It creates a free trade area between the EU and Egypt by abolishing tariffs on industrial products and facilitating trade in agricultural products. Since 2001, the European Union has concluded a preferential trade agreement with Egypt, which it wants to improve as part of a comprehensive free trade agreement between the EU and the Mediterranean. The agreement provides for unlimited payments for “current transactions” and ensures that capital can move freely in the context of direct investments, including repatriation and payment of benefits (Articles 28 to 30). The Joint Committee shall ensure that, from the fifth year following the entry into force of this Agreement, there is no adoption or maintenance of measures which distort trade between the Parties which run counter to their interests vis-à-vis public undertakings and undertakings to which special or exclusive rights have been granted (Article 32). The Parties shall endeavour to progressively liberalize and open their markets to each other`s trade in services, in accordance with the provisions of the General Agreement on Trade in Services (GATS) (Articles 26 and 27). “We should conclude an ambitious agreement that allows the business community to increase not only mutual trade, but also access to third markets, especially in the market of African countries. This applies to both the rules and the tariffs,” the minister stressed. In June 2013, the EU and Egypt started discussions on how to deepen their trade and investment relations through a Deep and Comprehensive Free Trade Agreement (CFTA). Under the George Bush administration, the US Trade Representative reportedly “punished” Egypt in 2003 by suspending all attempts to move closer to a free trade agreement, when Egypt withdrew its support for a US dispute against the European Union over trade in genetically modified plants in the WTO. This lasted until the end of 2004, when openings resumed.
However, the United States froze the FTA talks following allegations of fraud and corruption in Egypt`s December 2005 elections and has not resumed since. Agreements between economic operators of the Contracting Parties and their abuse of a dominant position by economic operators of the Contracting Parties are incompatible with the Agreement where they affect trade between the EFTA States and Egypt (Article 31). .