Egyptian-Saudi free trade zone
Egypt-Saudi Arabia, Economics, 8/21/2001

Experts and businessmen asserted that the latest summit between Egyptian President Hosni Mubarak and Crown Prince of Saudi Arabia Prince Abdullah Bin Abdul Aziz has given a new boost to investors in both countries to expand the volume of joint investments and maximize trade exchange in the upcoming stage.

They said the entry into effect of the free trade zone between the two countries in the year 2004 will help eliminate all customs barriers which preclude trade exchange.

They also underlined the need for having specialized companies in export-oriented industries both countries and for reactivating bilateral trade between Egypt and Saudi Arabia. They said doubling trade exchange and increasing investments can only be achieved through movement by private sector in both countries.

Chairman of the Federation of Chambers of Commerce (FCC) Khaled Abu Ismail said Egypt and Saudi Arabia are linked together by distinctive commercial relations, adding those relations have witnessed much developments which have had their impact on expanding the volume of trade exchange.

He said the year 1990 was a turning point in commercial relations when the two countries signed an agreement regulating cooperation in the economic, commercial and investment sectors.

He said a protocol was added to this agreement covering 134 commodities which the two sides agreed to exempt from duties, with 61 commodities for the Saudi side and 73 for the Egyptian side.

The protocol had doubled figures of trade exchange between Egypt and the Kingdom during the past 10 years, he said.

Elaborating, Abu Ismail said the volume of trade, has risen from L.E. 579 million in the year 1989 to L.E. 2,641 billion in the year 2000. He said this was made feasible, thanks to closeness of the two countries and similarity of consumers' taste and the opening by both governments of mutual distribution channels.

We hope to double trade exchange figures between the two countries after the latest summit talks," FCC Chairman said. However, that doubling trade exchange and increasing investments could be achieved through activating private sector role and eliminating barriers hindering exports, he said, adding that the free trade zone is about to become a reality.

He highlighted the need to have specialized companies in the field of export-oriented industrialies through observing quality criteria in packing Egyptian products. Moneim stressed the importance of diversifying commodities exchange between the two sides and not restricting them to a relatively limited group of commodities which only satisfy small portion of demand available on the Egyptian and Saudi markets.

Secretary General of the Arab Economic Unity Council, Ahmed Goweili asserted that the kingdom and Egypt have provided a distinctive model of commercial partnership relations at the level of the Arab nation. He said this model has been characterized by stability, growth and expansion, adding that the latest summit talks contribute to deepening trade relations.

"Egypt and Saudi Arabia represent a strategic depth and enjoy economic leverage at the Arab and Islamic levels," he noted.

He said the summit will help deepen economic, commercial and investment relations to a great extent, adding that development of economic relations between the two countries will help expand Arab trade exchange which accounts for only 8 percent of the volume of the Arab world trade.

Expert Moshen Al-Khadiry said despite the fact that inter Arab trade is extremely limited as Arab economy is competitive rather than integral, yet trade between Egypt and Saudi Arabia has taken a new turn during the past five years where they witnessed an increase of the Saudi exports to Egypt.

He said the active religious tourism movement has enhanced dependence by Egypt and the Kingdom on commodities produced in both countries He said finding a new concept of citizenship would facilitate residence of Saudis in Egypt and Egyptians in Saudi Arabia adding this would help achieve three points.

First: Reactivating industrial, agricultural and s i investment and doubling it to become 50 times the figures now cited.

Second: Enhancing peoples awareness of the globalization how to cope with them.

Third: Re-discovering economic opportunities with integral nature.

Previous Stories:
  Agreement on Saudi oil refining in Egypt   (5/15/2001)
  Obstacles impeding the Saudi- Egyptian free trade agreement   (1/13/2001)
  Egypt, Saudi Arabia to establish free zone area   (1/9/2001)

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