Egypt's Political Crossroads

Mounir Ibrahim, February 27, 2006

Students who support Egypt's Muslim Brotherhood group try to force one of the gates of the University of Cairo open during a demonstration earlier this month. (Photo: Khaled Desouki / AFP-Getty Images)

Egyptian President Hosni Mubarak is at a political crossroads. Egypt has been negotiating a Free Trade Agreement (F.T.A.) with the United States for approximately six years, and came very close to sealing the deal. However, different obstacles at different times have blocked the agreement. Now, another obstacle has risen. The United States (especially Congress) is demanding more democratic reforms in Egypt before a F.T.A. can be agreed upon. Mubarak has two options. Appease the United States by fulfilling its request for continued democratic reform, which would undercut his own authority in Egypt. Or maintain his grip on Egypt's political and social scales, and potentially lose the F.T.A. at least for the next four years.

Egyptian businessmen have been pushing for the establishment of an F.T.A. between the United States and Egypt since 1999. The United States has established similar agreements with Morocco, Jordan, Bahrain and Oman, and has remained open to an agreement with Egypt. However, Egypt is a much bigger player with a larger economy, a larger population and a larger impact on the region. In addition, Egypt will be the main benefactor of such a deal.

Because the benefits to the United States are political — democratic reform continues to be the goal in Egypt —it has used the F.T.A. as a reward for the completion of democratic reforms. The Bush administration believed its policy was working following the Egyptian presidential elections in September, a multi-candidate election, and the first of its kind in recent Egyptian history. "Egypt's presidential election represents one step in the march towards the full democracy that the Egyptian people desire and deserve," Condoleezza Rice said at the time.

That was then.

After the elections, which Mubarak won with close to 90 percent of the vote, there were cries of vote tampering and fraud. Parliament elections followed in November but were marred by violence. On Dec. 24, Ayman Nour, Mubarak's distant runner-up in the presidential vote, was jailed on charges of forgery. It is widely speculated that these charges were fabricated in retaliation for Nour's public criticism of the government. These events frustrated both the Bush administration and Congress. After once hailing Egypt's democratic steps, the United States is now critical of its efforts at reform.

As reported by The Washington Post, the United States "disinvited" an Egyptian delegation headed to Washington for F.T.A. talks. (This is refuted by Egyptian officials). The agreement itself "was put on hold." In addition, a Congressional staffer recently addressed Egyptian businessmen at the U.S. Chamber of Commerce where, according to CNN, he stated that Egypt could lose its chance at a trade deal with Washington if it cannot persuade the Bush administration to launch talks within the next few weeks. Most recently, President Bush subtly continued his demands for reform in his State of the Union address: "The great people of Egypt have voted in a multi-party presidential election — and now their government should open paths of peaceful opposition that will reduce the appeal of radicalism," he said. It seems that the only way Egypt will be able to persuade the U.S. government to launch talks is by continued democratic reform.

Benefits and Costs

The Egyptian government is very interested in an F.T.A. with the U.S. because the benefits to such an agreement could prove striking for Egypt. The International Institute of Economics calculated that a bilateral trade agreement between Egypt and the United States could increase Egypt's GDP by almost 3 percent. The United States' main objective is to advance its political agenda of democratization, which it hopes will spread across the region.

Although releasing Nour or furthering democratic reforms might prompt the United States to begin ironing out the F.T.A., it could also strengthen the voices of Mubarak's opponents, especially that of the Muslim Brotherhood.

The United States does not want to strengthen the hand of an Islamist opposition party in Egypt — especially since Hamas just won a majority of the parliamentary seats in Palestine — but if it plans on pushing real democratic reform, it cannot afford to shut out political voices.