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Egypt
Egypt is a major trading partner for the EU in the Southern Mediterranean region. It is part of the Euromed process for creating a free trade area of the Mediterranean.
The EU and Egypt have made significant progress in freeing up trade between them. The EU-Egypt Association Agreement, in force since 2004, establishes a free-trade area between the two partners with the elimination of tariffs on industrial products and significant concessions on agricultural products. Under the agreement the EU-Egypt bilateral trade has nearly doubled. Subsequent negotiations to further increase market access in bilateral farm trade were concluded in 2009 and an ambitious agreement on agricultural, processed agricultural and fisheries products is in force since 1 June 2010. Negotiations to improve conditions for services trade and for companies seeking to establish businesses in both markets are ongoing.
In November 2010, the EU and Egypt signed a protocol establishing a dispute settlement mechanism applicable to disputes under the trade provisions of the Association Agreement.
Trade between the EU and Egypt has risen substantially after the entry into force of the EU-Egypt Association Agreement in 2004
Trade in goods
- EU goods exports to Egypt 2010: €14.8 billion
- EU goods imports from Egypt 2010: €7.2 billion
From the entry into force of the Association Agreement in 2004 until 2008 EU-Egypt bilateral trade nearly doubled (from €11.5 billion to €20.9 billion). Although in account of the impact of the global slowdown total EU-Egypt bilateral trade volume contracted by almost 10% in 2009, in 2010 it reached its highest level ever of €22 billion.
In 2010, EU imports from Egypt were dominated by energy (53.1%), followed by chemicals (10.9%) and textiles and clothes (10.4%). EU exports to Egypt consist mainly of machinery (39.1%) and chemicals (10.7%).
The EU is traditionally Egypt's main trading partner (covering 33.1% of Egypt's trade volume) and ranking first both as Egypt's import (33.5%) and export partner (32.1%). In 2010 Egypt ranked 28. among the EU's trade partners (21. export and 36. import partner.)
Trade in services
- EU exports of services to Egypt 2009: €2.8 billion
- EU imports of services from Egypt 2009: €5.7 billion
EU exports of services to Egypt consist mainly of business (€968 million) and transport (€668 million) services while the EU mainly imports from Egypt travel services (€3.56 billion).
Foreign Direct Investment
FDI inflows into Egypt increased significantly between 2003 and 2007 from €210 million to €8.4 billion, whereas the trend reversed since 2008. Thus in 2008 the FDI inflows into Egypt amounted to €6.4 billion and in 2009 to €4.8 billion. In 2009, EU-originating FDI to Egypt reached €2.1 billion net outflows. Although FDI declined in 2009, in the context of the financial crisis, EU's share in the total FDI received by Egypt increased significantly.
The European Neighbourhood Policy
EU-Egypt co-operation is an important part of the European Neighbourhood Policy (ENP). Egypt has also engaged with the EU in negotiating an ENP Action Plan that was adopted in March 2007 for a period of three to five years. It provides a common framework for strengthening relations between the EU and Egypt.
The ENP supports political and economic cooperation between Egypt and the EU and is the framework for financial assistance from the EU to Egypt. The European Neighbourhood and Partnership Instrument (ENPI) is endowed with €11.9 billion for 2007-2013. The ENPI financial envelope for Egypt under the National Indicative Programme 2011-2013 is €449.29 million. The programme is geared towards supporting the achievement of key policy objectives as outlined in the Action Plan. On the basis of the Country Strategy Paper, it pursues three priorities: 1) supporting Egypt's reforms in the areas of democracy, human rights and justice, 2) developing the competitiveness and productivity of the Egyptian economy, and 3) ensuring the sustainability of the Egyptian development with better management of human and natural resources.
South-South integration
On 25 February 2004, Egypt signed the Agadir Agreement with Jordan, Morocco and Tunisia. This committed all parties to removing substantially all tariffs on trade between them and to harmonising their legislation with regard to standards and customs procedures. It entered into force in July 2006. The effective implementation started in April 2007 with the creation of the Agadir Technical Unit in Amman. Egypt has also free trade agreements in force with Turkey and with EFTA countries.
The signature of the single regional convention on preferential rules of origin for the Pan-Euro-Mediterranean area will replace the current network of bilateral protocols. It opens the door to a rapid revision of the existing rules of origin, and will thus facilitate regional trade and economic integration.
WTO
Egypt is a member of the WTO since 30 June 1995.
Bilateral relations
Trade relations with key trading partners
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