Egypt has asked the United States for an additional aid package to defray anticipated costs of a possible war with Iraq and has renewed its appeals for a bilateral free-trade agreement.
The appeal, made by a high-level Egyptian delegation visiting Washington this week, follows similar requests in recent months by Israel, Turkey and others seeking stepped-up U.S. assistance to offset whatever contribution they might make to an Iraq war, as well as declines in tourism and exports they expect would result from upheaval in the region.
The Bush administration is still considering an Israeli appeal for $2 billion in new military assistance along with $10 billion in loan guarantees. Turkey has also requested as much as $14 billion in various forms of assistance, and Jordan is receiving more than a dozen new F-16 fighter planes.
A free-trade agreement between Jordan and the United States recently went into effect, and early talks have started on a similar agreement with Morocco. "The Egyptians have said, 'If you can do it with Jordan, why not us?' " a U.S. official said. The State Department has been pushing for consideration of a U.S.-Egypt agreement as part of its Middle East Partnership Initiative, which aims to promote both economic and political reforms, but trade officials have resisted.
Israel and Egypt are already the largest recipients of U.S. military aid. Under the Bush administration's fiscal 2004 budget proposal, Egypt would receive $1.3 billion, the same as was allocated for 2003. Egypt is also among the largest recipients of U.S. development aid.
In terms of a new aid package, Foreign Trade Minister Youssef Boutros-Ghali said the Egyptians have submitted "outlines of what a conflict with Iraq would cost us" in meetings at the White House, the State Department and with trade officials. Although no specific figure has yet been mentioned, he said, "we will be submitting a set of requests on how to address it."
Boutros-Ghali said Egypt's initial analysis indicated that once a war starts, "tourism drops the next day to zero." Tourism, he said, amounts to 10 percent to 15 percent of the country's gross domestic product and employs about 2.5 million people.
The entire Middle East has been classified by insurers as a war zone since the Sept. 11, 2001, terrorist attacks and subsequent war in Afghanistan, Boutros-Ghali said, and further conflict with Iraq, he said, would send insurance premiums "through the roof" on goods entering and leaving Egyptian ports and traveling through the Suez Canal and Red Sea basin.
Egypt is also one of the principal suppliers to Iraq under the United Nations-administered oil-for-food program, with exports totaling more than $5 billion a year.
The Egyptian delegation also includes Osama Baz, senior adviser to Egyptian President Hosni Mubarak, and Gamal Mubarak, the president's son, who is head of the policy planning committee of the ruling National Democratic Party.
Asked about reports that the United States has discussed with countries in the region the possibility of creating a joint Arab force to administer Iraq after a military conflict, Baz said, "nobody has approached us" on the question. "We have been asked for certain facilities," he said, "but not for any [direct] participation." In order to consider such a proposal, he said, "we would have to be part of the whole thing. . . . informed . . . [and] consulted before starting a strike against Iraq." Right now, Baz said, "we still think there is a certain room for maneuver within the [U.N.] Security Council. War is not taken as a given or inevitable. It is something that is most likely, but not inevitable."