20111217
Reuters
(Reuters) - A top Republican lawmaker urged President Barack Obama's administration on Wednesday to pursue trade talks with Egypt to help shape the nascent democracy after a tumultuous year.

"Engagement is now more important than ever," Representative David Dreier said in a speech at the Center for Strategic and International Studies, which has issued a report recommending the two countries establish a path toward negotiation of a free trade agreement.

Dreier, a member of the House leadership who was in Egypt in September for the first round of parliamentary elections, endorsed that idea and said the United States and Egypt should start by updating "a very outdated bilateral investment treaty."

The California Republican said he believed the Muslim Brotherhood and other Islamic groups which captured about two-thirds of the vote in the first round were primarily interested in creating jobs.

"They weren't campaigning on a platform of abrogating agreements, treaties with Israel. They weren't campaigning on an anti-West platform. ... They were campaigning on one thing and one thing only, and that is they made a commitment that they would get the economy growing," Dreier said.

Setting a goal of a free trade agreement could help rival groups within Egypt agree on a common vision for their country, while promoting economic reforms that would open new opportunities for American business, he said.

At a time of tight U.S. budgets, it would also provide an alternative way of helping Egypt, which is currently the second largest recipient of U.S. aid after Israel, Dreier said.

The European Union announced on Wednesday its plan for trade talks with Egypt, Tunisia, Jordan and Morocco. The United States already has trade pacts with Jordan and Morocco, as well as Israel, Oman and Bahrain.

A U.S. trade official, speaking on the condition she not be identified, did not rule out the possibility of bilateral free trade talks with Egypt but said no decision had been made.

"We are actively pursuing initiatives and activities with countries in the Middle East and North Africa region - with particular focus on transition countries such as Egypt and Tunisia - designed to achieve the best results in terms of trade and investment growth and integration," she said.

"We are not prejudging the ultimate outcome, but it is important that we consult carefully with all stakeholders, both here and in the region, to determine which specific initiatives and activities will do the most good."

A leading U.S. business group said it was eager for the Obama administration to pursue trade talks with Egypt, the most populous country in the Arab world.

The CSIS "report is simple in its message: closer trade relations between the United States and Egypt can bring growth and jobs for both countries," said Lionel Johnson, the U.S. Chamber of Commerce's vice president for the Middle East.