Egypt caught in EU-US trade battle
Following Egypt's announcement that it would take its name away from a WTO complaint against the European Union for its moratorium on genetically modified food, Washington has announced it is freezing negotiations on a free trade deal with the country.
The US had previously announced ambitious plans to set up a Middle East free trade zone by 2013, plans which have now been placed on hold.
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Cairo's decision is deeply embarrassing to a US administration that has consistently linked the EU's reluctance to accept the crops, with famine in Africa. Egypt had been the only African country to put its name to the US-led case, also taken up by Canada and Argentina.
According to the Financial Times the Egyptian authorities had been shocked by the way the US presented its case.
One official is quoted as saying "The way it was announced was like a war with the EU, and we cannot go to war with the EU," he said. "It is 40 per cent of our trade."