Economic Study of Foreign Agricultural Trade Flows between Egypt and the COMESA Bloc

Abstract

The Common Market for Eastern and Southern Africa (COMESA) is considered of the most important forms of economic cooperation in the African Continent. The research investigates the problem that the volume of trade exchange between Egypt and the COMESA countries in general, and agricultural trade in particular. It only accounts for 7.2% during (2014-2018) of the volume of trade exchange between Egypt and the world. The research aimed to analyze intra-trade flows between Egypt and countries of the COMESA Bloc over the period (2001-2018) revealed that the value of Egyptian agricultural imports from the COMESA recorded an average of US$235 million, while the value of Egyptian agricultural exports to the COMESA recorded an average of US$132 million. Results of estimating the Basic Gravity Model for Egypt's agricultural imports from the COMESA indicated a direct relationship between Egypt's GDP and the volume of Egypt's agricultural imports, where 1% increase in Egypt's GDP lead to increasing Egypt's agricultural imports by 1.6%, the existence of common borders between Egypt and the COMESA countries result indicated that it has a direct relationship with the volume of Egypt’s agricultural imports from those countries, which is consistent with the economic logic, where the existence of common borders between Egypt and the COMESA countries resulted in increasing Egyptian agricultural imports by 3.22% .Results of estimating the Basic Gravity Model for agricultural exports indicated that a direct relationship exists between Egypt's GDP and the volume of Egypt's agricultural exports to the six countries, where 1% increase in Egypt's GDP leads to increasing Egypt's agricultural exports from the six mentioned countries by 0.05%. As for the relationship between the geographical distances between Egypt and each of COMESA countries and Egypt’s agricultural exports to those countries, results indicated an inverse relationship, which is consistent with both the economic and statistical logic, where a 1% increase in the geographical distances resulted in reducing Egypt’s agricultural exports to those countries by 0.92%. In regards to the relationship between the dummy variable representing the existence of common borders between Egypt and the COMESA countries, results revealed that it has a direct relationship with the volume of Egypt’s agricultural exports to six countries, which is consistent with the economic logic. So the search recommended to: developing the currently existing means of transportation between Egypt and each of the, Studying quality standards requirements of exports demanded by the COMESA markets thus paying attention to improving the quality of Egyptian exports to those markets, Seeking to on open new market windows for Egyptian agricultural exports . microcosm and unstable due to being affected by political issues from time to time. It only accounts for 7.2% of the volume of trade exchange between Egypt and the world. It was found that agricultural trade balance is biased in favor of the COMESA countries. In the light of the described research problem, the main objective the research aimed to achieve is to analyze intra-trade flows between Egypt and countries of the COMESA Bloc, and exploring the ways to achieve full benefit from joining the Bloc. Studying foreign agricultural trade flow between Egypt and the COMESA Bloc over the period (2001-2018) revealed that the value of Egyptian agricultural imports from the COMESA recorded an average of US$235 million, while the value of Egyptian agricultural exports to the COMESA recorded an average of US$132 million. Studying the structure of agricultural trade flows between Egypt and the COMESA over the period (2012-2018) revealed that Egypt's main imports from the COMESA bloc include the commodity groups: tea, coffee, oilseeds, chopped tobacco and cotton. Average value of tea and coffee imports from the COMESA bloc reached US$277.5 million, or 83.2% of the total value of Egyptian agricultural imports from the COMESA bloc, estimated at US$333.6 for the period (2012-2018). As for the imports value of oilseeds, chopped tobacco and cotton, it reached some US$52.35 million, or 15.69% of the total value of Egyptian imports from the COMESA bloc as average of the study period (2012-2018). In regards to the structure of agricultural exports to the COMESA bloc, main export commodity groups included vegetables, fruits, grains, flowers and trees, spices, medicinal and aromatic plants and leguminous crops. Average value of Egyptian vegetable exports to the COMESA bloc over the period (2012-2018) reached US$45.5 million or 27.8% of the total value of Egyptian exports to the COMESA bloc, estimated at US$164.4 million. The value of Egyptian exports of fruits to the COMESA total the 13.6%, 6.2%, 5.1% and 11.3% of the total value of Egyptian to the COMESA bloc, Results of estimating the Basic Gravity Model for Egypt's agricultural imports from the COMESA indicated a direct relationship between Egypt's GDP and the volume of Egypt's agricultural imports from the mentioned countries, where 1% increase in Egypt's GDP lead to increasing Egypt's agricultural imports from the six mentioned countries by 1.6%. Results also indicated a direct relationship between the geographical distances between Egypt and each of the six countries and Egypt’s agricultural imports from those countries, which might be to that most of Egypt’s from the six countries cotton. In regards to the relationship between the dummy variable existence of common borders between Egypt it a direct relationship with the volume of Egypt’s those is consistent with economic logic, common Egypt and the countries increasing agricultural by 3.2%. Moreover, results regarding the dummy variable representing State an increase in Egypt's agricultural those countries 2.0%. Results of estimating the Basic Gravity Model for agricultural a direct between Egypt's GDP and the volume Egypt's the six countries, in Egypt's GDP Egypt's from the six countries by 0.05%. Egypt six countries inverse the existence of common borders between Egypt and the COMESA countries, results revealed that it has a direct relationship with the volume of Egypt’s agricultural exports to six countries, which is consistent with the economic logic, where the existence of common borders between Egypt and the COMESA countries resulted in increasing Egyptian agricultural exports by 4.95%. In regards to the relationship between the dummy variable representing membership of the Community of Sahel-Saharan State, results revealed that it did not prove statistically significant.