CAIRO: In a flurry of activity since failing to sign a free trade agreement with the US last year, Egypt is expanding beyond the traditional Anglo-American trade umbrella and to seek new trade partners in the East and South, while not overlooking key regional and African partners.
In the past few weeks, Egypt singed trade agreements with plans to set up free trade zones with Eurasian countries including Uzbekistan and Kazakhstan, following similar agreements with Turkey and China last year.
Egypt and Russia also marked the signing of a memorandum of understanding to create a Russian free trade zone by Egyptian Russian joint companies in Alexandria with an initial investment of $1 billion this month.
Egypt also held intensive talks with Bulgaria, a new EU member, to boost economic and scientific cooperation in the fields of energy, heavy machinery and pharmaceuticals.
Analysts believe the drive to diversify seems to be a way to break out of the deadlock of stagnant trade dynamics with conventional partners like the Arab states and the US.
Former Ambassador Mahmoud Shokri said the drive has become a necessity as measures such as waving custom tariffs between Arab countries and Egypt, have not proven effective in boosting bilateral trade.
“The element of complementary exports, where Egyptian exports find markets in Arab states and the other way around is missing, this hurts bilateral trade, he said. “Egypt and the Arab countries have the same industrial outputs, therefore there is a need for a unified Arab policy and strategy, he said.
He added that Egypt must branch out to other partners especially that the US market has become saturated, proving to be difficult to penetrate.
Shokri warned, however, against the misinterpretation of the volume of trade data that project healthy figures of trade between Egypt and other countries.
“We must strike out data from Egypt’s oil and natural gas, and look at trade from industrial manufacturing, agriculture and services, he said.
He also expressed reservations with what he described as the “depletion of the energy resources which is tantamount to liquefying a precious stone.
“Egypt must be cautious not to rely heavily on oil and gas exports simply to meet immediate economic demands, and must start creating a fund for future generations similar to Gulf States, he added.
Earlier this year, Thomas Donohue, president and CEO of the United States Chamber of Commerce, said in a statement to the chamber in Cairo that there was a need to push governments, particularly in the US, not to abandon the cause of free trade.
He pointed out in comments published by AmCham website that there are over 300 US firms operating in Egypt in a range of sectors from energy and engineering to banking, finance and textiles. “Americans realize that Egypt is an important and strategic country, a market of significant size and potential, and a good friend and partner on many fronts, he said. “Whenever disagreements arise, and they often do, it is essential that we deal with them in the spirit of friendship and partnership built up over the many years of hard work and earned trust.
Donohue identified several areas in which improvement was necessary and would increase national economic strength.
He noted the burden of the US legal system on business, but acknowledged that businesses must be monitored, especially in the wake of a series of corporate scandals.
“We support aggressive action against fraud and dishonesty wherever it occurs. But we strongly oppose the abusive tactics and violations of due process rights we have recently seen, he said.
