Trade exchange bet. Egypt, Mercosur countries during 2020

CAIRO  - 17 August 2021: Trade exchange between Egypt and the Mercosur countries (Brazil-Argentina-Uruguay-Paraguay) amounted to about $3.3 billion during 2020, according to Director General of Bilateral Agreements at the Egyptian Ministry of Trade and Industry, Michael Gamal.

Gamal added during a seminar organized by the Agricultural Export Council that since the entry into force of the agreement in 2017, the volume of Egyptian exports has doubled, rising from $113.1 million in 2016 to $395.8 million in 2020, while the volume of Egyptian imports declined from $4 billion in 2016 to $3 billion in 2020.

He explained that the population of the Mercosur countries exceeds 264 million, and their area is about 12 million square kilometers, and they have great natural resources, as Brazil is the largest protein-producing country in the world, which gives it the advantage of import and export.

He added, according to the agreement, the exchanged goods were divided into five lists, the first list, which includes immediate exemption as soon as the agreement enters into force, and includes (agricultural crops - food industries - medicinal plants - engineering goods).

He pointed out that the second list includes a gradual reduction to 4 years, while the third list includes a gradual reduction to 8 years, while the fourth list includes a gradual reduction to 10 years, and the fifth list includes a very limited list of sensitive goods.

He noted that the first and second lists are exempt from customs and contain about 3,200 customs items, and that on September 2, the customs reduction rate in the third list will be from 50 to 62 percent, and it will increase in the fourth list from 40 to 50 percent, and all lists will become exempt from customs in 2026.

He added that Brazil is the main market for Egyptian exports in the gathering countries, and about 75 percent of our imports are from Egypt, followed by Argentina, followed by Uruguay and Paraguay, due to the small size of the two countries, whose population does not exceed 5 million consumers.

On the most important Egyptian exports to the Mercosur countries, Gamal explained that most of the exports are industrial, while agricultural exports do not exceed 20 percent of the total exports, unlike Egypt's imports from the grouping countries, which mostly depend on agricultural imports of raw meat, soy, sugar and corn.

He stressed the need for exporters wishing to export to the grouping countries to focus on exporting to the Brazilian market, which has a population of about 209 million, or two-thirds of the population of Arab countries of 320 million and half of the European market of 380 million.

The Brazilian market enjoys economic stability, its currency is stable, and it has a large purchasing power, and the Egyptian product has the advantage of customs exemption, as Egypt is the only country that has signed a free trade agreement with the grouping countries, which gives its goods the ability to compete against its counterparts from Morocco and China.

Regarding the most important agricultural crops that have export opportunities available to Brazil, Gamal said that Egypt has opportunities to export onions, aromatic and medicinal plants, some vegetables and olives in their forms. Two years ago, Egyptian garlic, grapes and oranges were registered with the Brazilian Ministry of Agriculture.

He added that although Brazil is one of the largest producers of oranges in Latin America, we have a great opportunity to export, due to the different seasons, in addition to the different types, as it produces only industrial oranges, while Egypt has different types.

He stated that Brazil is the largest garlic importer in the world, with an annual import volume of about $300 million.

With regard to the most important obstacles facing the increase of Egyptian exports to the Brazilian market, Gamal explained, the most important of which are the high costs of travel, especially for small exporters, as well as the language, as the official language is Portuguese, which requires the presence of a translator, in addition to the problem of presence, as Brazil is characterized by its vast area and distance between its states.

He stressed the need to communicate with the Commercial Representation Office in Sao Paulo to solve any problems facing exporters, as well as communicate and cooperate with the Arab-Brazilian Chamber of Commerce to conduct marketing studies and give exporters data on the market and information on importers.

He also called on exporters to coordinate with each other to preserve the reputation of the Egyptian product, with the need to adhere to standard specifications in storage, packaging and ventilation operations.