Egypt decided that it will not renew a three-year transit-trade agreement with Turkey in the latest evidence of worsening relations between the two countries, Egyptian officials announced on Sunday.

The agreement, signed in 2012 during Islamist president Mohamed Morsi's year in power, facilitated the export of Turkey’s goods to the Gulf and African nations through Egypt's mainland via Egyptian ports, Mohamed Abdel Kader, head of the Turkey and Arab East Programme of the Ahram Center for Strategic Studies told Ahram Online.

"This allowed Turkey to bypass the Suez Canal and other shipping costs which it had previously avoided by transporting its merchandise overland through Syrian ports, which was no longer possible in war-torn Syria," says Abdel Kader. 

Revenues from the Suez Canal are one of the main sources of foreign currency revenue for Egypt, alongside tourism and remittances from Egyptian expatriates.

In return, the deal was meant to facilitate Egypt exports to Europe through Turkish ports, but "poor economic conditions in Egypt prevented it from taking advantage of that aspect of the agreement," he explains.

The decision not to renew the deal, set to expire in April 2015, is not only economic, as relations between the two nations have steadily deteriorated since the Egyptian armed forces ousted Morsi in July 2013 following nationwide popular protests against the Islamist, in what Turkish president Recep Tayyip Erdogan condemned at the time as a "coup."

"The agreement will not been renewed because Egypt feels that it has already derived all the possible benefits from the agreement, with all aspects being considered," Hwaida Essam Abdel Rahman, deputy assistant minister for foreign affairs for south and eastern Europe, told Ahram Online.

Turkey is one of Egypt's main trade partners. Turkish imports to Egypt totalled $1.15 billion during the quarter ending in July 2014, according to the latest data published by the Central Bank of Egypt, while the value of Egypt's exports to Turkey for the period was $702 million.