RIYADH, 8 January — The Saudi-Egyptian Joint Commission, scheduled to meet here tomorrow, will focus on prospects of signing a free trade zone agreement and enhancing commercial, economic and investment relations between the two Arab giants.
The meeting to be chaired by Foreign Minister Prince Saud Al-Faisal and his Egyptian counterpart Amr Mousa will also look into measures taken by Cairo against what it called the dumping of certain Saudi products in Egypt.
Egyptian authorities have imposed temporary qualitative customs tariffs on polyester thread, polyethylene and copper coils for six months in their bid to combat market dumping following complaints from industrialists in the country.
Informed sources said the two-day conference would work to promote economic and commercial cooperation between the two countries, in tune with their strong political ties and economic and commercial potentials.
Trade exchange between the two countries has reached SR2.5 billion and economic analysts believe that there are prospects for doubling the figure.
Saudi officials are expected to push the free trade zone issue at the meeting. The Egyptians, on the other hand, have prepared a plan for the gradual implementation of the free trade zone project by Jan. 1, 2004. The two sides signed a preliminary accord in June 1991 to set up the zone, hoping that this would remove most of the obstacles before the free flow of goods between the two countries.
As per the agreement, potatoes, tomatoes and onions will not be subject to tariff exemptions or reductions in harvest seasons as per the agricultural calendar in Saudi Arabia. The agricultural season for potatoes, in accordance with the calendar, is from Feb. 1 to June 30, tomatoes June 1 to Aug. 31 and for onions from July 1 to Nov. 30. The calendar will be followed until Dec. 31, 2007.
According to Egyptian Ambassador Helmi Budair, the two countries have reached an accord on almost all points in the agreement, except on certain "simple details."
The commission meeting will also discuss ways to remove all non-tariff restrictions facing trade exchange. The two sides will not impose any new restrictions once the agreement is fully implemented.
Egypt is also proposing the scaling down of tariffs on products of Saudi and Egyptian origin on a gradual basis. As per the proposal, there will be a 40 percent decrease in tariff in the first year, 60 percent in the second year, 81 percent in the third year, 90 percent in the fourth year and 100 percent in the fifth year.
The meeting will also discuss the opening up of the Egyptian market for Saudi petrochemical products and prospects of re-exports to African and European markets.
Dr. Muhammad Al-Maghrawi, president of the General Investment Corporation and Free-Trade Zones in Egypt, will talk about prospects of joint investment in his country in the light of new regulations. The Saudi side will also highlight the incentives and facilities being offered by the government to foreign investors in the Kingdom.
Saudi Arabia and Egypt, being major players in Arab economy, contribute the largest share of Arab gross domestic product, with the former grabbing the first place with 24 percent and the latter holding the third place with a 13 percent contribution.
Saudi Arabia has introduced a number of major economic reforms as part of its efforts to reduce dependence on oil and create new revenue sources. Its private sector contributed 48 percent of the GDP last year.
There are 510 joint ventures in Egypt established with the contribution of Saudi businessmen and industrialists by the middle of April last year. They involved a total investment of SR15 billion ($4 billion) with Saudis providing 30 percent of the capital.
The two countries have also established 31 joint ventures in the Kingdom with a total capital of SR9 billion ($2.4 billion) by the end of 1999. Egyptian contribution to these projects was estimated at just 4.5 percent. Seventeen of these projects are in the industrial sector.
