Egypt will soon sign a free trade agreement with the UK following the latter’s exit from the EU, commonly known as Brexit, according to Minister of Trade and Industry Nevine Gamea.
The Minister said that the past period witnessed intensive negotiations between the two countries to reach an agreement on free trade, which will soon be finalized.
The announcement came during a virtual conference, entitled “The Role of the Government in Supporting the Private Sector”, organized by the British Egyptian Business Association (BEBA) on Sunday.
Gamea said that as the UK considers Egypt the main gateway to Africa, her ministry was looking to obtain additional advantages especially concerning the export of crops.
According to government data, the UK has the third-highest trade exchange among European countries with Egypt. The volume of trade exchanged between the two countries reached $2.5bn during the first 10 months of 2019, compared to $2.4bn during the same period in 2018.
During the conference, Gamea talked about intensifying local industrialization, which is a long-standing issue that has been discussed for years, but whose implementation is not easy. The minister explained that there are requirements if products are manufactured locally, including that they incur higher costs over imports. This has meant that this aspect of Egypt’s productivity needs to be looked at more comprehensively.
Gamea noted that the Ministry of Trade and Industry has held several meetings with industrialists in several sectors, most notably in engineering, textiles, and ready-made clothing. These meetings took place with participation from the Ministry of Finance, and were set up to understand the needs of manufacturers working in Egypt.
Gamea also revealed that customs distortions were the biggest obstacle facing the ministry’s plans to deep local industrialization.
The minister said that the government will review the new export subsidy program, which was launched last November, in which overdue arrears are being paid. She noted that the program has met with opposition from several companies, which necessitated the review.
Sessions are already being held to review the program, with the agreement that the program will be postponed until the required modifications and changes are put into effect.
The Minister asserted that the political leadership and the government are determined to quickly pay the subsidy arrears of for exporting companies, especially in light of the negative repercussions of the coronavirus pandemic on the global markets.
She said that EGP 3.168bn in export subsidy arrears have been disbursed so far from the Export Development Fund to exporting companies from January to May
Gamea said that the state has taken urgent measures to support the industrial sector in light of the ongoing coronavirus (COVID-19) pandemic, which has severely impacted the economy.
“We have taken several measures to protect industry, to provide production requirements for factories, and not to disrupt the production process,” she assured.
BEBA Chairperson Khaled Nossair said that the association is keen to support all measures and initiatives adopted by the state in facing the pandemic’s effects. He added that BEBA is holding meetings and discussions to follow up on all new measures on the economic stage.
Ahmed Fekry Abdel-Wahab, Board Member at the Federation of Egyptian Industries (FEI), concluded that industry faces unprecedented challenges amid the uncertainty of the current period. He noted that the private sector is looking forward to a message of reassurance from the government on this subject.