the USG will most certainly raise all of these issues in any future discussions on bilateral trade and investment; he stated the current U.S. political climate mandated a renewed focus in labor and environment. Fawzy acknowledged USTR's concerns, though it was unclear how she thought MOTI would address them in future conversations. A/USTR Wilson and Dr. Fawzy promised to work together in updating the paper over the next 6-8 weeks. ------------------------------------------- RENEWED INTERST IN US-EGYPT BUSINESS COUNCIL -------------------------------------------

6.(C) During the last part of their meetings, Fawzy passed to A/USTR Wilson a ministerial decree issued earlier that day naming the Egyptian membership to a revived U.S.-Egypt Business Council. (Reftel and note: Commerce had been in discussion with the MoTI on this issue and a draft joint statement was under review.) A/USTR Wilson advised Fawzy that DOC DAS Vineyard could discuss the issue during her upcoming visit. ---------------- QIZ DISAGREEMENTS ----------------

7.(C) A/USTR Wilson also met briefly on August 3 with the Ministry of Trade and Industry's (MoTI) Qualifying Industry Zones team. MoTI reiterated its interest in expansion of the QIZ program, especially in Upper Egypt where there is high unemployment and where MoTI seeks to encourage the Cairo business community to make larger investments. USTR restated its position ) also conveyed during a June 2009 visit - that they needed a better understanding of the companies already operating in Upper Egypt before considering expansion. A/USTR Wilson also repeated the U.S. request for positive engagement from MOTI on the U.S. proposal, first submitted in 2005, for handling requests for "Greenfield" investment in Egyptian QIZs. USTR alluded to QIZ labor problems in other countries as having prompted greater scrutiny of QIZ programs in general. MoTI officials rejected any suggestion that their QIZ programs shared any of the problems of those located elsewhere. Both USTR and MoTI agreed to further discussions about QIZs.

8.(U) USTR cleared on this cable. SCOBEY