Egypt and the European Union will sign their association agreement on Monday, June 25, in Luxembourg, paving the way for an opening of their markets, an Egyptian presidential source said Thursday.
The signing of the accord will take place on the sidelines of the EU's ministerial council meetings, with Egyptian Foreign Minister Ahmed Maher attending, the source said, reporting a decision by President Hosni Mubarak.
On January 26, Egypt and the European Commission 26 initialed the agreement, which has been under negotiation for more than five years. After it is signed, the pact will have to be ratified in Cairo and all 15 EU capitals.
Under the accord, the EU market will open completely to all Egyptian products, including agricultural goods, while the Egyptian market will be opened on a smaller scale to European products. The accord also calls for political, cultural and social dialogue.
Vittorio Ghidi, the commission's charge d'affaires in Cairo, has said the agreement will allow Europe "to increase the flow of investment into Egypt."
The deal will also be a double-edged sword for Egypt ― increasing its capacity to compete, but also bringing stiffer competition at a time when the country is experiencing economic difficulties, Ghidi said.
Egypt is facing economic stagnation and a liquidity crisis as a result of excessive spending in the public sector and state-run banks, analysts say. Investors are also discouraged by the lack of transparency provided for by the country's economic regulations.
The association agreement is part of the Euro-Mediterranean partnership scheme launched in 1995 which aims to set up a free trade zone by 2010.
Egypt exports oil products, fruit and vegetables, cotton and textiles to Europe. In 2000, Egypt exported €3.3 billion worth of goods to the EU while importing €7.9 billion of products. ― (AFP, Cairo)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)