The EU-Egypt Association Agreement, in force since 2004, establishes a free-trade area with the elimination of tariffs on industrial products and significant concessions on agricultural products. In addition, an agreement on agricultural and processed agricultural products entered into effect 2010. Egypt’s exporter base is a vital component to make use of these opportunities to spur economic growth, improving participation within the economy and generating employment. However, the export readiness of companies needs to be addressed in order to achieve competitiveness and to add value. Bottlenecks both exist at the company level, for example in terms of compliance to requirements and marketing capacities, as well as on the institutional level, in terms of trust, strategic cooperation, and linkages.
According to the Ecorys study, the Egyptian government appointed five priority sectors to develop an export strategy. Among them are (processed) agricultural products, textiles and garments and chemicals. Furthermore, Ecorys identified natural ingredients, garments and household and furnishing articles as high potential sectors for Egypt. This corresponds to a great extent with the projects selected within the programme: 1) engineering products, 2) natural ingredients and 3) crafts.
Although garments was selected as a high-potential sector, CBI will not commence activities in this sector in Egypt.
Since strong development opportunities exist for the three mentioned sectors, three projects have been designed, along the three pillars of the CBI mandate: export promotion, sustained success, and Corporate Social Responsibility (CSR). The main premise is that the CBI projects in Egypt are combined in a country programme, instead of combining sector activities in regional programmes. This is needed because of the specific nature of the Egyptian economy ([political] instabilities, weak sector organisation and strategy, and weak cooperation between companies and government-led export councils). CBI succeeded in attracting sufficient companies in order to start up projects for two of the three sectors namely 1) Engineering (the Engineering Egypt project) and 2) Crafts (the Home Decoration & Home Textiles Egypt Project, HDHT).
The projects include Human Resource Development, Export Coaching and Market Intelligence interventions (removing company internal obstacles and obstacles in the business environment). Moreover, Strategic Conferences have a prominent role in the projects to address cooperation in the sector and lacking sector strategies. The Home Decoration & Home Textiles Egypt Project specifically includes the option to move beyond this level, to the establishment and support of a platform for cooperation in the sector.