1. Dr. Mona El Garf وزارة التجارة والصناعة Ministry of Trade and Industry
Associate Professor, Faculty of Economics and Political Science, Cairo University
Lead Economist, Minister’s Technical Office

2. وزارة التجارة والصناعة Ministry of Trade and Industry
جمهورية مصر العربية
وزارة التجارة والصناعة
Ministry of Trade and Industry
Regional Integration and Development: A Possible Framework for the Mediterranean Region
FCM Conference on
“Integration and Development in the Mediterranean Region: the Role of the Accountancy Profession”
Paris 28th of November 2008

3. Main Points
I. Facts
II. Why Deepening the Euro-Mediterranean Relation is Important?
III. What is the Framework of Mediterranean – EU Relationship?
IV. What are the Implications of Egypt-EU Economic Relations in Figures?
V. What’s New?
VI. Where You Can Fit?

4. I. Facts
Egypt and EU have long standing relationship.
Egypt believes that there remains room for deepening existing relations.
The government cannot act alone. Other stakeholders should be strongly involved.
Hence, launching the FCM Conference reinforces this vision.

5. II. Why Deepening Euro-Mediterranean Relation is Important
II. Why Deepening Euro-Mediterranean Relation is Important? It is a Win – Win Situation
From the European Side
The Mediterranean frontier poses enormous demographic and geostrategic advantages.
This region has the potential to act as a nexus of cultural dialouge between the East and the West.
Europe's security and prosperity can only be assured if the countries bordering the Mediterranean also enjoy security and prosperity.
A healthy and prosperous Mediterranean will reinforce the position of Europe in the world.

6. From the Mediterranean Side
II. Why Deepening Euro-Mediterranean Relation is Important? It is a Win – Win Situation
From the Mediterranean Side
Importance of the EU on the global Market (27 members)
28% of the world GDP;
40% of the world merchandise and services trade;
51% out of the world foreign direct investment outflows during 2006;
Ranks 2nd after ASEAN bloc in terms of the population, with 7% out of the world population;
Different free trade agreements between the EU and other countries and blocs, 26 of these agreements have entered into force
More than 50% of the Mediterranean countries’ trade is with the EU, 70% of the exports of some Mediterranean countries are directed to the EU.

7. III. What is the Framework of the Mediterranean – EU Relationship
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
Cooperation Agreement 1977
Barcelona Process 1995
Association Agreement: entered into force 2004
European Neighborhood Policy: March 6th 2007, adopting Egypt-EU Action Plan
Union for the Mediterranean 2008
2008
Union For
Mediterranean
1995
Barcelona
Process
2007
ENP
1977
Cooperation
Agreement
2004
Association
Agreement

8. III. What is the Framework of the Mediterranean – EU Relationship
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
Cooperation Agreement ( )
Economic co-operation between the parties;
Non-reciprocal trade liberalisation and market access for industrial goods.
Partial preferential treatment for some specific agricultural exports.
Four financial Protocols (EC funding for programmes and projects in Egypt million euros).
Barcelona Process (1995)
Objective: creating an area of dialogue, exchange and co-operation guaranteeing peace, stability and prosperity.
Two instruments:
Bilateral level (the Association Agreement);
Regional level (the Euro-Mediterranean conferences at the Ministerial Level).

9. Services Sector with the EU?
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
The AA has three main pillars: the Political and Security pillar; the Economic and Financial pillar and the Social and Cultural pillar.
Association Agreement - AA ( present)
Objective: establishing a Free Trade Area for industrial goods in 12 years with some exceptions.
January 2004, the Trade Component entered into force
June 2004, Social, Political and Security components entered into force.
Why Liberalizing the
Services Sector with the EU?
Built in agenda in AA, article 30,
Goal of the Barcelona Process,
Istanbul & Marrakech Ministerial
Declaration,
ENP Action Plan,
Egypt’s National Strategy
Liberalization of Trade in Services and Right of Establishment
July 2003, the Istanbul protocol paved the way towards the liberalization of trade in services.
March 2006, Regional Euro-Med negotiations launched.
In 2008, Bilateral negotiations launched between the EU and Egypt, Morocco and Tunisia as well.

10. III. What is the Framework of the Mediterranean – EU Relationship
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
Euro-Mediterranean Road Map for Agriculture
In 2004, the Roadmap for liberalizing trade in agriculture, processed agriculture and fishery products was formulated.
In 2008, Egypt-EU finalized their agreement to fully liberalize agricultural products, with very short list of sensitive products.
Dispute Settlement Mechanism (DSM)
Since 2006, negotiations was launched on the establishment of a DSM.
European Neighborhood Policy (ENP)
In 2004, the ENP is based on sharing common values such as democracy and human rights, rule of law, good governance, market economy principles and sustainable development.
The ENP compliments the Barcelona Process (free trade Euro-Med area by 2010).
On March 6th, 2007, Egypt adopted the Action Plan which reflects Egypt’s reform agenda during the period
ENP Members
The ENP covers 16 countries; the 10 Mediterranean countries Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, the Palestinian Authority, Syria and Tunisia. In addition to Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

11. ?
However…………
It is no secret that the European Union’s policies toward the Mediterranean basin are not dynamic enough to instigate development.
The Barcelona process did not achieve expected results in addition that the private sector and the region’s populace were not engaged in it.
Problematic areas of cooperation such as immigration, energy, security and political stability were not properly addressed.
Mediterranean countries expect more constructive cooperation from EU.
Calls for other alternatives or strategies soon emerged from within Europe Itself

12. III. What is the Framework of the Mediterranean – EU Relationship
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
Barcelona Process: The Union for the Mediterranean
Launched by Nicolas Sarkozy during his Presidential campaign in 2007.
On 3 March 2008: Franco-German agreement paved the way for the European agreement on the Union for the Mediterranean.
On the 13/14 March 2008: The European Council approved the principle of a Union for the Mediterranean and invited the Commission to present proposals defining the modalities of what will be called “Barcelona Process: Union for the Mediterranean.
On July (Paris Summit for the Mediterranean – Heads of State): The first summit took place in Paris under the co-presidency of The President of France AND The President of Egypt.

13. III. What is the Framework of the Mediterranean – EU Relationship
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
Barcelona Process: Union for the Mediterranean as agreed upon in the 10th Euro-Med Ministerial Conference of Ministers of Foreign Affairs (Marseilles 3-4 Nov.)
Objective: build on and reinforce the successful elements of the existing Barcelona Process based on the following:
Enhance multilateral relations,
Increase co-ownership of the process,
Set governance on the basis of equal footing and translate it into concrete projects, more visible to citizens.
Members:
27 Member States of the European Union,
10 Mediterranean countries which are members of the Barcelona Process
Other six countries bordering the Mediterranean (Albania, Croatia, Bosnia and Herzegovina, Montenegro, Monaco and Turkey).

14. III. What is the Framework of the Mediterranean – EU Relationship
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
Barcelona Process: Union for the Mediterranean (Cont’d)
Institutional Framework
Joint Secretariat (Barcelona)
Joint Permanent Committee (Brussels)
Senior Officials
Co-Presidency
2 directors (one from EU and one from the Med. countries).
Apply to Summits, all Ministerial meetings, Senior Officials meetings, the Joint Permanent Committee.
Biennial summits of Heads of Government will be held. The 1st summit took place in Paris on 13 July 2008.
Ministers reached a unanimous agreement on the participation of the Arab League at all the meetings and at all levels of the Union for the Mediterranean.

15. III. What is the Framework of the Mediterranean – EU Relationship
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
Projects: The Summit on 13 July 2008 has identified 6 areas for cooperation:
De-pollution of the Mediterranean;
Maritime and Land Highways;
Civil Protection,
Alternative Energies - Mediterranean Solar Energy Plan;
Higher Education and Research;
The Mediterranean Business Development Initiative;
Funding
Funding for regional projects and activities should come mainly from the EU and its Member States; private sector; contributions from Mediterranean partners; International financial institutions; regional banks; FEMIP; ENPI

16. III. What is the Framework of the Mediterranean – EU Relationship
III. What is the Framework of the Mediterranean – EU Relationship? Egypt Case (From Shallow to Deep Integration)
Agreed Upon Issues in the Conference of the Ministers for Industry of the Barcelona Process: Union for the Mediterranean (Nice, 5 and 6 November 2008)
“Ministers welcomed the initiative of the Egyptian and French co-Presidents and the European Investment Bank to convene a high level meeting of Arab, European and Mediterranean financial institutions in Cairo in January 2009 to discuss ways and means to ensure the availability of funds for the UpM projects, notably in the field of energy preservation, solar energy, transportation, vocational training, as well as promoting SMEs.”

17. IV. What are the Implications of Egypt-EU Economic Relations in Figures?
The Importance of EU to Egypt in 2007/08
EU is considered Egypt’s main trading partner, constituting 33.7 % of Egypt’s total trade volume.
EU is a main source for Egypt’s FDI inflows reaching 5.1 billion$
EU is considered one of the main sources for financial and technical aid to Egypt.
EU is a main source for tourism inflows in Egypt. In 2007, 49.7% of the incoming tourism came from EU
Source: Central Bank of Egypt
Ministry of Tourism

18. Total Trade between Egypt and EU
IV. What are the Implications of Egypt-EU Economic Relations in Figures?
Total Trade between Egypt and EU
Total Exports and Imports between Egypt and EU
EU represents 33.7 % of Egypt’s total trade volume
Source: Central Bank of Egypt

19. IV. What are the Implications of Egypt-EU Economic Relations in Figures?
The Evolution of Net FDI Inflows from EU
Number of EU visitors to Egypt
Source: Central Bank of Egypt
Source: Ministry of Tourism

20. EU Financial and Technical Assistance Instruments
IV. What are the Implications of Egypt-EU Economic Relations in Figures?
EU Financial and Technical Assistance Instruments
Financial Instruments
European Neighborhood and Partnership Instrument (ENPI)
Facility for Euro-Mediterranean Investment and Partnership (FEMIP)
Neighborhood Investment Fund
Technical Assistance Instruments
Technical Assistance & Information Exchange (TAIEX)
Twinning Mechanism
Competitive and Innovation Program (CIP)
7th Research Framework Program – (FP7)

21. Ministry of Trade and Industry-EU Cooperation Programs
IV. What are the Implications of Egypt-EU Economic Relations in Figures?
Ministry of Trade and Industry-EU Cooperation Programs
Summary Overview of Major Technical Assistance & International Cooperation Programs
Status as of 20 November, 2008
Instrument and Status
End
Date
Start
Value
Policy
Area
Project /Intervention
Title
Technical Assistance
TBD – Q4/2013
TBD – Q2/2010
€ 74,000,000 TBD
(20% from GoE)
Trade, Internal Market and Industry
Technical Assistance to Support the Implementation of the Action Plan (TASIAP)
ONGOING
€ 66,000,000
(50% from GoE)
Industry
Technical Vocational and Educational Training (TVET)
Twinning
Awarded to UK 04.08
TBD
€ 1,300,000
Building the Capacity of the Egyptian Accreditation Council to Deliver Accreditation Services (EGAC)
TBD –
Q4/2012
Q1/2010
Building Capacity of the Egyptian Consumer Protection Agency (ECPA)
TBD – Q1/2013
Building the Capacity of the EOS to Award the “CE” Mark (EOS)
TAIEX
TBD – NA
Trade
Special Workshops on EU Acquis for Trade in Services
TBD: To Be Determined
Source: Ministry of Trade and Industry

22. There is room to enhance and deepen the relation
On the Other Hand,
The Mediterranean
EU Trade with Mediterranean Partners in 2007 represents 1.6% of total EU trade
The annual growth of total Mediterranean trade of goods with the EU during represents 4%
Trade in Services between Mediterranean Countries and EU represents 5% of the EU total services trade.
EU investment flows into the Mediterranean region represents 2.3% of EU’s total FDI in 2005.
Egypt
EU Trade with Egypt in 2007 represents 0.67% of total EU trade
Trade in Services between Egypt and EU represents 1.2% of the EU total services trade.
Egypt ranked the 34th among the main Merchandise trading partners with the EU in 2007
There is room to enhance and deepen the relation

23. V. What Is New? Step Forward: EU-Med Roadmap up to 2010 and Beyond
During the 7th Euro-Med Trade Ministerial meeting held in Marseille on July 2008, the Euro-Med Ministers reiterated the importance of establishing a Euro-Med Free Trade Area at the horizon of 2010.
Trade Ministers instructed the Senior Officials Working Group (SWOG) to work on finalizing a Euro-Med Trade Roadmap up to 2010 and beyond at the 2009 Trade Ministerial meeting.
The main objectives of the Trade Roadmap are:
Diversify and enhance trade,
Encourage industrial integration
Increase European investments in the Mediterranean countries.

24. V. What Is New? Step Forward: EU-Med Roadmap up to 2010 and Beyond
EU Proposed Areas for Deep Integration (Convergence and Approximation):
Non Tariff Barriers (NTBs)
Investment
Trade facilitation
Public Procurement (PP)
Intellectual Property Rights (IPR)
Competition policy
Sustainable Development concerns
Technical Barriers to Trade (TBT) - technical regulation on industrial products
SPS
Standards & Conformity Assessment - expand the ACAA process to areas which are not covered by the ACAA
Rules of Origin (ROO)
Dispute Settlement Mechanism

25. VI. Where Do You Fit? Investment Convergence Mutual Recognition
Facilitating Accountants’ Movement
Liberalizing Accounting Services

26. Thank you