Eu's Association And Trade Agreement With Egypt example essay topic

A new round of EU - Egyptian association agreement negotiations started in Cairo with the objective of ratifying an agreement between the two sides. During their two-day deliberations the two sides will discuss three main issues, covering 'renovation of industry, the exports, rules of origin (the original source of the production) and agriculture. ' A comprehensive report will be submitted on the results of the meetings which will conclude today to the political leadership in Egypt and the European Union to take the proper decision concerning pending issues, foremost being agricultural issues. The Egyptian side is led by chief of the partnership unity at the Egyptian Foreign Ministry, Gamal al Bayoumi, and the EU by the head of unity, Peter Zingle Taking part in the session were a number of negotiators in all matters debated for discussions, especially agricultural issues.

It is expected that number of these issues will be totally settled at the end of the meetings, and a number of agricultural issues will be left for decisions to be taken on the political level by the European and Egyptian sides. The new round of negotiations for Egyptian partnership with the European Union, is to be held in Cairo, on November 9 - 12. Egypt's assistant foreign minister and chairman of Egyptian - European partnership, Gamal Bayoumi, said that the new talks are aimed at resolving as many issues as possible, so the EU and Egypt can submit subjects that are not settled yet to their political leadership. Despite grave shortcomings in environmental provisions, the EU's association and trade agreement with Egypt has been adopted at the EU's General Council meeting in Luxembourg from 21-22 June 1999, warns Friends of the Earth Europe (FoEE), a federation of independent environmental groups in 29 countries. The association agreement now needs to be reviewed in a high-level ministerial committee in Egypt, then to be signed in autumn and afterwards ratified in the 15 EU national parliaments and the European Parliament. 'At this stage we will call upon government representatives in the EU and in the Egyptian government not to sign the agreement.

Deficiencies in environmental protection measures first need to be rectified so that an association agreement will lead to the benefit for the people and the environment', says Alexandra Wandel, Trade and Sustainability expert of FoEE. 'The EU committed itself in various EU and international agreements to incorporate environmental considerations into all its community policies. The EU does not live up to its commitments in the association agreement with Egypt. Recommendations from several environmental groups for a balanced trade policy and for the integration of environmental provisions of the bilateral trade agreements have been ignored as well by Commission and Council representatives of the EU', comments Wandel. The EU-Egyptian bilateral agreement was developed under the framework of the Euro-Mediterranean Partnership which was set up in Barcelona in 1995.

The Euro-Med Partnership aims to set up a Mediterranean Free Trade Zone (MFTZ) by the year 2010 by gradually concluding association agreements with the 12 Southern Mediterranean states. The MFTZ gradually will lead to the elimination of tariffs in industrial and agricultural goods as well as services. 'The setting up of the Mediterranean Free Trade Zone will have far reaching negative environmental and social consequences', says Munqeth Meh yar, chairperson of Friends of the Earth Middle East. 'Without proper environmental provision, we will soon see the migration of dirty industries to the Southern Mediterranean countries.

Already nowadays the coast of Alexandria in Egypt is a zone of heavy polluting industries that destroy the fragile ecosystem of the Mediterranean Sea. 'Friends of the Earth calls for a strategic sustainability assessment before any further trade liberalization negotiations continue', says Wandel. 'The EU has a responsibility to raise environmental standards in the partner countries as well as to guarantee that through the association agreements environmental regulations in the EU will not be downward harmonized', warned Wandel. The EU has already adopted association agreements with Israel, Jordan, Morocco, the Palestinian Authority and Tunisia. Agreements with Lebanon, Algeria and Syria are underway. Apart from bilateral association agreements, the MFTZ is built up through joint activities in the area of water, energy, transport and agriculture.

If created, the MFTZ will be the most populous free trade zone in the world. Trade between the EU and Egypt was worth more than 9.7 billion euros ($10 billion) in 1998. The EU is Egypt's main trading partner, accounting for about 40 percent of its total foreign trade. This gives the EU a significant impact in terms of influencing Egypt's environment. A new round of EU - Egyptian association agreement negotiations started on Tuesday in Cairo with the objective of ratifying an agreement between the two sides.

Egypt's assistant foreign minister and chairman of Egyptian - European partnership, said that the new talks are aimed at resolving as many issues as possible, so the EU and Egypt can submit subjects that are not settled yet to their political leadership. He also said the EU is going to take part in this round of talks with a large number of negotiators, especially to address agriculture issues. He described the situation as not being 'bad', clarifying that most of the agricultural problems have been settled. At the core of the agreement is the creation of a Free Trade Area (FTA) providing for the free movement of goods, capital and services. Although the agreement also provides for political and cultural dialogue between the two parties, specifically on issues such as security, human rights, the role of non-governmental organisations and illegal immigration, it is believed that the FTA is the component that will have the greatest impact on Egypt. Businessmen last week expressed mixed reactions to the agreement.

Proponents say it will open a huge market for Egyptian products and provide unlimited export opportunities. They argue that the increased competition will force Egyptian producers hitherto sheltered in a relatively closed local market to upgrade the quality of their goods and services. ' A partnership means equal benefits for both sides, but this is not the case with Egypt and the EU,' said MP Fath i Ne " matt allah, a former public sector textiles industry official. He claims that the EU will be able to prevent cheap, competitive Egyptian goods from entering its markets using anti-dumping regulations. But industrialists are not alone in their reservations about the agreement. The Egyptian agricultural sector, which will benefit only from reduced tariffs and increased export quotas, opposes the agreement because it treats agricultural products and processed agricultural goods differently from industrial goods.

All tariffs and quotas for the entry of industrial goods into the EU will be removed as soon as the agreement goes into force. Freedom of tariffs on EU products will occur gradually over a 15-year transitional period. Capital goods and raw materials will be among the first items for which tariffs will be gradually reduced while finished products will be the last. As for the Egyptian inquiries to the EU during the period between the singing the agreement with the initial letters and the final signature, the Minister said that there was an expanded dialogue inside both Egypt and the EU. They also have negotiated on 118 Egypt agricultural products to boost agricultural exports to the European Union. They said that the foreign minister will meet with EU foreign ministers during the coming stage, where the Barcelona declaration will hold a new meeting in Stuttgart, Germany in February 1999.

Concerning the dumping issue, Bayoumi said Egypt expresses its respect for all European countries who both stood with or against Egypt at the beginning. The European Union ambassador in Cairo, Christian Folokofeski, confirmed in press statements today to Arabic News. com that the European Union countries did not impose any embargo on Egyptian potatoes, but health authorities in the EU are concerned with putting aside diseased potatoes. The ambassador said there is mutual cooperation between the EU countries and the Egyptian government to fight this disease. He added that there would be a round of joint negotiations in November to specify the plantation areas that are free of this disease. In Egypt, we have been calling for modernizing these fields. President Mubarak has already set a comprehensive program for modernizing the Egyptian society as a whole.

This agreement urges us to accelerate this program and get open to the world and capitalize on all potentials available to Egypt, the Minister elaborated. On the required legislative amendments, Maher said that the modernization process needs legislative amendments. There are newly issued legislation's and others in the making regarding taxes. All legislation's will be revised for amendment, if needed. There will be a dialogue between all Egyptian institutions, bodies and authorities to come up with the best legislation, Maher maintained. This was normal in light of the democratic climate we live in today.

There is a kind of free expression since the matter concerns all of Egypt. Such discussions sought clarification of some points for the part of the EU. The agreement give the opportunity for discussing the matters and amending whatever proved improper. There should be long discussions with the EU during the implementation of the agreement, Maher added. Regarding the Egyptian government's satisfaction with the European answers to its inquiries, Maher noted that the answers were not up to the Egyptian expectations. Regarding the contradiction between the Egyptian commitments within the COMESA and those imposed by this agreement, the foreign Minister said that there is no contradiction.

The more Egypt opens foreign markets for its products and the more we have opportunities to choose between markets for the best prices and conditions, the better it is for Egypt, he remarked. The EU is Egypt's largest trading partner, accounting for over 40% of Egyptian exports, and thus the EU plays a fundamental role in shaping the Egyptian economy, including its management of natural resources. According to representatives from FoEME's Trade & Environment campaign, 'This trade agreement is likely to result in European industries locating in Egypt, and overwhelming the Egypt's scarce natural resources. The agreement does not provide Egypt with the capacity needed to deal with the environmental repercussions of this expected economic growth: infrastructure, technical training, or funding for proper enforcement of environmental regulations. While Egypt desperately needs additional economic development, it should not come at the expense of its environment. ' FoEME is calling for specific commitments and provisions written into the agreement itself to ensure that 'the agreement will lead to sustainable development that will benefit both the people and environment of Egypt.

' The EU-Egyptian bilateral agreement was developed under a policy program of the Euro-Mediterranean Partnership, a governmental forum including EU member states and 12 Mediterranean countries. The Partnership, established in 1995, calls for gradual trade liberalization, with the ultimate goal of establishing a Mediterranean Free Trade Zone (MFTZ) by the year 2010. Already bilateral agreements between the EU and several other Mediterranean countries have been initialed. The agreement with Egypt is likely to be used as a model for future agreements between the EU and Algeria, Lebanon, and Syria, negotiations for which are already underway. If established, the MFTZ would become the world's most populous free trade area. Under current procedures, the agreement, agreed upon in principle by officials from the two sides, must return for official approval by the national parliaments, as well as the EU Parliament.

The Egyptians have already declared their intent to establish an inter-ministerial committee to evaluate the agreement. Despite the agreement's potentially significant environmental impacts, representatives of the Ministry of State for the Environment, however, were not included in the list of committee members. The bilateral FTA will be based on reciprocal tariff liberalization for both industry and agriculture. Quantitative restrictions and equivalent measures will be removed between the parties. For industrial goods, Egypt reciprocates the preferential treatment by dismantling all industrial duties over a transitional period of 12-15 years. Within three years from entry into force of the FTA Egypt will eliminate duties on imports of inputs, components, capital goods and raw materials that are instrumental to upgrade and modernise its industry.

These account for more than half of Egypt's industrial imports. Safeguard mechanisms are provided for to review dismantling duties for products affected by serious difficulties. Egypt continues to enjoy free access to the EU for its industrial exports according to the Cooperation Agreement. The EU significantly improves its concessions for Egyptian agricultural exports by increasing the tariff quotas granted for Egypt's main exports and new tariff quotas for products that are not currently enjoying preferential treatment are established. A mechanism to review agricultural concessions is foreseen three years after entry into force.

Egypt on its turn reduces tariff duties for a number of EU agricultural exports. The rules of origin protocol established between the parties, as part of the Agreement is the most developed used by the EU in its relations with partner countries. Consultations and deeper co-operation on the right of establishment and supply of services, payments and capital movements, as well as on legal approximation in the field of competition, including public aid and monopolies of a commercial character are foreseen in the AA. Effective protection of intellectual property rights in the context of the multilateral commitments of both parties will be guaranteed. Progressive liberalization on public procurement is equally foreseen. Signing of EU partnership agreement delayed Egypt's ambivalent attitude to its Euro-Mediterranean Association Agreement with the European Union appears to have come to the fore once again following the government's postponement of the official signing ceremony scheduled in Brussels for May 14.

As the agreement has to be signed by all 15 EU member states, Egypt's foreign minister was due to sign for Egypt on the sidelines of the monthly meeting of the EU General Affairs Council, attended by all EU foreign ministers. However, the date was obviously inconvenient in that May 14 was also the day that Moussa took over from Esm at Abdel Me guid as secretary-general of the Arab League. Many on the European side considered that it would be better if the agreement was signed by new foreign minister Ahmed Maher - whose appointment was announced the day before Moussa took up his new post - as he will have to implement it, often against strong opposition from cabinet colleagues. However, strangely, the Egyptian government has failed to offer the EU a clear reason as to why it has delayed the signing and then, to compound the error, failed to consult the EU on the new date. As speculation over the signing date mounted, in a surprise move, prime minister A tef Ebeid announced to a meeting of the German-Arab Chamber of Industry & Commerce in early May that the signing 'will be next June' and not as originally scheduled. Although this date is unlikely to cause any logistical problems, as the General Affairs Council will meet mid-month, the EU has yet to confirm that it is prepared to accommodate Egypt's unilateral demand.

This lack of clarity on the Egyptian side has inevitably allowed speculation to run riot as to the real reasons for the delay. Diplomats say Egypt has assured the EU that it will sign the agreement, despite reports of cabinet rows on the subject. Much of the Egyptian government remains deeply unsure about the benefits of the agreement, with concerns focused on the effect it will have on Egypt's ageing and technically backward industries - although the foreign ministry, which negotiated the accord over the past five years, has said it is the best deal Egypt is likely to get. The general consensus is that minister of industry Mustafa al-Rifa'i who is in charge of the government's new lbE 500 million plan to modernise and develop Egyptian industries and who has remained resolutely opposed to the agreement, has again managed to throw a spanner in the works. Ebeid chaired an expanded ministerial meeting on issues related to the EU partnership agreement on April 29, at which Rifa'i outlined his plans along with the progress made in the yet to be implemented EU-funded E 250 million Industrial Modernisation Programme (IMP). This is a Euro-Med initiative aimed at preparing Association Agreement partners for the advent of free trade.

Egypt's will be the largest loan granted by the EC to a country outside the European Union. It has, however, been delayed by stalling from the ministry of industry, which wants the EC to pay the money straight into the ministry's coffers for disbursal as it sees fit. The fact that Egypt has little choice but to sign its EU Association Agreement was highlighted by Egypt signing a free trade agreement on May 8 in Rabat with fellow Euro-Med Arab countries Jordan, Morocco and Tunisia, hailed as the first step towards an Arab common market. The four countries all have partnership accords with the EU - only Egypt has yet to sign formally - and therefore will have the same trading rules, making economic coordination more possible. The idea is to strengthen their relationship and bargaining power with the EU, their main trading partner, by establishing a free trade grouping of Arab countries bordering the Mediterranean. The meeting was also attended by the foreign ministers of Libya, Algeria, Mauritania and representatives of Lebanon, Syria and the Palestinian Authority.

Eventually, all these countries are projected to join the grouping. However, if Egypt is to play a leading role in the new grouping, it will have to have a working association agreement with the EU. Today on the 25 of June in Luxembourg the EU and Egypt will sign the Association Agreement between the EU and the Arab Republic of Egypt, paving the way for a new era in bilateral relations. It also marks a turning point in the building of a network of Association Agreements, consolidating the Euro-Mediterranean partnership launched by the 1995 Barcelona conference. The signature of this Agreement is an important sign of Egypt's commitment to its ambitious programme of economic and social reform and of the EU's commitment to assist in this endeavour. It also constitutes a positive message to international investors on the opportunities for direct foreign investment in Egypt.