Russia, Egypt Discuss Eurasian Economic Union Free Trade Agreement
EAEU expansion continues into the African and Arabic Markets
Egypt’s Minister of International Cooperation Rania Al-Mashat has met with Russia’s Minister of Trade and Industry Denis Manturov to discuss bilateral economic and trade cooperation between Egypt, Russia, and the Eurasian Economic Union.
Egyptian Minister Al-Mashat reviewed areas of strategic cooperation between Egypt and Russia, such as the Dabaa Nuclear Power Plant project. The meeting also covered the necessary means for enhancing trade volume and attracting Russian investments in development sectors of cooperation.
She also urged the Russian side to invest in various national projects, whilst highlighting the Russian Industrial Zone in the Suez Canal Economic Zone (SCZone). Al-Mashat emphasized the possibility that Russia would benefit from positioning the Egyptian market as a central entry point for Russian products into Arab and African markets.
Russia has been collaborating with Egypt’s National Railways Authority (ENRA) through a Russian-Hungarian venture and has sold 1,300 rail carriages through Russia’s Transmashholding Company. New high speed rail tracks being laid in Egypt will link the Red Sea to the Mediterranean Sea creating improved and faster market access and distribution.
Both Ministers discussed negotiations for a free trade agreement between Egypt and Eurasian Economic Union (EAEU) countries, which includes Russia as well as Armenia, Belarus, Kazakhstan and Kyrgyzstan in a market with an annual GDP of just under US$5 trillion. Such a deal would increase of the volume of Egyptian exports to the countries within the EAEU as well as provide Russian exporters with a new market of 100 million in Egypt alone. Egyptian-Russian trade reached US$3.8billion in 2019. Some 472 Russian companies have invested in the country in various markets sectors including tourism, auto components and other manufacturing, the services industry and energy.
Egypt is also Russia’s top trade partner in Africa, with both sides reiterating that further cooperation is needed in strengthening bilateral partnerships and
The two ministers also discussed future areas of common cooperation to implement several joint projects in development sectors in oil and gas; transportation; infrastructure; energy; mining industries; as well as the construction of agricultural silos and the development of logistical areas. The existing Port Said Free Trade Zone is useful for Russian companies as it permits the importation in the zone of Russian products and component parts duty free. These can then be added to Egyptian or other African sourced products at relatively low labour overheads, and then either reexported as finished items back to Russia and the EAEU or sold onto the Egyptian and African continental market.
Egypt is part of the African Continental Free Trade Area (AfCFTA) which includes all African nations bar Eritrea and reduces duties on traded goods between African nations to zero on some 97% of all product categories. Egypt and Russia also have a Double Tax Treaty in place, signed off in 2000.