As stated by Eng. Rachid: “ Economically, our (Egypt) clear objective is to improve trade relations from the current level of 470 million USD to 2 billion USD in terms of trade volume between Egypt and Turkey, as Egypt wants and plans to form a joint team with Turkey in textiles, industry and technology ”.
The signing of the Egypt–Turkey FTA will compliment the implementation of the Euro-Mediterranean Free Trade in the region. .
Turkey economy grew last year at the fastest rate in nearly 40 years. The GDP surged 8.9% year-on-year, and 5.9% last year, which has affected the cost of manufacturing in the Turkish Clothing industry. With regards to Textile and Clothing Industry, Turkey is moving towards high quality and branded products, following the EU model and living the mass production behind. .
Therefore, the Egyptian Clothing exports is expected to greatly benefit from the FTA agreement with Turkey due to the lower cost of labor in Egypt compared to Turkey in manufacturing (C., the access to Turkish qualitive finished knitted and woven fabrics and Free Trade access to Europe and the USA markets under the QIZ agreement. “Egypt has been undergoing a liberalization process and the country is opening up its economy, just like Turkey ” Eng. Rachid noted during the singing ceremony of the memorandum of understanding on talks for the FTA. .
Apart from the EUROMED Agreement, another important recent step for Egypt to overcome the challenges of the quota elimination is the Qualified Industrial Zone (QIZ) agreement signed with the United States and allowing the Duty-Free export to the USA of certain Egyptian goods that contains a minimum of 11.7% Israeli input and a minimum of 35% of Egyptian input. .
The FTA between Egypt and Turkey will add a great value in manufacturing the textile final products and therefore stimulating the increase of exports within the two countries as well as the exports to each country to their preferential markets according to the exercised agreements. Below is a potential module of functionality of the Egypt-Turkey FTA, making the EUROMED agreement a powerful tool for regional benefits.