Duration and validity of the agreement
Egypt and the European Union (15 countries) signed on June 25, 2001 in Brussels an agreement to establish a free trade zone between the two parties within a maximum period of 12 years from the entry into force of the agreement (gradual liberalization), while the liberalization of Egyptian imports of industrial goods of European origin extends to 16 years.
Under the agreement, the agreement will enter into force on the first day of the second month following the date on which the parties notify each other of completing the ratification procedures.
The agreement is valid for an unlimited period (open-ended) and either party may terminate this agreement by notifying the other party, and this agreement expires after six months from the date of this notification.
The President of the Republic issued Decree No. 335 of 2002 regarding approving the Euro-Mediterranean agreement to establish partnership between Egypt and the European Union.
Goods that enjoy the prescribed exemptions
The Egyptian-European partnership agreement covers trade in industrial commodities, agricultural commodities, and manufactured agricultural commodities as follows:
First: Industrial Goods:
Pursuant to the agreement, trade in industrial commodities will be liberalized between the two parties from all quantitative restrictions and customs tariffs, according to commodity and time schedules indicated in the agreement, as follows:
For Egyptian exports of industrial goods:
The agreement allows Egypt to enjoy its industrial exports to the countries of the European Union, exemption from customs duties and any other fees of similar effect, as soon as the agreement enters into force.
As for the European Union’s exports to Egypt of industrial goods:
It shall be exempted from customs duties and any other fees of similar effect, without any quantitative restrictions or other restrictions of similar effect, in accordance with the following schedule:
1- Commodities included in the first list:
Customs duties on it shall be gradually abolished within three years from the date of entry into force of the agreement, with a reduction in customs duties of 25% when the agreement enters into force, and then 25% annually thereafter.
This list includes capital goods, machinery, some components, raw materials and production inputs on which customs duties range between 1% and 5%.
2- Commodities included in the second list:
Customs duties on it shall be reduced by 10% after 3 years of the entry into force of the agreement, and by 15% annually for a period of 6 years until customs duties are completely abolished 10 years after the entry into force of the agreement.
This list includes intermediate commodities, production inputs and some investment commodities that were not included in the first list. Customs duties on them range between 3% and 5%.
3- Commodities included in the third list:
Customs duties on it shall be reduced by 5% five years after the entry into force of the agreement, and by 5% in the following year, then by 15% for a period of six years.
Egypt’s imports include the vast majority of industrial consumer goods that were not included in the first and second lists.
4- Commodities included in the fourth list:
Customs duties on it shall be reduced by 10% annually after the passage of 6 years, and it shall be liberated from customs duties after 15 years of the entry into force of the agreement. It mainly includes cars.
Second: agricultural commodities:
The agricultural file of the Egyptian-European partnership agreement contained an expansion of the list of Egyptian agricultural commodities that can be exported to the European Union to more than one hundred commodities in exchange for 25 commodities according to the 1977 agreement. Egyptian agricultural commodities exported to the European Union can be divided into four groups:
Goods that have quantitative quotas and specific export seasons (quota exemption from customs tariffs), the most important of which are: cut flowers, potatoes, onions, garlic, cabbage and cauliflower, lettuce, carrots, cucumbers, green beans, cantaloupe, peaches, plums, strawberries.
Goods that have quantitative quotas and have no export seasons (customs exemption within the quotas), the most important of which are: onions and tubers, frozen and preserved vegetables, dried vegetables, potatoes, oranges, pears, fruits, rice, sesame oil, black honey, and peanuts.
Goods that have export seasons and do not have quantitative quotas (exemption from customs duties within the export seasons), the most important of which are: artichokes, mushrooms, asparagus, sweet peppers, fresh grapes, watermelon
Commodities that do not have quantitative quotas or export seasons, the most important of which are dates, guavas, mangoes, tangerines, grapefruits, black pepper, star anise, fennel, coriander, caraway, seeds and plants used in the manufacture of perfumes and medicines, salty and sweet lemons.
agricultural imports:
The agreement also stipulated that the Egyptian side should reduce or cancel customs duties imposed on imports of some agricultural products from the European Union, such as meat and dairy products, in addition to some vegetables and fruits. For certain products, customs duties would be canceled or reduced within the agreed tariff quotas.
Third: manufactured agricultural commodities:
For Egyptian exports:
The agreement provided for a limited partial liberalization of manufactured agricultural commodities exported from Egypt to the European Union, according to three lists:
1- Goods not produced by Egypt, and the two sides exchange customs duties on them.
2- Goods in which the European Union cancels duties on the industrial component.
3- A third list cancels the fees for the industrial component and cancels 30% of the fees for the agricultural component.
As for Egyptian imports of manufactured agricultural commodities, the agreement provided for arrangements to be applied to the European Union’s exports of manufactured agricultural commodities to Egypt, divided into three lists:
The first list:
It contains commodities from which, two years after the entry into force of the agreement, customs duties and other charges of similar effect imposed on imports thereof from the European Union shall be cancelled.
The second list:
Goods are subject to customs duties and fees of similar effect imposed on imports from them into Egypt to the following reductions:
5% of the basic fees two years after the entry into force of the agreement.
10% of the basic fees three years after the entry into force of the agreement.
15% of the basic fees four years after the entry into force of the agreement.
The third list:
Goods are subject to customs duties and fees of equivalent effect imposed on imports thereof to the following reductions:
5% of the basic fees two years after the entry into force of the agreement.
10% of the basic fees three years after the entry into force of the agreement.
25% of the basic fees four years after the entry into force of the agreement.
Egypt ratified the association agreement with the European Union in 2003, and the European Parliament also ratified it, in addition to the parliaments of the European member states of the European Union.
– And the desire of both parties to expedite the activation of the agreement and take advantage of the advantages it provides without waiting for the ratification and notification procedures, it was agreed in the form of an exchange of letters between the Minister of Foreign Trade and Mr. Pascal Lamy, the European Trade Commissioner in December 2003 to start applying the commercial part of the Egyptian-European partnership agreement As of January 1, 2004, and the issuance of Presidential Decree No. 11 of 2004 regarding the approval of the early implementation of some provisions of the Euro-Mediterranean Agreement.
Accordingly, the implementation of the Egyptian-European Partnership Agreement started as of January 1, 2004, with a 25% reduction on Egyptian imports from the European Union of industrial commodities included in the first list (Annex 2 of the Egyptian-European Participation Agreement).
As of January 1, 2005, another 25% was reduced, bringing the total customs reduction on Egyptian imports included in the first list from the European Union to 50%.
As of May 1, 2004, ten new members from Eastern Europe joined the European Union, and thus joined the Egyptian-European Partnership Agreement. Benefiting from the expansion of the European market, especially after the accession of new members, which entails adding a large consumer power amounting to more than 105 million people to the European Union markets, which amount to 375 million people.
As a result of the accession of new members to the Egyptian-European Association Agreement, a harmonization agreement was concluded between Egypt and the European Union in December 2004, which provides for expanding the shares of Egyptian agricultural exports to the European Union markets, as stipulated in Article 21 of the Association Agreement.
Cancellation of customs duties on Egyptian exports of industrial goods and any other fees of similar effect without any quantitative restrictions or other restrictions of similar effect.
Cancellation of quantitative quotas on Egyptian exports of spinning and weaving products.
Increasing the quantitative quotas for some agricultural commodities, extending some export seasons for some commodities, and canceling customs duties within the framework of annual quotas for new commodities.
Advantages of the agreement:
The Egyptian-European partnership agreement offers many advantages to the Egyptian economy, represented in the following:
First: In the commercial field:
For industrial commodities
1- Increasing the volume of Egyptian industrial exports to European markets by removing customs duties and any other fees of similar effect and canceling all quantitative restrictions on them as of 1/1/2004.
2- Benefiting from the early abolition of quantitative restrictions (quotas) on Egyptian exports of products of the spinning and weaving industry without waiting for the date for the abolition of these restrictions under the Textiles and Clothing Agreement within the framework of the World Trade Organization (January 1, 2005) and before canceling quotas on the exports of other countries, especially Asian ones.
For manufactured agricultural and agricultural commodities:
1- Expanding the list of Egyptian agricultural commodities that can be exported to the European Union to more than 100 commodities, compared to 25 commodities in the 1977 agreement.
2- Obtaining quotas for exporting new agricultural commodities that did not previously enjoy any preferential trade quotas or advantages when exported to European Union countries, such as: molasses, flowers, strawberries, mangoes, guavas, dates, onions, dried garlic, peas, eggplant, juices, vegetable oils, potatoes and peanuts.
3- Reducing entry prices for some Egyptian products.
4- Extending export seasons for some agricultural commodities.
5- Doubling the export quotas of many of the main agricultural export commodities exported by Egypt several times, such as potatoes 230%, oranges 769% and beans 166%.
6- Reducing the customs duties imposed by the European Union on quantities in excess of the quotas exempt from customs duties, “reduced to 3% for potatoes.”
7- Increasing the export quotas of most agricultural exports by 3% annually, and negotiating every three years to increase them.
8- The agreement allows for further liberalization of trade in manufactured agricultural commodities by canceling the industrial component fee on some commodities, and 30% of the agricultural component on other commodities, in addition to obtaining a share that is completely exempt from any fees on one thousand tons of Egyptian jam.
Second: Programs to modernize the Egyptian economy and support its capabilities:
The Egyptian-European partnership agreement provides grants to help the Egyptian economy amounting to 670 million euros, including a grant of 250 million euros to modernize the Egyptian industrial sector, in addition to financing health sector reform programs with 110 million euros, education with 100 million euros, and the Social Fund for Development 155 million. Euros, and the private sector modernization program 55 million euros.
Third: In the field of investment:
The agreement allows attracting more direct investments from the European Union to Egypt.
