Central to Kosygin's talks in Cairo was the October 1973 war that Israel fought against Egypt and Syria. It is obvious that Fradkov will also focus on the situation in the Middle East during his visit to Cairo. Russia and Egypt have very similar positions on the Palestine-Israel conflict, Iraq settlement and issues of combating terrorism. Moscow appreciates Egypt's active role in the region and is grateful for the opportunity to have ongoing consultations on international issues with the Egyptians. Such an exchange of opinions will occur during the Russian prime minister's talks in Cairo.
The discussion will also focus on bilateral trade and economic cooperation. Moscow hopes that Egypt will formally recognize the market status of the Russian economy, informed sources told RIA Novosti. During a visit to Russia in May, Egyptian President Hosny Mubarak said that Egypt recognized Russia as a market economy. The countries only need to formalize an official document, which is why the issue is receiving so much attention during preparations for Fradkov's visit to Cairo.
In the past, Egypt's refusal to recognize Russia as a market economy was a pretext for imposing anti-dumping duties on Russian goods. Progress has been made on this issue. Egypt stopped an anti-dumping investigation as regards paper. However, 40% duties on Russian cold-rolled and hot-rolled steel have been extended until February 2005, which undoubtedly infringes on the interests of Russian exporters.
A solution to questions of Russia's economic status and anti-dumping duties will make it possible to increase bilateral trade. According to the Economic Development and Trade Ministry, Russia accounted for only 2% of Egypt's foreign trade, or $417 million in 2003. In 2001, the figure was $455.6 million and in 2002, $508.9 million. One of the reasons for the drop in trade is a reduction of Russian ferrous metal exports to Egypt because of anti-dumping duties.
However, duties are not the only obstacle to bilateral cooperation. For example, in 2002 Russian company Tyazhpromexport won a tender as part of a consortium with the French firm Alstom to modernize the Helwan Steel Mill's blast furnace No.3. However, the Egyptian customer has not signed the $50 million contract yet. The situation has been complicated because Alstom was purchased by another French firm, Areva, in 2003. A discussion of the future of this contract may be on the agenda of Fradkov's talks in Cairo. The fate of the contract is not that important, as the point at issue is protecting Russian businessmen working in Egypt and Egyptian businessmen working in Russia against unforeseen complications.
However, specific problems do not impede the overall development of bilateral ties.
Russia and Egypt have traditionally cooperated in power engineering and metallurgy. Today Russian companies are actively participating in modernizing industrial facilities built with Soviet assistance in Soviet times.
The best example of such cooperation is the 72 million euro contract signed in late 2003 by the Russian-German consortium Energormash-Silovye Mashiny-Siemens to modernize the hydroelectric station generators for the Aswan High Dam.
A new promising sphere is industrial cooperation, for example, Egyptian companies assembling cars with Russian parts. A new assembly line launched the production of VAZ-2107s in a suburb of Cairo in the fall of 2002. Over 1,000 cars were assembled in 2003. GAZ joint-stock company signed a framework agreement for shipments of Gazel minivan assembly sets to Egypt. Assembling UAZ-3162 SUVs, Kamaz trucks, Oka cars, Lipetsk tractors and Irbit motorcycles in Egypt is being currently considered.
According to informed sources, another interesting topic may be broached during the talks -coordinating the countries' gas export policy for Europe and other markets. Egypt is increasing gas production and exports. The construction of a gas pipeline from Egypt to Jordan has begun and in the future, it may be extended to Syria, Lebanon, Turkey, Iraq and possibly to Europe. Russian companies could also take part in these projects.
Bilateral cooperation in science and technology, IT is particularly promising. For example, contracts for space cooperation were signed recently. The main issue is GPS.
There are quite a few cooperation projects. Fradkov's visit to Cairo will hopefully give them a fresh impetus and convince Russian and Egyptian businessmen that their governments are working for long-term mutually beneficial cooperation.
