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JAN 28, 2020

Remarks by Ambassador Cohen to the American Chamber of Commerce

Ahmed Fathy الثلاثاء 28 يناير 2020 الساعة 11:16 مساءً

Opportunities for Commercial Engagement.”

(AS PREPARED)
 
 
Good afternoon AmCham Members and thank you, Sherif, for that warm introduction. Thanks also to Sylvia and the whole AmCham team for the hard work that goes into putting these events together, and to the Board and Members of AmCham for sustaining the vibrant partnership with the U.S. Embassy.
 
As you’ve just heard, my entire career has been about forging U.S. partnerships with countries and regions to expand mutually beneficial opportunities, including with and for U.S. business.  I previously worked on economic and commercial files in a number of Mediterranean countries, including Greece, Cyprus, Israel, and Turkey, and gained in-depth understandings of how to realize opportunities and overcome challenges to boost trade, investment, and development.  
 
During my time in Iraq, I worked with GE, Hill International, Cargill, and others and advocated for their projects with the government in Baghdad.  As DCM in Cyprus, my team and I worked hard to grow the footprint of U.S. franchises and were in close contact with Houston-based Noble Energy as they conducted offshore seismic exploration and found gas. It’s great to come full circle ten years later and now see Noble playing a pivotal role in the development of Egypt’s energy sector.  And in both Cyprus and Greece, I worked with Exxon and am delighted to report the signing just yesterday of a new contract to explore offshore here in Egypt.
 
All of that is to say that I’ve long been a big proponent of diplomatic commercial engagement and advocacy for U.S. companies.
 
As you all know, Egypt is a dynamic country with a complex economy and unique regional challenges.  And I’ve been working hard over the past few months to understand the specific challenges our U.S. companies face here. And I’m still learning.  But with your help I hope to be an expert advocate for your interests – because the success of U.S. businesses in Egypt is in America’s best interests.  It’s good for the U.S. economy and it’s good for U.S.-Egypt relations.
 
As the U.S. Ambassador, I am responsible for the U.S.-Egypt relationship in all its aspects.  Political, military, economic, trade, cultural, educational – it all comes across my desk.  I could talk today about each of these elements, but if I did, this lunch would stretch to dinner and beyond!
 
So today, I want to focus on what I believe you all – as AmCham Members – are most interested in hearing from me – what we see as the opportunities for expanding and deepening our commercial engagement in Egypt.
 
The first and most important point is that I am, and will be, your advocate in Egypt.  I will be working tirelessly to create and expand business opportunities between the United States and Egypt, and working with the Egyptian government to build an environment that attracts U.S. investment and in which a strong private sector can generate jobs and deliver the economic growth that Egypt needs.  U.S. government support for your work is more important than ever, given, among other things, the support your competitors get from their governments.  From the U.S. side, we will be pressing harder for you than ever before, you can count on it.
 
Second, the American brand is not just about U.S. foreign policy and what we do at the Embassy or in Washington.  It is about what you all do as well.  The quality products and services you bring to the market here.  The jobs you create.  The innovation and entrepreneurship you inculcate.  The knowledge and technology you transfer.  The corporate social responsibility projects you undertake. The improvements to Egypt’s healthcare, transportation, education, agriculture, and infrastructure that come with your investments here.  American business ingenuity and partnership is part and parcel of the overall American brand.  We’re in this together, and your success is our success.
 
Third, we have a great base to build on for more commercial engagement in the years ahead.  And the trend lines are already very promising.  Let’s quickly look at some numbers:
 
Egypt is the fourth-largest export market for U.S. goods and services in the Middle East, and the largest market for U.S. goods and services exports on the African continent. From 2017 through this past November, total U.S.-Egyptian bilateral trade grew by over 44 percent to $8.2 billion. U.S. goods exports to Egypt were $5.2 billion, up 30 percent over the past two years. Corresponding U.S. imports from Egypt were $3 billion, up 76 percent in two years. U.S. food and agricultural exports to Egypt grew 145 percent from 2017 to 2018. Equally important, Egyptian agricultural exports to the U.S. reached a record-high two-years in row, in 2018 and 2019. These figures only tell part of the story though.  
 
When we think about commercial engagement, we should also consider the people-to-people relationships that will lay the foundation for long-term commercial partnerships. Last year, we issued over 46,000 visas to Egyptians to visit the United States.  That includes 1,000 student visas, and 2,000 exchange visitor visas.  These students and exchange visitors are building the relationships today that will form the bedrock of our partnership for years to come.  And in the same way, the thousands of Americans who are visiting Egypt every year – many for tourism but also for business – are returning to America with a [clearer] picture of the opportunities available here.
 
The U.S. government provides robust support for Egypt, both bilaterally and through multilateral institutions, having invested over $80 billion in Egypt in the 40 years of our strategic partnership.  
 
The U.S. Agency for International Development, has just celebrated its 40th year in Egypt – 40 years of partnering with the Egyptian people to improve economic growth and trade, healthcare, education, vocational training, water, sanitation, historical site preservation, and so much more.  
 
Our military and security assistance to Egypt also remains a lasting testament to Egypt’s historic peace treaty with Israel 41 years ago and totals over $50 billion over that time span.
 
So, with this strong foundation, on both private business and governmental sides, there really isn’t a sector in Egypt where we don’t see opportunities for U.S. companies to be more engaged, to make more investments, and to cultivate new business opportunities. Let’s consider some of the key sectors:
 
Energy is one of the most promising, not just in Egypt, but across the Eastern Mediterranean region.  The recent announcement by Egypt and Israel of gas deliveries via the East Mediterranean Gas pipeline is historic – congratulations to Noble Energy for their part in this success story.  ExxonMobil and Chevron are entering Egypt’s dynamic upstream market.  And Apache Corporation, remains one of the largest investors in the country.  Egypt also offers exciting opportunities for U.S. companies in its growing renewables sector.
 
In transport, it’s easy to understand why Uber chose Egypt as the first country in the world in which to launch its new bus service – given this market of 100 million people needing to get somewhere every day.  And General Electric and Caterpillar’s Progress Rail are helping Egypt upgrade its rail system with new locomotives.
 
Related to transport of course is aviation.  As we see EgyptAir expand its routes in Egypt, across the region and internationally, including its new nonstop services to Washington DC, we see opportunities for Boeing and other U.S. companies to provide outstanding products and services.  It was great to see EgyptAir adding new Boeing Dreamliners to its fleet last year (I recently had the privilege of flying on one – it was spectacular), and we’re looking forward to a deepening of this partnership in the years to come.
 
U.S. support for Egypt’s defense and security needs is another key pillar of the strategic partnership, and we are working with Egypt to ensure it has a 21st century military capability. We recognize, of course, that Egypt’s security needs go beyond what our foreign military financing can provide.  So, we are working hard to make sure that U.S. companies understand Egypt’s needs and are ready to supply the highest quality products for the best price.  Egypt should be buying U.S. military goods. We firmly believe in and will always advocate for these products and services because they are the world’s best.  The United States currently has over 500 military equipment transfer, repair, and training cases ongoing with Egypt. These cases range from aircraft to armored vehicles to medical assistance to maritime security vessels, with a total value of over $20 billion.   Last year at Egypt’s first ever International Defense Expo, the U.S. had the largest number of exhibitors from any country, with 43 companies participating. We are planning for an even stronger turnout at the next Expo.
 
In infrastructure, the commercial opportunities are as vast and growing as Egypt’s overall economy.  With 14 smart cities being developed across Egypt, including the New Administrative Capital, these state-of-the-art developments are generating opportunities in power plant construction and operation, transport systems, water and wastewater plants, engineering and design, and major broadband installations.
 
Speaking of broadband, information and communications technology, ICT, is another very promising area in this country bursting with entrepreneurial spirit.   The most recent ICT show attracted over 20 major U.S. vendors, who see great opportunities in helping Egypt build out a 21st century communications infrastructure.  In the past two years, IBM, Microsoft, Uber, Cisco, and Honeywell have all expanded their footprint in Egypt.  And Google has returned to Egypt based on positive growth prospects in the market.
 
In healthcare, a growing population and a health sector modernization plan present both challenges and opportunities to the government and the private sector.  U.S. pharmaceutical companies and medical equipment providers have long played an important role here partnering with the Egyptian government to keep Egyptian citizens healthy.  It was a U.S.-Egypt joint venture that mobilized the public and private sector and with the support of the World Bank tested 70 million Egyptians in seven years to wipe out Hepatitis C in Egypt. And we see opportunities for U.S. companies in Egypt’s plans to digitize medical records and upgrade its national health insurance plan.
 
Textiles continue to present important commercial opportunities for Egyptian companies to export to the U.S., which translates into opportunities for U.S. importers and clothing manufacturers.  The Qualified Industrial Zone, which allows for duty-free imports to the U.S. of Egyptian products with 10.5% Israeli input, continues to expand Egypt’s textile exports to the U.S, now worth nearly a billion dollars each year and supporting tens of thousands of jobs in both of our countries.  I want to underscore that the QIZ is NOT limited to textiles and that we very much want to encourage Egyptian companies to look for other opportunities to expand the use of this facility to other products.
 
I also want to mention our Generalized System of Preferences program, GSP, through which Egyptian companies that manufacture any one of over 3,500 different products can export them duty-free to buyers and customers in the United States.  Egyptian companies currently only export $90 million to the United States under this program, so there is significant room to expand – and we want to help you do so.
 
And of course, we can’t overlook agriculture, which accounted for nearly 60 percent of U.S.-Egypt bilateral trade last year.  From Cargill and ADM’s joint venture soybean crushing facility to Pepsi’s investment in potato production here in Egypt, U.S. companies are well-aware of the many opportunities across Egypt’s agricultural sector, including food and beverages, feedstock, and so much more.  Many U.S. agribusiness associations are already active in Egypt and work closely with local firms on best practices.
 
Turning to entrepreneurship, the spirit of innovation is alive and well across Egypt’s economy.  From the Egyptian restaurant Zooba, which recently opened a location in New York City, to the Elves concierge app which has also expanded into the U.S., Egypt has many startups on their way to becoming household names in the region and beyond. The Egyptian government, Central Bank, private sector, and multilateral institutions have all joined forces to increase the momentum of Egypt’s vibrant entrepreneurial sector. Over the past three years, the United States connected over 10,000 young entrepreneurs to financing and business development and mentoring services. We helped to establish 14 business incubators and 14 business development centers that have already helped over 800 small companies improve their business models and management skills. USAID is working with universities and technical high schools to promote entrepreneurship programs that will help the next generation of entrepreneurs enter the market.
 
The tourism sector also presents excellent opportunities.  With tourism numbers rising back up to pre-2011 levels, including an increasing number of Americans, and with more tourists from around the world seeking a deeper, more meaningful experience in their visits to Egypt, there are new opportunities in hotel construction and transportation, among other things. This is a sector at the Embassy we plan to explore further in the months ahead.
 
Finally, space, outer space, the final frontier (for you Star Trek fans).  Upon my arrival, I learned about an opportunity with Nilesat to launch their newest satellite into space. My team and I made a strong case for an American company, and were delighted to learn last week that Nilesat had chosen California’s SpaceX to launch their satellite.  We expect to see a lot more U.S. interest in Egypt as new space-related opportunities arise.
 
To help translate prospects across these sectors into real investments, I am listening closely to what U.S. companies tell us about what is needed to increase engagement in Egypt.
 
You tell us you want to see more reliable infrastructure and a faster, more efficient customs and trade facilitation system.  Egypt will need both to realize its potential as a regional trade and investment hub.   As Egypt builds or upgrades its airports, roads, railways, and seaports, U.S. companies are participating with superb products and services, with financing facilitated by the Development Finance Corporation and the EXIM Bank, feasibility studies backed by the U.S. Trade and Development Agency, and advocacy from senior U.S. government officials. And on customs, we believe we are close to signing a Mutual Assistance Agreement, culminating years of effort.  This will provide technical assistance, expertise, and possibly even funding to enhance customs clearance procedures.  Additionally, USAID and the U.S. Commerce Department’s Commercial Law and Development Program are working with Egypt to train customs officers on international agreements dealing with customs valuations. 
 
Investors are looking for clearer, more efficient regulatory structures, a streamlined and customer focused bureaucracy, and stronger protection for intellectual property.  So we are working with the Egyptian National Competitiveness Council to reduce regulatory red tape and with chambers of commerce, streamlining business regulations and facilitate business licensing through one stop shops, with a particular focus on industrial licensing.   On intellectual property, the Embassy is supporting the Egyptian Government’s efforts to improve its IPR protection, including through training of judges and border officials.
 
Businesses also tell us that they seek, and are willing to partner to develop, a more educated workforce with the technical skills needed to establish 21st century factories and production lines.  Through expanding career center programs, we are connecting public universities with business leaders in order to improve the readiness of graduates to fill existing jobs. And since 2015, the U.S.-Egypt Higher Education Initiative has provided scholarships to hundreds of talented women and men from communities throughout Egypt to study at premier Egyptian and American universities in fields crucial for sustained economic growth and development.
 
And business leaders also tell us that they are looking for a more open society that encourages innovation and entrepreneurship across all sectors.  We have established incubators in universities across Egypt to train young Egyptians and build their entrepreneurial skills in order to launch their business ideas.  And our American Cultural Center at the U.S. Embassy is full every day with hundreds of young Egyptians receiving training and certification on the latest technologies, including virtual reality design, 3D printing, and more.
 
Besides these specific efforts, we have many other tools at our disposal to help you, and a great team at the Embassy standing by to do so.
 
Select USA is a U.S. government-wide program led by the Department of Commerce that has facilitated more than $64 billion in investment.  Last year, for the first time, we had an official Egyptian delegation travel to the annual Select USA Investment Summit in Washington, DC to look for opportunities for Egyptian companies to increase their investments in the U.S.  While many in this room are focused on increasing U.S. investment here in Egypt, we don’t want to overlook the other important side of this two-way equation, nor the opportunities to network, meet the competition, or explore joint venture possibilities.  I plan to accompany the next delegation to Washington for this year’s Summit, June 1st to 4th, so save the dates.  I hope to see many of you there.
 
Our toolkit also includes the Egyptian-American Enterprise Fund.  This U.S. government-funded private entity aims to stimulate growth in the Egyptian private sector by providing small- and medium-sized enterprises access to investment capital and loans, modern technologies, and best business practices. The $300 million fund targets investments that will contribute to long-term sustainable economic development, and has so far made around $185 million in investments in a number of promising Egyptian companies.
 
Through our Foreign Commercial Service, we can also help with trade development, business counseling, and commercial advocacy. We have a number of large, promising projects and procurements for which we’re currently advocating, and we hope to have some exciting announcements in the near future.  Overall, we’re upping our game on commercial advocacy, including through USTDA, the DFC, and the EXIM Bank.  
 
Every day, our Commercial, Economic, and Agricultural teams are advocating with the Government of Egypt to remove or reduce specific barriers and improve the overall business environment.  
 
I want to circle back to where we started.  We are truly in this together. I am personally committed to nourishing and strengthening the Embassy-AmCham partnership, and Embassy support for U.S. business in Egypt – though in a sense that is the same thing.  After two and a half years without a U.S. Ambassador in Egypt, I’m here and I want to make sure we don’t miss any opportunities that my presence can leverage.
 
I would love to get out and see your offices, plants, and projects. America means business here in Egypt. Again, thank you Sherif, Sylvia and your team, the AmCham Board, and all of you for the warm welcome today.  We’ve got a lot of great, important work to do together.  I look forward to helping you succeed and thank you for your support and friendship.


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