Association Agreement

Introduction

The EU/Egypt Association Agreement entered into force on 1 June 2004, after ratification by the Egyptian People’s Assembly, the European Union and the European Union Member States. The Association Agreement reflects the approach of the Barcelona Process, as it contains provisions with respect to the three pillars of the Euro-Mediterranean partnership, namely political dialogue, trade and economic integration, and social and cultural co-operation. It is concluded for an unlimited period. Its overall objective is to establish the appropriate framework for co-operation and partnership, within the larger regional context and building on the significant development assistance co-operation between Egypt and the European Union. As stated in article 2, relations between the parties shall be based on the respect of democratic principles and fundamental human rights, which constitutes an essential element of the Agreement.

Pillar One: Political Dialogue

A regular political dialogue and co-operation will be established between the parties to develop better mutual understanding and increase convergence of positions on international issues, enhance regional security and stability, and promote common initiatives. It will cover subjects of common interest, namely peace, democracy and regional development. The political dimension of the Association Agreement is one of its essential factors, whose objective is a full-fledged partnership beyond trade and development assistance co-operation.

The political dialogue will take place at regular intervals at ministerial level, as well as among senior officials and through all diplomatic channels. A political dialogue between the European Parliament and the Egyptian People’s Assembly will also take place.

Pillar Two: Trade & Economic Integration

1. Trade Provisions in the Association Agreement
The establishment of a Free Trade Area between the EU and Egypt implies reciprocal tariff liberalisation for industrial and agricultural goods, a well as provisions concerning other areas. In order to speed up the implementation of the trade part of the Association Agreement, an exchange of letters was signed between Egypt and the EU, allowing trade provisions of the Association Agreement to enter into force already as from 1 January 2004.

Industrial Products:
A complete dismantling of customs duties and other charges having equivalent effect for Egyptian industrial products is in force from 1 January 2004. No quantitative restrictions shall apply.
Gradual abolition of customs duties for European industrial products according to a schedule of up to 10 years for the total elimination of customs duties for some European products:

  • 25% reduction each year for raw materials and industrial equipment starting from January 2004 to January 2007 (Annex II of the Association Agreement).
  • 10% reduction first year and 15% reduction each successive year for industrial supplies, semi-manufactured goods and construction materials starting from January 2007 to January 2013 (Annex III of the Association Agreement).
  • 5% reduction first and second year and 15% reduction each successive year for clothes, electrical domestic appliances, cosmetics, furniture and motor vehicles for the transport of goods, starting from January 2009 to January 2016 (Annex IV of the Association Agreement).
  • 10% reduction each year for motor vehicles designed for the transport of persons, starting from January 2010 to January 2019 (Annex V of the Association Agreement).

For industrial products, Egypt may take exceptional measures of limited duration to increase or re-introduce customs duties to protect new and infant industries or sectors under restructuring or experiencing serious difficulties, particularly where those difficulties entail severe social problems.

Agricultural Products:
Egypt and the European Commission shall progressively establish a greater liberalisation of their trade in agricultural, fishers and processed agricultural products of interest to both parties. During the third year of implementation of the Association Agreement, both Parties shall examine the situation in order to determine what further liberalisation measures can be applied.

Egyptian agricultural products (processed or not): For almost all products on the list, the Association Agreement grants a 100% reduction of customs duties, in many cases up to certain tariff quota, in other cases free, such as grapes, watermelons, asparagus, etc. (Annex to Protocol 1and Annex II to Protocol 3).
European agricultural products: Reduction of customs duties between 25% and 100% for a list of products, in some cases within the limit of a tariff quota, such as dairy products, seeds, etc. (Annex to Protocol 2).
European processed agricultural products: gradual reduction depending on the commodity from January 2006 to January 2008 (Annex I to Protocol 3).

2. Other Provisions
The Association Agreement also includes chapters on the right of establishment and supply of services, payments and capital movements, provisions on competition rules, protection of intellectual property rights, transparency of public aid, liberalisation of public procurement, provisions on state monopolies of commercial character (Title III and IV of the Association Agreement).

Economic co-operation should be intensified between the parties in a number of sectors, such as education and training, science and technology, environment, industrial co-operation, investment promotion, standardisation and conformity assessment, approximation of laws, financial services, agriculture and fisheries, transport, information society and telecoms, energy, tourism, customs statistics, money laundering, fight against drugs and terrorism, consumer protection and regional co-operation (Title V of the Association Agreement).

Pillar Three: Social and Cultural Co-Operation

Co-operation is also foreseen under the third pillar of the Barcelona Process, i.e. social and cultural co-operation. A dialogue on social matters will take place, in particular on the movement of workers, migration issues, intercultural dialogue and social integration of Egyptian and Community nationals legally residing in the territories of their host countries. Co-operation is envisaged for the prevention and control of illegal immigration and other consular issues, whereby EU Member States and Egypt agree to negotiate and conclude bilateral agreements with each other, regulating specific obligations for the readmission of their nationals. Co-operation is equally envisaged on cultural matters, audio-visual, media and information.

A major tool within the Barcelona Process for intensifying the “dialogue between cultures” will be the Euro-Mediterranean Foundation for Dialogue among Cultures, which will be established in Alexandria, Egypt.

Institutional Structure of the Association Agreement

An Association Council is set up at Ministerial level to provide the political guidance, make the main policy decisions and settle disputes on the implementation of the Agreement.
An Association Committee will be responsible for the implementation of the Association Agreement. It can take binding decisions for the management of the Agreement by consensus between the parties.
Sub-committees and Working groups can be set up by the Council, if appropriate.
Co-operation and contacts can equally be established between the European Parliament and the Egyptian People’s Assembly.

The Association Agreement objective is to establish an ambitious co-operation framework for a long-term partnership between the European Union and Egypt. It also has a role in supporting and encouraging domestic reform. Smooth implementation of trade and economic liberalisation could engender bilateral and regional economic integration conducive to more foreign investment. The Association Agreement, thus, holds a great promise for a new level of binding ties between Egypt and Europe.

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