Moreover, Agadir Agreement will create much needed momentum for Mediterranean regional integration and the Euro-Med Agreement. The relation between Agadir and Euro-Med agreements holds a twofold importance to the area: .
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• first, because of the very important dependence of Southern and Eastern Mediterranean countries on the EU market for their exports and employment; .
• second, because of the close relationship between EU T&C industry and the T&C industry of those countries, via investment and subcontracting relationships. .
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A mixture of trade preferences, closeness, low-cost labour and EU investments have resulted in a dependence of EU textile export industry on this market, mostly for processing and transformation in garments (in 2002 the EU exported €14,6 bn of textiles and imported €25 bn in garments). Trade between the EU and the rest of this area has grown more quickly than with the rest of the world, outpacing both imports and exports by 15 percentage points. .
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Looking at Egypt in the context of its latest association agreement with the EU following the Barcelona Agreement and also in view of its active membership in Greater Arab Free Trade Association (GAFTA) and the Agadir Group, its position within other Mediterranean countries is of interest. .
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It is noteworthy that Egypt as an economy is less vulnerable to possible negative impacts by the expiry of the ATC arrangement in 2005 compared to some of its neighbors and major competitors. Only 7.7% of its total workforce depends on textiles and clothing whereas some others like Morocco (40%) and Tunisia (46%) and even Turkey with 34.1% are much stronger exposed. .
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In particular, before signing the Agadir Agreement, the Magreb countries were in a weak position due to the lack of a strong primary textile sector. Out of the 4 countries participating in the Agadir Agreement, only Egypt has an unlimited access to the primary textiles due to the availability of the raw fiber of cotton and the vertical integrated Industry. .
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The share of Egypt textile and clothing exports is still very conservative in comparison to most neighbors. With the devaluation of the local currency, the availability of high quality natural fibres and most favourable labour cost structure, the various association agreements (EU, GAFTA, Agadir) and the proximity to major markets in the suitcase, Egypt stands every to draw level with the regional competitors. .
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The Agadir Agreement will support EU buyers to source their textile and apparel products from the four countries and take advantage of the Free trade agreement signed between each country and the EU. The module could work by circulating the best-to-provide products from each participating country, within the supply chain to the final product. .
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In these terms, Egypt can provide the primary textiles (yarns – fabrics), to continue the production process in Jordan , Tunisia and Morocco , and all to be exported to European market.
Date:3/18/2004
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