Egypt to sign EU trade treaty

Trade barriers for many goods will be dismantled

By the BBC's Heba Saleh in Cairo

Egypt is to sign an agreement with the European Union, the first step in the dismantling of the country's trade barriers with Europe.

The deal calls for the gradual dismantling of all trade barriers for manufactured goods and its supporters hope it will kick start faltering economic reform in Egypt.

They say Egyptian industry, which exists in a relatively protected environment, will now have to prepare itself for eventual competition with European imports.

The EU's ultimate aim is to establish a free trade area encompassing Europe and it's Mediterranean neighbours and hopefully boost political stability in the region.

Cairo shoppers could have the choice of European imports

Under the deal, trade barriers for manufactured goods will be taken away over a period of around fifteen years.

Europe will provide funds and expertise to help upgrade industry during this transition period.

Some in Egypt have expressed fears about the impact of competition, but officials insist that the benefits outweigh the risks.

They say the agreement will encourage foreign investment by sending a clear message about Egypt's commitment to economic liberalisation.

Morocco, Tunisia, Jordan and Israel already have similar agreements with the EU.

The EU believes that its security is closely linked to that of its poorer neighbours.

It hopes that economic growth will boost political stability in the region, in turn cutting down on illegal immigration and drug smuggling.