In March, the MERCOSUR (Argentina, Brazil, Paraguay, and Uruguay) and the Arab Republic of Egypt concluded the 3rd round of negotiations aimed at signing a Free Trade Agreement (FTA).
The first discussions concerning the possibility of an FTA between Egypt and MERCOSUR were held between at the G20 meeting of November 2003, which led to the signing of a formal framework agreement at the XXVI ordinary meeting of the MERCOSUR Common Market Council on July 2004. As stated in Article 2 of this framework agreement, the principal objective was to “strengthen relations between the Contracting Parties, to promote the expansion of trade and to provide the conditions and mechanisms to negotiate a Free Trade Area”.
It took five years before the 2nd round of negotiations to study the viability of the MERCOSUR – Egypt FTA took place in Montevideo on November 2009. However, the pace of talks then accelerated and the 3rd round of negotiations was held in Cairo only five months after the Montevideo meeting.
All participating countries at the Cairo meeting in March expressed their desire to enhance their economic relationship and agreed to further negotiate the establishment of the FTA. Three focus groups were formed to work simultaneously on key topics of the future FTA: General Provisions; Rules of Origin; and Dispute Settlement. Though some controversial issues remain, the text for each topic was for the most part resolved and the parties agreed to send any modifications to the wording by the end of April. Furthermore, the parties agreed to exchange their proposed lists of products subject to preferential treatment and full tariff elimination before 13 May 2010, including the lists of sensitive products and those with specific rules of origin.
The date for the 4th round of negotiations was tentatively set for the first week of June 2010, in Buenos Aires. In the meantime the parties will exchange drafts on the possible texts for other key issues of the FTA: services; investment; and double taxation and double inspection for Egyptian products exported to the MERCOSUR.