Mercosur flag via Wikimedia Commons
CAIRO – 1 November 2017: The trade agreement between Egypt and the Mercosur bloc, compromising Argentina, Brazil, Uruguay and Paraguay, will benefit the Egyptian furniture products as they will enjoy an annual 10 percent reduction in the custom duties on Egypt’s exports to the South American markets, a study by the Egyptian Furniture Export Council (EFEC) shows.
The customs will continue to drop until they are completely eliminated in 10 years.
EFEC Executive Director Yasmin Helal said in press statements on Wednesday that this would help boost Egypt’s trade with Mercosur countries, whose GDP exceeded $1.7 trillion in 2016, achieving a GDP growth of 7.1 percent.
Helal said that although Brazil is one of the furniture manufacturing countries, it has been seeing a dwindling production on the back of the deterioration in the value of the Brazilian Real against the U.S. dollars, levying hefty taxes on the industry and labor strikes over insurance and wages.
Helal said that it is important to create partnerships with Brazilian companies for mutual benefit and to boost trade in the wood and furniture sectors.
However, there are some obstacles that stand in the way of making full use of the agreement, according to Helal. These include the high cost of shipping between Egypt and Mercosur countries and the fact that the four countries speak Spanish, which is not widely used in Egyptian companies’ trade transactions.
The Egypt-Mercosur agreement came into effect after Argentina’s ratification last month. The agreement aims to strengthen relations between Egypt and the Mercosur countries, promote trade, and negotiate a free-trade area in conformity with the rules of the World Trade Organisation (WTO).