Stop, in a word: the agreement between the EAEU and Egypt has been put on pause
Negotiations on the creation of a free trade area (FTA) between the Eurasian Economic Union (EAEU) and Egypt are still on hold due to economic problems in the republic, the Eurasian Economic Commission (EEC) told Izvestia. Moscow, however, hopes to return to dialogue with Cairo and calls on the Arab Republic to agree on another round. Discussions have been going on for about 10 years. At the same time, at least several dozen foreign countries are showing interest in cooperation with the "five". They are attracted by access to 180 million customers, Russian goods and the prospects for cooperation with the EAEU, the expert community notes.
Why is the agreement with Egypt being delayed?
The conclusion of an agreement on the creation of a free trade zone between the EAEU and Egypt has been postponed due to the economic situation in the Arab republic.
— We are currently on pause with Egypt due to the economic situation in Egypt. There is no agreement with Egypt yet," Andrei Slepnev, Minister for Trade of the Eurasian Economic Commission, told Izvestia.
Egypt applied for the creation of a free trade area with the EAEU back in 2015. Since then, several rounds of negotiations have been held, but no concrete progress has been achieved, despite the fact that the union has repeatedly stressed the ambition of the plan to zero duties on most goods.
In addition, Egypt is an important partner of Russia, particularly in the field of agriculture. Last year, the agricultural turnover increased by 20%. Russia mainly supplies Egypt with wheat, vegetable oils, chickpeas and peas. The republic also exports fruits and vegetables, including citrus fruits and potatoes.
— Egypt is still interested in the FTA format, which is why it does not withdraw from the dialogue and did not withdraw earlier, when the pressure on the republic from Western countries was more consistent and thorough. In 2024, the trade turnover between the two countries exceeded $9 billion (+32%). Over the past five years, it has grown 1.5 times. The creation of a free trade zone with the EAEU can give an additional impetus to economic rapprochement, including by removing some trade and economic barriers and synchronizing standards," explained orientalist Leonid Tsukanov.
According to the expert, Cairo has to constantly take into account in its foreign policy the factor of possible US dissatisfaction with excessive rapprochement with the EAEU. At the same time, the Egyptian authorities are under pressure from internal causes — damage to the economy due to tensions in the region, and a decrease in food security. This forces the authorities of the Arab Republic to rely on already established networks and increase economic contacts with existing partners — the EU and the United States.
— The second difficulty is technical. The parties need to find a common denominator on trade and economic issues (including the legislative component of regulation), establish contacts between customs, approve and adopt the necessary standards. It takes time, and Cairo is gradually moving towards its goal," says Tsukanov.
Which EAEU countries already have FTA agreements with?
Currently, free trade agreements are in force between the EAEU and Vietnam, Iran, Singapore and Serbia. This year, it was signed with the UAE and Mongolia, but the ratification procedure is still underway.
At the same time, the agreements are periodically updated and improved. For example, information exchange between customs authorities is currently being discussed with Hanoi.
— We already have trade with Vietnam. Today, the issue is to ensure information exchange between customs authorities so that we can see the structure of trade and generally implement control measures, analytical tools that we have so that we can see our potential to further increase trade between the Union and the republic," says Daniyar Imanaliev, Minister for Integration and Macroeconomics of the EEC.
Discussions on the possibility of including more states in the duty-free trade zone with the EAEU countries are ongoing. In particular, the Union states expect to sign a document on the establishment of a free trade area with Indonesia at a meeting of the Supreme Eurasian Economic Council (SEECC) at the end of next week. Negotiations are underway with India.
— The first round was held just two weeks ago. The second one is tentatively scheduled for February, for its second half. We will be engaged in the preparation of positions, preliminary study," Slepnev told Izvestia.
At least 40 countries are now interested in signing a free trade area agreement with the EAEU, said Alexander Korolev, Deputy Director of the Central Research Institute of Higher School of Economics. Given the recent dynamics of political statements, the next countries with whom the union can begin negotiations on a free trade area may be Tunisia, Malaysia, Algeria, Cambodia, the expert predicts. The EAEU is a large and capacious market, where you get access to more than 180 million buyers.
— The main stakeholder within the EAEU is Russia. The Russian Federation has wide export opportunities for products in demand in countries that are interested in the FTA. First of all, these are food products (from frozen fish to wheat), then these are chemical products (fertilizers), mineral raw materials, and in particular coal. In fact, states that are looking for opportunities to conclude an agreement on a free trade area are more interested in cooperating with Russia," Korolev emphasizes.
As for the benefits that our country receives in this case, in addition to the opportunity to sell its goods to a wider range of consumers, it is also a chance to use the states with which the FTA agreement has been concluded as hubs. For example, Egypt could be an access point for Russian goods to the markets of several countries on the African continent at once, and the UAE could be a hub for goods exported to Middle Eastern countries.
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