RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/150 
28 June 2005  
 
(05-2611) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
EGYPT 
 
Report by the Secretariat 
 
  
 
This report, prepared for the third Tr ade Policy Review of Egypt, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Eg ypt on its trade policies and practices. 
 
Any technical questions arising from this report may be addressed to 
Mr. Arne Klau (tel:  022/739 57 06;  fax:  022/739 57 65) and 
Mr. Jacques Degbelo (tel:  022/739 55 83). 
 
Document WT/TPR/G/150 contains the policy statement submitted by Egypt. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Egypt. Egypt WT/TPR/S/150 
 Page iii 
 
 
CONTENTS 
Page 
SUMMARY OBSERVATIONS vii 
 (1) T HE ECONOMIC ENVIRONMENT  vii 
 (2) I NSTITUTIONAL FRAMEWORK  vii 
 (3) T RADE POLICY INSTRUMENTS  viii 
 (4) S ECTORAL POLICIES  ix 
 (5) T RADE POLICY AND TRADING PARTNERS  ix 
I. ECONOMIC ENVIRONMENT 1 
 (1) M AJOR FEATURES OF THE ECONOMY  1 
 (2) R ECENT ECONOMIC DEVELOPMENTS  2 
 (3) D EVELOPMENTS IN TRADE AND INVESTMENT  5 
 (i) Trade in goods and services 5  (ii) Investment 9 
 (4) O
UTLOOK  10 
II. TRADE AND INVESTMENT REGIMES 11 
 (1) I NSTITUTIONAL FRAMEWORK  11 
 (2) T RADE POLICY FORMULATION AND IMPLEMENTATION  12 
 (3) T RADE POLICY OBJECTIVES  13 
 (4) M AIN TRADE LAWS AND REGULATIONS  14 
 (5) I NVESTMENT REGIME  14 
 (6) T RADE AGREEMENTS  17 
(i) World Trade Organization 17 
(ii) Preferential tr ade agreements 19 
(iii) Other arrangements 21 
III. TRADE POLICIES AND PRACTICES BY MEASURE 23 
(1) O VERVIEW  23 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  23 
(i) Documentation and customs procedures 23 
(ii) Customs valuation 24 (iii) Rules of origin 25 
(iv) Tariffs 26 
(v) Other taxes and charges 33 (vi) Import prohibitions, restrictions, and licensing 34 
(vii) Contingency trade remedies 35 
(viii) Standards and other technical requirements 37 (ix) Other measures 40 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  40 
(i) Registration, documentation, and control 40 
(ii) Export taxes, charges, and levies 41 
(iii) Export prohibitions, re strictions, and licensing 41 
(iv) Export subsidies, and duty and tax concessions for exports 41 WT/TPR/S/150 Trade Policy Review 
Page iv 
 
 
Page 
(v) Free zones and special economic zones 42 
(vi) Export finance, insurance, and guarantees 42 
(vii) Export promotion and marketing assistance 43 
 (4) M EASURES AFFECTING PRODUCTION AND TRADE  43 
(i) Incentives 43 
(ii) Competition policy and price controls 45 (iii) Government procurement 46 
(iv) State-owned enterprises and privatization 47 
(v) Local-content requirements 48 (vi) Intellectual property rights 49 
IV. TRADE POLICIES BY SECTOR 53 
 (1) I
NTRODUCTION  53 
 (2) A GRICULTURE  54 
 (i) Main features 54 
 (ii) Policy developments 55 
 (3) F ISHING   57 
 (4) M INING , PETROLEUM AND NATURAL GAS 57 
 (i) Main features 57 
 (ii) Policy issues 58 
 (5) E LECTRICITY  59 
 (6) M ANUFACTURING  60 
 (i) Main features and policy framework 60 
 (ii) Selected manufacturing activities 62 
 (7) S ERVICES  63 
 (i) Overview 63 
 (ii) Financial services 66  (iii) Telecommunication and postal services 69 
 (iv) Transport 70 
 (v) Tourism 72 
REFERENCES   75 
APPENDIX TABLES  77 Egypt WT/TPR/S/150 
 Page v 
 
 
CHARTS 
Page 
I. ECONOMIC ENVIRONMENT 
I.1 Structure of merchandise exports and imports, 1995-03 7 
I.2 Direction of merchandise trade, 1995-03 8 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
III.1 Breakdown of applied MFN duties, 2005 28 
III.2 Tariff escalation by ISIC 2-digit industry, 2005 30 
IV. TRADE POLICIES BY SECTORS 
IV.1 Tariff protection in the industrial sector, 2005 61 
TABLES 
I. ECONOMIC ENVIRONMENT  
I.1 Egypt in figures, 1998/99 to 2003/04 1 
I.2 Basic macroeconomic indicators, 1998/99 to 2003/04 3 
I.3 Fiscal operations, 1998/99 to 2003/04 4 
I.4 Balance of payments, 1998/99 to 03/04  5 I.5 Foreign direct investment, by country of origin, 1999/00 to 2003/04 9 
II. TRADE AND INVESTMENT REGIMES  
II.1 Ministerial responsibility for trade-related issues 13 
II.2 Main trade-related laws 14 
II.3 Areas eligible for incentives under the I nvestment Guarantees and Incentives Law  15 
II.4 Egypt's notifications under the WTO Agreements, August 2004 18 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
III.1 Structure of MFN tariffs, 1998 and 2005 27 
III.2 Summary analysis of the MFN tariff, 2005 28 III.3  Tariff lines with applied rates higher than the corresponding bound duties, 2005  31 
III.4 Tariff exemptions and concessions, 2005 32 
III.5 General sales tax rates, 2005 33 III.6 Definitive anti-dumping duties in force, 2005 36 
III.7 Egypt's major free zones, 2004 42 
III.8 Privatized co mpanies, 1993-04 47 
III.9 Value of companies and productive units privatized, 1997-04 48 
III.10 Tariff concessions subject to local-content requirement in assembled products, 2005 49 III.11 Overview of IPR protection, 2005 50 
IV. TRADE POLICIES BY SECTORS  
IV.1 Gross domestic product at factor cost, 1996/97 to 2003/04 53 
IV.2 Land use by crop, 2003-04 54 
IV.3 Agricultural output, 1997-03 55 
IV.4 Fisheries sector, 1999-04 57 WT/TPR/S/150 Trade Policy Review 
Page vi 
 
 
Page 
IV.5 Petroleum and gas production, 1996-00 58 
IV.6 Basic data on electricity, 1997-04 59 
IV.7 Manufacturing output by activity, 1996-04 60 IV.8 Summary of Egypt's specific commitments in in dividual service sectors 64 
IV.9 Summary of Article II (MFN) exemptions listed by Egypt 65 
IV.10 Stock market indicators, 1996-04 68 IV.11 Telecommunication services, 1998-04 69 
IV.12 Suez Canal traffic, 1996-04 71 
IV.13 Legislation applied to the maritime sector, 2005 71 IV.14 Tourism industry, 1998/99 to 2003/04 73 
IV.15 Legislation applied to the tourism subsector, 2005 73 
IV.16 Investment incentives in the tourism industry, 2005 74 
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT 
AI.1 Structure of exports, 1995-03 79 
AI.2 Structure of imports, 1995-03 80 
AI.3 Origin of imports, 1995-03 81 
AI.4 Destination of exports, 1995-03 82 
 
 
 
  Egypt WT/TPR/S/150 
 Page vii 
 
 
SUMMARY OBSERVATIONS 
(1) T HE ECONOMIC ENVIRONMENT  
1. Since its last Trade Policy Review 
(TPR) in 1999, Egypt's GDP has grown at an 
average rate of 3.9% a year.  Per capita GDP 
is now some US$1,120.  Monetary discipline has helped to contain inflation at below 5%.  After a decade of being pegged to the U.S. dollar, the Egyptian pound has been 
floating since January 2003.  Egypt has 
accepted the obligations of Article VIII of the IMF Agreement effective from January 2005.  Egypt's current account has posted growing surpluses since 2000/01 (after years of deficit), mainly a result of strong increases in 
merchandise exports.  Nevertheless, the fiscal 
deficit has fluctuated around 6% of GDP in recent years.  Unemployment remains relatively high, at between 8% and 10%, and the poverty index is about 20%. 
2. Trade plays an important role in 
Egypt's economy;  exports of goods and services have been a motor for the current economic recovery.  Egypt has traditionally been a net service exporter, with service receipts substantially exceeding merchandise 
exports.  Important services sources of foreign 
exchange are tourism and the Suez Canal.  Remittances from Egyptians working abroad are also an important source of foreign exchange receipts.  Egypt's most important 
merchandise exports are fuel products, which 
accounted for about 43% of commodity exports in 2003;  this share, however, has fluctuated considerably over the years due to price variations.  Manufactures account for 
about 30% of merchandise exports, while the 
share of agricultural products is about 15%;  cotton is the single most important agricultural export.  The share of textiles in Egypt's merchandise exports has declined gradually, from 16.6% in 1995 to 4.5% 
in 2003. 
3. Merchandise imports fell by over 22% 
between 2000 and 2003, mainly due to the depreciation of the Egyptian pound.  Agricultural products and manufactured goods account for about 30% and 48% of imports 
respectively;  about 14% of imports originate in Egypt's free zones and have not been classified by product category.  Egypt's main 
trading partners are, in descending order, the 
United States, Italy, Germany, and China. 
(2) I
NSTITUTIONAL FRAMEWORK  
4. Since its last Review, Egypt has 
maintained broadly unchanged its overall 
institutional framework for trade policy 
formulation;  the Ministerial Economic Group has responsibility in this regard.  Trade policy 
is implemented by the Ministry of Foreign Trade and Industry, established in November 2004 through a merger of the Ministry of 
Foreign Trade and the Ministry of Industry 
and Technological Development.  Recent changes in trade legislation have been driven mainly by a combination of autonomous policy initiatives and compliance with multilateral 
rules.   
5. A contracting party to the GATT since 
1970 and a WTO Member since June 1995, Egypt is an active participant in the multilateral trading system (MTS).  Egypt accords at least MFN treatment to all WTO 
Members.  It is seeking to liberalize its trade 
regime on a multilateral, regional, and unilateral basis.  In  the current multilateral 
trade negotiations, Egyp t supports meaningful 
liberalization of the agriculture sector.  It also 
seeks improved market access for non-
agricultural goods, but believes that concerns for infant industries in developing countries should be accommodated.  In the services sector, Egypt supports greater multilateral 
trade liberalization, most notably with respect 
to supply through the movement of natural persons (mode 4).  Egypt considers issues such as implementation, special and differential treatment, and rules as essential to the integration of developing countries into the 
MTS.  Since its last Review, Egypt has been a 
defendant in one dispute relating to definitive anti-dumping measures, and reserved its third party rights in another. WT/TPR/S/150 Trade Policy Review 
Page viii 
 
 
6. Preferential agreements are 
increasingly important for Egypt's trade relations.  In the period under review, it has concluded agreements with the European 
Union, Jordan, Morocco, and Tunisia.  It is 
also a member of the Greater Arab Free Trade Area and the Common Market for Eastern and Southern Africa.  In addition, it has concluded a trade protocol with Israel and a trade 
framework agreement with the United States. 
7. While Egypt has no specific law on 
foreign direct investment, most foreign investment takes place under the 1997 Investment Guarantees and Incentives Law, which defines incentives for investment in 
certain activities.  The incentives include tax 
advantages, reduced tariffs for imported inputs, and guarantees against confiscation.  Foreign investment is managed by the General Authority for Foreign Investment and Free 
Zones (GAFI), whose role has gradually 
shifted from investment regulation to investment promotion and facilitation.   
(3) T
RADE POLICY INSTRUMENTS  
8. Egypt has bound over 98% of its tariff 
lines, at rates averaging 37.5% in 2005, down 
from 45% in 1998.  Egypt's present applied 
MFN tariff structure was implemented in September 2004, with significant across-the-board cuts and a reduction in the number of tariff bands to twelve.  As a result, the average 
applied MFN tariff has fallen from 26.8% in 
1998 to 20%.  Nevertheless, Egypt's tariff system remains complex, with numerous exemptions, and concessions.  Peaks, of up to 3,000%, apply to alcoholic beverages and 
spirits.  For 19 tariff lines, the applied tariff 
exceeds, sometimes substantially, the corresponding bound rate;  imports from WTO Members are alleged to carry the bound or the applied tariff rate, whichever is lower.  Moreover, in aggregate,  the tariff displays 
positive escalation, i.e. high effective 
protection. 
9. Egypt has been implementing the 
WTO Agreement on Customs Valuation since July 2001.  It has also increased efforts to improve customs procedures.  In September 
2004, Egypt eliminated all customs service fees and charges of up to 5% on imports.  A general sales tax, at rates between 5% and 
45%, applies equally to imported and domestic 
goods.  Import prohibitions on most textile and clothing products w ere lifted in 2004, but 
remain in place for poultry offal.  Egypt does not maintain tariff quotas.  However, a wide 
range of imported products are subject to 
mandatory quality controls.  In December 2004, Egypt embarked on a programme to ensure that all its standards comply with international standards;  the programme is to be completed in early 2006.  Since its last 
TPR, Egypt has submitte d no notifications to 
the WTO on sanitary and phytosanitary (SPS) measures or on technical barriers to trade (TBT).  It has imposed 14 definitive anti-dumping duties and two safeguard measures.  
Most of the anti-dumping measures were on 
electric lamps and tyres;  safeguard measures were imposed on common fluorescent lamps and powdered milk.  No countervailing duties were imposed. 
10. Egypt promotes exports through 
marketing assistance, and official credit and 
guarantee schemes.  Free zones are in place to promote export-oriented investment, and employment.  A new Export Promotion Law was adopted in 2002.  Some 50 raw and 
processed agricultural products are subject to  
mandatory quality control upon export.  Egypt does not apply any export taxes, charges or levies.  
11. State ownership remains extensive in 
the Egyptian economy, although there is an 
ongoing privatization programme.  Between 1999 and 2004, 97 companies were privatized, generating divestiture receipts of LE 7.1 billion.  The privatization programme had lost some of its momentum at the 
beginning of the millennium, but an ambitious 
plan to revitalize it was presented to the Cabinet in early 2004.  It envisages the privatization of 125 of the remaining 178 state-owned enterprises. Egypt WT/TPR/S/150 
 Page ix 
 
 
12. Egypt's first comprehensive 
competition legislation was adopted by the People's Assembly in February 2005.  The Competition Law prohibits price collusion, 
production-restricting agreements, market 
sharing, and abuse of a dominant market position.  Government procurement legislation grants a 15% price preference to Egyptian bidders.  Tariff reductions on imported inputs 
for certain assembly industries are contingent 
on local-content requirements. The Government views the promotion of small and micro enterprises as an important way to adjust to structural problems and to modernize the economy.  In 2002, Egypt adopted new 
intellectual property legislation covering all 
major areas of the TRIPS Agreement.  
(4) S
ECTORAL POLICIES  
13. The contribution of agriculture to 
GDP in Egypt has been declining gradually 
and was just below 16% in 2003/04.  However, 
the sector retains a significant role in employment (about 34% of the labour force).  Egypt remains a net importer of agricultural products, although its agricultural trade 
deficit has decreased in recent years.  
Financial assistance to the sector is provided 
in the form of subsidi zed electricity and water, 
the latter being provided almost free of charge to farmers.  The Government also subsidizes various food products, most notably bread, 
sugar, and oil, for low-income groups.  Since 
1999, Egypt has not submitted any notifications to the WTO Committee on Agriculture. 
14. The share of petroleum and natural 
gas production in Egypt's GDP increased from 
4.6% in 1998/99 to 11.6% in 2003/04, mainly as a result of rising oil prices.  Output has increasingly shifted from crude oil production to natural gas as production at mature oilfields decreases. To engage in the 
exploration of petroleum and natural gas, 
foreign companies must enter into a joint-venture with the state-owned Egyptian General Petroleum Corporation. 15. The manufacturing sector contributes 
about 19% of Egypt's GDP.  It comprises a broad range of activities, the most important being metallurgy and metallurgical products, 
food processing, and chemical products.  
However, Egypt's escala tory tariff structure 
does not encourage export-oriented manufacturing.  A key objective of the Government is to increa se the competitiveness 
of private enterprises in the sector.  To this 
end, it has launched the Industrial Modernization Programme for capacity development. 
16. With a share of about 48% in GDP, 
the services sector is vita l to Egypt's economy.  
The tourism industry and fees for using the 
Suez Canal remain Egypt's most important sources of foreign exchange.  Egypt's tourism industry has continued to perform well since 1999, despite a slump in 2001/02;  however, 
recent security-related events may affect its 
growth prospects.  Financial services reforms are planned for the near future; they include the privatization of state-owned banks and insurance companies, and the establishment of a deposit insurance scheme.  The 
Telecommunications Law stipulates that 
Telecom Egypt will relinquish its monopoly status as domestic and international fixed-line operator by 31 December 2005.   
17. Egypt's Schedule of Specific 
Commitments under the GATS includes 
commitments on commercial presence and the presence of natural persons for the supply of a number of individual service categories, most notably in telecommunications, construction 
and related engineering services, financial 
services, tourism, and transport.  Egypt's initial offer in the ongoing multilateral services negotiations provides for an expansion of its schedule of horizontal as well as sector-specific commitments. 
(5) T
RADE POLICY AND TRADING 
 P ARTNERS  
18. Since its last TPR, Egypt has taken 
steps towards the liberalization of its trade regime.  The reforms reflect its commitment to WT/TPR/S/150 Trade Policy Review 
Page x 
 
 
the multilateral trading system, in which it 
participates actively.  As a proponent for issues of interest to developing countries, it has been instrumental in advancing the Doha 
Development Agenda by tabling proposals in 
several areas.  None theless, Egypt's recent 
macroeconomic performance has been mixed.   
19. Continued structural and trade 
reforms, particularly further privatization, tariff reductions, and reducing in the gap 
between bound and applied tariff rates, would contribute to better resource allocation, enhance predictability and transparency of the 
trade regime, contain the need for incentives, 
and help to put the economy on a higher growth path.  Trading partners could help by 
providing increased market access for products and services of interest to Egypt.