Egypt, the oldest and most populous country in the Arab world, and one of its most influential in the Southern Mediterranean region, is now moving into the global economy. During the 1990s the country has pursued successful macroeconomic stabilisation policies and has also begun the structural reform programmes needed to put the country onto an export-led, high-growth path. The main constraint for this is the need to introduce change at a pace which will not undermine political stability.

This paper reviews the results of the Uruguay Round Trade Agreements from the perspective of the Egyptian economy, examines the country’s economic relationships with the European Union in the context of the Europe-Mediterranean Partnership Initiative, and identifies main domestic policy challenges. It argues that the European Union could offer more technical assistance and better access for Egyptian agricultural products, while Egypt could further liberalise its trade regime, including ...