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Egypt

EU trade relations with Egypt. Facts, figures and latest developments.

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Egypt
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Negotiations and agreementsTrade policy

The EU-Egypt Association Agreement has been in force since 2004. It creates a free-trade area between the EU and Egypt by removing tariffs on industrial products and making agricultural products easier to trade.

Another agreement on agricultural, processed agricultural and fisheries products entered into force on 1 June 2010.

The EU and Egypt began talks about a Deep and Comprehensive Free Trade Area in June 2013. Negotiations are currently on hold.

Trade picture

  • Egypt is the EU’s 29th largest trading partner, representing 0.7% of the EU’s total trade in goods with the world in 2020.
  • The EU is Egypt's biggest trading partner, covering 24.5% of Egypt's trade volume in 2020. 25.8% of Egypt’s imports came from the EU and 21.8% of Egypt’s exports went to the EU.
  • Total trade in goods between the EU and Egypt amounted to €24.5 billion in 2020. The EU’s imports from Egypt amounted to €6.4 billion and were led by fuel and mining products (€2.4 billion, 37.7%), chemicals (€1.1 billion, 16.9%), agriculture and raw materials (€1.1 billion, 16.8%) as well as textiles and clothing (€0.6 billion, 9.9%). The EU's exports to Egypt amounted to €18.1 billion and were dominated by machinery and transport equipment (€7.2 billion, 39.8%), chemicals (€2.9 billion, 16.1%), agriculture and raw materials (€2.4 billion, 13.1%) as well as fuel and mining products (€1.6 billion, 9.0%).
  • Bilateral trade in services amounted to €10.9 billion in 2019. EU imports of services from Egypt represented €6.7 billion and exports to Egypt amounted to €4.2 billion. The EU's main service exports to Egypt are business services, while EU imports from Egypt consist mainly of travel services and transport.

The EU and Egypt

In June 2013, the EU and Egypt began discussing how to deepen their trade and investment relations through a Deep and Comprehensive Free Trade Area (DCFTA). A future DCFTA would aim to improve market access and the investment climate. It would also support Egyptian economic reforms. It would extend beyond the Association Agreement to include i.a. trade in services, government procurement, competition, intellectual property rights, and investments. The EU commissioned a Sustainability Impact Assessment (SIA) for a possible DCFTA with Egypt in 2014. However, the DCFTA negotiations have not yet started.

From January 2014, due to its Association Agreement with the EU, Egypt stopped benefitting from preferential access to the EU market under the Generalised Scheme of Preferences (GSP).

The Partnership Priorities agreed between the EU and Egypt aim to address common challenges facing the EU and Egypt, to promote joint interests and to guarantee long-term stability on both sides of the Mediterranean.

The Partnership Priorities are guided by a shared commitment to the universal values of democracy, the rule of law and the respect of human rights. They also aim to reinforce cooperation in support of Egypt's "Sustainable Development Strategy – Vision-2030”.

This partnership includes support to Egypt's sustainable economic and social development, good governance, the rule of law, human rights, migration, security, counter-terrorism, and cooperation in foreign policy through intensified consultations on regional and international issues.

In the EU Trade Policy Review of February 2021, the EU has proposed a new sustainable investment initiative to interested partners in Africa and the EU’s Southern Neighbourhood. Fostering strategic interdependencies and enhancing the EU’s relations and economic integration with its Southern Neighbourhood is a strategic necessity for long-term regional stability.

In November 2010, the EU and Egypt signed a protocol creating a dispute settlement mechanism that applies to the trade parts of the Association Agreement. Egypt has not yet ratified the protocol.

Financial support

  • The European Neighbourhood Policy provides political and financial assistance to Egypt. The EU committed €756 million to bilateral assistance for Egypt for the period 2017-2020, under the European Neighbourhood Instrument (ENI). The funding supported cooperation priorities agreed with Egypt in three areas, namely: (i) economic modernisation, energy sustainability and environment; (ii) social development and social protection and; (iii) governance, enhancing stability and modern democratic state.
  • Under the EU’s Multiannual Financial Framework for the period 2021-2027, the EU will adopt a broad new financial cooperation instrument: the Neighbourhood, Development and International Cooperation Instrument (NDICI). The NDICI will be the basis of future EU-Egypt cooperation.
  • More information on EU support to Egypt is available from the Directorate-General for Neighbourhood and Enlargement Negotiations.

Egypt in the Southern Neighbourhood

Egypt is one of the partners of the EU’s ’Southern Neighbourhood’ (Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine*, Syria and Tunisia).

The EU established its privileged partnership with the Eastern and Southern shores of the Mediterranean back in 1995 with the launch of the Euro-Mediterranean Partnership at the Barcelona Conference, aiming to create an area of peace, stability and economic prosperity that upholds democratic values and human rights.

The 25th anniversary of the Barcelona Process in November 2020 was an opportunity to reflect on the strategic partnership with the region in light of the political, socioeconomic, financial and environmental challenges exacerbated by the Covid-19 pandemic, and to reassess the EU’s partnership with Egypt and the other Southern Neighbourhood partner countries. Following consultations with partners, this reflection resulted in a Joint Communication by the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy on ‘A renewed partnership with the Southern Neighbourhood – A new Agenda for the Mediterranean’ and the annexed ‘Economic and Investment Plan for the Southern Neighbours’ in February 2021.

More information on the Southern Neighbourhood

In 2004, Egypt signed the Agadir Agreement with Jordan, Morocco, and Tunisia. This agreement committed the signatory parties to removing all tariffs on trade between them and to harmonise their legislation with regard to standards and customs procedures. The Agadir Agreement entered into force in July 2006, and an Agadir Technical Unit in Amman ensures its implementation. Lebanon and Palestine joined the Agreement in 2020.

The impact of trade component of the EU’s Euro-Mediterranean Association Agreement with Egypt was assessed in the Ex-Post Evaluation of Trade Chapters of the Six Euro-Mediterranean Association Agreements with the EU’s Southern Neighbours (Algeria, Egypt, Jordan, Lebanon, Morocco and Tunisia), which was published by the European Commission in 2021.

The pan-Euro-Mediterranean cumulation and the PEM Convention on rules of origin

The pan-Euro-Mediterranean cumulation system of origin was created in 2005. It brings together the EU, Egypt, and other partners in Europe and the Mediterranean to support regional integration by creating a common system of rules of origin. Rules of origin are technical criteria which determine whether a specific product qualifies for duty-free or other preferential access under a given trade agreement.

Cumulation of origin means a product coming from one partner country can be processed or added to a product of a second partner country and still be considered an ‘originating product’ of that second partner country for the purposes of a particular trade agreement.

The pan-Euro-Mediterranean system allows for diagonal cumulation (i.e. cumulation between two or more countries) between the EU, EFTA countries, Turkey, the Western Balkans, the Faroe Islands, Ukraine, Moldova, Georgia and any country that signed the Barcelona Declaration of 1995. The system was originally based on a network of Free Trade Agreements with identical origin protocols. These individual origin protocols are being progressively replaced by a reference to the regional convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention), which was established in 2011 to provide a more unified framework for origin protocols. Egypt joined the regional convention in October 2013.

More information on Mediterranean preferential Rules of Origin

Committees and Dialogues

The EU and Egypt meet regularly to discuss issues and best practices and oversee the proper functioning of the Agreement.

Technical committee meetings - agendas and reports

Trading with Egypt

Map of Egypt: The designations employed and the presentation of material on this map do not imply the expression of any opinion whatsoever on the part of the European Union concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

* Palestine: This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of the Member States on this issue

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