CAIRO: Russia and Egypt will sign an agreement on a Free Trade Zone at the next summit between officials of the two countries, said Trade Minister Rachid Mohamed Rachid.
On Thursday, Rachid met with his Russian counterpart Minister Viktor Khristenko to discuss partnerships between the two countries. The next meeting between members of the two governments will take place in Moscow in a few months.
“The partnership between Russia and Egypt, which has continued for decades, is of special strategic character, said Khristenko. “Not only do we have rich history but we will also have an interesting future together which will be based not only on the traditional industrial production and energy sectors but also on the technology in the fields of solar energy and atomic energy, he said.
Khristenko pointed out that in 2009 the profits from tourism for Russia and Egypt reached $4.2 billion, as the number of Russian tourist grew.
Rachid and Khristenko also discussed the creation of the Russian Industrial Zone near Alexandria. Minister Rachid said that there are “intentions and plans and that it will be funded by joint investment.
Khristenko said that the projects for the industrial zone are not decreasing but increasing. “We are grateful to the Egyptian government for formulating a preferential regime for the creation of the industrial zone. I assure you that our interest will not subside and we will continue working on the project, he added.
In late December 2009, the two officials said negotiations on the bilateral FTA will start in the first quarter of 2010.
“We discussed that joint desire of both governments to double our bilateral trade from $2 billion to $4 billion over the upcoming few years, Rachid said at the time.
Both the Free Trade Agreement and the Russian Industrial Zone have been delayed due to the impact of the financial crisis on the two countries.
Russia, nevertheless, is committed to pursuing more investment prospects in Egypt. Khristenko said that during the year a group of CEOs of Russian companies will be visiting Egypt to look at investment opportunities.
On the question of grain exports to Egypt, he said that his country is looking to meet the Egyptian quality standards. “Egypt for Russia is a stable and promising market for our grain. We are able to satisfy the volume we are supplying and to even increase it, he explained.
Khristenko also talked about the prospects of establishing production operations for Russian cars in Egypt. He said that he discussed with Egyptian officials also the possibility of starting a production line of engines for Russian cars and trucks.
The two ministers also addressed prospects for future projects in the energy sector.
Khristenko said that four different working groups were created to work on the energy cooperation between Russia and Egypt on topics like training of specialists, technology and policymaking.
Russia intends to bid in the competition for the building the first nuclear power plant in Egypt. “Russia is ready to offer its huge experience, our high tech solutions, financial resources, and practical knowledge from having such projects on the territories of other countries. Like all other participants, we are getting ready for the competition which will be announced by the end of the year, said Khristenko.
Earlier in the day he also met with the Minister of Electricity and Energy Hassan Younes and discussed wider cooperation in the energy sector.
“During our meeting we came to an agreement on a long-term cooperation program for development of Egypt’s energy sector in the period 2010-2027. The program is for the building of a 58 000 MW power including four blocks of a nuclear power plant which will create 4000 MW. The remaining 54 000 MW will be produced by hydro, fossil fuel, solar and wind energy, said Khristenko.
In the summer Egypt and Russia will also be celebrating the building of the Aswan Dam. Its construction was supported by Soviet funds, machinery and specialists in the late 1950s.
Despite the history of Russian influence in Egypt’s energy sector, Egypt will be competing in one of Russia’s most profitable exports: natural gas for Europe.
Last year Egypt signed a transit agreement with Turkey for the Nabucco pipeline. This alternative gas supply is the only competition to Russia’s monopoly over EU imports of natural gas.
Bilateral trade between the two countries reached $2.07 billion in 2008, with Egyptian exports to Russia reaching $191.6 million and imports from Russia reaching $1.88 billion.
From January to May 2009, bilateral trade reached $793.6 million with Egyptian exports to Russia dropping.
