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Egypt

Egypt

The EU-Egypt Association Agreement, in force since 2004, establishes a free-trade area with the elimination of tariffs on industrial products and significant concessions on agricultural products. In addition, an ambitious agreement on agricultural, processed agricultural and fisheries products entered into force on 1 June 2010.

Following exploratory discussions in 2012, a dialogue on the DCFTA was launched in June 2013. Bilateral negotiations on liberalisation of trade in services and establishment are on hold.

Trade picture

  • Egypt is a major trading partner for the EU in the Southern Mediterranean region.
  • The entry into force of the Association Agreement in 2004 improved conditions for trade between the EU and Egypt. Since 2004, EU-Egypt bilateral trade has more than doubled and reached its highest level ever in 2016 (from €11.8 billion in 2004 to €27,3 billion in 2016).
  • The EU is traditionally Egypt's main trading partner, covering 31,3% of Egypt's trade volume in 2016 and ranking first both as Egypt's import and export partner.
  • EU imports of goods from Egypt in 2016 are dominated by fuel and mining products (€2,9 billion, 43,2%), followed by chemicals (€0,8 billion, 13,2%) and textiles and clothing (€0,8 billion, 12,3%). EU exports to Egypt consist mainly of machinery and transport equipment (€7,8 billion, 37,9%), chemicals (€3,2 billion, 15,7%), fuels and mining products (€2,6billion, 12,6%) and agricultural products (€2,4 billion, 12,0%).
  • EU exports of services to Egypt are dominated by business services, while the EU imports from Egypt consist mainly of travel services and transport. In 2015, the EU exported €4,8 billion of services to Egypt, and imported €5,2 billion services from Egypt.

EU-Egypt: Trade in goods

Trade in goods 2014-2016, € billions
Year EU imports EU exports Balance
2014 8.6 16.9 8.3
2015 7.3 20.4 13.1
2016 6.7 20.6 14.0

EU-Egypt: Trade in services

Trade in services 2013-2015, € billions
Year EU imports EU exports Balance
2013 4.9 3.3 -1.6
2014 4.6 3.5 -1.1
2015 5.2 4.8 -0.3

EU-Egypt: Foreign direct investment

Foreign direct investment 2015, € billions
Year Inward stocks Outward stocks Balance
2015 0.1 41.5 41.4

Date of retrieval: 15/02/2017

More statistics on Egypt

EU and Egypt

In June 2013 the EU and Egypt began an exploratory dialogue on how to deepen trade and investment relations, in particular through the possible negotiation of a Deep and Comprehensive Free Trade Agreement (DCFTA). The DCFTA would aim at improving market access opportunities and the investment climate and at supporting economic reforms undertaken by Egypt. It will extend significantly beyond the scope of the existing Association Agreement to include trade in services, government procurement, competition, intellectual property rights, and investment protection.

A Sustainability Impact Assessment (SIA) in relation to a possible DCFTA with Egypt has been carried out by an independent contractor in 2014. Further information on SIA available here.

From January 2014, due to its Free Trade Agreement with the EU, Egypt ceased to benefit from preferential access to the EU market under the Generalised System of Preferences (GSP) scheme (for more details on the EU's new GSP scheme, see here).

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. Egypt has not yet ratified the Protocol.

As a response to the unprecedented events across the Arab world in 2011, the EU has identified possible avenues to further develop and deepen our trade and investment relations with Southern Mediterranean partners presented in:

Egypt in Euromed

Egypt is one of the partners of the Euro-Mediterranean Partnership (Euromed).

Euromed is one of the key initiatives of the European Neighbourhood Policy, through which the EU offers its neighbours a privileged relationship, building upon a mutual commitment to common values (including democracy and human rights, rule of law, good governance, market economy principles and sustainable development).

Euromed is an essential component in the pursuit of greater economic integration in the Mediterranean region, including among Mediterranean partners themselves.

More information on the Euro-Mediterranean partnership

In 2004, Egypt signed the Agadir Agreement with Jordan, Morocco, and Tunisia. This committed all parties to removing all tariffs on trade between them and to harmonizing their legislation with regard to standards and customs procedures. The Agadir Agreement entered into force in July 2006 and the implementation is ensured by the Agadir Technical Unit in Amman.

More information on the Agadir Agreement

The pan-Euro-Mediterranean cumulation and the PEM Convention on rules of origin

The pan-Euro-Mediterranean cumulation system of origin was created in 2005. It brings together the EU, Egypt, and other partners in Europe and the Mediterranean to support regional integration by creating a common system of rules of origin. Rules of origin are the technical criteria which determine whether a specific product qualifies for duty free or other preferential access under a given trade agreement.

Cumulation of origin means a product coming from one partner country can be processed or added to a product of a second partner country and still be considered an “originating product” of that second partner country for the purposes of a particular trade agreement.

The pan-Euro-Mediterranean system allows for diagonal cumulation (i.e. cumulation between two or more countries) between the EU, EFTA States, Turkey, the Western Balkans, the Faroe Islands, and any countries which signed the Barcelona Declaration of 1995. The system was originally based on a network of Free Trade Agreements having identical origin protocols.

These individual origin protocols are being progressively replaced by a reference to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention), which was established in 2011 to provide a more unified framework for origin protocols. Egypt signed the Regional Convention on 9 October 2013, the Regional Convention came into force on 1 June 2014.

Trading with Egypt