Egypt looks forward to 12-year competition respite

Date: 05/10/1995

EGYPT and the European Union will resume talks later this month aimed at an eventual free-trade accord and closer political cooperation.

Egypt and the EU member states have been cooperating on trade since a 1977 agreement and Egypt has most favoured nation status when exporting its products on to the European market. The country's industrial and raw materials come into the EU tariff-free. Its farm exports have, however, been subject to duty thanks to a large extent to pressure from competing producers in EU states.

Although Commission officials acknowledge the situation will not improve in the near future for Egyptian agricultural exporters, the two sides are negotiating import duties in general in a bid to upgrade their trading ties.

The meeting of high-level foreign ministry representatives from Cairo and Commission experts on 16 and 17 October in Brussels will focus on competition laws, rules of origin for products entering the Union and harmonisation of standards, according to Henrik Osterby of DGI, the Directorate-General for external relations.

The Union will insist Egypt opens its markets to EU products as well. Industry there has always enjoyed high protection and may lobby hard to retain it. But Osterby said public debate on the subject is starting to make inroads. EU officials will press Egypt to lower then dismantle import tariffs which are high in nearly all sectors. Many have already fallen as a result of the Uruguay Round negotiations.

The EU-Egypt accord would give Egyptian industry 12 years to restructure and modernise before facing competition from European firms. Egyptian companies which want EU technical know-how may seek it in a new, EU-funded European-Egyptian Business Development Centre in Cairo. The accord would also guarantee the Middle East nation a regular political dialogue, which will eventually comprise talks on democratic reform of its highly-bureaucratic regime.

The accord clearly has political significance in Cairo. Egypt's Prime Minister Atif Sidqi has placed himself in charge of a committee of representatives from 20 Egyptian ministries and the private sector. The group will draft ongoing strategy for achieving the accord with the EU.

Tunisia and Morocco are ahead of Egypt in the drive towards partnership with the Union and Jordan is also making progress. Israel has already established two-way free trade with the EU and benefits from collaboration on research and development and special consideration in bids for public procurement contracts.

The accords are part of a strategy of establishing an eventual “Euro-Med” free-trade zone between the EU and a dozen North African and Middle East countries bordering the Mediterranean Sea. Union officials hope to create a zone of economic cooperation by the year 2010 which would promote joint ventures between companies on both sides of the Mediterranean, and boost both European investment and the competitiveness of North African industries.