Moving towards enhanced relations is a shared objective of Egypt and the EU, despite a slowdown in their trade volume On 12 May, the European Commission issued its 2009 annual report on the implementation of the Europe Neighbourhood Policy (ENP), including in Egypt, Mona El-Fiqi reports. The Egypt report lists progress made through the Egypt-EU ENP Action Plan approved in March 2007 for a period of three to five years. The EU document reports good overall progress, with strong Egyptian commitment to social, economic and sectoral reform, and to a lesser extent political reform. "2009 was a year marked by Egypt's commitment to continue its reform, despite the slowdown of the economy as a result of the international financial crisis," the report says. According to the report, the Egyptian economy fared well during the global financial crisis with GDP growth rate only decelerating to 4.7 per cent in fiscal year 2009 -- running from July 2008 to June 2009 -- after growth of around seven per cent in previous years. Meanwhile, approximately 500,000 migrant workers returned home from Gulf countries, and unemployment is estimated at nine per cent. Due to the financial crisis, bilateral trade between Egypt and Europe slowed. Egypt's exports to the EU fell by 26 per cent while EU exports to Egypt decreased by 0.9 per cent. According to EU figures, the total volume of trade between Egypt and the EU was 18.7 billion Euros in 2009. However, the EU remained the primary trading partner of Egypt in 2009. In April 2009, Egypt and the EU jointly decided to work towards enhancing relations. The agreement on further liberalisation in agricultural and fishery products was signed by the two sides in October 2009. Following the approval by the Egyptian parliament, the agreement is expected to enter into force in June 2010. The agreement provides for the dismantling of tariffs applied to agricultural and fishery trade, leaving only a limited number of products subject to protection on both sides. According to the European Commission report, there are good prospects that the Egyptian economy will move quickly to take advantage of the opportunities offered by this agreement. Negotiations on the liberalisation of trade on services continued through 2009. As for financial cooperation, the EU retains 558 million Euros for Egypt under the National Indicative Programme 2007-2010. The programme is geared towards the achievement of policy objectives as outlined by Egypt and the EU Action Plan: namely, political reform and good governance, competitiveness and productivity and socio- economic sustainability in development.
