I wonder what is the story of the important agreement that Egypt signed with Saudi Arabia? How can this agreement create two roles in the transportation and shipping market between the two countries? What is the impact of this step on the Egyptian economy? Does this mean a boom in trade exchange with Riyadh?
Imagine that the customs release of goods that used to take 3 days can now be done in just 3 hours.. Just a few days ago, Egypt and Saudi Arabia announced a strong agreement to reduce the customs release time from 3 days to only 3 hours.. This announcement came after the signing of an agreement between “ The Saudi Zakat, Tax and Customs Authority and the Egyptian Customs Authority.
What’s new in the agreement?
The agreement is based on the principle of “mutual recognition of authorized economic operator programs.” This simply means that each country will recognize a specific group of exporters in the other country, and this will make the entry of goods between Egypt and Saudi Arabia faster and easier.
Why is this agreement important?
The agreement has many benefits, such as saving a huge amount of time, because the customs release used to take 3 days, meaning the goods were delayed, and this time costs a lot of money for companies, but now, with the 3 hours, the trade movement will become much faster. The agreement will also provide new advantages for exporters from both countries, such as reducing costs and accelerating The entry of goods will stimulate small and medium-sized companies to enter the market more
What do the numbers say?
Non-oil trade exchange between Egypt and Saudi Arabia is targeted to reach $8.1 billion next year, compared to $6.7 billion this year. This means that the goal of this agreement is not only to facilitate trade, but also to double the numbers, and also during the visit of Saudi Crown Prince Mohammed bin Salman to Cairo, the private sector in Saudi Arabia. He announced that he is ready to pump investments amounting to $15 billion into Egypt over the next three years
What is the impact of the agreement on trade movement?
This agreement will create a real boom in supply chains between Egypt and Saudi Arabia… Egyptian exporters will make it easier for them to enter the Saudi market, and this means a significant increase in Egyptian exports to Saudi Arabia… At the same time, the Egyptian market will remain more open to Saudi goods, and this will increase the diversity of products available to us… as well. The agreement opens the door to Egypt making the same type of agreements with other Gulf countries such as Bahrain, the Emirates, Qatar, and Kuwait. This means a greater expansion of foreign trade movement
In the end, reducing the customs clearance time from 3 days to 3 hours is not only a bold step, but it completely changes the rules of the game… In the short term, this will significantly increase trade movement between Egypt and Saudi Arabia, and in the long term, it will support the competitiveness of Egyptian products in regional markets.
But the real question is: Is Egypt really ready to receive the huge investments that could come as a result of this step? Will the private sector be able to exploit these new opportunities in the desired manner? Nor can it be like many opportunities we missed before
