Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Egypt Succeeds in Entering Latin Markets via Mercosur

Sun 20 Sep 2020 | 04:45 AM
Taarek Refaat

Egypt succeeded in entering Latin American markets through a free trade agreement with the South American trade bloc (Mercosur), which strengthened the country's position in the global economic network by reaching out to various blocs, and translating the Sustainable Development Goals (SDGs) for the year 2050, which were agreed upon by the United Nations (UN), to a practical reality.

According to trade figures, the agreement is one of the brightest examples of successes between Egypt and the bloc, and the achievement of prosperity for the people of Egypt and South America.

During the past three years, Egypt has been able to exempt more than 2,000 products from customs imposed on trade with Mercosur members, and as of this month, more than 463 Egyptian products have been exempted from all customs. In return, the zero tax will also be granted to more than 719 Mercosur products destined for the Egyptian market.

Recently, the Arab Brazilian Chamber of Commerce praised Egypt's success with the bloc for the fruitful efforts and facilities provided by the government to enhance trade between the two countries.

Egypt's exports to Brazil rose by 73.9% since the free trade agreement between the two countries came into effect in September 2017 within the framework of the Mercosur agreement. A report issued by the Arab Brazilian Chamber stated that Brazilian exports to Egypt in turn grew by 21.1% during the same period.

According to the Brazilian National Industry Confederation (CNI), after signing this agreement, Brazil began exporting more products to Egypt such as glycerin, red bricks, slabs, tiles, ceramics, petroleum products and bituminous mineral oils, while Egypt's exports to Brazil also increased, especially in aromatic plants and their accessories, seeds, fruits and olives, paraffin and cement.

This month, Mercosur countries obtained exemption from customs duties for some products, including inorganic and organic chemical compounds, paper, cardboard, pharmaceuticals, plastics and their derivatives and fuels, mineral oils and distillates.

Egypt will also enjoy the possibility to import products free of customs tax, including plants, roots, tubers, fuels, mineral oils and their derivatives, grains, seeds, fruits, salts and sulfur, soil and stones, plaster, lime, cement and rubber.

Mercosur in brief

Mercosur was established by the Treaty of Asunción in 1991 and the Protocol of Ouro Preto in 1994, and has 5 members: Argentina, Brazil, Paraguay, Uruguay and Venezuela (suspended since December 2016).The bloc also includes associate countries, such as Bolivia,  Chile,  Colombia,  Ecuador,  Guyana,  Peru and Suriname.

The population of the bloc is 295 million with an estimated GDP of $ 3.396 trillion, equivalent to 76% of Latin America's GDP. In 2019, Mercosur produced a nominal GDP of around $ 4.6 trillion, making it the fifth largest global economy.

It is noteworthy that Mercosur signed free trade agreements with Israel in 2007, with Egypt in 2010, Palestine in 2011 and Lebanon in 2014.