Egypt as a Trade Gateway: Suez Canal, Alexandria Port, COMESA, and UK-Egypt Bilateral Trade

The Suez Canal: Egypt's Strategic Chokepoint#

The Suez Canal connects the Mediterranean Sea to the Red Sea, cutting approximately 7,000km off the shipping route between Europe and Asia compared to rounding the Cape of Good Hope. Around 12-15% of global trade — roughly 19,000 ships per year — transits the canal, including oil tankers, LNG carriers, container ships, and bulk carriers. Egypt earns approximately $9-10 billion annually in canal revenues, making it a critical source of foreign exchange. The canal's strategic importance was demonstrated dramatically in 2021 when the Ever Given grounding blocked traffic for six days, causing an estimated $9.6 billion per day in global trade disruption. More recently, Houthi attacks on Red Sea shipping since late 2023 have caused many vessels to reroute around the Cape, significantly reducing canal revenues — an acute economic problem for Egypt that has intensified its focus on diversifying through trade agreements and Special Economic Zones.

Alexandria Port: Egypt's Trade Workhorse#

Alexandria and its adjacent Dekheila port together form Egypt's primary container and general cargo gateway, handling approximately 60% of Egypt's imports and exports. Alexandria port has operated for over 2,000 years and remains strategically positioned in the eastern Mediterranean. Port Said, at the northern entrance to the Suez Canal, is Egypt's second major container port and benefits from its position as a natural transhipment hub for goods transiting the canal from Asia to Mediterranean markets. The East Port Said terminal operated by Cosco Shipping has developed into one of the region's significant transhipment hubs. For UK exporters, Alexandria is the primary receiving port; goods are then distributed by road to Cairo (approximately 220km) and other Egyptian cities.

COMESA Membership: Egypt's African Trade Preference Network#

Egypt is a member of COMESA (Common Market for Eastern and Southern Africa), the 21-country free trade bloc covering a market of over 600 million people and combined GDP of over $1 trillion. COMESA membership gives Egypt preferential tariff access to East and Southern African markets including Kenya, Ethiopia, Rwanda, Zambia, and Zimbabwe. For businesses manufacturing in Egypt — in Special Economic Zones or export processing zones — COMESA membership is a significant advantage: goods with sufficient Egyptian content can access these markets at reduced or zero tariff rates. Egypt also has bilateral trade agreements with the EU, the US (the Qualified Industrial Zone arrangement), Turkey, and several Arab League countries, making it one of Africa's most trade-agreement-connected economies.

Special Economic Zones: Egypt's Manufacturing Incentive Programme#

Egypt has established several Special Economic Zones (SEZs) offering tax holidays, reduced customs duties on imported inputs, and simplified regulatory procedures for businesses manufacturing for export. The most significant is the Suez Canal Economic Zone (SCZone), encompassing six development zones along the canal including Port Said, Ain Sokhna, and East Port Said. The SCZone offers a 5% flat tax rate for businesses established there, compared to the standard 22.5% corporate tax rate. The Damietta Furniture City SEZ and the East Cairo Technology Zone add sector-specific specialisation. For UK manufacturers looking for a production base with access to both EU and African markets, Egyptian SEZs deserve evaluation — particularly for goods where Egyptian rules of origin can unlock COMESA or EU GSP preferences.

UK-Egypt Bilateral Trade and Market Entry#

UK-Egypt bilateral trade runs at approximately £3-4 billion annually, with UK exports including machinery, vehicles, pharmaceuticals, and financial services. Egypt is the UK's largest trading partner in North Africa. The UK-Egypt Association Agreement (inherited and updated from the EU-Egypt agreement post-Brexit) provides preferential tariff terms for goods meeting rules of origin requirements. Egypt's domestic market of 100 million people, with a growing urban middle class, offers opportunities in consumer goods, healthcare, education services, and construction. Practical market entry considerations include currency risk on the Egyptian pound (which devalued sharply in 2022-2023 before partial stabilisation), bureaucratic complexity in regulatory approvals, and the importance of local partners with government relationships. AskBiz tracks your Egypt trade costs and flags automatically when duty changes or exchange rate movements affect your landed cost calculations.

• Egypt combines unparalleled geographic significance (controlling the Suez Canal route) with a large domestic market of 100 million people, COMESA membership giving preferential access to 21 African countries, and ambitious Special Economic Zone investment.
• For UK businesses, Egypt is both a destination market and a gateway to North and East Africa.