Trade Composition:

a) Trading partner:

The EU is Egypt's main trading partner. EU exports to Egypt consisted mainly of machinery and
chemicals. EU imports from Egypt consisted mainly of energy products, chemicals, textiles and
clothing. Egypt continued to dismantle its tariffs on imports of EU industrial goods, as laid down
in the Association Agreement. Egypt formally lifted an import ban on cotton in March 2012.
However, not a single permission to import cotton has been granted. This goes against the
Association Agreement and WTO rules. Egypt initiated safeguard investigations on imports of
cotton yarn, cotton textiles and polypropylene, which led to a final imposition of safeguard fees
on cotton yarn in August 2012. In February 2012, Egypt imposed restrictions on imports of
dairy, meat and live cattle from the EU following the outbreak of the Schmallenberg virus (SBV)
in Europe. The restrictions on meat and dairy were lifted in May 2012 and the ban on live cattle
imports was lifted in July under certain conditions.

b) Exportable goods:

Egypts main exports consist of- natural gas, and non-petroleum products such as ready-made
clothes, cotton textiles, medical and petrochemical products, citrus fruits, rice and dried onion,
and more recently cement, steel, and ceramics.

c) Importable goods:

Egypt's main imports consist of pharmaceuticals and non-petroleum products such as wheat,
maize, cars and car spare parts. Italy and the USA are the top export markets for Egyptian goods
and services. In the Arab world Egypt has the largest non-oil GDP as of 2005.

d) Remittances:

According to the International Organization of Migration an estimated 2.7 million Egyptians

abroad contribute actively to the development of their country through remittance inflows,
circulation of human and social capital, as well as investment. In 2009 Egypt was the biggest
recipient of remittances in the Middle East an estimated US$ 7.8 bn was received in 2009,
representing approximately 5% of national GDP, with a decline of 10% from 2008, due mostly
to the effect of the financial crisis. According to data from Egypt's Central Bank, the United
States was the top sending country of remittances (23%), followed by Kuwait (15%), the United
Arab Emirates (14%) and Saudi Arabia (9%). As Egypt has a great migration rate, its remittance
gradually increases due to the migration of Egyptian people.

Natural resources:

Land, agriculture and crops: Warm weather and plentiful water have in the past produced several
crops a year. Land is worked intensively and yields are high. Cotton, rice, wheat, corn,
sugarcane, sugar beets, onions, and beans are the principal crops. Increasingly, a few modern
techniques are applied to producing fruits, vegetables and flowers, in addition to cotton, for
export. Further improvement is possible. The most common traditional farms occupy one acre
each, typically in a canal-irrigated area along the banks of the Nile. Many small farmers also own
cows, water buffalos, and chickens. The Western Desert accounts for about two-thirds of the
country's land area. For the most part, it is a massive sandy plateau marked by seven major
depressions. One of these, Fayoum, was connected about 3,600 years ago to the Nile by canals.
Today, it is an important irrigated agricultural area.

Practically all Egyptian agriculture takes place in some 25,000 km2 (6 million acres) of fertile
soil in the Nile Valley and Delta. Some desert lands are being developed for agriculture, but
some other fertile lands in the Nile Valley and Delta are being lost to urbanization and erosion.
Larger modern farms are becoming more important in the desert.

Agriculture biomass, including agricultural wastes and animal manure, produce approximately
30 million metric tons of dry material per year that could be massively and decisively used, inter
alia, for generating bio-energy and improve the quality of life in rural Egypt. Unfortunately, this
resource remains terribly underutilized.
Water resources:

"Egypt", wrote the Greek historian Herodotus 25 centuries ago, "is the gift of the Nile." The
land's seemingly inexhaustible resources of water and soil carried by this mighty river created in
the Nile Valley and Delta the world's most extensive oasis. Without the Nile, Egypt would be
little more than a desert wasteland. The river carves a narrow, cultivated floodplain never more
than 20 kilometers wide, as it travels northward toward Cairo from Lake Nasser on the Sudanese
border, behind the Aswan High Dam.

Before the construction of dams on the Nile, particularly the Aswan High Dam, the fertility of
the Nile Valley was sustained by the water flow and the silt was deposited by the annual flood.
Sediment is now obstructed by the Aswan High Dam and retained in Lake Nasser. The
interruption of yearly, natural fertilization and the increasing salinity of the soil has been a
manageable problem resulting from the dam. The benefits remain impressive more intensive
farming on thousands of square kilometers of land made possible by improved irrigation,
prevention of flood damage, and the generation of millions of gigajoules of electricity at low
cost.

Mineral and energy resources:

Egypt's mineral and energy resources include petroleum, natural gas, phosphates, gold and iron.
Crude oil is found primarily in the Gulf of Suez and in the Western Desert. Natural gas is found
mainly in the Nile Delta off the Mediterranean shore, and in the Western Desert. Gold mining is
more recently a fast growing industry with vast untapped gold reserves in the Eastern Desert. To
develop this nascent sector the Egyptian government took a first step by awarding mineral
concessions, in what was considered the first international bid round. Egypt's excess of natural
gas will more than meet its domestic demand for many years to come. The Ministry of Petroleum
and Mineral Resources has established expanding the Egyptian petrochemical industry and
increasing exports of natural gas as its most significant strategic objectives.
Main economic sectors:

a) Agricultural sector:

Cotton has been the staple crop of Egypt, but it is no longer vital as an export. Egypt is also a
substantial producer of wheat, corn, sugarcane, fruit and vegetables, fodder, and rice; substantial
quantities of wheat are also imported, especially from the United States of America and Russia,
despite increases in yield since 1970, and significant quantities of rice are exported. Citrus, dates,
and grapes are the main fruits by acreage. The government exercises a strong degree of control
over agriculture, not only to ensure the best use of irrigation water but also to confine the
planting of cotton in favor of food grains. However, the government's ability to achieve this
objective is limited by crop rotational constraints. Egypt's fertile area totals about 3.3 million
hectares (8.1 million acres), about one-quarter of which is land reclaimed from the desert.
However, the reclaimed lands only add 7 percent to the total value of agricultural production.
Even though only 3 percent of the land is arable, it is extremely productive and can be cropped
two or even three times annually. Most land is cropped at least twice a year, but agricultural
productivity is limited by salinity, which afflicts an estimation of 35% of cultivated land, and
drainage issues. Irrigation plays a major role in a country the very livelihood of which depends
upon a single river, the Nile.

b) Industrial sector:

1) Automobiles manufacturing: El Nasr Automotive Manufacturing Company is Egypt's state

owned automobile company, founded in 1960 in Helwan, Egypt. Established in 1977, the
company manufactures various vehicles under license from Zastava Automobili, Daimler AG,
Kia, and Peugeot.

2) Chemicals: Abu Qir Fertilizers Company (AFC) is one of the largest producers of nitrogen
fertilizers in Egypt and the Middle East. It produces about 50% of the Egyptian Nitrogen
Fertilizers. The company and the 1st Ammonia Urea plant was established at 1976.
3) Consumer electronics and home appliances: Olympic Group is the largest Egyptian group
of companies operating mainly in the field of domestic appliances. The main products it
manufactures are washing machines, refrigerators, electric water heaters and gas cookers. It also
operates in the fields of IT and real estate. Bahgat Group is a leading company in the fields of
electronics and electrical home appliances, industries, constructions, internet service providing,
and T.V. stations. The group is composed of the following companies: Egy Aircon, International
Electronics Products, Electrical Home appliances, General Electronics and Trading, Goldi
Trading, Goldi Servicing, Egy Medical, Egyptian Plastic Industry, Egy House, Egy Speakers,
Egy Marble, Dreamland and Dream TV.

4) Steel industries: EZDK is the largest steel company in Egypt and the Middle East. Now a
part of Ezz Industries, which consists of four steel plants in Alexandria, Sadat City, Suez and
10th of Ramadan City. In addition, it includes also Al-Jawhara (Gemma) Company for Ceramic
and Porcelain tiles. EZDK is the largest independent producer of steel in the Middle East and
North Africa (MENA) region and is the market leader in Egypt. It is ranked at the 65th place in
the world biggest steel producers as per the World Steel Institute with total production of 4.5
Million Tons per year representing about three quarters of Egypt total annual production (6
Million Tons).

5) Textiles and clothing: Textiles and clothing is one of the largest manufacturing and exporting
processes in the country and a huge employment absorber. The Egyptian apparel industry is
attractive for two reasons. Firstly, its proximity to European markets, whose rapidly changing
fashions require quick replenishment. Egypts geographical proximity to style-conscious Europe
is a logistical advantage. Secondly, the production of garments is a low-capital and high-labor-
intensive industry, and the local population of 66 million provides a ready workforce as well as a
natural local consumer market that acts as a springboard for exports.
Rural-urban gap:

Egypt has a high rate of migration from rural areas to urban cities. A major reason for the
massive migration to cities because of over population, abundant labor, unemployment and lack
of literacy rate .In urban areas have seen a much higher growth rate as compared to rural areas.
Despite up to three-fourths of the population living in rural areas, these areas contribute to only
one-third of the national income. The main reason for rural Egypts poor performance in terms of
income is the fact that rural Egypt is mostly dependent on agriculture. An extremely slow rate of
growth in the agriculture sector of the Egypts economy has serious implications for the rural-
urban divide, both in terms of income and GDP. Some estimates say that that the average income
of a person living in an urban area may be up to 4 times higher than that of a person living in a
rural area. The rising levels of urbanization in Egypt are a major reason for the rising levels of
income disparity in the country.