The United States has become a strong trade ally of Egypt. What fuels this partnership?
Earlier in the year, Egyptian Minister of Trade and Industry, Amr Nassar, announced that a delegation of major US companies would visit Cairo in October to get acquainted with investment opportunities in the country.
He said this at a meeting with members of the American Chamber of Commerce in Cairo. According to him, the proposed visit was organized by the chamber in cooperation with the Egyptian-American Business Council.
The delegation would include officials representing more than 60 US companies, he added.
Well, it appears all has worked as planned because Egypt is expecting an investment worth some 200 million dollars from the United States by the end of 2018, according to Chief of Mission at the US embassy in Egypt.
The Ecofin news agency said Thomas Goldberger made this known at the US Chamber of Commerce conference in Egypt on the sidelines of a visit by a delegation of 44 US companies to the North African nation.
Goldberger also said small businesses and entrepreneurs will receive funding of some 30 million US dollars.
In March 2018, direct US investments to Egypt totaled some 2.4 billion US dollars. The investments are in the services, construction, agriculture, industry and the information and community technology sectors.
It said these investments account for about 35. 4 percent of the total direct US investment in Africa, thus making Egypt the largest recipient of US investments in Africa and the second largest in the Middle East.
Egypt's trade and investment relationship with the United States deepened over the nearly forty years since 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 various partnership and agreements.
At the beginning of the 1990's, negotiations for a free trade agreement were a topic of discussion, and 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. Further FTA negotiations with the UAE and Egypt were put on hold in 2005 and 2007, respectively.
The United States is one of Egypt’s largest trade partners with a trade volume of USD 5.6 billion in 2017, ranking it sixth in the Middle East and first in Africa. Up 12.9% from 2016, this accounts for 1.5% of GDP and 3.9% of MENA-U.S. merchandise trade.
Egypt's export basket is considerably 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 2017, Egypt exported USD 1.44 billion worth of non-petroleum goods to the U.S., 14.8% more than the previous year.
The predominant non-petroleum exports to the U.S. were apparel, textile furnishings, food and kindred products, fertilizers, mineral products such as salt and plaster, works of arts and antiques, and paper and printed products.
Egypt’s oil exports to the U.S. shrank 18.7%, slipping from USD 235.34 million in 2016 to USD 191.37 million in 2017. Oil exports represent 11.7% of all exports, down from 15.8% in 2016 but higher than the country’s lowest percentage in 2014, when they made up just 0.1%.
Egypt ranks first in Africa and fifth in the MENA region for imports originating from the United States. Imports from the U.S. grew 14.4% in 2017, from USD 3.48 billion to USD 3.98 billion. Egyptian imports of iron and steel rose 93.4% during 2017.
Other increased imports include a 72.7% rise in stone, cement, glass and ceramics; a 64.7% increase in mineral fuel and oil, a 48.3% increase in textiles and apparel, and a 26.9% increase in plastics and rubber imports. Arms and ammunition imports also increased by more than threefold to reach USD 34.74 million.
Some of these gains, however, were offset by losses, most notably a 58.7% fall in imports of works of arts and antiques, a 57.8% fall in imports of vehicles, a 30.8% fall in imports of industrial machinery, and a 12.2% fall in imports of chemical products.
U.S. - Egypt Trade History Credit: American Chamber of Commerce in Egypt
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