THE COMPETITIVENESS OF THE EGYPTIAN AGRICULTURAL EXPORT IN THE EU MARKET;SHOULD EGYPT DIVERSIFY ITS TRADE PATTERN?

This paper analyzes the export competitiveness of Egypt's agricultural exports (EAE) in the European Union between 1998 and 2010. The Revealed Comparative Advantage (RCA) index and Comparative Export Performance (CEP) index are applied. An analysis is done to the major subgroups of EAE (fruit & vegetables). The competitiveness of EAE in the EU markets is compared with those of its main rivals, particularly Mediterranean countries (MEDC) that are likely to become more accessible and attractive than Egypt. The findings show that although Egypt’s exports of fruit & vegetables to the EU are growing, it is limited to the competition from other MEDC which has grown dramatically in the last years. One of the largest problems facing the Egyptian exporters of agricultural product is food safety (FS) and sanitary and phytosanitary (SPS) measures applied by the EU which impose severe restrictions on Egyptian farmers. The competitiveness of EAE in other markets are inquired using the comparative advantage indices. The results reveal that Egypt is losing its comparative advantages in Saudi market in exporting fruit and vegetables in favor of some main competitors. The results in Russian and Ukrainian markets are found to be more optimistic. Egypt experienced a progressive trend in gaining a comparative advantage in exporting agricultural products in comparison to the main rivals. Despite the fact that underdeveloped transportation infrastructure and poor delivery systems are the most prevalent NTBs hindrance to EAE in some alternative markets, the EU decisions about imposing bans on the importation of several kinds of fruit and vegetables (F & V) from Egypt have likely to motivate many countries such as Russia, Ukraine and Saudi Arabia to impose the similar bans. en EU food safety standards also have important implications for exporters in Egypt as they open up opportunities to export more quality products in several markets.