Upgrading diplomatic ties between Egypt and Türkiye after a decade-long hiatus will positively impact trade and economic relations.
Diplomatic relations between Türkiye and Egypt had been at the level of charges d’Affaires since 2013.
Recently, Türkiye nominated Salih Mutlu Sen as its new ambassador to Cairo, while Egypt named Amr el-Hamamy as its ambassador to Ankara.
The decision to restore diplomatic relations between Egypt and Türkiye offers fresh prospects for enhancing bilateral trade relations, which continued despite the severing of political ties after the Muslim Brotherhood’s ouster from power in Egypt in 2013.
Appointing mutual ambassadors has opened a new page in bilateral relations.
“Both sides encourage mutual investments. Turkish authorities also encourage Turkish investors to invest in Egypt again,” according to political analysts.
President Abdel Fattah El Sisi will make his first-ever visit to Türkiye on 27 July, where he will meet with Turkish President Recep Tayyip Erdogan to discuss bilateral relations as well as regional developments.
The Egyptian Foreign Ministry affirmed that the upgrade of diplomatic relations with Ankara is a culmination of recent diplomatic efforts and a prelude to stronger economic and trade ties between the two countries.
In late May, President Sisi congratulated Erdogan on his re-election in a phone call, with the two leaders agreeing to boost their diplomatic relations as well as exchange ambassadors.
In November 2022, the two presidents exchanged greetings in a brief encounter on the sidelines of the inauguration of the 2022 World Cup in Qatar, agreeing to jump-start bilateral relations between the two countries.
Egypt and Türkiye are bound by strong religious, cultural and historical ties, but diplomatic relations between the two countries have remained extremely friendly at times and strained at others.
For three centuries, Egypt was part of the Ottoman Empire, whose capital was Istanbul in modern-day Türkiye, despite governor of Egypt at that time, Muhammad Ali, waged war against the Ottoman sultan, Mahmud II, in 1831.
Türkiye established diplomatic relations with Egypt in 1925 at the level of charge d’ affaires and upgraded its mission in Cairo to Ambassadorial level in 1948.
Both countries have embassies and consulate generals in the other’s capitals. Both countries signed a free trade agreement in December 2005. Egypt and Türkiye are full members of the Union for the Mediterranean.
On 16 April 2008, Egypt and Türkiye signed a memorandum of understanding to improve and further military relations and co-operation between the two countries.
Relations, however, have been quite tense on many occasions in the history of both countries including the Nasser era in Egypt in the 1950s and 1960s. It has also strongly deteriorated in the period following the overthrow of Egyptian president Mohamed Morsi on 3 July 2013 following a 48-hour deadline on 1 July, marking the end of anti-government protests that took place between 30 June and 3 July that year.
On 23 November 2013, the Egyptian government expelled the Turkish ambassador in Cairo after a months-long diplomatic crisis.
In 2021, both countries started having talks about normalising ties.
According to official reports, Turkish people have invested an estimated $1.5 billion in Cairo since 2007, prominently in textiles and fashion. Ankara is expecting upcoming investment in Egypt in the sectors of energy, retail, transportation, and household appliances, projecting to amount to $500 million between 2023 and 2024.
Turkish investments in Egypt grew by 30.3 per cent during the FY2021/2022, amounting to $179.9 million, against $138.1 million during fiscal year 2020/2021.
Bilateral trade volume between Egypt and Türkiye rose by 14 per cent to $7.7 billion in 2022, up from $6.7 billion in 2021, according to data released by the Central Agency for Public Mobilisation and Statistics (CAPMAS) in March.
As relations are getting to improve, trade activities will increase and investment opportunities will be expanded, according to Mohamed Samir, professor of economics at the Faculty of Commerce, Benha University.
Egypt has duty-free trade agreements with African countries, the US and South American countries, and this situation encourages Turkish investors to launch fresh investments nationwide, Samir told the Egyptian Mail.
Egypt will be Türkiye’s most important export and trade partner in the future, according to him.
In recent years, there has been a significant expansion in Turkish investments in various fields in Egypt, including in the textile industries, food, services, and chemicals, Samir said. Further increase is expected in the volume of these investments, particularly with the state’s recent decisions in favour of the private sector, such as the non-exemption of state-affiliated companies from fees and customs, he added.
Exports and imports
Egypt’s exports to Türkiye grew by 32.3 per cent recording $4 billion in 2022 compared to $3 billion in 2021, the CAPMAS has reported.
Egypt’s imports from Türkiye plunged 0.7 per cent to $3.72 billion from $3.74 billion, according to a CAPMAS statement.
Fuels, mineral oils, distilled products, plastics, non-organic chemicals, fertilisers, clothes, and electric appliances were the main exports in 2022, the agency said. Türkiye ranked seventh on the list of exporting countries to Egypt over the past year.
According to CAPMAS, Türkiye was the largest importer of Egyptian products in 2022 totalling $4 billion.
The most important commodities that Egypt imports from Turkey are iron and steel.
Moreover, remittances sent by Egyptian expats in Türkiye went up 32.3 per cent during FY2020/2021, recording $21.5 million, against $16.3 million for FY2019/2020, CAPMAS noted.
Two hundred Turkish companies currently operating in Egypt are investing LE2 billion ($64 million) in the country, according to Atilla Yenigun, Commercial Counselor of the Turkish embassy in Cairo.
Egypt and Türkiye are major countries in the region, and reestablishing the diplomatic ties will be to the benefit of the peace, prosperity and regional co-operation in the Middle East and in the Eastern Mediterranean in general, as well as in Africa and in Eurasia, according to Yenigun.
Exchange of visits
Over the past months, Egyptian-Turkish relations have been thawing at the state level following a decade-long rupture. In the latest round of the recent rapprochement between Türkiye and Egypt, former Turkish Minister of Foreign Affairs Mevlüt Çavuşoğlu visited Cairo in March and held bilateral talks with his Egyptian counterpart Sameh Shoukry.
The visit followed a visit by Shoukry to Türkiye also in March, to express Egypt’s support following the devastating earthquakes in the southeast of the country that have taken the lives of over 50,000 people, which comes as a signal of a new warmth in Egyptian-Turkish relations.
On the economic front, the two countries maintained strong ties despite the frosty diplomatic relations. Also in February, a delegation of 14 representatives of Turkish companies visited Cairo and met with Egyptian Prime Minister Moustafa Madbouli, to discuss economic co-operation between the two countries.