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Free Trade Agreement Egypt - Mercosur (MERCOSUR? (Associate States (Perú,…
Free Trade Agreement Egypt - Mercosur
MERCOSUR?
Is Considered as one of the most successful South - South economic blocs in Latin America
Originated as a common Market in 1991
And it developed till it became a customs union in 1995
Member States
Uruguay
Paraguay
Argentina
Brazil
Associate States
Perú
Ecuador
Colombia
Bolivia
Chile
The Agreement
"Egypt - MERCOSUR"
SIGNED BY EGYPT ON AUGUST 2010
Increased Egypts participation in Latin American countries, to ensure access to important privileges in commodity lists.
More favorable conditions for sustainable development and economic cooperation in areas of common interest
Basis of equality
Mutual benefit
Non-discrimination
International law
Contribute to the multilateral trading system
Explore the possibility of developing and deepening the economic relations among the parties in question by extending the fields covered by this agreement.
Extending the fields covered by this agreement
Composed of five chapters.
General Provisions
Originating Goods
Preferential Safe guards
Dispute Settlement
Final Provisions
Anexos
Timeline
2012
Egypt Ratified the Agreement
2015
Brazil, Uruguay and Paraguay Finalizes the ratification procedures.
2017
The Argentinian Parliament ratified the agreement.
2010
The Egypt - MERCOSUR FTA was signed
Preferential Safeguards
The MERCOSUR bloc should carry out the investigation process as a single entity, to guarantee that the Egyptian industry will not face numerous requirements from more than one investigation authority
The investigations to determine serious injury or threat of serious injury shall take into consideration all relevant factors as
The amount and rate of the increase in preferential imports of the good concerned in absolute and relative terms
The share of the internal market taken by increased preferential imports
The consequent impact on the domestic industry of the like or directly competitive goods, based on factors
The existence of a causal link between the increased imports of the good under preferential terms and serious injury or threat to the domestic industry
Investigation Procedures
Each party should establish or maintain published procedures for the application of preferential safeguard measures.
Investigations shall include reasonable public notice to all interested parties and public hearings or other means, including the opportunity to respond to presentations of other parties
Investigation authorities should maintain the secrecy of the information presented by the parties
Investigations should be over in a period of 8 months
Investigation Requirements
The party that intends to apply preferential safeguards should provide adequate opportunity for prior consultations with the other party
If no satisfactory solution is reached within 30 days of the notification, the party may apply preferential safeguard measures
A party or signatory party proposing to apply those measures should endeavor to maintain a substantially equivalent level of concessions to that existing under the agreement, between it and the party which would be affected by such a measure
General provisions
II. Trade in Goods
III. Investment & Services
I. Initial Provisions
IV. Institutional Provisions
Dispute Settlement
Objective
settling the disputes that arise between Egypt and the MERCOSUR countries as a result of the agreement, which will guarantee Egypt’s rights in the face of the MERCOSUR
Span of Application
The application of this section is restricted to the articles of free goods movement
Issues of dumping, subsidies and global protection are excluded from the span of application of this section
Once the complainer resorts to one mechanism, he cannot shift to the other.
MERCOSUR countries act as one country, in case Egypt had a problem with more than one country; common responses are set up
Mechanism
Consultations
shall reply within 15 days of the request’s receipt
Consultations should be held within 45 days of the receipt of the request & shall be deemed concluded within 75 days of receipt
Joint Committee Intervention
If consultations fail, the joint committee intervenes
The committee should convene within 45 days
Recommendations should be given within 30 days after its first meeting
Mediation
If the committee fails, the parties seek recourse to a mediator
A meeting between both parties should be convened within 30 days after the mediator is selected
The mediator’s opinion should be given within 60 days after he is chosen. Awards are non-binding
Arbitration
This is done when parties have failed to resolve the dispute by recourse to consultations
Hearing sessions should be held
The process takes 90-120 days
Awards are binding
Final Provisions
Possitive Spillovers
Enhancing the trade relations between Egypt and the MERCOSUR bloc and taking advantage of the wide market of the MERCOSUR countries
Liberating trade between both parties over a period of 10 years, taking into consideration that 47% of the Egyptian exports will be immediately fully exempted from all custom duties once the agreement comes into force.
Reducing the expenses of the Egyptian imports from the MERCOSUR countries
Attracting more investments from the MERCOSUR in case they faced any obstacles during the transition period of liberating the imports from the MERCOSUR nations
Presence of an institutional mechanism to resolve the problems that cripple trade between the two parties; the annual joint committee meeting
Protection of domestic industries against increased imports under preferential treatment that cause or threaten to harm it
Trade Patterns
Egypt & Brazil
Prominent areas of trade: meat, machinery and chemicals, cereals, plastics and vehicles
Egypt & Paraguay
Prominent areas of trade: oil, seeds, animal fodder, fertilizers, plastics, paper, pharmaceuticals and electric machinery
Egypt & Argentina
Prominent areas of trade: cereals, vehicles, plastics, meat, oil seeds, chemicals and fertilizers
Egypt & Uruguay
Prominent areas of trade: oil seeds, meat, wood, cereals, plastics, pharmaceuticals, clothing & textiles and electric machinery
Originating Goods
Is the concept that allows or deprives experts to benefit from the tariff reduction
Article 3:
Comulation of origin
Goods originating in any of the Signatory Parties, when used as an input for a finished good in the other Signatory Parties, shall be considered as originating in the latter
Holly produced goods
Examples:
Plants and plant goods grown,harvested,picked or gathered there
Mineral goods extracted from the soil or subsoil of any of the Signatory Parties
Goods from live animals as in (c) above
Goods of sea fishing, under a specific quota or other fishing rights allocated to a Signatory Party by a international agreements
A good shall be considered as originating in a accordance with one of the following
Good are wholly produced in the territory of the signatory partty
Good are not wholly produced in the territory of the Signatory Party, provided that the said goods are "eligible" under article 3 and 5
Article 5: Sufficiently worked or processed goods
A brief overview on specific rules of origin
ROO applied under this FTA adress a number of industries that are crucial to the Egyptian economy;textile;clothing; food;cars; etc.
These rules were set based on the cooperative meetings held between the
Sector representatives
Export councils
Bussinessmen
Chambers of federations of industries