Monday, 31 March 2014


Egypt and Russia to boost trade ties as US influence wanes

Egypt is discussing a trade agreement with the customs union of Russia, Belarus and Kazakhstan, in the latest sign that Moscow is seeking to capitalise on US troubles in the Middle East to expand its own influence in the region.

Mounir Fakhry Abdennour, Egypt’s trade and industry minister, who is in Moscow, said that Russia had agreed to start talks on a trade agreement.

The discussions are part of a broader push by Moscow to take advantage of US weakness in the Middle East. Analysts say the Russian government feels deeply uneasy that its traditional allies in the region have crumbled and it is trying to establish new alliances.

Cairo, once a close ally of the former Soviet Union, has been courting Russia in recent months after its relations with Washington worsened in the wake of the coup that toppled Mohamed Morsi, the elected Islamist president last July.

Abdel Fattah al-Sisi, the defence minister who led the coup and who is widely tipped to become the next president, visited Moscow last month in an effort to strengthen ties and to demonstrate that his country has alternatives to Washington, which has withheld some of its annual military aid to Cairo in protest at Mr Morsi’s removal.

Vladimir Putin, the Russian president, proclaimed his support for a Sisi presidency even before the Egyptian army chief declared any formal intention to run for office.

The press in both countries have spoken of plans for Russian arms sales to Egypt, though there have been no official announcements.

Addressing a joint trade meeting in Moscow, Mr Abdennour told his Russian hosts: “You’ve expressed your wish to expand exports, primarily of wheat . . . and we want to develop exports of vegetables and fruit. It would help widen our co-operation. An agreement on free trade with the customs union could contribute to it.”

One-fifth of Russian wheat exports have gone to Egypt so far in 2013/14, making the North African country the largest importer of Russian wheat. Cairo bought 2.6m tonnes of Russian wheat between July 1 and the end of February.

A statement from the Egyptian trade ministry said Russia had “demonstrated great flexibility” during the meetings between the two countries.

It added that the two countries had signed a protocol for co-operation trade, industry and investment and that Moscow “would study the possibility” of providing Cairo with “financial facilities” to help it import Russian wheat.

The two countries also agreed to launch direct flights between Moscow and Egyptian holiday destinations such as Luxor, Sharm el-Sheikh and Hurghda, which already draw millions of Russian visitors.

Nikolai Fedorov, Russia’s agriculture minister and co-chair of the joint Russian-Egyptian trade commission, said the two sides had discussed creating a free-trade zone, as well as a special industrial zone for Russian investments into Egypt.

The two ministers said that bilateral trade between the two countries could double from current levels of $3bn, according to local news reports.

Mr Fedorov also drew attention to two projects to supply Russian liquefied natural gas to Egypt, as well as a project that could see Russia’s state nuclear power company Rosatom build a nuclear power plant in Egypt.
“All these projects will have state support,” he said.

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