60% of Argentine exports will be tariff-free immediately upon entry into the Egyptian market and, ten years from now, no export tariffs will be levied on Argentine products.
Egypt is the seventh destination for Argentine exports, amounting to USD 1.8 billion in 2016.
Argentina ratified the Mercosur-Egypt agreement, after seven years of delay. The agreement will be in full force and effect 30 days after submitting the ratification of the document to the Mercosur headquarters in Asunción, Paraguay.
Egypt is the seventh destination for Argentine exports, amounting to USD 1.8 billion in 2016, with Argentina running a trade surplus with Egypt.
The agreement exempts the following products, among others, from import duties: food (cereals, oils, meat, fruit, vegetables), automobiles and auto parts, inputs for hydrocarbon extraction, chemical products and agricultural machinery.
In this way, Mercosur and Argentina secure access into the Egyptian market for almost ten thousand tariff headings. 60% of Argentine exports will be tariff-free immediately upon entry into the Egyptian market and, ten years from now, no export tariffs will be levied on Argentine products. This creates a major competitive advantage for Argentine exporters to Egypt and allows new businesses to engage in trade.
The agreement was signed in August 2010, but our country was the only MERCOSUR member that had failed to ratify it. The agreement was ratified by Congress on 9 May and enacted by the Executive (Law No. 27361).
The free trade agreement with Egypt is the second agreement of its kind entered into by MERCOSUR, and it connects our bloc with a prominent country in northern Africa —a region that is very important for our exports. The Secretary for International Economic Relations, Horacio Reyser, stated that "the entry into force of this agreement coincides with Vice president Gabriela Michetti's visit to Egypt and is part of a dynamic stage of foreign relations of MERCOSUR during Argentina's Presidency Pro Tempore, which involves ongoing negotiations with the EU, EFTA and various countries from ALADI, as well as closer relations with countries in Asia, Africa and Oceania."
"This is another step forward: we have ratified a pending agreement. This shows that Argentina has been reintegrated into the world," stated the Secretary of Commerce, Miguel Braun. "Lowering tariffs creates competitive advantages for Argentine exporting SMEs, and we believe that new businesses could engage in trade and thus raise the level of exports," he added.
Particulars of the agreement
. It lifts the 40% tariff on pears and apples. Egypt's demand for these products amounts to 400 thousand tons per annum.
. The agreement also eliminates tariffs on beef and imposes preferential tariffs on poultry. The African country's demand for these products is over 2 million tons per annum.
. It also removes the 43% tariff on vehicles and auto parts. Egypt has the second-largest vehicle fleet and replacement market in the region. Egypt imports almost only gasoline-powered cars with 1,500 to 3,000 c.c. engines, since it has local oil price subsidies. Argentina specializes in this category of vehicle.
. The car models sold in Egypt are those made in Mercosur countries. There are opportunities in the auto part replacement market.
. The agreement lifts the tariff on inputs for hydrocarbon exploitation, which represents approximately 20% of Egypt's economic activity.
- There are also opportunities as regards Egypt's rapidly growing imports, such as peaches, plums, cherries, herbicides, fungicides and insecticides.
Geopolitical importance
. Egypt is the second-largest economy among Arab countries. It serves as a bridge between the Mediterranean and the Gulf. With a population of 92 million, it is a port of entry to consumers from Arab countries.
. It has a projected annual growth rate of 6%, the highest in the region and one of the highest worldwide.
. Egypt imports 40% of its food.
. It was the third fastest-growing export destination in 2016.
Press release No. 287/17
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