Egypt-UK: Stabilising bilateral trade post Brexit

Ahmed Kotb , Tuesday 15 Dec 2020

Egyptian exporters and traders have praised the new free-trade agreement between Egypt and the UK

Stabilising bilateral trade post Brexit
Agricultural produce is among Egypt’s main exports to the UK (photo: AFP)

The new association agreement signed between Egypt and Britain on 5 December provides a platform to deepen trade and investment relations between the two countries after Brexit by securing free trade.

The agreement, expected to enter into force on 1 January after the United Kingdom ends the transition period to leave the European Union, ensures the continuity of preferential access to both markets as it secures the same advantages that have been provided by the Egyptian-European free-trade agreement.

Egyptian exporters and importers have been calling for concluding a free-trade agreement between Egypt and the UK to preserve the volume of trade exchanges between the two countries, worth a total of £3.5 billion ($4.67 billion) in 2019.

According to a statement by the British foreign office, the agreement will provide tariff-free trade on industrial products, as well as liberalisation of trade in agriculture, agri-foods, and fisheries, making trade easier and delivering significant savings to businesses in both the UK and Egypt.

“This agreement highlights the strength of the UK-Egypt partnership and reflects our shared ambition to build cooperation on a range of important issues,” the UK Foreign Secretary Dominic Raab said.

“Stronger trade links and more investment will grow our economies and help both our countries build back better from the impact of the coronavirus pandemic,” he added.

“The new trade deal between Egypt and Britain is considered a mini-agreement building on an agreement previously signed between Egypt and the European Union,” said Hani Hussein, head of the Egyptian Agricultural Export Council.

He explained that Britain’s exit from the European Union meant that it would not be subject to the agreements signed with the EU, prompting the British government to sign trade agreements with various countries in preparation for its exit by the end of this year.

The UK was automatically part of about 40 trade deals that the EU had signed with more than 70 countries. The British government has signed or agreed in principle trade agreements with 55 countries over the last two years in preparation for the post-Brexit period starting on 1 January. Britons voted 52 per cent to 48 per cent in favour of leaving the European Union in a referendum on 23 June 2016.

Hussein said the new deal between Egypt and the UK included an agreement for Egyptian agricultural crops exported to Britain, whereby these products would enjoy the same customs exemptions as in the European Union agreement.

“Most Egyptian agricultural crops exported to the European Union enjoy customs exemptions, except for a few products such as strawberries, garlic, cucumbers and grapes,” Hussein said, adding that export quotas were determined and customs duties imposed if they exceeded a certain limit, which would be the same case for the agreement with the UK.

A statement by the Egyptian Foreign Ministry said that some agricultural products would only be exported in quantities set by the association agreement between Egypt and the UK, adding that the two sides had pledged to work together to achieve greater free trade in agricultural goods during the coming period.

Anthony Pile, chairman of Blue Skies Holdings, a fresh fruit and freshly squeezed juice company with production facilities in Ghana, Egypt, the UK and South Africa, commented on the new association agreement between the two countries, saying it was vital to securing jobs, prosperity, sustainability and driving much-needed economic growth in both Egypt and the UK.

“Now, more than ever in the current international climate, we need the security of a seamless continuation of free trade to safeguard the future of our business,” he said.

Moreover, the agreement will allow British cars to receive the same customs benefits as European cars with zero customs, making them more competitive in the Egyptian market.

Effat Abdel-Ati, head of the Cars Division at the Cairo Chamber of Commerce, said that the prices of cars imported from Britain would be stabilised after the agreement was signed between Egypt and Britain, as it guaranteed the import and export of cars without customs duties.

“Many cars are imported from the UK, but their prices would have been uncompetitive had there been no free trade deal,” he said.

According to the British foreign office statement, Egypt is an important market for UK exports worth £2.3 billion in 2019 (£1.5 billion in goods exports and £0.8 billion in services).

Major goods exports to Egypt from the UK last year included metal ores (£235 million) and medicinal and pharmaceutical products (£111 million).

The statement added that consumers and businesses would continue to benefit from more choice and lower prices on goods imported from Egypt, and that major imports from Egypt to the UK in 2019 included intermediate electrical goods (£193 million) and vegetables and fruit (£160 million).


*A version of this article appears in print in the 17 December, 2020 edition of Al-Ahram Weekly.


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