Total two-way trade between the United States and Egypt was $8.8bn in 2019 and $7bn in 2020, according to Jonathan S. Fischer, the US Embassy Minister Counsellor for Economic Affairs.
“I expect the trade volume to increase this year as we both emerge from the pandemic. Egypt is our top export market in Africa and our fourth largest in the Middle East,” he said.
Fischer added that the United States is Egypt’s second-largest trading partner, mentioning that Egypt’s main exports to the United States include mineral fuels and textiles and apparel. He added that US exports to Egypt include aircraft, agricultural goods, mineral fuels, and machinery.
He mentioned that Egypt and the United States governments hope to hold a round of trade and investment talks by autumn.
Daily News Egypt interviewed Fischer on the occasion of the US Independence Day, to shed light on the economic cooperation between Egypt and the US.
The interview touched on all aspects of the Egypt-US economic cooperation, including trade exchange.
Fischer offered recommendations to attract more foreign direct investments (FDIs) to Egypt, and maximise the QIZ agreement He also revealed plans of dispatching US business delegations to Egypt in 2021 and 2022.
He also talked about the US embassy’s previous and current support for Egyptian entrepreneurs in 2020 and 2021.
What do you think of Egypt’s economic performance in the recent period?
Egypt’s economic growth in 2020, despite the novel coronavirus (COVID-19) pandemic, is highly encouraging, and it illustrates the importance of the difficult macroeconomic reforms Egypt undertook from 2016 to 2019. We agree with the IMF that Egypt’s timely and prudent fiscal and monetary action in response to the COVID-19 crisis safeguarded economic stability, debt sustainability, and investor confidence. We expect strong economic growth in the next fiscal year.
How do you assess Egypt-US relations, particularly in the business sector?
The US-Egypt strategic partnership is vital to both nations and spans over decades. Egypt is our largest export market in Africa, and the United States is Egypt’s second largest trade partner. We are also one of its largest contributors of foreign direct investment. US companies are extremely active in the Egyptian market, and we have outstanding business associations on both sides of the Atlantic working with us to facilitate commercial relationships. We are working with Egypt to continue expanding our economic ties, to promote economic growth and job creation, and to advance our commercial and environmental goals.
Are there any planned visits of US business delegations (either from American companies or the government) to Egypt in 2021?
Assuming the COVID-19 situation allows, we are working to bring major US defence companies and senior US government officials to participate in the Egyptian Defence Expo (EDEX), which will be held on 29 November – 3 December 2021. We are also planning for a major US infrastructure trade delegation to visit Egypt and other countries in the region in the spring of 2022. In addition, we are actively working with the American Chamber (AmCham) in Egypt and others to facilitate the participation of Egyptian companies in trade shows in the United States in energy, information and communication technology, healthcare, and other sectors. These exchanges are vital to help strengthen and deepen our trade relations.
How much is the value of US investment in Egypt?
US firms invested $1.5bn in Egypt in 2020, making the United States the fifth-largest source of FDI in Egypt last year. We were Egypt’s third-largest source of FDI in 2019. A lot of our investment is in the oil and gas sector, but US firms are increasing investment in real estate, telecommunications, manufacturing, and financial services. More than 1,400 Egyptian companies outside the oil and gas sector are backed by American FDI, supporting tens of thousands of jobs.
What are the target sectors for US companies showing interest to operate in the Egyptian market?
US firms are very interested in the large and growing Egyptian market and Egypt as a strategic location from which to export to Africa, Europe, and the Middle East. Our companies are looking at a variety of sectors, including energy, transportation, manufacturing, communications and information technology, and financial services.
From your point of view, what are the main problems that US companies face in Egypt?
US companies want to make sure their intellectual property is protected in the Egyptian market. We appreciate the Egyptian government’s focus on this important area and its efforts to increase protections, but we would like to see further improvement. American firms would like to see less bureaucratic red tape and faster processing of goods through customs. We also want to ensure a level playing field for the private sector when it comes to competing against government-backed firms.
How many US companies do operate in Egypt? How many direct jobs do they provide?
Almost 1,700 American companies operate in Egypt in various economic sectors, including oil and renewable energy, telecommunications and information technology, and agriculture. In addition, our legacy Commodity Import Program brought $5.9bn in US commodities to construct, expand, and modernise Egyptian infrastructure (like roads and electrical systems) and thousands of businesses, creating nearly 600,000 jobs. This investment created the $300m Egyptian-American Enterprise Fund, supporting thousands more Egyptian small businesses, generating thousands of jobs, and attracting $400m in foreign direct investment. Likewise, we supported the Alexandria Business Association to establish one of the first and most successful microfinance institutions in Egypt, which has provided five small business loans worth over $1bn since 1990.
From your point of view, how could Egypt maximise the QIZ agreement?
Egypt can further benefit from the QIZ agreement by diversifying away from textiles and toward value-added, high technology goods.
What about the US embassy’s current and future support for Egyptian entrepreneurs in 2020 and 2021?
The United States has a long history of supporting Egyptian entrepreneurs. The US Embassy in Cairo supports hundreds of local entrepreneurs annually at every level, starting with training youth in the soft skills essential to entrepreneurship. We send up-and-coming, early-stage entrepreneurs on many professional development programmes, including a spring 2021 series of skill-building workshops for women start-up founders. The US government played a key role in transforming the entire entrepreneurship ecosystem in Egypt through its assistance programmes, establishing some of the country’s first business incubators and attracting private and public sector partners to supplement the initial US investment. In total, the US has helped more than 10,000 Egyptians strengthen their businesses through mentorship programs, incubators, and accelerators.
In 2020 and 2021, the Embassy is focused on supporting Egyptian entrepreneurs and micro, small, and medium-sized enterprises (MSMEs) as these businesses respond to the impacts of the COVID-19 crisis. In June, we helped several Egyptian startups to participate in the 2021 SelectUSA Virtual Investment Summit Tech Program, meet with US mentors and investors, and learn from the US startup ecosystem. The Embassy also partnered with INJAZ Egypt to support Egyptian entrepreneurs to participate in the “Meet Silicon Valley Entrepreneur Exchange Program,” which brings entrepreneurs from around the world for a two-week program in Silicon Valley.
The US-funded Egyptian-American Enterprise Fund is providing a $10m loan to Fawry Microfinance over a three-year period to lend money to Egyptian MSMEs whose operations have been impacted as a result of the COVID-19 pandemic. The microfinance lending targets supermarkets, telecom stores, kiosks, and other small businesses. This means more businesses, more jobs, and more stability coming out of the pandemic. Over 2,000 businesses have already benefited. Other US-funded activities are focused on further developing the entrepreneurship ecosystem by establishing more incubators and accelerators to spur innovation and digital transformation in specific sectors. One of these sectors will be renewable energy to mitigate the impact of climate change.