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Trade History
Egypt's trade and investment relationship with the United States deepened over the last thirty years after Egypt signed a peace agreement with Israel. Since that time the two countries have sought ways to increase their economic and trade ties, notably through the various partnership and agreements. At the beginning of the 1990's, negotiations for a free trade agreement were a topic of discussion but no comprehensive conclusions could be reached. Egypt and the U.S. finalized a Trade and Investment Framework Agreement (TIFA) in 1999. After the failure to reach a FTA bilaterally, the U.S. shifted to giving regional trade agreements priority, such as the 2003 Middle East Free Trade Area initiative (MEFTA). It did, however, conclude free trade agreements with Israel, Jordan, Morocco, Bahrain, and Oman.

Nevertheless, in the pursuit of a free trade framework, Egypt has made strides to open its economy through various reforms and, in essence, has laid the ground work for a free trade agreement in the future by focusing on each part of modernizing its economy. Furthermore, Egypt-U.S. trade operates within two initiatives designed to increase Egypt's exports to the U.S. The first is the U.S. Generalized System of Preferences (GSP), a preferential treatment program where certain products are eligible for duty-free entry to the U.S. under specific qualifications. The second is the Qualifying Industrial Zones (QIZs), a one-way free trade agreement that combines Egyptian and Israeli components in manufactured goods from designated industrial zones that enter the U.S. duty-free.

In the absence of greater trade liberalization measures between Egypt and the U.S., other trading partners have been sought. Egypt joined the Greater Arab Free Trade Area agreement (GAFTA) under the Arab League in 1997; it became a member of the Common Market for East and Southern Africa (COMESA) in 1998; it finalized the EU-Egypt Partnership Agreement, signed in 2002; it joined the Agadir Agreement, a FTA between Mediterranean countries (Egypt, Jordan, Morocco, and Tunisia), in 2004; it signed the Egypt-Turkey Free Trade Agreement in 2005; it signed an FTA with Mercosur in 2010 and most recently became part of the Tripartite Free Trade Area in AfricaThe above denotes that Egypt’s trade ties with the Africa, the EU and the MENA region have grown over the past 15 years relative to Asia and the United States. Nevertheless, the U.S. remains a vital trade partner sharing a robust trade relationship with Egypt.

The United States is among Egypt's largest trading partners with a volume of trade reaching USD 7.9 billion in 2014, rising by 16.5% from 2013 and representing approximately 2.8% of Egypt's GDP.

What is significant about Egypt's exports is that they are diversified, unlike many other countries in the Middle East and North Africa region who export predominantly oil and gas. This factor indicates that the Egyptian economy has great growth potential in a variety of sectors. In 2014, Egypt exported USD 1.4 billion worth of goods to the U.S. The predominant exports to the U.S. were apparel, textile furnishings, fertilizers and other agricultural chemicals, and fruit and vegetable preserves.

The U.S. Generalized System of Preferences (GSP) is a program that provides preferential duty-free treatment for 3,509 products from 122 beneficiary developing countries. The GSP program was initiated on January 1, 1976, and authorized under the Trade Act of 1974.

Legal authorization of the GSP program expired on July 31, 2013. On June 25, 2015, U.S. Congress passed the Trade Preferences Extension Act, and subsequently on June 29, 2015, President Obama signed it into law. The Trade Preferences Extension Act includes the extension of the GSP program to December 31, 2017.

Egypt has been a beneficiary country under GSP since its initiation and yet GSP accounts for only  4.8% of Egypt's total exports to the U.S., as over 80% of Egypt’s exports to the U.S. are not eligible for GSP treatment. This ranks Egypt 22nd among GSP beneficiary countries.  GSP-eligible exports fell by 5.4% in 2014 compared to 2013.

Egypt ranks first in Africa and 70th worldwide for imports originating from the United States. Egypt's top imports from the U.S. are petroleum and oil products, oilseeds and grains, aerospace products and parts, resin, synthetic rubber, artificial and synthetic fibers and filament. . The U.S. trade surplus with Egypt grew by 42.3% in 2014. The U.S. exported USD 6.5 billion worth of goods to Egypt in 2014.

Additional Trade Statistics Resources:


(Updated May 2015)



 
 
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