The government has approved a plan to strengthen economic ties with Egypt – the goal is to double the volume of trade within three years to $ 700 million (excluding gas and tourism).
The plan, which we first reported on Globes last week, includes government investments amounting to about NIS 100 million in the next two years. Among other things, it includes the development of the Nitzana Crossing – the commercial crossing between the two countries, as a regional logistics center, a land port and a common employment area; Increasing the supply of flights between countries; Collaboration in research and development; joint projects in the field of green energy; import of food and fresh fish and export of solutions and technologies in the fields of industry and agriculture.
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The Ministry of Economy and Industry stated that the program is intended to increase the exposure of Israeli industry to programs and trends in economic development in Egypt and to make development and infrastructure projects accessible to Israeli companies, in order to integrate technological capabilities, innovation and Israeli entrepreneurship into the Egyptian economy. At the same time, the plan is intended to increase the exposure of the products of the Egyptian economy to the Israeli economy, in order to diversify and expand the sources of imports to Israel in the construction, agricultural products, food products and other industries.
The program includes detailed objectives and seeks to help increase long-term engagements between companies, organizations and governments in the two countries; Increase export knowledge, civic technologies and implement implementation of advanced production methods; And increase the volume of trade between the countries to $ 700 million (excluding natural gas exports and tourism) within 3 years.
Among other things, the plan stipulates that for the purpose of its implementation, an inter-ministerial task team will be established, jointly with: the Prime Minister’s Office, the Ministry of Foreign Affairs, the National Security Council, the Ministry of Economy and Industry, the Ministry of Transport, the Ministry of Finance and the Ministry of Regional Cooperation. On the agenda: strengthening and expanding the agreement to the approved industrial areas from December 2004 (QIZ agreement); encouraging mutual investments; strengthening joint research and development projects; renewing the activities of the joint agricultural committee; establishing joint working teams in the field of energy; joint investment in renewable energy projects
Renewal of the activities of the Economic Committee
The plan to promote and expand economic ties with Egypt and Israel also includes the intention to renew the activities of the Joint Economic Committee for the two countries. This committee, established as part of the Trade Agreement in 1980, was established to review the progress of trade agreements and the movement of goods between countries, to advise and act to resolve trade problems, coordinate information transfer and examine other issues such as procedures, licensing, regulation, participation in tenders, tariffs, standards and regulations. On trading. The plan stipulates that the joint committee – from the Israeli side – will be headed by a representative of the Ministry of Economy and Industry.
In addition, the program includes the establishment of a research and development center in the field of agriculture, water and energy; Construction of a solar power plant on the Egyptian side and more. Among the goods that will be given priority in imports from Egypt: agricultural produce and other food products, fish, cement, aggregates, clinker, sand, humus, industrial gases, chemicals, fertilizers and raw materials for the food industry.
The Foreign Trade Administration of the Ministry of Economy and Industry stated that the volume of annual trade between Israel and Egypt (excluding tourism and natural gas exports) was about $ 330 million in 2021, reflecting a significant increase of about 60% compared to 2020. Israeli exports of goods to Egypt amounted to In 2021 about $ 120 million, while total imports from Egypt amounted to $ 210 million. About 78% of Israeli exports are in the textile sector, with the rest being divided between chemicals (11%), rubber and plastics (8%) and more. Israel imports from Egypt agricultural products and food products (27%), chemicals (32%), machinery and electrical machinery (17%), rubber and plastics (5%) and minerals and fuels (2%).
Warming in relations with Egypt
The Minister of Economy and Industry, Maj. Gen. (Res.) Orna Barbibai, whose office is in charge of the move, said: “Last March I visited Egypt, met with the Egyptian Minister of Planning and Development and was impressed by Egypt’s willingness to invest in strengthening trade ties with Israel. As a result of this visit, as well as a series of field trips and work processes as part of the efforts led by the Ministry of Economy and Industry to realize the economic potential of trade relations with Egypt. And lowering the cost of living by importing food and cement “
Recall that three months ago we reported in Globes a significant warming trend in the sector of economic ties with Egypt, after years of minimal ties. Among the reasons for our rapprochement was Egypt’s desire to receive Israeli support from the administration in Washington for the release of aid funds, which are being delayed in Congress. But mostly Egypt’s desire and need to advance their economy. Egypt saw the enormous success of the Abrahamic Agreements in the economic aspect, which among other things led to the entry of Israeli companies in the fields of water, agriculture and cyber into the Moroccan, Emirati and Gulf markets in general and began to envy. And now it is moving on to practical tracks at least on the interstate level. The decision said that despite the peace agreements signed in 1981, the volume of trade between the countries remained negligible and now the conditions were ripe to change the picture.
The geo-strategic importance of the plan is great. The moderate regional axis to which Egypt and Israel are associated is strengthened from the commercial economic aspect that has been lacking so far.