Egypt and US to strike a trade deal


The US announced today that it would work to establish a comprehensive plan to boost trade with Egypt, as the country moves through a difficult political and economic transition, according to Reuters

The announcement came as Egyptians marked the one-year anniversary of the revolution that saw President Hosni Mubarak ousted from power last year. 

More from GlobalPost: Egypt: Protests erupt on anniversary of revolution (LIVE BLOG)

"In the wake of the extraordinary changes underway … we want to help Egypt empower individuals to make their own economic, as well as political choices," US Trade Representative Ron Kirk said in a statement.

Egyptian Minister of Industry and Foreign Trade Mahmoud Eisa was in Washington last week, where he also met with Kirk. 

The two governments plan to finalize the trade agreement in the next few weeks, Reuters reported. The plan has three main goals: boosting exports, expanding investments, and supporting small- and medium-sized businesses, with a central focus on creating jobs.

The US Chamber of Commerce has also asked the United States and Egypt to consider talks about a free trade agreement, which would encourage American companies to increase investment in Egypt's fragile democracy.

"Today's announcement is a good first step but trade officials should now think boldly and look longer-term at seriously pursuing free trade negotiations with Egypt," Lionel Johnson, vice president of Middle East and North Africa affairs at the US Chamber, said, according to Reuters. 

Egypt is currently struggling to secure a $3.2 billion International Monetary Fund (IMF) aid package that economists say is crucial to averting a sweeping economic crisis, Egypt Independent reported.

The past year of turmoil has increased unemployment and and drained Egypt's foreign reserves, and many economists have predicted that a currency devaluation is imminent, according to the Independent.  

Egypt is walking on eggshells as it looks towards working more closely with the US.

As the Atlantic wrote in it's analysis of what's next for Egypt: 

Observers expect the Muslim Brotherhood, which is likely to form a coalition government with the small centrist-secular parties, […] to focus in the coming months and years on sorting out Egypt's internal problems — consolidating its hold on power, battling the flight of foreign investors, reducing unemployment, shoring up crumbling infrastructure and reviving foreign tourism. Thus, it probably will forego its traditional foreign-policy agenda of breaking with the West and annulling the 1979 peace treaty with Israel. The Egyptian economy can ill afford the loss of the annual American foreign-aid subsidy of $1.5 billion.

Cairo has received offers of financial support and other aid totaling over $10 billion from Qatar, Saudi Arabia, the United Arab Emirates and other countries. However, actual aid flows have been slow to arrive, the Independent reported.

In 2011, the US's trade in goods with Egypt was over $3 billion, according to US Census Bureau statistics.

More from GlobalPost: Egypt's tourism revenues drop 30 percent in 2011, a year of tumult

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