Final Report (phase 2) Expert Opinion Analysis The Case of Egypt EU-MED AGPOL Project Final Report (phase 2) Expert Opinion Analysis The Case of Egypt By Gamal Siam Center for Agricultural Economic Studies (UC-CAES) May 2006

Contents Introduction Delphi method Delphi analysis results 3.1. Quantitative results 3.2. Protection constraints 3.3. Delphi difficulties encountered Conclusions

The objectives of the study: To forecast Egypt’s export potential of major F&V export commodities under different liberalization scenarios. To explore the major constraints in incresing FV Egyptian exports to EU. To conclude procedures to eliminate constraints.

1. Introduction Background The Eu is the Egypt’s biggest partner. 40% of Egyptian exports 34% of Egyptian imports Agric. Trade represent about 10 percent (9% of Egypt’s exports and 10% of Egypt’s imports) 1977-2004: Protocol of Economic cooperation May 2004: enforcement of the EU-Egypt Partnership Agreement (EUEPA)

Rationale for use of expert opinion Impossible to get reliable econometric estimates. Possible changes in protection beyond the scope of quantitative analysis. Delphi method has been shown to be a reliable expert opinion.

2. The Delphi method Select the most important F&V products. Select panel members. Define liberalization scenarios. Prepare and distribute questionnaire. Analyze questionnaire responses.

Product selection ** Criteria for product selection: Importance in terms of exports to the EU. Growth rates of exports. Subject to protection procedures. **Based on these criteria eight products have been selected: Potatoes , orange, green beans, table grapes, strawberries, melons, onion and tomatoes.

Product coverage (cont’d) Total value of Egypt’s exports of selected products to EU $168.2 million (2004) (43.6% of total) Potatoes (15.6%), g. beans (5.8%), orange (7.2), t.grapes (7.0%), strawberries (3.2%), onion (1.5%), melons (0.2%), tomatoes (0.2%). Percentages of exports to production potatoes (18.4%), g.beans (9.2%), orange ( ), t.grapes (14.2%), straberries (3.2%), melons (0.6%) tomatoes (0.1%).

Annual Growth Rates (%) of EU imports (quantity) 1992-2003 From Egypt Total Products 3.3 1.4 Orange 33.8 5.2 Strawberries 15.9 2.8 Onions 35.6 6.5 Table grapes 25.5 0.6 Melons 42.6 4.0 Tomatoes -0.3 3.1 Potatoes 10.3 8.4 Green beans

Protection measures Product 59000 66055 54000 1700 3887 1205 17128 Quota (tons) 2006 Actual (2004) Imports Window Quota (2004) Product 59000 66055 No 54000 Orange 1700 3887 1/1-31/3 1205 Strawberries 17128 20324 1/2-15/6 15314 Onions UL 17157 1/2-21/7 T. grapes 1210 1192 15/10-31/5 690 Melons 909 Tomatoes 250000 206202 13167 Potatoes 20000 28098 1/11-30/4 17500 G. beans

Impact of EUEPA on market access Old Protocol Product Quota (tons) Window Quota (tons) 54000 1/1-31/5 7840 1/1-31/3 Orange 1205 1/10-30/11 500 1/11-31/3 Strawberries 15314 5880 Onions UL 1/2-15/6 1/2-30/6 T. grapes 690 1/2-21/7 120 Melons 15/10-31/5 1/2-31/3 Tomatoes 130000 109670 Potatoes 17500 1/11-30/4 7680 G. beans

Coverage of quota (%) EUEPA (mt) Coverage of quota 2000-03 122 66.055 Egypt’s total actual exports are always greater than quotas for products subjects to quota system Actual exports within the windows are greater than quotas expect for orange and t. grapes Coverage of quota (%) EUEPA (mt) Coverage of quota 2000-03 Product 122 66.055 271 21.282 Orange 322 3.886 464 2.320 Strawberries 1396 21.386 19.966 Onions - 17098 6891 T. grapes 172 1190 225 270 Melons 908 634 Tomatoes 159 206202 135 147795 Potatoes 161 28097 269 20647 G. beans

The Export Panel Composition (30 members): Major exporters of the selected commodities. Major producers of the selected commodities. Government officials involved in trade. Academics

Delphi results: Export potential estimate (2015) under PLS Percentage (%) to: Potential Product Quota assumed (2006) (2004) Acual 90 180 243 218 450.000 Orange 92 323 456 141 5.500 Strawberries 112 225 257 161 45.000 Onions 83 168 185 152 100.000 T. grapes 125 250 283 209 42.500 Melons 190 32594 Tomatoes 150 1500 Potatoes 165 290 2000 G. beans

Delphi results: Export potential estimate (2015) under FLS Percentage (%) to: Potential estimate mt Product PLS Actual (2004) 120 262 540.000 Potatoes Strawberries 124 200 56.000 G. beans 182 120.000 Orange Onions 105 34314 T. grapes 300 3.000 Tomatoes 150 252 Melons

Assumed Enlarged quota Delphi results: Export potential Assumed Enlarged quota Export Potential PL Current Export 2004 Product 540 500 450 206 Potato 56 40 45 28 G. beans 120 100 66 Orange 34.3 - 32.6 17.2 T. Grapes 3.0 1.5 2 Tomato 2.4 1.2 Melons

Summary of Delphi results: Annual % mt - 100 34560 Actual 2004 6.4 197.7 679094 PLS 2015 8.0 234.1 804314 FLS 2015

Delphi results: Production and marketing constraints Quality constraints Lack of post harvest facilities Cooling/packing sheds refrigerated transport cold storage High costs of transportation Egyptian law does not permir efficient use of non-Egyptian trucks Roads are often rough (slowing speed and reducing the quality shipments) Other quality factors Product variety and pesticide issues. The pesticide issue fast track system. Poor cultural practices. Low quality domestic inputs. Problem facing F&V exporters: Cumbersome duty-drawback and adminission regimes. Excessive paperwork. Fees and delays for customs and inpections. Protection Constraints: Non-tariff barriers . Eu-Egypt Partnership Agreement Technical barriers-related measures applied by the EU

Conclusions EUEPA came into effect in 2004 with partial liberalization of agric. Trade. Shifting from the old preferences to the EUPA has made significant improvement in market access for Egypt’s exports of the studied products to EU markets, either through enlargement of zero tariff quotas or extending the windows or reducing tariffs and entry prices. Egypt’s exports of most of fruit and vegetable products (in 2004) have responded positively to improvement of EU market access due to EUEPA. Delphi results prove that Egypt’s export potential of thr studied products would respond positively to higher levels of liberalization

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