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Abstract

The Coca-Cola Company was barred from the Egyptian market in 1966 under the Arab boycott of Israel and firms conducting business with Israel. The company responded by mobilizing its influence in the American government to assist in negotiations. It succeeded in inking a deal in 1977, two years before Egypt officially ended its participation in the boycott altogether, whereby Coca-Cola agreed to invest $10 million ($39 million in today’s dollars) in agriculture and factory infrastructure, insured by the U.S. government. However, in secret talks in 1975 with the U.S., Egypt had already agreed to end the boycott (thus allowing Coca-Cola to return) as a part of the peace deal with Israel. When Egypt allowed Coca-Cola to re-enter the country, it was facing a foreign exchange crisis as a part of larger economic woes. In the first decision to ban Coca-Cola and the second allowing it to return, economic circumstances rather than anti-imperialist ideology dictated Egypt’s negotiating position, and it extracted a desperately needed inflow of foreign investment from Coca-Cola in exchange for a right to sell that it had already secretly negotiated away as part of an American-backed peace deal with Israel.

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