MFTI: 2010 target for free trade with EU unlikely to be met but vision will prevail.
CAIRO: Government and business leaders met with the European Commission s Enterprise Policy Unit Wednesday to discuss Egypt s implementation of the Euro-Mediterranean Charter for Enterprise, a program paving the way for tariff-free trade between the two sides by 2010.
The program is designed to strengthen the competitiveness of Egyptian products to balance out European Union (EU) products to flood Egypt once a free trade zone is established as part of the Euro-Mediterranean Partnership Agreement. Already, the EU is Egypt s largest trading partner with ?11.5 billion (LE 87.3 billion) in annual bilateral trade, or almost 40 percent of Egypt s total trade.
Egypt and the EU signed an Association Agreement in 2004 but have yet to sign an Action Plan, as Jordan and Israel have done, for example, as members of the Southern Mediterranean bloc of countries the EU is attempting to establish a free-trade zone with by 2010. The Charter for Enterprise comprises the industrial portion of Egypt s yet to be finalized Action Plan. According to EU Trade Commissioner Peter Mandelson, the disagreement now involves wording of clauses involving weapons and personal rights.
The privileges we have gained from the Association Agreement are far greater than those from WTO, Hany Barakat, first undersecretary for industrial and technological development at the Ministry of Foreign Trade and Industry told The Daily Star Egypt. I have the advantage right now of tariff-free access to the European market for my industrial products. The question is how can I best take advantage of this privilege? Because a free trade agreement is a license, it does not guarantee your right to penetrate it.
The charter, signed in Oct. 2004 by all 10 Southern Mediterranean countries seeking membership in the Euro-Med. Partnership Agreement, calls for the implementation of 10 programs including improving education, labor training and access to credit and building strong business associations to support small and medium enterprises.
Egypt is now in the process of selecting two or three programs to implement in the next two years, to be followed by the implementation of other programs as working on all 10 has proved exhausting and inefficient, Barakat says.
The meeting comes just two weeks after EU Agriculture and Rural Development Commissioner Mariann Boel sent a clear message to Southern Mediterranean Agriculture Ministers in a Cairo meeting that there will be no compromise on sanitary and phytosanitary standards. We will not step back on the quality issue.
In Jan. 2007, EU will make available ?558 million (LE 4.2 billion) until 2010 to improve the quality of Egyptian exports to EU. Boel said she hopes the government chooses to allocate an appropriate portion of the funds to upgrade agriculture production processes.
Egyptian agricultural exports, making up the majority of non-oil exports to the EU, soared 70 percent in 2005, from ?248 million (LE 1.9 billion) in 2003 to ?404 million (LE 3.1 billion) after the beginning of implementation of the EU-Egypt Association Agreement in 2004. EU agriculture exports to Egypt also witnessed an increase from ?523 million (LE 4 billion) in 2003 to ?600 million (LE 4.5 billion) in 2005.
The money allocated to Egypt is part of a ?12 billion plan, including technical support and technology transfer programs, by the EU to bring Southern Mediterranean producers and manufacturers up to EU standards.
Tapping into the EU intellectual resources is what is important for us, Barakat says. It s not about how much money you re getting.
Barakat says Wednesday s meeting is an indication of Egypt s willingness to implement the reforms necessary to join what is projected to be the largest free trade zone globally in 2010, even if the reforms miss their target implementation dates.
It s good to have a target date, even if you don t meet it, Barakat says. It s expected that delays will occur but as long as you re sitting down with the other side to agree on a plan, the vision will prevail.
