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| 3. Barriers to trade |
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3.1 Tariff and tariff administrative measures Since being a full member of the WTO in 1995, the Government of Egypt has adjusted tariff rates many times on the basis of its accession commitments. Import duties on 98 percent products are lower than the overall bound tariff rates. Egypt's prevailing overall bound tariff rates average 38.6 percent while the average applied tariff is 20.0 percent. 3.1.1 Tariff peak Import duties vary from 2 percent to 40 percent on different imports of raw materials, components, primary feeding materials, and durable products based on the different degrees of processing. However, high tariff rates are maintained on some products including passenger cars, tobacco and alcoholic drinks. The highest rate reaches 3000 percent. 3.1.2 Tariff escalation Egypt's tariff structure clearly reveals a pattern of positive escalation, with average tariffs of 4.8 percent on raw materials, 10.6 percent on semi-processed goods, and 28.2 percent on fully processed goods. 3.2 Import restrictions Egypt maintains import prohibitions for economic, environmental, health, safety, sanitary, and phytosanitary reasons. Import prohibitions apply to edible offal of poultry (including liver). They also apply to hazardous chemicals, certain chemicals and pesticides, and hazardous wastes. Pursuant to Article 46 of the Telecommunications Law, imports of used telecommunications materials for trading purposes are prohibited. Egypt does have quotas or tariff quotas on imports. In general, it does not subject imports to licensing or prior approval. Permits from the National Telecommunications Regulatory Authority are required for the import of telecommunications equipment. 3.3 Barriers to customs procedures According to the Egyptian Customs regulations, to ensure the release of the consignments to Egypt, all the documents including invoices, certificates of health, analysis reports and certificates of origin should be notarized by the local notary offices and be verified by the embassies and consulates general of Egypt in the countries. However, the Government of Egypt has only set up its embassy in Beijing and consulate general in Shanghai. Wherever the Chinese export enterprises are, they have to go to Beijing or Shanghai for the notary procedures and other related issues. The requirement increases export costs and causes inconvenience to Chinese enterprises. Although the Egyptian Customs has eliminated all customs service fees and charges on imports, an additional fee of 2 percent is levied on commodities subject to customs duties of 5 percent to 29 percent; 3 percent on duties of 30 percent; and 4 percent on over 30 percent. 3.4 Technical barriers to trade The Government of Egypt lifted the import restrictions on fabrics and textiles for commercial use on January 2004 and subjected garments to ad valorem duties (at present the import duty on garment is 40 percent). However, in February 2004, it required that all enterprises exporting garments to Egypt should register with the General Authority for Import and Export Inspection of Egypt, confirming that the products are in line with the international labor, health and environmental standards and that the General Authority for Import and Export Inspection of Egypt should send staff to make field inspection and the inspection expenses should be borne by the exporters. In October 2004, the requirement on field inspection was cancelled by the Government of Egypt, but garment exporters to Egypt should still register with the General Authority for Import and Export Inspection of Egypt. These regulations have increased the cost on exporting enterprises and weakened their competitiveness. For the import of chemical raw materials used in food, importers should provide the inspection report notarized by the Egyptian embassies or consulates general in the countries of origin. The Customs makes an estimation of the date of production indicated on the packaging upon arrival of the shipments. The shipment will be refused if the goods were made three months ago. 3.5 Sanitary and phytosanitary measures Egypt requires a certificate provided by the importers for importing frozen meat products, confirming that a temperature below –18°C was maintained before export. Egypt also requires that imported cotton is subject to fumigation in both its country of origin and Egypt. These practices have increased the cost of exports and posed apparent barriers to trade. 3.6 Trade remedies Egypt has initiated a total of 15 cases regarding trade remedy measures since 1996, of which 13 are anti-dumping cases while two are related to safeguard measures in the areas of machinery and electronics, light industry, chemical industry and hardware and minerals. On 5 July 2005, the Ministry of Foreign Trade and Industry issued an announcement, initiating anti-dumping sunset review on two machinery and electronic products originated or imported from China, which are 1/3 horsepower single-phase electric machine mainly used in washing machines and 3/4 25 horsepower three-phase electric machine mainly used in motive power equipment of air-conditioners. In January 2006, the anti-dumping Bureau of the Ministry of Foreign Trade and Industry accepted the application filed by Egyptian domestic enterprises for anti-dumping investigation into ball-point pens and color pens originally made in China. In the anti-dumping investigation into Chinese products, Egypt still regards China as a “non- market economy” and uses a surrogate country to calculate the normal value of the Chinese commodities. High anti-dumping duties are levied. The Chinese side feels regretful for this and hopes the Egyptian side to reevaluate China's marketization process and grant China full market economy status at an early date. 3.7 Government procurement Tenders Law ( Law of 89/1998) of Egypt provided that the government procurement should take both prices and technical factors into account. Meanwhile, Egyptian bidders enjoy preferential policies compared with foreign bidders. In tendering and bidding, if the price offered by the Egyptian bidder is 15 percent higher than the foreign bidder, it is viewed the same as the one made by the foreign bidder. 3.8 Barriers to trade in services 3.8.1 Financial service The Egyptian government allows privatization of insurance companies and banks. However, within ten years, the government will not approve any new banking licenses. As a result, the only way a foreign bank can enter the Egyptian market is to purchase an existing bank. 3.8.2 Telecommunications Telecom Egypt (TE) is still a state-owned monopoly. In February 2003, the new Telecommunications Law (Law 10) was passed. It stipulates that Telecom Egypt will relinquish its monopoly status as of January 2006. 3.8.3 Transportation service Transportation services of Egypt are being liberalized. Pursuant to the Law of 1998, the government no longer enjoys monopoly in maritime transportation. Private concessions can operate maritime transportation service including carrying and delivering of goods, providing supply to ships, ship repair and container businesses. Private enterprises can also provide services at airports, but private ownership of airports is not permitted. Private and foreign air carriers may not operate charter flights to and from Cairo without the approval of the national carrier, Egypt Air. |
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