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					                                PROTOCOL
                          of the Second Session of
                        the Joint Trade Committee
                                  between
             the Czech Republic and the Arab Republic of Egypt

       Pursuant to the Article 8 of the Trade Agreement between the Government of the Czech
Republic and the Government of the Arab Republic of Egypt signed in Cairo on November 28,
1993, the second Session of the Joint Committee was convened in Cairo on February 17 - 18, 2004.

        Mr. Miroslav Somol, Deputy Minister of Industry and Trade headed the Czech delegation.
        Mr. E. Mohamed Hefni, First Under-Secretary, Head of the Egyptian Commercial Service
(ECS) - Ministry of Foreign Trade, headed the Egyptian delegation.
        The compositions of the Czech and Egyptian delegations are listed in Annexes No. I and
No. II.

        During his stay in Cairo, the head of the Czech delegation had bilateral consultations with
H.E. Mr. Ali Fahmy Al-Saiedi, Minister of Industry and Technological Development, H.E. Mr.
Mokhtar Khattab, Minister of Public Enterprises, H.E. Mrs. Fayza Abul-Naga, Minister of State of
Foreign Affairs and H.E. Mr. Abd El Salam El-Mahgoub, Governor of Alexandria. During
the deliberations, apart from the exchange of viewpoints on the present economic and trade
relations, a firm and sincere intention to strengthen bilateral cooperation was emphasized.

        The second Session of the Joint Committee was conducted under the constructive and
cordial atmosphere reflecting the traditional friendly relations between the two countries and their
desire to strengthen and further develop economic and commercial relatio ns on the basis of equality
and mutual benefit.

       Both sides remarked the official visit of H.E. Mr. Vladimír Špidla, Prime Minister of
the Czech Republic, to the Arab Republic of Egypt in September 2003 and the meeting with H.E.
Dr. Atef Ebeid, Prime Minister of the Arab Republic of Egypt, that gave a serious impetus to
the development of Czech-Egyptian relations.


Opening remarks

       The head of the Egyptian delegation, in his opening remarks, extended a cordial welcome to
the head and the members of the Czech delegation and expressed his appreciation on
the longstanding relationship between the Czech Republic and the Arab Republic of Egypt.

       The head of the Czech delegation, in response, expressed thanks for the warm welco me to
the Czech delegation on its arrival to Cairo and for the kind hospitality.


Adoption of the Agenda

       The agenda, as adopted by the Joint Committee, is attached as Annex No. III.
                                                 2

Review of Economic Situation in the Czech Republic and the Arab Republic of Egypt

        The head of the Czech delegation informed the meeting that the overall macroeconomic
situation in the Czech Republic was quite satisfactory. The Czech economy has experienced a solid
GDP growth over the last three years, which reached 2.9 % in 2003. Moreover, the industrial
production increased by 5.6 % in 2003 compared to 2002. The inflation rate of just 0.1 % is under
control of the central bank, unemployment rate slightly grew to 10.4 %. Total exports for 2003
amounted to US$ 48.7 billion, which shows an increase of 26.9 % compared to 2002, and imports
expanded by 25.9 % to reach US$ 51.3 billion. The Czech Republic’s trade with advanced market
economies accounted for 75.6 % of total exports and 68.5 % of total imports in 2003. Furthermore,
trade deficit for the year 2003 was US$ 2.6 billion - lower than that in 2002.

      The head of the Egyptian delegation informed the Czech side about the Egyptian
commitment to an Economic Reform Program started in 1991.

       The macroeconomic discipline has been maintained and restructuring as well as reforms are
an ongoing process, inflation was low at 2.9 % in 2002/2003, foreign debt reached 36.4 % of GDP
which represented a half of its percentage 10 years ago.

       The current account deficit witnessed a considerable improvement, declining from
4.9 % of GDP in 1992/1993 to 2.4 % of the GDP in 2002/2003.

       Unemployment rate decreased from 10 % in the early nineties to around 8 % at
the end of the year 2003.

        Growth rate was 3.2 % in 2002/2003 which is the lowest rate in the last few years due to
the regional and international economic and political crisis.

       Egypt rapidly shifted to a market economy, a transition that demands implementation of
a consistent economic policy. Hence real economic growth takes place in an enabling environment,
while macro-and microeconomic institutions are rehabilitated.


Review of Bilateral Trade Relations

        Both sides agreed that the volume of trade doesn’t reflect the potentials available in both
countries and that certain procedures should be adopted to increase the level of bilateral trade and
further intensify economic and commercial relationships.

       The Czech delegation outlined the recent development of bilateral trade. According to
the Czech statistical data, Czech exports to Egypt amounted to US$ 36.4 million and Czech imports
from Egypt to US$ 24.3 million in the year 2003, which represents a decrease of 26.2 % and an
increase of 96 % respectively, compared to the year 2002. Trade balance is active in favour of
the Czech Republic. Main Czech export items are passenger cars, machinery, manufactured good
and glass, while cotton, textile products, consumer goods and agricultural products belong to
the most important articles imported to the Czech Republic from Egypt.

       The Egyptian side noted a slight decrease of trade turnover between the two countries and
a notable decrease of Czech exports to Egypt while the Egyptian exports to the Czech Republic
showed a steadily positive trend; however, the Egyptian side emphasized that joint efforts would
have to be exerted to increase the volume of trade in both directions.
                                                  3

Termination of bilateral Trade Agreement between the Government of the Czech Republic and
the Government of the Arab Republic of Egypt signed in the year 1993

        The Czech side mentioned the diplomatic note of the Czech Embassy in Cairo submitted in
May, 2003 proposing the termination of the above mentioned Agreement by the date of the Czech
Republic´s accession to the European Union. The Czech side appreciates the positive response
received from the Egyptian Ministry of Foreign Trade in this respect. The Czech side asked that
the positive response of the Egyptian Ministry of Foreign Trade be confirmed by a diplomatic note
of the Egyptian Ministry of Foreign Affairs at its earliest convenience to finalize the respective
legal process. The Egyptian side promised to submit the official notification by the end of March
2004.

       The Egyptian side confirmed that the Association Agreement between the Arab Republic of
Egypt and the European Union and/or the related Interim Agreement would be automatically
applied to the new Member States of the European Union since May 1 st , 2004.


Protocol on cooperation between the Ministry of Industry and Trade of the Czech Republic and
the Ministry of Foreign Trade of the Arab Republic of Egypt

       Both sides agreed that the Joint Committee would remain an important instrument for
promoting mutual trade, industrial, investment and othe r spheres of economic cooperation after
the accession of the Czech Republic to the European Union. In this connection, the Czech side
submitted an initial draft of the Protocol on cooperation between the Ministry of Industry and Trade
of the Czech Republic and the Ministry of Foreign Trade of the Arab Republic of Egypt.
The establishment of the new Joint Committee is an integral part of this Protocol. The Czech side
would appreciate the Egyptian side´s position on the submitted draft.

       The Egyptian side will consider the draft and give its response at the earliest convenience.


Trade and Economic Cooperation

        Both sides noted with satisfaction the signing of the Memorandum of Understanding on
cooperation between the Czech company ŠKODA TS and the Egyptian Sugar and Integrated
Industrial Company during the session.

        Both sides agreed the measures to promote their bilateral trade relations and investment
activities, among others:

      Establish direct cooperation contacts between the respective Egyptian and Czech Trade and
       Investment Promotion Organizations;
      Encourage corporate sectors to identify development, commercial and industrial projects for
       further elaboration;
      Exchange information on business and investment opportunities;
      Support a more frequent exchange of trade and investment missions;
      Consistently promote participation in international trade fairs;
      Explore the possibility to implement export credit schemes, joint ventures and other means
       as an effort to intensify the bilateral cooperation.
                                                 4

       The Czech side informed about the activities of CzechInvest, the Czech Agency for Foreign
Investment, which organizes training courses under the Investment Promotion Training Institute and
stated that, in case of interest on the Egyptian side, CzechInvest would be ready to offer more
detailed information.

The Czech side handed over the following useful materials on commercial and economic climate in
the Czech Republic:

      Doing Business in the Czech Republic 2003/2004
      Czech Exporters catalogue

The Egyptian side handed over the following useful materials:

      investing in Egypt 2004;
      policy issues on development of small and medium sectors;
      a draft national policy on development of small and medium enterprises in Egypt;
      profile of Micro/SME’s in Egypt;
      international experience in governmental policies for SME’s;
      streamlining the regulatory procedures for small and medium enterprises;
      the study of an operational definition for micro, small and medium sized enterprises.

       The Czech side expressed its support for the participation of Czech companies
in implementation of industrial development projects in Egypt by delivering complete plants,
equipment and machinery. The participation of Czech companies in infrastructure projects in Egypt
was also discussed.


Investment

       The Czech side informed that, owing to a well competitive system of investment incentives
adopted by the Czech Government, a promising inflow of foreign direct investment to the Czech
Republic of almost US$ 30 billion over the last three years has been recorded. The Czech side
expressed its support for the participation of Czech companies in implementation of industrial
development projects in Egypt by delivering complete plants, equipment and machinery.

       The Egyptian side highlighted the investment environment and opportunities in Egypt,
mainly policies, legal framework, incentives, competition safeguards, transparency, dispute
settlement and insurance schemes.


Cooperation in the Banking Sector

        The Czech Export Bank is ready to support the development of business relations between
the Czech Republic and the Arab Republic of Egypt through financing in various forms of Egyptian
imports provided by the Czech companies including issuing of the respective guarantees for
the obligations of Czech exporters.
                                                    5

Cooperation in the Field of Industry

The Egyptian side suggested the following possible areas of cooperation:

      assembling tractors, cars, power equipment and other Czech equipment in Egypt;

      production of fertilizers, metallurgical and textile industries;

      construction of water stations;

      possibility of     joint   manufacturing    of    electrical   equipments   (transformers,
       switchgears).


Cooperation in the Field of SME´s

       Both sides referred to the Agreement on cooperation between the Business Development
Agency and the Ministry of Foreign Trade of the Arab Republic of Egypt signed on May 17 th , 2002
and expressed their interest in developing the cooperation between the SME´s of both countries,
especially:

      exchange experience in the field of creation and development of SME´s;
      support the exchange of business missions and participation of the SME´s in international
       exhibitions, seminars and training programs organized in both countries.


Cooperation in the Field of Agriculture

        Both sides confirmed their interest to promote mutual cooperation in the field of plant
biotechnology applications. In this respect, the following possible topics of these cooperation were
identified:

      resistance of Cucumber, Melon, Squash, Zuccini to zuccini yellow mosaic virus;
      resistance of Apricot and Peach to Plum pox virus.

        Both sides expressed their satisfaction with the results achieved by the common ad hoc
working group in the field of exploring the possibilities enabling exports of Egyptian potatoes into
the Czech Republic. At the same time, the Memorandum of Understanding between the State
Phytosanitary Administration of the Czech Republic and the Central Administration for Plant
Quarantine of the Arab Republic of Egypt concerning imports of non-seed potatoes of Egyptian
origin into the Czech Republic, signed in Prague on January 10 th , 2003, was highly appreciated.

         Both sides exchanged their views on the development of mutual agriculture trade with
a special attention to the Czech Republic´s membership in the European Union since May 1 st , 2004.
In this respect, both sides expressed their intention to maintain the existing trade flows in respective
commodities as well as to further promote mutual agriculture trade, particularly in the framework of
the Association Agreement between the Arab Republic of Egypt and the European Union.


Cooperation in the Field of Tourism

       Both sides agreed to promote the cooperation in the field of tourism, among others:
                                                6

      encourage exchange of visits of tourist experts to be acquainted with the possible fields of
       cooperation in tourism in both countries;
      exchange of information and experience in the field of investment opportunities in new
       tourist areas in both countries, especially therapeutic tourism;
      exchange of promotional materials, information and statistics, as well as participating in
       tourist events and fairs held in both countries.


Multilateral and Regional Trade Cooperation

       The Egyptian side highlighted the preferential treatment for the Egyptian exports within the
regional economic blocks, specifically COMESA and GAFTA and invited the Czech side to get
advantage of such privilege through the joint production in Egypt.


European Union

       Since May 1st , 2004, the Czech Republic is going to become a Member state of
the European Union. Consequently, the prevailing majority of trade policy issues will be handled
within EU’s Common Trade Policy. Nevertheless, the Czech Republic will keep its impact on
the development of the multilateral trading system. On the contrary, it will be amplified by the
Czech Republic’s participation in formation of the EU’s Common Trade Policy.


       Done and signed in Cairo on February 18 th , 2004 in English language in two originals, both
being equally authentic.


            FOR THE DELEGATION                           FOR THE DELEGATION
           OF THE CZECH REPUBLIC                    OF THE ARAB REPUBLIC OF EGYPT


                  Miroslav Somol                              E. Mohamed Hefni
                  Deputy Minister                            First Under-Secretary
           Ministry of Industry and Trade           Head of ECS, Ministry of Foreign Trade

				
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