As of the beginning of 2021, Egypt and the UK are exchanging goods according to a new Association Agreement signed early in December 2020. The agreement replaces the Egypt-EU Association Agreement that previously governed relations between the two countries but had to be discarded with the exit of the UK from the EU. The conclusion of the agreement was imperative to ensure stable and continuous relations between the parties, director of trade in goods at the Ministry of Trade and Industry Iman Refaat told a webinar organised by the British-Egyptian Businessmen's Association. In the absence of such an agreement, both parties would have reverted to Most Favoured Nation (MFN) terms of trade, she said, explaining that this would have meant that Egypt would have imposed an average of 19 per cent tariffs on goods imported from the UK while the UK would have imposed an average 5.7 per cent tariffs. The new agreement covers trade in goods, including provisions on technical matters like rules of origin, preferential treatment, and quotas. It also covers trade in services, sanitary and phytosanitary measures, intellectual property, and government procurement. The UK is one of Egypt's major trading partners, with total bilateral trade in 2019 reaching 3.6 billion pounds sterling. UK exports to Egypt accounted for 2.3 billion pounds sterling. While Egypt has already ratified the agreement, the UK is in the process of doing so and could finish in February, said Paul Mullard, senior trade policy advisor at the UK's Department of International Trade. “The whole point of the agreement was to ensure continuity; hopefully, it does that,” Mullard said, adding that it also provides for a dialogue mechanism to tackle any concerns that could come up during implementation. Refaat reiterated that the agreement provides an opportunity to enhance relations on both sides. She said Egyptian agricultural exports had high potential in the UK market, with UK statistics showing that UK imports of fruit and vegetables were 11.5 billion pounds sterling in 2019 vs exports of 1.3 billion pounds sterling. Egypt's exports of fruit and vegetables were around 160 million pounds sterling in 2019. According to Refaat, for trade in goods, tariff commitments have been transferred, while for agricultural produce tariff rate quotas have been resized to take into account principles agreed by the World Trade Organisation (WTO) and historic utilisation rates. Strawberries are an exception, since here Egypt is able to increase the tariff-free volume of quotas. “During the negotiations we agreed that the further liberalisation of agricultural produce would be at the top of future agendas,” Refaat said. The new agreement is a window of opportunity, according to Ahmed Ezzeddin of Fed International for Industry and Trade, which has been exporting food products to the UK for 30 years and more recently has also been exporting home textiles made of linen and Egyptian cotton. Ezzeddin said that over the past three months there has been increasing interest by UK companies in Egyptian exports. He explained that such companies had earlier sourced their goods from the EU, but because they had been forecasting disruptions when the transitional period was over before the UK's leaving the EU went into full effect at the beginning of last month, they had been looking for new sourcing countries. “This is an opportunity for Egyptian companies to grow,” he said, adding that there still needed more work to be done to build awareness among British companies through match-making meetings and trade missions. Refaat pointed to the opportunities for the UK if it were to take advantage of Egypt's multiple international agreements such as the Greater Arab Free Trade Area and the Africa Continental Free Trade Area (AfCTA). Egypt is conducting several projects in Africa to enhance its position as a regional hub for international trade and energy, Refaat said, adding that there were many opportunities for UK companies to invest in Egypt and to take advantage of the access the agreements could give UK products in the African market. “The UK is a big fan of AfCTA,” Mullard said, adding that it had been studying how to use the AfCTA and Egypt's bilateral trade agreements to deepen relations between the UK and Egypt and the rest of Africa.
