Doing business with the EU newsletter by abstraks



                       Business without borders
The long-standing relationship between Egypt and the EU entered a new phase; the EU-
Egypt Neighbourhood Policy Action Plan was agreed on 6 March 2007. Egypt and the EU
are in the process of building an ever-closer partnership, building upon and complementing
our already existing close ties through the Barcelona process and the EU-Egypt Association

European Neighbourhood Policy and business

"Egypt and the EU agree, through the current Action Plan, to enter into intensified political,
security, economic, trade, investment, scientific, technological and cultural relations, and
shared responsibility in establishing an area of peace and stability including the prevention
and settlement of conflicts in the region and to reinvigorate regional and sub-regional
cooperation." (Introduction to Action Plan)

What are the agreed priorities for joint co-operation relevant to business?

  Economic reform and investment: creating jobs, improving economic governance,
   improving the overall business climate, building up the private sector, financial sector
   and tax reforms, boosting inward investment
  Trade related issues, markets and regulatory framework: continued liberalisation of
   trade in goods, agriculture and services, opening the EU internal market of over 500
   million consumers to Egyptian products, supporting reform of standards and conformity
   assessment, improving industrial competitiveness, new technologies
  Transport, Energy and Environment: co-operation in air, maritime, road safety, linking
   transport networks; energy co-operation in electricity, oil and gas, renewable energy,
   efficiency and supply; co-operation in climate change, cleaner Mediterranean Sea, air,
   coastal management, desertification, soil and water pollution.
  Science and technology, research, communication: strengthen scientific co-operation
   and research, develop national capabilities in R&D and innovation, broaden links with
   EU R&D institutions, promote information technology for business, government and
  Social development: improving quality of life and living standards for citizens, reducing
   poverty and illiteracy, expanding social security coverage, develop education and
   schooling, health reforms
  People-to-People contacts: encourage more exchange between citizens, in education
   (including ENP scholarship programme), between youth, researchers, civil society, sports
   and cultural groups, business, trade unions.
The EU-Egypt European Neighbourhood Policy (ENP) Action Plan opened a new chapter
in EU-Egypt relations and upgraded our relationship in a substantial way. The European
Neighbourhood Action Plan is the "work programme" of the Association Agreement. The
European Neighbourhood Policy (ENP) complements the Barcelona-process, which remains
the multilateral element of EU-Med relations and the Association Agreements (which remains
legal base for bilateral relations) with additional bilateral commitments through the ENP
Action Plan. The ENP Action Plan helps to fulfil the provisions of the Association Agreement
by setting out more detailed definition of actions. The European Commission agreed a €558
million package of financial support for Egypt for 2007-2010, to support implementation of
the Action Plan.

In the field of economic and trade provisions, the ENP Action Plan supports Egypt’s
national development, modernisation and reform objectives, offers Egypt a participation in the
EU internal market and leads to continuing trade liberalisation, including in agriculture and
services. Though the ENP, the EU offers Egypt participation in the European Internal
Market, which is today the largest single free trade area where goods, people, services and
capital can move freely, giving access to more than 500 million consumers in 27 countries.
Participation in the EU Internal Market means for trade in goods: progress on regulatory
convergence, adoption of EU technical norms and standards (easier to sell to EU without
additional testing and certification procedures). For trade in services, this means moving
towards EU regulatory framework on right of establishment and company law. For capital
movements, reforms will lift restrictions and make cheaper capital available. In addition,
flanking regulatory policies (competition, prudential supervision, taxation, customs, IPR…)
will need to be adopted. ENP partner countries will gradually become part of the EU internal
market and will then also have the possibility to participate in discussions on the development
of further regulatory aspects of the internal market.
Other trade-related provisions in the Action Plan foresee the following: continue
liberalisation of trade in agricultural, processed agricultural and fishery products (negotiations
are ongoing). Furthermore, the Action Plan aims at substantially reducing non-tariff barriers,
harmonisation of standards, certification (a process already begun). The Action Plan also
enhances cooperation between Egypt and the EU in the field of sanitary and phytosanitary
issues (SPS) and explores areas where the two sides might cooperate in such areas as
legislation and implementing practices. Concerning investments, the establishment of
companies and foreign investment should be facilitated and obstacles progressively removed,
according to the Action Plan.

Barcelona Process and a Euro-Med free trade area
The Barcelona process launched by Euro-Mediterranean Foreign Ministers in 1995 formed
an innovative alliance based on the principles of joint ownership, dialogue and cooperation.
The Partnership has been driven by a common political will to build together a space of peace,
security and shared prosperity. It has been successful in creating long-term political and
institutional links between Europe and its Mediterranean partners; in establishing the
foundations for free trade and in engaging Mediterranean partners to the path of reform. The
target of a Euro-Med Free Trade Area was set for 2010 both through a regional dimension
(South-South Agreements) as well as through bilateral Association Agreements that have
been concluded with individual Mediterranean partner countries.
EU-Egypt trade relations
For years, the EU has been Egypt’s main trade partner (followed by US and China). The
enlarged EU in 2007 represented about 34% of Egypt’s total trade flows with the world with
more than 16.3 bn Euros. This accounts for 34% of Egypt’s imports and more than 33% of its
exports. These figures have increased by an average of 15% every year since the
implementation of the AA (1st January 2004) and potential is still very high. Among EU
Member States, United Kingdom, Italy, Germany and France are Egypt's largest trading

The EU is the Nº2 (closely following the US) investor in Egypt and Egypt is the main
recipient of EU investments in the Mediterranean region with €3 billion for the fiscal year
(July to July) 2006/2007 (€2.4 billion for the fiscal year 2005/2006).

The main products traded between EU and Egypt are energy, machinery, transport equipment,
chemicals, manufactured goods and agricultural products.

                                       EU27-Egypt Trade (2007)
                                            17 bn Euros

                                         Others                        Beverages & T obacco
                 Miscellaneous            1%         Food & live animals       1%
              manufactured articles                         5%                          Crude materials,
                      8%                                                              inedible, except fuels

                                                                                               Mineral fuels,
     Machinery &
                                                                                           lubricants and related
 transport equipment

                                                                                          Animal & vegetable
                                                                                           oils, fats & waxes
                             Manufactured goods                  Chemicals & related                0%
                             classifeid chiefly by                    producs
                                    material                           13%

Source: Eurostat

Egypt is the main recipient of EU investments in the Mediterranean region with €3
billion for the fiscal year (July to July) 2006/2007 (€2.4 billion for the fiscal year 2005/2006).
Investments are spread in the oil and gas, info technologies, construction and industrial
sectors. In fiscal year 2006 non-oil investments reached 70% of total FDIs, compared to a
more 30% in previous years.

Amongst the EU MS, the main investors in Egypt are UK (with 54% of the total investments),
followed by Italy (40%) and Germany (2%).
                                        Inflow of foreign direct investment in
                                                      Egypt (total)
                                               Ara b
                                            c o untrie s
                                                28%                                  EU

                                                               US A
Source: Central Bank of Egypt

Impact of the Association Agreement on trade

Following the entry into force of the EU-Egypt Association Agreement EU-Egypt in 2004,
bilateral trade has been steadily increasing: €11,5 billion in 2004, €13,3 billion in 2005 and €
16.3 billion in 2006 (compared to an average of € 10 billion in previous years) with an
upward trend for both Egyptian exports to the EU which have increased by 45 % in 2006 and
EU exports to Egypt which increased by 6%.

                                                    EU27-Egypt Trade

                                                                                     16,798           17,238
                16,000                                                 13,724
                14,000                              11,840
                12,000              9,923                                                       10,127
      M Euros

                10,000                         7,605                            7,669         7,111
                 8,000         6,346
                 6,000                      4,235
                         Jan.-Dec. 2003 Jan.-Dec. 2004 Jan.-Dec. 2005 Jan.-Dec. 2006       Jan-Dec 2007

                                            Import         Export     Total Trade

Source: Eurostat

The Association Agreement has improved Egypt’s access to the EU market via reduced
Custom duties and increased quotas. As a consequence, Egypt’s exports of agricultural
products to the EU have increased by 80% between 2003 and 2006.
                                          EU Imports from EG (agricultural products)

             700,000                                                                                                     604,162
             500,000                                                         431,541
   M euros




























Source: Eurostat

In addition, the EU and Egypt have negotiated further liberalization of trade in agriculture,
processed agriculture goods and fisheries products which will also improve EU- market
access for Egyptian products.

Since 2005, Egypt’s trade deficit has decreased substantially by 60% although it has
experienced an increasing trend during 2007.

                                                 Egypt's trade deficit with the EU

                            M Euros
                                                 Jan.-Dec.    Jan.-Dec.       Jan.-Dec.   Jan.-Dec.       Jan.-Dec.
                                                   2003         2004            2005        2006            2007

Source: Eurostat

The tariff dismantling schedule under the Association Agreement

The core of the EU-Egypt Association Agreement is the establishment of a Free Trade Area
(FTA) between Egypt and the EU with reciprocal tariff liberalisation for industrial and
agricultural products and the removal of quantitative restrictions and equivalent measures.

For industrial products, Egyptian products can enter freely into the EU: A complete
dismantling of EU-customs duties and other charges having equivalent effect took place as of
1.1.2004, there are no quantitative restrictions. For European industrial products into Egypt,
there is a gradual abolition of customs duties according to a tariff dismantling schedule (2004
– 2019), with personnal cars to be liberalised for imports into Egypt only in 2019.
                                                                                                                 Annex 5:
                                                                                                        Motor vehicles for transport of
100 %                                                                                                             persons
   Share of EU total industrial exports to Egypt

                                                                                                       Annex 4:
                                                                                              Clothes, electrical appliances,
                                                                                                 cosmetics, furniture and
                                                                                              vehicles for transport of goods

                                                                                        Annex 3:
                                                                                Semi manufactured goods and
                                                                                   construction materials

                                                            Annex 2:
                                                         Raw material and
                                                       industrial equipment

                                                   Year 1                     Year 4                       Year 10          Year 13       Year 16

For Agricultural products, according to the Association Agreement, there are currently lists
on both sides:

        1. For Egyptian Products into the EU, there is a 100% customs duties reduction for a list
           of agricultural and processed agricultural products; with increased quotas. For almost
           all products on the list, the Association Agreement grants a 100% reduction of
           customs duties, in many cases up to certain tariff quota, in other cases free, such as
           grapes, watermelons, asparagus, etc. (Annex to Protocol 1and Annex II to Protocol 3).

        2. For EU Products into Egypt, there is a reduction of customs duties between 25% to
           100% for a list of products, in some cases within the limit of a quota. (Annex to
           Protocol 2 and Protocol 3). There is a gradual tariff reduction for processed
           agricultural products.

The AA foresees that in 2006, the EU and Egypt will examine the situation with the aim of
establishing a greater liberalisation of their trade in agricultural, fisheries and processed
agricultural products. Fist exploratory talks took place in 2006, formal negotiations started on
8 February 2007.

A complete version of the Association Agreement can be obtained in the following address:

How to benefit from preferential duties

In order to benefit from the Association Agreement provisions, namely preferential duties, the
exporter should accompany the imported goods with a EUR.1 certificate of origin.

If an Egyptian exporter wants to know the customs duties applied to its products when
exported to the EU, they can access the EU Customs Tariffs Database:
If an European exporter wants to know the customs duties applied to its products when
exported to Egypt, they can access the Egyptian Customs website: (information displayed in

The European Commission Export Helpdesk

The Export Helpdesk is a free online service for exporters, importers, trade associations and
governments from developing countries to more easily access the EU market. The website
provides imports tariffs to the EU, customs documents, Rules of Origin, trade statistics, useful
links, market place, contacts section. It also gives detailed on-line information as to the EU
and Member State specific requirements for each particular product (including SPS, labelling,
marketing, and more) as well as the Member State internal taxes that apply (VAT and excise).
In other words, it turns the Export Helpdesk into a "one-stop shop" for information on
exporting from a developing country to the EU.

Export Helpdesk for developing
Market Access Unit
DG Trade - European Commission

Fax: +32-2-29.67.393

Trade related assistance
Our overall ongoing co-operation programme is of €1.2 billion (approximately EGP 8.4
billion) in grants, plus €2.8 billion loans by the European Investment Bank over the last 20
years. Our programme with Egypt is the EU’s 5th largest programme in the world. In 2005,
the EU has disbursed 145 Mi € on cooperation programs with Egypt. Trade related assistance
is a major component of EU’s cooperation with Egypt.

Concerning the EU’s financial commitments under the ENP, the EU has agreed €11.18 billion
for global ENPI funding 2007-13 for bilateral, regional and cross-border activities; and adds
new instruments: Twinning, TAIEX (TA). This is a 32% real increase over previous funding
levels. The South's share of global funding is unchanged: the EU allocated 70% to the
Mediterranean partners 2004-2006, 30% to Eastern partners. Under the ENPI, Egypt will be
allocated €558 million for 2007-2010 through the National Indicative Programme.

Trade Enhancement Program (TEP)

The Trade Enhancement Programme (TEP) included three different components designed to
assist Egypt in meeting the globalisation challenge (worth €46 million in grant assistance), as
part of the EU’s support to economic modernization:

 TEP A: a €20 million technical assistance programme to the MoTI focusing on trade
facilitation. The TEP-A contributed to the growth of trade and export activities, thus fostering
economic growth and employment with 5 priority areas:
          Commercial diplomacy (Egyptian Commercial Service)
          Implementation of the EU-Egypt Association Agreement
        WTO agreements
        Export promotion
        Trade facilitation (support to GOEIC)

 TEP B: provided €40 million as budgetary support to back trade reforms implemented by
the Egyptian government. The objective was to improve the access of Egyptian producers to
international markets, and the competitiveness of their products. The programme outcomes
         Modernising customs services
         Export promotion
         Improving standards

 TEP C: provided €6 million as technical assistance for Customs Reform implemented by
the Egyptian government. The objective was to reduce the cost of doing business, especially
as regards foreign trade transactions, to enhance economic efficiency and foster
competitiveness of exports. The ambitious programme centered on 5 main pillars.
         Valuation and origin
         Intelligence
         PCA
         Middle management training
         Internal/External Communications.


The Industrial Modernisation Programme has been funded by the European Commission for
an amount of €250 million to promote GDP growth and competitiveness of the private
enterprise sector, with special emphasis on small and medium-sized enterprises in the context
of continued economic liberalisation. The specific objectives of the program were:
 Assist private enterprises in their development,
 Strengthen business associations,
 Support institutions
 Support export-oriented SMEs.

The Industrial Modernisation Programme is managed by the Industrial Modernisation Centre
providing demand-driven services for the private sector companies and institutions and
support to the MoTI, notably in the policy-making area.

Twinning programmes

The twinning programme is a powerful tool developed for candidate countries seeking EU
membership. It assists candidate countries to strengthen their administrative capacity to
implement European Community legislation as future Member States of the European Union.
More than 1,200 twinnings have been implemented in Europe since then. Under the new
European Neighbourhood Policy, Egypt has now access to this co-operation instrument. The
twinning instrument will play an important role in the implementation of the EU/Egypt Action

The first twining agreements between the European Union and Egypt in the sectors of tourism
and postal services were signed ending February in Cairo. France, for postal services, and
Austria for tourism, have been selected as twinning partners. The overall funds allocated for
the twinning programme are €27 million.

Egyptian-European Business community

CEEBA: Confederation of Egyptian European Business Associations

The Confederation of Egyptian European Business Associations (CEEBA) was created in
2004 as a coordinative body to guarantee the cooperation between the existing European
bilateral chambers and act on behalf of the non-existent ones.

 Create a forum for Egyptian Pan-European dialogue
 Coordinate between EU-Egypt bilateral associations and intensifying the cooperation at
   the Pan-European level.
 Promote Trade, Investments and Technology transfer between Egypt and the EU
 Support the EU-Egypt Association Agreement
 Act as a bilateral chamber for EU member states that do not have a bilateral chamber
 Support, coordinate, outreach and implement EU and MS economic programs and projects

Dr. Alaa Ezz, Secretary General
21, Soliman Abaza St, off Gamaet El Dowal El Arabeya St., Mohandessin, Cairo
Tel: +20-2-336-81-83, Fax: +20-2-336-87-86

Bilateral chambers of Commerce

 British Egyptian Business Association (BEBA)       German-Arab Chamber of Industry and
 Ms. Laila El Maghraby, Executive Director          Commerce (AHK)
 124, Nile St., Agouza, Cairo                       Dr. Peter Gopfrich, Chief Executive Director
 Tel: +20-2-749-14-21, Fax: +20-2-760-60-83         Ms. Marion Kusmann, Executive Officer
 Email:                            21, Soliman Abaza St, off Gamaet El Dowal El
 Website:                           Arabeya St., GIC Tower, Mohandessin, Cairo
 Club d’Affaires Franco Egyptien (CAFÉ)             Tel: +20-2-336-81-83, Fax: +20-2-336-80-26
 Mr. Atef Moukhtar, Director General                Email:
 1, Wadi El Nil St. 4th Floor                       Website:
 Mohandessin, Cairo                                 Egyptian Belgium Business Association
 Tel: +20-2-346-94-17, Fax: +20-2-346-94-19         14, Omar Ibn El Khattab Street, Nasr City, Cairo
 Email: café                             Tel: 02 690 76 11
 Website:                           Fax: 02 291 25 23
 Egyptian Scandinavian Business Association         Website:
 Mr. Mohamed Abou Alam, General Secretary           Greek Chamber of Commerce in Cairo
 44, Gol Gamal St.                                  Mr. Nabih Berzi, chairman
 Agouza, Cairo                                      17 Soliman el Halabist, Cairo
 Tel: +20-2-346-67-50, Fax: +20-2-346-38-90          tel.:02-5754970
                                                    Alexandria Branch:
                                                    18 Sidi Metwalli Str., Alexandria
                                                     tel.: 00203-4862698
 Italian Chamber of Commerce in Egypt
 Mr. Soliman El-Wazzan                                Egyptian Dutch Business Club
 Secretary General                                    Mr Tarek Tawfik - Chairman           Mr Frans van Rijn – Secretary
 33, Abdel Khalek Tharwat Street Downtown             Contact:
 Tel.: 002 02 3922275 / 002 02 3937944.               Tel: 02-7368752

Egyptian European Council

The Egyptian European Council (EEC) was founded in 2003 by high level Egyptian
businesspeople, bankers, media persons, economists, industrialists, diplomats, politicians and
academics. It aims at further strengthening relations between Egyptian institutions,
corporations and organizations and European Union and their Member States.

The Council aims at promoting EU-Egypt business via the following activities:
    Regular dissemination of Egyptian/EU related business, economic and trade news
    Providing a regular forum for discussion by organizing workshops and seminars
    Coordinating activities with other similar bodies such as EU specialized agencies
    Coordinating between representatives and ambassadors of the EU states, in order to
      enlarge scope of cooperation and understanding
    Developing a market database of the EU countries

President: Dr. Ibrahim Kamel
Vice President: Amb. Dr. Ihab Sourour
Secretary General: Dr. Mona L. Zaki
6A, Moustafa Rafaar St, Cairo Aviation Building, 5th Floor
Heliopolis, Cairo
Tel: +20-2-269-37-77, Fax: +20-2-269-48-88

Other useful business links:

 EU-Egypt Association Agreement (on the
 Delegation’s website):                                             Federation of Egyptian Industries (FEI) Mr. Hani Hafez, Chairman’s Counsellor
                                                     1195, Cornish El Nil, Cairo
 European Commission External Trade                  Tel: +20-2-579-65-90, Fax: +20-2-579-65-93        Email:
 Export Helpdesk for Developing Countries:                       Federation of Egyptian Chambers of
 European Standards and CE marking                   Dr. Alaa Ezz, Secretary General, CEO                                 4 El Falaky Square, Bab El Louk, Cairo
                                                     Tel: 7951136 7956066 7953677
 Customs Duties towards the EU                       Fax: 7943801 7951164 email:
 General Organisation for Import and Export
 Control (GOIEC)                                     Industrial Modernisation Centre (IMC)
 Mr. Osama Mohamed Abd Elmonem, General              Email:
 Manager International Relations                     Website : www.imc-egypt-org
 1, Intersection of Ramese and Maarouf St.
 Email:                        Egyptian Chamber of Food Industries (CFI)
                                                      Mr. Tamer Badrawy, Business Development
 Egyptian Customs:                                    Manager                                   1195, Cornish El Nil
 Applicable duties are displayed only for the product Ramlet Boulak, Cairo
 requested by its HS Code. For the moment only the Tel: +20-2-574-86-27, Fax: +20-2-574-83-12
 Arabic version is available.                         Email:
                                                      Website :
 Ministry of Trade and Industry Website:
                                                      Egyptian Centre for Economic Studies
 General Authority for Investments and Free           (ECES)
 Zones (GAFI)                                         Mr. Ahmed Galal, Executive Director
 Email:                              Ms. Omneia Hemly, Principal Economist
 Website : www.gafinet                                Nile City Building, North tower, 8th Floor,
                                                      Cornish El Nil, Ramlet Boulak, Cairo
                                                      Tel: +20-2-461-90-37, Fax: +20-2-461-90-45
                                                      Email :
                                                      Website :

                                                     Economic Research Forum (ERF)
                                                     Mr. Diaa Nour El-Din, Economist
                                                     7, Bouls Hanna St., Dokki, Cairo
                                                     Tel: +20-2-337-08-10, Fax: +20-2-761-60-42

For further information:

EU Commission Delegation Egypt,

Contact person:
Rodrigo Romero van Cutsem
Tel: +202 3749 4680 Ext. 218

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