Egypt and the European Union took another step on the road to liberalising trade, reports Mona El-Fiqi Egypt and the European Union (EU) signed a tentative agreement on 1 July according to which all exports of agricultural, processed agricultural products, as well as fish and fishery products to the EU will be fully liberalised. The document is an amendment to the current provisions of the Association Agreement between Egypt and the European Commission (EC) as far as agricultural, processed agricultural products and fish and fishery products are concerned. Both sides believe that the agreement constitutes a substantial leap forward in dismantling tariffs applied to trade in the specified fields. The amendments will come into force on 1 January 2009 after being presented to the People's Assembly when it convenes in November. On the EU side, the text of the agreement will take the form of a proposal for a council decision. After adoption by the commission in September, it will be submitted to the council in October or November. When the agreement is finally signed, free trade becomes the rule and only a very limited number of sensitive products remain subject to certain protections on both sides. Negotiations began in early 2007, and six rounds of talks held in Cairo and Brussels finally resulted in this month's agreement. Accordingly, the two sides will meet on 1 January, 2011, to consider greater liberalisation of trade in these three fields. With 500 million consumers endowed with one of the highest purchasing power in the world, the European Union and its 27 member states constitute a major trading partner as far as these products are concerned. According to the agreement, there will be no tariff or quantitative restrictions except for 23 tariff lines, including tomatoes, cucumbers, artichokes, courgettes, table grapes, garlic, strawberries, rice, sugar, processed products with high sugar content and processed tuna and sardines. Even though not fully liberalised, all of the 23 above tariff lines but tuna and sardines will obtain a preferential bilateral treatment. The EC protection instruments still in place include duty free quotas, export calendars and entry prices. Yet, the agreement is definitely a far-reaching one. Compared to the situation prevailing before, some major Egyptian export products like potatoes, oranges and onions will benefit from full liberalisation on the EU market. Given the size of its fast increasing population and accelerating economic development, which can only translate into a rise in living standards and consumption patterns, Egypt represents a key market for the EU in the region. In value terms, some 90 per cent of the EU's exports of agricultural, processed agricultural and fishery products to Egypt will be fully liberalised. The agreement also stipulates full liberalisation for all products except tobacco, wines and spirits, pig meat, confectionery, chocolate, pasta and bakery products. Even though not fully liberalised, some of these products will obtain preferential bilateral treatment. A press release issued by the European Commission delegation to Cairo last week stated that this liberalisation comes at a time when supply constraints and high food prices have reached unprecedented heights. It will, therefore, help alleviate recent inflationary pressures in both Egypt and the EU. Also, taking into account the geographic proximity of the two partners, this agreement is very likely to significantly boost bilateral trade in the specified fields.
