Egypt hopes to bring its preferential Free Trade Agreement (FTA) with the South American Common Market (Mercosur) into effect before the end of this year, minister of industry said Thursday.
Therefore, Mounir Fakhry Abdel Nour – Minister of Industry and Trade – revealed that the government had started negotiations with Brazil, seeking the latter’s endorsement on Mercosur Free Trade Agreement.
The Mercosur is composed of four member countries Argentina, Brazil, Paraguay and Uruguay, who have signed the free trade agreement with Egypt during the Mercosur Summit in Argentina on August 3, 2010.
It is considered one of the most significant economic blocs in the world and also the most successful bloc in South America. It ranks fourth in terms of economic importance after the EU, the North American Free Trade Agreement (NAFTA), and the Association of Southeast Asian Nations (ASEAN).
The Mercosur agreement allows preferential privileges for the Egyptian exports to enter the Latin American markets, and to reduce the cost of Egyptian imports from Latin American countries such as sugar, meat and soy oil.
The FTA aims at cutting tariffs by more than 90% between Egypt and the Mercosur countries and cancelling customs duties on agricultural goods, along with finding solutions to the issues of the rules of origin and the preferential guarantees and promoting cooperation in the fields of investment, services and others.
Egypt is considered the first Arab and African country to sign the agreement with Latin America countries, which will open up new markets for the Egyptian exports. At the same time, it will strengthen Egypt’s exports competitiveness, especially in the markets of Argentina and Brazil, which are considered major rising economic powers in the world.
This FTA ensures that Egypt will have its needs of food commodities at the best prices on the long run. It will also work to increase the confidence of Latin America investors in Egypt, and will, therefore, lead to the increase of joint ventures. It contains guarantees that will prevent damage to the Egyptian industry, and it embodies the idea of deepening economic cooperation between the countries of the South.
It will also open up new prospects for economic cooperation between the two continents of Africa and Latin America.
The Egyptian government aims through this agreement at promoting foreign trade and diversifying export markets.
The agreement is expected to double the volume of trade between Egypt and the Mercosur countries.
Elsewhere, Minister Abdel Nour also said his ministry intends to complete a number of trade agreements in the coming period, notably the free trade zone with the Eurasian Economic Union (EEU), comprising Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan.