Trade between Turkey and Egypt 2023

Trade between Egypt and Turkey is one of the topics that attracts the attention and interest of investors from both countries as well as other businessmen, so we prepared this guide to serve as an introductory guide to the most important features of the trade exchange sector between these two important countries.

Turkey and Egypt is two of the most important countries in the Middle East, with large economies and trade volume, the coperation between Turkey and Egypt offers great opprtunites for both countries.

Trade between Egypt and Turkey – a general reading

Turkey and Egypt represented an unusual ideal in the Middle East and the region in general, where the two countries’ foreign political differences were unusually accompanied by the growth of economic relations and the increase in openness in the fields of import and export between them, despite the difference in official political positions.

Egypt’s geographical attributes also give it with certain advantages over its economic counterparts. Because of its strategic location, Egypt has the potential to open new doors for Turkish exporters to enter the markets of Africa and other Arab countries, while Cairo will benefit from its relationship with Turkey to enter the markets of the Caucasus and the Balkans and encourage European investors to invest in Egypt.

Economists believe that, given the discovery of gas reserves in the eastern Mediterranean, as well as Egyptian investments and projects in various energy transmission lines, the Egyptian-Turkish partnership will provide huge opportunities and gains for the two countries, as they can collaborate in various infrastructure projects, resulting in a healthy integration in the roles of two countries with enormous capabilities and potential.

The amount of economic exchange between Cairo and Ankara has been quite active in recent years, according to statistics released by the Turkish Trade and Statistics Institute (TUIK). Between 2014 and 2020, Turkish goods and products were sold to Egypt for a total value of $21.9 billion, while recent imports to Turkey totaled around $12.1 billion over the same time, with the current year alone seeing an increase in trade exchange volume reaching $6 billion.

History of economic relations between Turkey and Egypt

Egypt and Anatolia have had a long history of commerce and geopolitical collaboration. Egypt was one of the most important markets for Anatolian goods throughout the Roman, Byzantine, and Ottoman periods. Turkey has always prized strong economic ties with Egypt, which has historically been one of the most stable countries in the Middle East and North Africa.

Relations between Turkey and Egypt were regular two decades ago, affected by certain political conflicts in the fifties and sixties of the past century, but relations “particularly economic” started to take a good and growing trend about 2005.

• Turkey signed a free trade agreement with Egypt at the end of 2005
• Both countries joined as “permanent members” of the Union for the Mediterranean
• The largest joint venture between the two countries is the “Natural Gas Deal” signed in 2008
• The economic relations between the two countries are still improving in a positive direction, despite the many diplomatic and political crises between the two countries.

Trade between Turkey and Egypt in 10 points

1. Egypt and Turkey concluded a free trade agreement in 2005, which went into effect in 2007. When compared to the preceding time, the Egyptian-Turkish bilateral commercial ties improved significantly following the agreement’s adoption.
2. The two nations’ trade volume climbed from $753 million in 2006 to $4.675 billion in 2020.
3. Between 2007 and 2021, the total amount of commerce exchanged between the two nations was around $54.1 billion.
4. The trade balance favours Turkey as a consequence of an increase in Turkish imports to the Egyptian market relative to Egyptian exports to Ankara.
5. The value of the trade balance deficit from the agreement’s entrance into effect through 2020 was about $16.2 billion.
6. Turkey’s imports to Egypt were 35.2 billion dollars since the agreement’s inception until last year, while Egyptian exports to Turkey totaled 19.011 billion dollars.
7. Over the last years, Egyptian exports to Turkey have increased by 7 percent, while Turkish imports to Egypt have increased by just 2 percent.
8. In the fiscal year 2021, Turkish commodities contributed for 3.7 percent of Egypt’s total imports, totaling $2.6 billion.
9. Machines, electronics, automobiles, and textiles account for around 38 percent of total Turkish imports to Egypt, iron and steel 20 percent, and Egyptian imports of Turkish steel account for 25 percent of overall imports in this sector.
10. Due to high prices, it is probable that Egyptian exports to Turkey would increase, particularly in the intermediate and raw materials sector, which includes cotton and chemicals, which account for 34% of Egypt’s exports to Turkey.

The challenges of trade between Egypt and Turkey

Many observers and economic analysts believe that the field of trade between Turkey and Egypt faces some important challenges, which are summarized as follows:

• Although the political conflict had no effect on the continuing of commerce between the two nations.
• Turkish exports to Egypt are suffering as some Egyptian businesspeople want to lessen their reliance on them under the guise of “fear of dumping the Egyptian market in Turkey.”
• One of the most serious contemporary concerns is the Corona crisis, which has halted numerous global and regional business activity.

The balance of trade exchange between Egypt and Turkey

Egypt is one of the major nations in terms of exports and imports to Turkey, and this ranking is recognised as one of the distinctive qualities of the two countries’ commercial relationship.

Turkish exports to Egypt

Goods, chemicals, plastics, rubber, textile products, ready-made garments, minerals, gold, petroleum oils, equipment, glass products, raw glass, foodstuffs, and agricultural products are the most important materials and products that Turkey exports to Egypt.

Imports to Turkey from Egypt

Petroleum goods and materials, metals and their industrial products, textiles, apparel, equipment, electrical machinery, chemicals, plastics, rubber, vehicles, engines, paper, foodstuffs, agricultural commodities, gold and jewellery items are among Turkey’s most important imports from Egypt.

The balance of trade exchange between the two countries

According to the statistics of the National Statistical Institute in Turkey, the value of Turkish imports from Egypt during the year 2020 amounted to about one billion and 722 billion US dollars.

While Turkish exports to Egypt amounted to about 3 billion 134 million US dollars in the same year.

Thus, the balance of trade exchange is in favor of Turkish exports to Egypt, and the volume of trade exchange between the two countries amounted to 4 billion 856 million US dollars.

Turkish-Egyptian Partnership Agreement

It is also known as the “Egypt-Turkey Free Trade Agreement.” The agreement was signed at the end of 2005, and it went into effect formally at the beginning of March 2007 following the conclusion of legal and procedural processes. The agreement intends to construct a free trade zone between the two nations within 12 years. In accordance with a variety of international and regional accords, as well as the World Trade Organization’s principles.

Objectives of the agreement

• Strengthening and expanding economic cooperation between Turkey and Egypt with the goal of boosting their peoples’ living standards.
• Getting rid of the limitations that stymie commodity trade, particularly agricultural trade.
• Increasing the amount of commerce between the two nations
• Creating favourable circumstances for the two nations’ trade competitiveness
• Encouraging investment between the two nations and establishing the necessary circumstances for it to grow
• The expansion of commercial activity and economic collaboration between Turkey and Egypt in third-country commercial markets.

Summary of the trade agreement

The following points explain the parameters of Turkey’s and Egypt’s free trade agreement:

• Cancellation of limitations and non-tariff tariffs, as well as a guarantee by the two nations not to impose new non-tariff levies.
• The health safety measures for foodstuffs and commodities should be in conformity with the GATT and WTO accords.
• The requirements and processes for financial transfers relating to investment and commerce between the two nations comply with the regulations and legislation that regulate financial transfers in both countries.
• Protecting the intellectual property of the two nations’ goods and fostering cross-border investment
• Increasing the liberalisation of trade exchange for commodities and agricultural sectors, as well as the continuance of trade discussions between the two nations, via yearly meetings of the Turkish-Egyptian joint committee.

Advantages of the agreement

The trade agreement between Egypt and Turkey has achieved many advantages in several areas, we will summarize the most important of these advantages in the following paragraphs:

Investment areas

The agreement improved mutual confidence between Turkish and Egyptian investors, encouraging each to direct their investments and develop cooperative projects in the other nation.

Turkey has also benefited from the trade agreements that Egypt signed with Arab and African countries, and Egypt has become a commercial base for Turkey to launch into the Arab markets in North Africa.

Egypt also benefited from the trade agreement with Turkey in entering the markets of the “former” Soviet Union and stimulating European investors to invest in Egypt.

Protecting emerging local industries

The Egyptian-Turkish trade agreement offered the essential safeguards to preserve both nations’ national industries and to decrease customs taxes on new items, enabling their export between the two countries as well as to other worldwide markets.

Reduce taxes and customs duties

The agreement allowed for considerable reductions in customs tariffs and taxes placed on comparable items, increasing prospects for the two nations’ exports to reach local and worldwide markets, particularly “cement,” “iron,” “polyethylene paste,” and many other commodities. Agricultural items are exempt from customs charges ranging from 32 to 45 percent.

Turkey also granted the Egyptian side reductions in customs duties and quotas of agricultural exports manufactured in Turkey in proportions close to what was granted to European Union countries.

In general, the customs reduction includes the following lists:

• Raw materials
• Intermediate goods
• Finished Goods
• Cars

Customs reductions began after varying periods of the signing of the trade agreement between Egypt and Turkey, and some goods are still promised reductions in the coming years.

Establishment of joint integrative industries

The agreement enabled the formation of several cooperative projects between Egypt, Turkey, and the Euro-Mediterranean nations, particularly in the sectors of textiles, which also helped to increasing the worldwide competitiveness of Turkish and Egyptian companies.

The future of trade exchange between Turkey and Egypt

The two nations’ trade agreement was intended to be appraised in 2020, however because to the Corona crisis, the planned examination of the free trade agreement between Egypt and Turkey was postponed.

In the same vein, neither country intends to terminate the agreement or restrict the rights and advantages offered to both parties under the provisions of the agreement.

This would also help to improve their commercial and economic connections, as well as provide more favourable conditions for investment between them, as well as reduce friction and unreasonable rivalry for Turkish products in Egypt.

Egypt-Turkey trade is an important industry with a high ranking and position in both nations. It also provided a unique picture of separating the economics between fraternal nations from the interim and urgent political disputes, which is a positive sign for the future of mutual investments not only between Turkey and Egypt, but in all investments between the countries in the region.