TIME FOR INVESTING IN EGYPT :
Trade Policies - EGYPT
- Egypt has gradually moved towards a more liberal trade regime. It became a member of the World Trade Organisation (WTO) in 1995, and revamped its tariff regime in 2004 as agreed in its accession agreement.
- Egypt participates actively in the multilateral trading system, both in the regular work of the WTO and in the Doha Development Agenda negotiations. It grants at least most favoured nation (MFN) treatment to all WTO Members. Egypt is a party to the Agreement on Trade in Civil Aircraft, and to the Information Technology Agreement (ITA), but not to the Agreement on Government Procurement (GPA). In June 2017, Egypt ratified domestically the Trade Facilitation Agreement (TFA), but has still to submit to the WTO its instrument of acceptance of the Agreement.
- Egypt’s simple average applied MFN tariff rate was 19.1% in 2017, slightly down from 20% in 2005, but higher than 16.5% in 2012. Some two-thirds of all tariff lines face rates of 10% or lower. The 51.6% average tariff in agriculture reflects tariff peaks for alcohol and tobacco, which can be as high as 3,000%. Egypt has bound 99.3% of its tariff lines; the general simple average bound tariff is 37.2%. In 2017, some 46 lines exceeded their bindings. All tariff rates are ad valorem, with the exception of 21 lines. In addition to tariffs, imports are now subject to a value-added tax of 14%, which also applies to domestically produced goods; exported goods are exempted and services are zero-rated. Egypt also applies excise taxes on some products in addition to the general VAT rate.
- Egypt’s trade policy objectives are set out in the Industrial Development Strategy (IDS) for 2016-2020, in accordance with Egypt’s SDS “Egypt Vision 2030”. The aim is to help Egypt become a leading industrial economy in the Middle East and North Africa region and a main export hub for medium-technology manufactured products by 2025. The IDS covers the following areas: industrial development for micro, small and medium enterprises (MSMEs); export promotion and import rationalisation; innovation promotion; energy conservation; the development of technical and vocational education; and improvement of the business climate. The main goals are to accelerate industrial growth, increase the contribution of MSMEs to GDP, spur export growth and create productive jobs.
- As a measure designed to protect the local automotive industry, imported vehicles are subjected to a tariff ranging from 40%-135%, depending on the engine size. Vehicles with engines over 2,000cc are subject to an additional sales tax of up to 45%. The Presidential Decree 25 of 2016 also significantly increased import tariffs on a wide range of products such as household appliances, electronic devices, clothing, shoes, watches and some agricultural produce.
- Egypt requires proper labelling for imports of food products. All food products should be packed in appropriate packages, which should be clean, intact, and odourless so as to preserve the products and not affect its characteristics.
- Imported products must be marked and labelled in Arabic. The language requirement is mandatory for all information, including the brand and type of the products, country of origin, date of production, expiry date and instructions on handling products. For imported tools, machines and equipment, a user manual in Arabic has to be attached.
- Egypt has continued its reform process, with a view to making its customs administration more efficient and transparent, by reducing the number of documents required for import and export processes and allowing their presentation electronically. Some changes have already been introduced to facilitate trade. These changes include activating the Authorised Economic Operator (AEO) system, introducing x-ray devices in most customs posts to facilitate customs control and reduce release times, and implementing an e-freight import and export system for air freight. A Ministerial Steering Council for Egyptian Trade Facilitation (EgyTrade) has been established, aiming at the creation of an Egyptian National Single Window (ENSW) system.
- Import prohibitions and restrictions are maintained for economic, environmental, health, religious, safety, sanitary and phytosanitary reasons. They are applied equally to all trading partners. Import prohibitions apply to chicken offal and limbs, fowl livers, goods bearing marks considered sensitive to religious beliefs, and various hazardous chemicals and pesticides, among others. There are also restrictions on the importation of used products, which must meet certain conditions.
- A number of products are subject to quality control inspections when imported. Additionally, the importation of a relatively large number of items is subject to special conditions and requires a licence, including cars, shoes, textiles, car parts, certain food products such as milk and other consumer goods.
- The importation of certain products is subject to specific administrative formalities and requires government approval; such is the case for wheat grains, corn used for the feed industry, and soya bean seeds for oil extraction.
- Egypt has accepted the WTO Code of Good Practice for the Preparation, Adoption and Application of Standards. Technical regulations are issued by the different ministries. As at December 2016, Egypt had in place some 860 technical regulations covering five sectors, with the largest number pertaining to engineering and chemical products, food, textiles and measurement products. All imported goods subject to technical regulations are inspected to verify conformity with each regulation. The Egyptian Accreditation Council (EGAC) is the sole national body for the assessment and accreditation of conformity assessment bodies and laboratories in Egypt performing testing and calibration, inspection, and certification activities for products, systems and personnel.
- Egypt is a relatively active user of trade remedy measures: between January 2005 and June 30, 2017, it initiated 31 anti-dumping investigations, 16 of which resulted in the imposition of definitive anti-dumping duties. Three anti-dumping measures were extended. During the same period, Egypt initiated 14 safeguard investigations, imposed provisional measures in all and final safeguard measures on three products: blankets, steel rebar, and cotton and mixed yarns. There are currently no countervailing measures in place.
- Egypt imposes export taxes on a number of products, including sugar, waste plastic, some fertilisers, fish, sand, some skins, marble, and raw granite, among others. Egypt introduced an export tax on sugar for an unlimited duration effective March 2017.
- Exports can be prohibited or restricted in order to meet local demand or for environmental purposes. Exports of rice of any kind have been banned since August 2016; this measure has unlimited validity and was imposed due to the lack of water resources. In addition, Egypt bans the exportation of raw or tanned hides, skins or leather in its wet state.
- There are various controls and inspection procedures for food products, live animals, and animal and plant products, implemented by the corresponding responsible agency. Importers of plants must obtain an import permit prior to importation and are also required to notify the exporting trading partner of the corresponding import regulatory requirements, which are set according to the potential risk associated with pests. Imports of live animals require an import permit from the Central Administration of Veterinary Quarantine. Importers of meat products and chicken must provide a number of certificates before the product is accepted, including a slaughter certificate proving that the animal was slaughtered in accordance with the Islamic ritual (halal), a veterinary certificate and a certificate of origin.
- Egypt is a member of most of the main international treaties on intellectual property rights (IPRs). The Intellectual Property Law No. 82/2002 is a unified Law that covers the major areas referred to in the TRIPS Agreement. There are no provisions in Egypt’s IPR legislation that expressly allow or prohibit parallel imports. According to the authorities, Egypt’s IPR policy recognises the importance of IPR protection as a key factor in economic growth and development. The enforcement of IPR legislation is handled by various specialised authorities, some of which are entitled to act ex officio regarding IPR crimes. Border measures may be applied on all forms of intellectual property.
- Besides the Association Agreement with the EU, Egypt has signed a number of free trade agreements (FTAs) to help Egyptian exports gain preferential access to markets of the signatories. Such FTAs include the Greater Arab Free Trade Agreement (GAFTA, with 17 members including Egypt), the Common Market for Eastern and Southern Africa (COMESA, with 19 members including Egypt), the Agadir Agreement (with Egypt, Morocco, Tunisia and Jordan as members), plus the MERCOSUR-Egypt FTA (with Argentina, Brazil, Paraguay and Uruguay).
- Egypt has also signed bilateral trade agreements with Lebanon, Syria, Morocco, Tunisia, Libya, Jordan and Iraq. Egypt also offers improved market access to least developed countries (LDCs). Egypt also participates in the Framework Agreement on the Trade Preferences System of the Organisation of Islamic Cooperation (TPS-OIC), which is still to enter into force.
- Egypt is also negotiating trade agreements with various countries and regions, including Nigeria, Tanzania, India, Sri Lank, Russia, the West African Economic and Monetary Union (UEMOA) and the CEMAC Group (including Cameroon, Central African Republic, Chad, Congo, Gabon and Equatorial Guinea).
- Egypt enjoys Generalised System of Preferences (GSP) status provided by Australia, Canada, Japan, Kazakhstan, New Zealand, Russia, Turkey and the US. Preferential tariff and duty-free treatment on certain items are granted to Egypt by these countries.
Sources: WTO - Trade Policy Review, Global Trade Alert, Fitch Solutions