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Cablegate: Egypt: Next Steps On a Bilateral Investment Treaty

VZCZCXYZ0019
RR RUEHWEB

DE RUEHEG #3367 3331556
ZNR UUUUU ZZH
R 291556Z NOV 07
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 7587
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 0360

UNCLAS CAIRO 003367

SIPDIS

SIPDIS
SENSITIVE

STATE FOR NEA/ELA, NEA/RA, AND EEB/IFD/OIA
USAID FOR ANE/MEA MCCLOUD AND RILEY
TREASURY FOR MATHIASON AND HIRSON
COMMERCE FOR 4520/ITA/ANESA/OBERG

E.O. 12958: N/A
TAGS: PGOV ECON EAID EINV EG
SUBJECT: EGYPT: NEXT STEPS ON A BILATERAL INVESTMENT TREATY

Sensitive but Unclassified. Please protect accordingly.

1. (SBU) Visiting EEB PDAS Elizabeth Dibble met with Minister of
Investment Mohieldin to discuss next steps on updating the
U.S.-Egypt Bilateral Investment Treaty (BIT). Mohieldin was
positive about the U.S. white paper and said his staff would have a
reply soon. He does not foresee problems with any articles of the
model BIT, but considers the agreement very "technical," requiring
considerable effort and resources from the Egyptian side to
negotiate and implement. Mohieldin now believes updating the BIT
will take at least 24 months, and will only be ready to introduce to
the People's Assembly at its November 2009 session.

2. (SBU) Mohieldin said he still hopes to open discussion on a
U.S.-Egypt FTA, and asked if BIT negotiations should be delayed in
anticipation of FTA negotiations in the next few years. He was
concerned that formally announcing BIT negotiations would signal
that the FTA was "dead," and was being replaced by a BIT. That is a
message Mohieldin did not want to send to the government or the
business community. Furthermore, he thought the BIT should be
negotiated in the context of an FTA, where there may be
"trade-offs." Dibble noted that the focus now is on getting the
four completed FTAs through Congress. Without Trade Promotion
Authority, it would be very difficult to envision opening talks on
new FTAs. A BIT, on the other hand, should be relatively easy to
pass through Congress. Opening BIT negotiations would not signal
that the FTA is dead, but rather that the U.S. and Egypt are moving
from a donor-recipient relationship to an economic partnership.

3. (SBU) Mohieldin agreed that his staff could meet with U.S.
representatives on the margins of the OECD Investment Committee
meeting in Paris December 12-13 for exploratory talks on updating
the BIT. Zaid Bahie el Din, former head of the General Authority
for Investment and Free Zones, will lead the Egyptian delegation to
the OECD Investment Conference in Paris December 12-13, and will be
accompanied by Egypt's main BIT technical negotiators, Maha
Serageldin and Mohamed Abdel Gawad. Mohieldin noted that the
ministries of Investment and Justice would need technical
cooperation and capacity building in order to implement some
obligations of the model BIT, including enforcement of property
rights. Dibble agreed that this would be discussed in the context
of the talks.
RICCIARDONE

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