Turkish industrial zone to be established this year in the 6th of October City
CAIRO: Egyptian and Turkish Ministers of Trade Rachid Mohamed Rachid and Kursad Tuzman signed a memorandum of understanding yesterday for the establishment of a private industrial park for Turkish manufacturers in the 6th of October City.
The 2 million square meter area will provide services to Turkish textiles and ready-made garments manufacturers in the near term but could expand to include automotive and electrical equipment manufacturers should they express interest in the future, Rachid said.
The signing comes on the first day of a three-day visit to Egypt by Tuzman at the helm of a 100-member business delegation looking to take advantage of the recently ratified free trade agreement between both sides. The agreement was signed in December 2005.
“I think [Tuzman and I] have put the foundation for this relationship to move forward very quickly, Rachid told reporters. “At least in my mind, I want to see trade reach $3 billion at the end of five years and Turkish investments in Egypt reach $1 billion.
In 2005, bilateral trade between Turkey and Egypt reached $949 million, up 30 percent from 2004, according to Ministry of Trade and Industry (MTI) figures. Final 2006 numbers have not yet been released.
Despite the admittance of Bulgaria and Romania into the European Union (EU) this month, EU officials have signaled the bid of the more economically advanced Turkey could be years away from approval. Kuzman said while Turkey will continue its efforts to join the EU, the country plans to strengthen its economic ties with its Arab neighbors.
“What we need in the region is to increase our interdependencies, increase our activities and our product-sharing mechanisms, Kuzman said.
Turkey’s total bilateral trade reached $220 billion in 2006, of which exports accounted for $86 billion. Kuzman said government efforts to provide outsourcing opportunities in “attractive places like Egypt aim to raise the export volume to $100 billion in 2007.
“In terms of competitiveness, we have to find new attractive places like Egypt, Kuzman said. “Egypt has high-skilled labor, quite adaptable, and educated.
By setting up operations in Egypt, Turkish businesses automatically obtain duty-free access to the American market through the Qualified Industrial Zones (QIZ) agreement between Egypt and the United States. Kuzman said he expects manufacturers will also export to EU markets, although Turkey’s Customs Union Agreement with the EU already gives producers duty free access.
In June, the Egyptian Parliament ratified the agreement, the mere signing of which has pushed Egyptian exports up 44 percent in the first seven months of this year, according to MFTI. The 2005 FTA was signed after seven months of negotiation, prior to which there was never real movement from either side. Similar to Egypt’s Association Agreement with the EU, the Turkish-Egyptian FTA calls for gradual liberalization of the industrial and agricultural sectors on both sides over 12 years.
Kuzman and Rachid will participate in the opening of the first factory for Turkish textiles manufacturer Taha Group in Borg El Arab on Friday. Rachid said his office is now studying the establishment of a second Turkish industrial zone to include the new factory and attract more investors.