Egypt Upbeat About Getting Closer to Brazil and Mercosur

The Egyptian Foreign Trade deputy minister, Achraf El Rabie, said that there are great perspectives for the improvement of commercial and economic relations between his country and Brazil, as with the other countries in the Mercosur, the customs union that also includes Argentina, Uruguay, and Paraguay.

To him, the business is going to receive a strong impulse with the signing of the tariff preference agreements that are being negotiated between the Arab nation and the South American bloc.


He, however, did not establish a span for the signing of the treaty, which started being negotiated last year.


“We are currently studying the text of the agreement. We are preparing the lists of products to be made free, or semi-free, of customs tariffs,” stated El Rabie.


According to him, the work process is long and complex in the technical point of view. After each party has prepared its lists, there will also be a round of negotiations and only after them will the agreement itself be signed.


“This work will still take some time and, with regard to Egypt, we are working with great serenity and hope that the agreement will be completed as soon as possible,” he declared.


To El Rabie, the treaty is very important to his country, which, in his evaluation, will be greatly benefited.


“We believe that the signing of the agreement will provide a great impulse to Egyptian exports to the whole of South America and will simplify the entry of our products into these markets. This is because, to be frank, the tariff barriers that currently exist in the countries of the Mercosur represent the greatest obstacle to the access of Egyptian products to this market,” he said.


Rabie explained that some markets tax as high as 20% and 23%. “When added to the high costs of freight, we point out that our products have become excessively expensive and, consequently, little competitive on the South American markets,” he pointed out, adding that, on the other hand, tariffs imposed by Egypt are low.


“This occurs due to the fact that a large part of the products imported from the South American countries are considered ‘strategic’, or of first necessity. We import essential products like wheat, maize, iron, sugar, cattle beef and the fees charged are extremely low.”


In his opinion, this is one of the factors that contributed to make the trade balance with Egypt so favorable for the South American side.


“In all means, I think that the conclusion of the tariff preference agreement may improve the situation a little,” he said.


Investment


Another priority of the Egyptian government at this moment is the attraction of investment to the country.


“After the reforms made in our economy in recent months, an environment that is very favorable to investment and the creation of new companies has been created. Some regions of Egypt offer great attraction to investors, as is the case with tax exemption,” he declared.


The Egyptian government promoted a series of changes in the country economy to make it more dynamic and competitive. Among the reforms are the reduction of taxes, the restructuring of the private sector and the privatization of state-owned companies.


In recent months, various mechanisms for incentives have been implemented. Today, for example, the necessary procedures for the opening of a new company have been very much simplified.


“In the bureaucratic point of view, the work is much less complicated. The emission of documents was greatly simplified,” stated El Rabie.


The country prime minister, Ahmed Nazif, recently stated that “an investor interested in opening a company in Egypt does not need more than three days to complete the project.”


To El Rabie, the trade agreements that Egypt has with the European Union, the African countries and the remaining Arab nations, also serve as incentives to investors.


“Those who come to invest in our country may take advantage of these agreements,” he declared.


In this sense, he believes that economic cooperation between Egypt and the countries in the Mercosur should not be exclusively limited to trade, but should also cover areas like investment and partnerships.


“I know that, for the time being, the volume of South American investment in Egypt is very small. But we know that Brazil invests in the oil sector in countries in the region, like Libya.


“In Egypt we have, for example, great possibilities for investment in the area of production of natural gas,” he declared, referring to the fact that, at the beginning of this year, Petrobras won a tender to explore oil in Libya.


“We are discussing the creation of mechanisms for cooperation developed by specialists in the area,” he added.


Tourism


According to El Rabie, tourism is another area that offers great growth possibilities. “But for this activity to become more intense, it is necessary, in my opinion, to create a direct aerial route between both regions, and at the same time between Egypt and Brazil.


“This would contribute not only to the increase of tourism, but also to trade,” he declared. “It is evident that airlines, as well as passengers, also transport products,” he added.


According to him, the existence of a significant colony of Arab immigrants in Brazil would guarantee the movement of passengers to the region.


Anba – www.anba.com.br

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