Luxembourg, 25/06/2001 (Agence Europe) - The European Union and Egypt have signed, on Monday in Luxembourg, an Association Agreement that opens the way for a new era in their relations. This agreement has been concluded in the framework of the new Euro-Mediterranean partnership that should lead to the creation of a large free trade area between the two shores of the Mediterranean. The two parties must ratify the agreement for it to enter into force.
The EU is Egypt's main trading partner (32% of its exports and 42% of its imports), and contributes in a significant manner to the Egyptian economic and social modernisation programme. The new agreement enhances the bilateral cooperation begun in 1995 with the MEDA programme (whose aim is to prepare Egyptian companies for the new challenges of the international economy), and establish new institutional structures to allow for an intensification of the political dialogue and cooperation in numerous fields such as culture, education and the fight against organised crime. Furthermore, it constitutes a further step down the road of liberalisation in trade relations, since the quantitative restrictions and the equivalent measures will be ended between the parties.
With regards to industrial goods, Egypt will dismantle is customs duties system during a transition period of 12 to 15 years. In the three years following the entry into force of the agreement, it will eliminate the duties hitting imports of goods, capital and raw materials needed for the modernisation of its industry.
Safeguard mechanisms are provided for for certain products affected by serious difficulties. Egypt will, moreover, continue to benefit from access to the European market already provided for by the Cooperation Agreement or its exports of industrial products.
In addition, the Union has considerably improved the conditions offered to Egyptian exports of agricultural products by increasing the tariff quotas for the main products concerned and establishing new quotas for products that so far only benefited from preferential treatment. A review of these provisions is scheduled after the agreement's entry into force. Egypt, for its part, will reduce customs duties on European farm products.
The provisions relating to rules of origin consigned in the agreement are the most advanced used by the Union in its relations with third countries, says a Commission press release. Also provided for in the agreement are: consultations and deepened cooperation relating to the right of establishment and to offer services, movement of capitals, competition and the gradual liberalisation of public procurement. Finally, the protection of intellectual property rights in the framework of the multilateral commitments by both parties will be guaranteed.