Egypt nears completion of free trade agreement with Eurasian Economic Union
BNN | 1st January 2024
By Ebenezer Mensah
In a significant stride towards economic integration, Egypt is nearing final negotiations to establish a free trade zone with the Eurasian Economic Union (EAEU). This latest development was confirmed by Alexei Tevanyan, the Russian Trade Representative to Egypt, who underscored the potential benefits of such a pact in facilitating easier access to the Egyptian market for EAEU commodities.
Strengthening Trade Ties
The EAEU, an international organization operative since January 1, 2015, comprises five member nations: Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan. Its primary objective is to foster economic integration among its members. The Union has previously inked a similar free trade agreement with Iran and, in 2020, granted observer status to Cuba and Uzbekistan. Trade turnover between Russia and Egypt is anticipated to surpass $7 billion by the end of 2023, with Russian exports to Egypt charting positive trends.
Switch to National Currencies
Another significant highlight of these discussions is the potential shift of Egyptian companies to transactions in national currencies. This transition is expected to further bolster the trade dynamics between Russia and Egypt. The most promising areas for trade growth have been identified as agricultural goods and equipment. Russia, a significant supplier of grain to Egypt, could see its access to the Egyptian market simplified with this proposed free trade agreement.
Implications for the Global Economy
The establishment of a free trade zone between Egypt and the EAEU symbolizes a substantial leap in economic cooperation and trade relations between the North African nation and the Eurasian bloc. This move could significantly alter the transit of commodity flows in the global economy, especially in a rapidly changing economic landscape. The EAEU member states have approved a strategic planning document outlining crucial short and medium-term tasks for their respective economies, signifying the Union’s commitment to strong partnerships and deepening economic integration in the Eurasian region.