Bid to find a compromise in EU-Egypt negotiations

Date: 09/10/1997

OFFICIALS are hoping that a series of technical meetings in mid-October could help kick-start deadlocked negotiations on an EU-Egypt association accord.

But given the complete failure over the past year of talks on access to EU markets for Egyptian agricultural produce, few people are holding their breath.

Although the dates are not yet confirmed, two encounters originally scheduled for September will aim to find some room for compromise between Egyptian demands to sell oranges, potatoes and rice to the Union, and European fears of vast potential competition to its own producers.

If the two sides do not succeed, it will mark yet another set-back for the Euro-Mediterranean partnership created in Barcelona in 1995.

At that first summit, leaders from all around the Mediterranean called for a new and more vigorous trading and political alliance, and free trade by early next century.

A key element of the partnership was a series of nine bilateral association accords to boost mutual commercial ties, to be negotiated within 18 months.

More than two years later, agreements have been reached with Israel, Morocco, Tunisia, Jordan and the Palestinian Authorities, but negotiations are stalled with Egypt (over farming), Algeria (due to the violence) and Lebanon (over import duties). Discussions have hardly begun with Syria, and the multilateral framework (MEDA) is widely believed to be losing steam.

Although Cairo has considerably reduced its agricultural demands over the past 12 months - from 750,000 to 450,000 tonnes/year on potatoes, for example - the gap between its wish-list and the EU's offer is still enormous, sometimes differing by a factor of ten, according to Commission officials.

“Our agriculture represents for us a very important area of potential growth and presents no real threat to the Europeans,” Egypt's ambassador to the EU Raouf Saad insisted this week.

Egypt adds that it can hardly be expected to lay its own uncompetitive industries open to EU competition if the Union will not play ball over farm produce.

But Commission officials counter that unless Egypt starts to restructure its industries soon, without or without an agreement on agriculture, it may find itself permanently isolated from world commerce.

“We must not give businesses the wrong message by allowing excessively long transition periods. But we do understand that if we open trade too quickly, the Egyptian economy could suffer badly,” said one.

The difficulties are compounded by continued fights between Cairo and Trade Commissioner Sir Leon Brittan over EU anti-dumping measures on Egyptian cotton fabrics.

Discussions have also hit snags on the issue of illegal immigration, with EU officials complaining that the country inadequately controls throughflows of people from southern Africa.

Nevertheless, last month's conclusion of an accord with Jordan is giving some hope for optimism. “We hope that we will be in a position to sign with Egypt by the end of the year,” said a Commission official. “Realistically, something could be in place by next spring.”