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US pushes for more economic reform in Mideast

This week the US and Egypt plan to sign a trade agreement worth $500 million annually.

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"Let us face it,'' says Saudi Arabia's foreign Minister Prince Saud Faisal. "We perceive no clash of civilizations... The real bone of contention is the longest conflict in modern history." The prince's comments were made in a session that was supposed to be closed to the media, but a snafu led to the session being broadcast to reporters in the media center.

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But despite Secretary Powell's comments - he said Saturday at the closing news conference that "reform has to go on'' - there were also signs that the US has backed away from democracy initiatives. Most of the agreements at the forum, which involved Arab nations and the G-8, were economic, with a $60 million fund announced to help start new businesses in Arab countries, an effort to strengthen regional capital markets, and another effort to make small loans available in the Middle East.

The details of Egypt's QIZ's are still being worked out, particularly how many factories will be involved in the agreement. But US officials are already calling it a key victory on two policy fronts for the US - securing Israel and increasing regional economic cooperation.

"It is a concrete, practical result of President Bush's plan to promote closer US trade ties with the Middle East so as to strengthen development, openness, and peaceful economic links between Israel and its neighbors,'' Trade Representative Zoellick said in a statement.

The economic advantages to Egypt of the new agreement are clear. Jordan, the only other country to have a QIZ agreement with the US and Israel, saw its exports to the US soar after signing its deal from $31 million in 1999 to $670 million last year.

The deal also comes less than a month before Egypt's key cotton and textile industry, with export revenue of about $1.2 billion a year, was expected to take a hit from the Jan. 1 end of a quota system on European and US textile imports that has guaranteed the industry access to those markets.

"The Egyptians are being rewarded for their closer ties with the Israelis,'' says Josh Stacher, a doctoral candidate at the University of St. Andrews in Scotland who is writing his dissertation on modern Egyptian politics. "This is an enticement to keep Egypt on the path toward strengthening US strategic objectives in the region and in the war on terror. There are massive human rights violations going on in Egypt right now, and the Americans are essentially silent about it."

Mr. Stacher says that the shift in US rhetoric closely matches that of an emerging crop of Egyptian officials with ties to President Mubarak's son Gamal. These officials, who include Foreign Trade and Industry Minister Rashid Mohammed Rashid, say that economic changes should be prioritized over political change.

"They don't want a functioning market democracy, they want a functioning market," says Stacher. "The US has returned to the more classical foreign policy posture. The Americans seem willing to forgo human rights concerns as long as there's movement on economic reform."

Despite concerns that "when it comes to security issues, US pressure on human rights seems to go out the window,'' Mr. Stork of Human Rights Watch says that changes in Egypt and other countries can't be ignored.

The fact that he was able to travel to Al-Arish to report on human rights problems there - similar trips were blocked in the 1990s - is a sign that Egyptians have generally been freer to speak out in recent years as the Bush administration has increased demands for democratic change.

"There are more people sticking their heads up now to complain and not having them chopped off,'' says Mr. Stork. "That's progress."

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