This paper evaluates, from a US perspective, two distinct models for a US-Egypt free trade agreement (FTA). One model is the traditional GATT FTA exemplified by the US-Israel and Euro-Med agreements. The US-Israeli FTA was the first signed by the United States, and its provisions were relatively limited. The other model, as exemplified by NAFTA is a WTO-plus arrangement. If the United States signed a traditional FTA with Egypt, it would more than offset the effects of trade diversion on US exports due to the Euro-Med agreements. But it would not really deal adequately with the many barriers faced by US firms in operating in Egypt, nor would it make a major contribution to Egypt’s internal reforms and its relationship with other trading partners. By contrast, a WTO-plus FTA with the United States, which did eliminate these measures would boost US employment related to trade by an additional 10 thousand, facilitate US access to the Egyptian market, promote Egyptian growth, provide a fulcrum for regional economic growth and trade and advance America’s multi-track approach to freer trade and investment.
Author(s): Robert Z. Lawrence