RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/150 
28 June 2005  
 (05-2592) 
Trade Policy Review Body Original: English 
 
 
   
 
 
TRADE POLICY REVIEW 
 
Report by 
 
EGYPT 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Egypt is attached. 
 
 
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/G/150 
 Page 3 
 
 
CONTENTS 
Page 
I. EGYPT AND THE WTO 5 
II. ECONOMIC VISION 5 III. A COHERENT TRADE POLICY FRAMEWORK 6 
 (1) T
ARIFF REDUCTION  7 
 (2) S TANDARDS HARMONIZATION  7 
 (3) T RADE FACILITATION AND CUSTOMS REFORM  8 
(4) R ELIANCE ON WTO INSTRUMENTS AGAINST UNFAIR TRADE PRACTICES  9 
IV. EGYPT'S TRADE POLICY AT THE GLOBAL AND REGIONAL LEVEL 9 
(1) T HE EGYPT -EU  PARTNERSHIP AGREEMENT  10 
 (2) T HE GAFTA AGREEMENT  10 
 (3) T HE COMESA AGREEMENT  11 
V. ENABLING POLICIES ENHANCING FOREIGN TRADE PERFORMANCE 11 
 (1) M ONETARY AND FISCAL POLICY ENSURES STABILITY AND PREDICTABILITY  11 
 (2) E NFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS LAW 12 
(3) P ASSING OF LAW ON PROTECTING COMPETITION AND PROHIBITION OF MONOPOLISTIC 
PRACTICES  12 
 (4) M OMENTUM IN PRIVATIZATION PROGRAM  12 
 (5) B ANKING SECTOR AND FINANCIAL SERVICES REFORM  13 
 (6) I NDUSTRY MODERNIZATION PROGRAM AND INDUSTRY RESTRUCTURING  14 
 (7) T OURISM SECTOR GROWTH  14 
 (8) P LAIN LEVEL FIELD FOR INVESTMENT AND REDUCED BUSINESS AND INCOME TAXES  14 
 (9) N ATIONAL COMMITTEE TO UPDATE COMMERCIAL AND BUSINESS LAWS 15 
 (10) C ONSUMER PROTECTION LAW 15 
VI. FUTURE ECONOMIC POLICY DIRECTION 15 
TABLES 
A.1 Macroeconomic Overview, Selected Economic Indicators, 1998/99-2003/04 16 
A.2 Balance of Payments, 1997/98-2003/04 16 
A.3 Regional Distribution of Exports and Imports, 1998/99-2003/04 17 
 Egypt WT/TPR/G/150 
 Page 5 
 
 
I. EGYPT AND THE WTO 
1. Egypt was a contracting party to the GATT as early as 1970, and has been a member of the 
World Trade Organization as of 1995. All legislation relating to WTO agreements became applicable 
to Egypt since that date.  During that period and unt il now, Egypt has been keen  in ensuring that we 
utilize the multilateral trading system to achieve Egypt's economic objectives. The WTO, as a forum 
leading to open and frictionless movement of goods a nd services at the global level, gradually ensures 
the realization of this collective objective of its 148 members.  
2. Egypt remains to be a committed and active member  of the WTO.  Since the last trade policy 
review for Egypt in 1999, Egypt' s delegations participated actively in Ministerial Conferences in 
Seattle in 1999, in Doha, 2001, in Cancun in 2003 and we are particip ating in Hong Kong later this 
year. We believe that the multilateral trading system  by all WTO members in the direction of further 
agreement on pending issues is the only vehicle for improving the global trade environment and ensuring that the complexities of today's trade flows hinder past efforts to liberalize trade. 
3. Under the Doha Development Agenda, Egypt has,  either on its own or in conjunction with 
other Members, submitted proposals on agricultu re, non-agricultural market access, special and 
differential treatment, dispute settlement, rules, se rvices, and trade facilitation. The theme of our 
position, which is reflected in these proposals, emph asizes the need to rely on the multilateral trading 
system to effect significant liberalization of the agriculture sector and towards ensure market access 
for non-agricultural goods. However, the principles of  special and differential treatment and less than 
full reciprocity must be reflected in the negotiations.    
4. Egypt became party to the Basic Telecommuni cation Agreement in 1997 and party to the 
Information Technology Agreement in 2003. We are al so a signatory to the Plurilateral Agreement on 
Trade in Civil Aircraft.  We participate actively in most WTO meetings, and are active in submitting 
proposals concerning various pending issues in WTO negotiations.   
II. ECONOMIC VISION 
5. The core of Egypt's vision for economic reform is the promotion of a competitiveness-
enhancing business environment that encourages furthe r integration of Egypt into the global economy.  
A vision that targets the productive employment for Egyptian youth and raising living standards for Egyptians guides the country's long- term strategy of ensuring divers ification of the Egyptian economy 
away from resource-based activities. 
6. The country's economic strategy, envisions an economy where the private sector leads activity 
in all sectors and the government role is limited to the role of the enabler of economic activity, 
guaranteeing competition, providing a stable macro envi ronment, and protecting the rights of different 
parties. Success of government efforts in this re gard will depend on the confidence of the private 
sector in the sustainability, coherence,  and stability of government policies.  
7. Creating a private sector led economy requires st rengthening our efforts to attract investment, 
whether local or foreign. In this regard, we are pa rticularly interested in attracting foreign direct 
investment, as it is perceived to be a primary vehicle to modernize local production standards and 
improve management systems.    
8. Financial investment is also encouraged, partic ularly to help speed up divestiture of public 
assets and to help inject capital in large and medium  private firms. The government focuses especially 
on developing the stock market and setting rules that  are consistent with international guidelines to WT/TPR/G/150 Trade Policy Review 
Page 6 
 
 
enhance the transparency and efficiency of the market and produce the governance vehicles to expand 
its base.   
9. Egypt's current laws and regulations are still, in  very few circumstances, remnants of the era 
of public sector dominance and control. To stre ngthen the legal infrastructure for a market-based 
economy, we are currently in the process of review ing all laws and regulati ons related to business 
activity in Egypt. The principles guiding these review s include the reduction of the discretionary role 
of the state and reducing government intervention to  policies that are consistent with market economy 
principles, allowing more transparency and predic tability in all government functions related to 
business environment.  
10. A main pillar of Egypt's current economic strate gy is its integration into the global economy. 
For the past decade, a number of trade liberaliza tion policies faced obstacles from policies in other 
segments of the economy that were not consistent with  trade liberalization. As a result, the focus in 
the country's trade policy framework is on trad e specific policies while establishing the necessary 
infrastructure of policies in other areas of the econo my that enable the country to make significant 
progress in foreign trade liberalization.  . 
11. We have also in the past six years been activ e in utilizing other tools for trade liberalization 
such as unilateral tariff reductions, foreign curre ncy liberalization, various trade facilitation and 
business environment simplification initiatives that co llectively improve the environment for ensuring 
competition and transparency in economic activity in  Egypt. A number of critical laws and policies 
were implemented during this period that signifi cantly changed the business environment in Egypt. 
Details of the policies and laws passed are presented in section III and V below.  
12. In terms of economic performance indicators fo r Egypt over the period 1999-2004, GDP grew 
by an annual average of 3.5%.  Average annual in flation rate ranged between 2.4 and 4.9 for 1998/9-
2003/04.  Fiscal deficit as a percentage of GDP grew from a low of 2.9% in 1998/9 to 5.9 % in 2003/04 (Table A.1).   
13. The current account was in surplus in the past  3 years reaching $ 3.4 billion, which is 
equivalent to 4.8% of GDP in 2003/04.  For services, Egypt's main sources of revenues are Travel and Tourism and Suez Canal ($5.5 billion and $2.8 billion respectively in 03/04  (Table A.2).  
14. Many challenges exist, however, that slow dow n the progress of economic reform policies as 
well as the realized impact of these efforts. E gypt still faces a growing population creating pressures 
on education policy to enhance literacy rates. Unemployment rates are still high, and around 
500,000 new jobs are needed annually. This emphasi zes the need to attract FDI investment and 
facilitate business further. Other pressures on the econom y stem from fiscal deficit rates that reached 
5.9% of GDP in 2003/04.  
III. A COHERENT TRADE POLICY FRAMEWORK 
15. With the objective of enhancing integration in the global economy as a strategic target, 
Egypt's trade policy framework utilizes multilateral,  regional and bilateral agreements to expand 
market access for Egyptian exports and to facilitate  access by domestic firms to inputs necessary for 
production. At the same time, we are conscious of  consumers' right to choose from a variety of 
products that provide price-quality combinations that  satisfy their needs. We also understand- very 
clearly- that the country's international obligatio ns require that imports coming from other countries 
must be granted national treatment in Egyptian markets.  Egypt WT/TPR/G/150 
 Page 7 
 
 
16. A component that is gaining attention of th e government is trade facilitation role of 
government. There are legitimate roles for custom s, food inspection, IPR enforcement, origin 
verification, etc at the border, yet these roles have  to be conducted with the objective of reducing the 
financial, time, and uncertainty burden on importe rs and exporters.   Policies to benchmark the 
performance of Egyptian customs and inspection pro cedures at the borders with international norms 
are on the agenda of all ministries involved.   
17. Various services liberalization initiatives were in troduced since the last trade policy review. A 
sector where significant liberalization initiatives ma terialized is telecommunications where Law 
10/2003 establishes the National Telecommunications  Regulatory Authority (NTRA), with overall 
responsibility for regulating telecommunications in  Egypt. There is no discrimination between 
domestic and foreign companies.  In insurance, econom ic needs, tests were eliminated for life, health 
& personal accident insurance sub-sectors in 2001 and for the non-lif e sub-sector in 2003. 
18. The banking sector is under significant restructuring because of the Central Bank Law and of 
the government initiative to sell its sh are in joint venture banks and one of the four big public sector 
banks.   
19. In addition, synchronization of foreign trade policies with economic policies outside foreign 
trade take up an important position in the curre nt phase of the country's foreign trade policy 
formulation. We are conscious of the need to 1) ensure that all trade policy tools work in tandem 
toward achieving trade liberalization and that 2)  other economic policies are enabling the economy to 
achieve the maximum benefit from tr ade liberalization. We utilize various trade policy tools that 
contribute towards implementing this trad e policy framework. These tools include:  
(1) T ARIFF REDUCTION  
20. We started last year by reducing and simplifying the tariff schedule. The objective is to move 
Egypt toward integration of production and forei gn trade in global networks of production and 
distribution.  In September 2004, Egypt's tariff schedule was simplified significantly and the number 
of tariff lines was consolidated, reducing tariff lines from 13,000 to around 6,000.  
21. Currently, we have six tariff bands with speci al rates for alcoholic beverages, tobacco 
products and cars with engines over 1600 cc.  Previous ly, there were over 25 tariff bands with vastly 
different rates applied to slightly differentiate d items which created significant classification 
problems.     
22. The recent tariff reduction decree reduced the weighted average tariff from 14.6% in 9%.  
Tariff rates on components that were linked to thei r assembled finished goods were all eliminated. 
Currently, all applied tariff rates are we ll below Egypt's WTO tariff bindings.  
(2) STANDARDS HARMONIZATION  
23. The government of Egypt realizes that standa rds and the resulting inspection at the border 
represent an area of concern to other WTO member s. Transparency and pr edictability of these 
procedures represent the foundation of the WTO Techni cal Barriers to Trade (TBT) and Sanitary and 
Phytosanitary (SPS) agreements. We also realize that  our efforts to adhere to national treatment and 
most favored nation principles of the WTO require that treatment of locally produced goods is not 
more favorable that treatment of imports. In addition, national standards that are not based on 
guidelines of international organizations such as CODEX, OIE, IPPC and others are typically 
perceived as an unnecessary barrier to trade. WT/TPR/G/150 Trade Policy Review 
Page 8 
 
 
24. In this setting, the government of Egypt has invested in a program that harmonizes Egyptian 
mandatory standards with interna tional norms and separated essential re quirements to those related to 
health, safety and impact on environment, from other requirements (Ministerial Decree 130/2005). In 
addition,  the Egyptian system allows Egyptian producers and importers to bring to the market 
commodities that are produced according to 6 other internationally recognized standards including 
those of the EU, Britain, the US, Germany, and Japan (Ministerial Decree 180/1996). 
25. At the same time, we understand from our tradi ng partners that some sanitary and phyto-
sanitary measures that are implemented at the E gyptian border are perceived as non-transparent or 
unpredictable. To address this problem, we have de vised a coordination mechanism that ensures that 
all technical requirements that fall under the auspices  of different ministries are consistent with TBT 
and SPS obligations and follow the notification and tr ansparency requirements of these agreements (a 
Prime Ministerial Decree is currently being drafted). 
26. These harmonization and coordination efforts,  in conjunction with trade facilitation and 
customs reforms (discussed in the following section), are expected to produce a noticeable impact on 
the time required and predictability of import inspection at the border.    
(3) TRADE FACILITATION AND CUSTOMS REFORM  
27. Consolidation of all inspection entities unde r GOEIC- Accreditation of labs, various 
regulations that reduce the frequency of inspecti on for imports of manufactured goods. A number of 
Presidential, Prime Ministerial and Ministerial Decrees were issued over the past few years, 
streamlining procedures of import inspection, conso lidating the authority to complete the necessary 
inspections under the authority of GOEIC. Other Decr ees issued recognize certif ication of inspections 
conducted by outside accredited agencies (primar ily Presidential Decree 106/2000, Ministerial 
Decree 552/2000, Ministerial Decree 515/2003 and Pr ime Minister's Decree and Prime Ministerial 
Decree 1186/2003).   
28. Egypt is moving ahead in lab accreditation unde r various programs. The National Council for 
Accreditation (AGAC) currently devises a system that  ensures that labs follow guidelines of the ISO 
regulations concerning lab accreditation standards for inspection and testing while preparing for 
pertinent arrangements between th is Council and the International Lab Accreditation Council (ILAC), 
which in turn will internationa lly certify Egyptian lab results. 
29. In addition, GOIEC -the agency responsibl e for conducting inspection at the border- has a 
plan for the enhancement and accreditation of all its la bs in ports that comply with technical standards 
set according to relevant international organizations to ensure higher degree of accuracy. In addition, 
the objective of bringing lab procedures and the qua lity of staff responsible for conducting tests with 
international norms will enhance the acceptance of lab results originating in Egypt, thus reducing the 
financial cost inspection on both imported and expor ted goods subject to inspection requirements in 
Egypt or in export markets.  
30. In 2001, Egypt incorporated the WTO customs valuation principles in customs procedures. 
Customs authorities constantly refine implementati on resulting in fewer disputes.  We also passed 
Law 15/2004 concerning the adoption of electronic signat ure. This law will expe dite many procedures 
in customs and port procedures of clearance.    
31. In 2004, Presidential Decree 300 eliminated rema ining export taxes and eliminated the 1-4% 
customs surcharge on imports.  Electronic signature  law will facilitates pre-shipment inspection.  
Various risk management principles are applied cu rrently in customs to reduce the time required for Egypt WT/TPR/G/150 
 Page 9 
 
 
clearance. Further work in this area will have a noticeable impact on time of clearance averages in 
customs.  
32. Modern clearance centres have been established at  the Ports of Alexandria, Cairo, Port Said 
and Suez to simplify entry procedures.  Procedures to facilitate customs procedures for large 
importers are currently in place. The adoption of th ese procedures will be generalized to cover all port 
in the near future.   
(4) RELIANCE ON WTO INSTRUMENTS AGAINST UNFAIR TRADE PRACTICES  
33. In the context of protecting Egyptian industr y against unfair practices, Egypt relies on WTO 
instruments granted to members in Anti dumping,  subsidy countervailing duties and safeguards. 
Between August 1999 and January 2005, Egypt ini tiated 17 anti-dumping investigations, of which 
14 resulted in the imposition of definitive anti-dumpi ng duties.  As at 31 December 2004, Egypt had 
14 definitive anti-dumping duties in force, most of which were on electric lamps and tires. 
34. Since its last TPR in 1999, Egypt has been a defendant in one dispute and reserved its third 
party rights in another. The case involving Egypt as a defendant relates to definitive anti-dumping 
measures on steel rebar from Turkey. The panel repor t concluded that Egypt acted consistently with 
its obligations under the WTO Anti-dumping Agreem ent and only acted inconsistently with its 
obligations under Articles 3.4. and 6.8. of th e WTO Agreement on Anti-dumping. Based on the 
recommendations of the panel, Egypt modified its measures and both Turkey and the Dispute 
Settlement Body approved the modifications. Egypt was involved as a third party in only one case that 
relates to anti-dumping duties imposed by the European Communities on imports of cotton-type bed 
linen from India, Pakistan, and Egypt. 
35. For subsidies, Egypt only initiated a count ervailing subsidy case in 1999 against sugar 
imports from the European Union.  The Egyptian au thorities terminated the investigation, however, 
because analysis revealed that in jury suffered by the complaining industry was caused by factors other 
than subsidies. 
36.  Since its last TPR in 1999, Egypt has imposed  safeguard measures on two products, common 
fluorescent lamps and powdered milk. Investigat ions relating to the importation of common 
fluorescent lamps resulted in an additional duty of 30% for one year as of February 2000. In February 
2001, the additional duty was reduced to 25%. For imports of powdered milk, a provisional safeguard 
measure in the form of an additional duty of 45% entered into force in September 2000.  A definitive 
duty of 15% was imposed in April 2001, declining to 7% in April 2002 and 3% in April 2003.  
IV. EGYPT'S TRADE POLICY AT THE GLOBAL AND REGIONAL LEVEL  
37. Egypt's integration in the global economy stre ngthened in the period 1999 to the present. 
Export proceeds more than doubled from $4.4 billi on in 1998/99 to $10.5 billion in 2003/04, an 
increase of 135%.  Similarly, non-oil merchandi ze exports grew from $3.4 billion in 1998/9 to 
$ 6.5 billion in 2003/04.  Currently non-oil export s represent 63% of total exports. Imports increased 
over the same period from $ 17 billion in 1998/9 to $18 .3 billion in 2003/04.  The faster growth of 
exports compared to imports reduced the trade ba lance from $12.6 billion in 1998/9 to $ 7.5 billion in 
2003/04 (Table A.2).   
38. In terms of comprehensive openness index (exports + imports)/GDP, Egypt's performance 
improved significantly over the period since its last TPR. In 1998/99 the value of the openness index 
was 24% while the value of the index in 2003/ 04 is 37%. Adding services international trade in 
calculating the index, we observe an increase in its value from 43% in 1998/9 to 62% in 2003/04. WT/TPR/G/150 Trade Policy Review 
Page 10 
 
 
39. Egypt's major trading partners continue to be  the EU, the US, and Arab countries. The share 
of the EU in Egypt's total exports was in the range  of 30% over the period, while Egyptian exports to 
the US market represented 35-45 percent of total exports.  Egyptian exports destined to Arab 
countries remain in the range between 10-13 percent of total exports (Table A.3). 
40. Sources of Egyptian imports exhibit the same pattern, with the EU accounting for 33% of 
import value. The US contributes an additional 24 % of Egypt's imports. Asian countries follow, from 
where around 15% of Egypt's imports originate.   
41. Commodity groups such as textiles and clothi ng, processed food products, chemicals and 
pharmaceuticals, and construction and building materi als represent the main categories of Egypt's 
non-oil exports. Egyptian imports are dominated by imports of capital goods, intermediates and raw 
materials accounting collectively for over two-thirds of Egypt's import bill.    
42. In addition to unilateral policies to liberalize trade, Egypt relies heavily on cooperation with 
other countries at the regional and b ilateral levels. The main regional ag reements that Egypt is party to 
are the following: Egypt-EU, The Greater Arab Free  Trade Area (GAFTA), and the Common Market 
for East and South Africa Agreement (COMESA).  The following sections highlight the main 
developments in Egypt's relations  under each of these agreements.  
(1) T HE EGYPT -EU  PARTNERSHIP AGREEMENT  
43. Egypt's Partnership Agreement with the EU en tered into force in July 2004. Provisional 
implementation of trade-related pr ovisions started in January 2004.  The Agreement also includes 
provisions on political, scientific, technol ogical, and cultural cooperation.    
44. The Agreement is a free trade area that reduces tariffs between the two partners over a period 
of twelve years. Quantitative restrictions and othe r measures having equivalent effect on trade were 
abolished when the Agreement entered into for ce.  With the exception of a number of products 
(including wool, cotton, hides and skins, various oils), imports into the EU, of non-agricultural 
products originating in Egypt enter the EU duty free.  Customs duties on EU imports into Egypt are 
phased out over the twelve-year period according to  the annexes to which the product belongs (there 
are four annexes attached to the agreement).  Th e Agreement also specifies that the EU and Egypt 
shall gradually liberalize a greater share of thei r trade in agricultural and fisheries products.  
Discussions regarding this issue started in February 2005.  
45. In 2004, Egypt signed the Agadir Agreement with  three Arab countries; Jordan, Morocco, and 
Tunisia. In tariff reduction, the Agreement has prov isions to strengthen ec onomic cooperation in areas 
such as standards, customs procedures, government  procurement, financial services, intellectual 
property rights, and dispute settlement. It also re presents a major step for the four participating 
countries to achieve cummulation of origin for their products entering the EU market in the context of 
their respective EU partnership agreements.  
(2) THE GAFTA AGREEMENT  
46. The GAFTA, entered into force in 1998. Its objectiv e is to create Pan Arab Free Trade Area 
by dismantling all customs duties. GAFTA represents  the umbrella agreemen t governing all bilateral 
agreements between Egypt and Arab countries. Cu stoms duties on imports from participating Arab 
countries reached zero in January 2005.    
47. The Agreement encompasses 17 countries: Bahr ain, Egypt, Iraq, Jordan, Kuwait, Lebanon, 
Libyan Arab Jamahiriya, Morocco, Oman, Palestinian Authority, Qatar, Saudi Arabia, Sudan, Syrian Egypt WT/TPR/G/150 
 Page 11 
 
 
Arab Republic, Tunisia, United Arab Emirates, a nd Yemen. The objective of the Agreement is to 
create a vast Arab free-trade ar ea by 2007. The principal entity r esponsible for implementing the 
program is the Economic and Social Council of the Arab League.  Further info on GAFTA 
(3) THE COMESA AGREEMENT  
48. Egypt became a member of the twenty-nati on COMESA Agreement in 1998. The Agreement 
aims to deepen and expand the integration of me mber countries by adopting measures to remove all 
tariffs and not tariff barriers. The adoption of a co mmon external tariff, free movement of capital and 
labor, liberalization of establishment in member c ountries, common standards, certification systems, 
tax harmonization, competition policy, and others are areas that COMESA aspires to achieve beyond 
tariff reduction.  
49. Egypt eliminated duties on imports from COMESA countries in 2000. Pending issues in the 
COMESA are the timing of implementing the Comm on External Tariff (CET) and the revision of 
rules of origin applicable to goods moving among member countries.  
50. A monetary harmonization program is to be implemented in four stages between 1992 and 
2025.  A protocol on free movement of persons is to be implemented in several stages.  Only Kenya, 
Rwanda, Zimbabwe signed the Protocol. Egypt did not sign the protocol, even on a reciprocal basis.)    
V. ENABLING POLICIES ENHANCIN G FOREIGN TRADE PERFORMANCE 
51. In terms of creating the enabling business e nvironment for various trade liberalization 
policies, Egypt in the past six years has implemen ted reform in various areas that reflect a more 
mature market-based economy that acknowledges the policy stability and the necessity of creating the 
right incentives for participants, Egyptian or Fore ign.  The following areas represent highlights of 
these reforms. 
(1) M ONETARY AND FISCAL POLICY ENSURES STABILITY AND PREDICTABILITY  
52. The Government is taking a number of steps to  improve our fiscal stance. Reforms in customs 
and taxation are considered as a huge incentive to busi nesses replacing the tax holidays that existed in 
the previous system. We expect that base broadeni ng efforts and administrative reforms, combined 
with increased economic activity will yield higher revenues to address budget deficits pressures that 
are currently financed through local debt.  
53. On the expenditure side, we are introduc ing performance-based budgeting to control 
expenditures and improving our management of de bt while carefully reviewing all consumer 
subsidies to ensure that they are properly targeted  and supportive of our goals.  Maintenance of public 
assets is as important as new investment in promo ting the efficiency and step up capabilities of public 
resources.  New public expenditures are scrutinized in terms of strict economic and social cost benefit criteria. Finally, we are ensuring the human resour ce and technical capabilities of staffs responsible 
for preparation and implementation of appropriations.  Efforts to enhance the performance of existing 
economic authorities are crucial toward achieving fiscal as well as economic efficiency objectives. 
54. On the monetary side, we have institutionalized a number of measures that are consistent with 
monetary management of a mature economy. Ce ntral Bank independence is  strengthened in the 
current law. Government borrowing is controlled und er the law, public debt issues are auctioned on 
the market among primary dealers. Problems of non -performing loans that characterized the recession 
period are currently handled through plans between banks and companies. WT/TPR/G/150 Trade Policy Review 
Page 12 
 
 
55. Foreign currency is under a floating system. Desp ite imbalances in the past few years, the 
Egyptian Pound is allowed to move (up and down) to adjust to the real value of the currency and in 
accordance with the economy's strengths and weaknesses.   
(2) ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS LAW 
56. Egypt enacted Law 82/2002 bringing Egypt's s ituation with TRIPS compliance and ensuring 
the product of Egyptian creativity and development under the protection of the law. The law protects 
patents, utility models, trademarks, copyri ghts, and undisclosed information.   
57. Egypt joined The Nice Agreement for Registra tion of marks.  In addition, Egypt began 
implementation of the Patent Cooperation Treaty, wh ich we have joined and ratified a year ago. 
58. With respect to enforcement of IPR in computer  software, we have established in the Ministry 
of Information and Telecommunication a new unit fo r licensing software. Enforcement procedures are 
currently being drafted and a decree will come out  soon that outlines the necessary procedures that 
govern the new unit's activity. Even before this regula tion, piracy rates in software are already around 
50%, down from over 70% five or six years ago. 
59. Similar enforcement systems are set up in the Ministry of Culture, responsible for 
enforcement of audiovisual products. Similarly, the Ministry of Trade and Supply has enforcement 
offices for IPR enforcement of trademarks. Offices in all governorates of Egypt are being established 
and staffs are trained to accomplish this task.  
60. Trademark registrations in Egypt, which had a backlog resulting in delays reaching over five 
years, are now by over 40%. The target is that registration of a trademark takes under two years. 
61. For pharmaceutical patents, Egypt opened a mailbox for patents and begun examination of 
applications in January 2005.  
62. Regulations on IPR enforcement at the borde r are currently being drafted. These will 
strengthen enforcement on infringing and counterfe ited imported goods in the Egyptian market that 
enter through ports.   
(3) PASSING OF LAW ON PROTECTING COMPETITION AND PROHIBITION OF MONOPOLISTIC 
PRACTICES  
63. The Egyptian Parliament passed Law 3/2005 on the Protection of Competition and the 
Prohibition of Monopolistic Practices. A Commission responsible for implementation of the Law is 
due to be operational in June. Companies (public or private) that are established as for-profit 
companies are subject to the Law.  
64. Together with trade liberalization trends, the la w is expected to inject health competition in 
the Egyptian economy that strengthens competitiveness of Egyptian products in the local and international markets. 
(4) M
OMENTUM IN PRIVATIZATION PROGRAM  
65. The Ministry of Investment is also responsib le for privatization of remaining public sector 
firms, injecting management and capital in existin g firms or selling public sector firms to strategic 
investors capable of re-orienting these firms' activ ities subject to the necessary guidelines that govern 
utilities performance in market-based developed econom ies. Private participation in ownership and Egypt WT/TPR/G/150 
 Page 13 
 
 
management is slowly introduced; the private sector  (local or foreign) will be invited to provide 
various services in ports, after it already is providi ng some services in some Egyptian airports.   
66. Since it began its privatization program in 199 1, the Government sold 195 (63%) of the 314 
companies initially identified for disposal. By 20 01, about 85% of manufacturing was done by the 
private sector.   Though the pace of privatization slowed somewhat in recent years due to the global economic downturn, the Government took action in  September and October 2004 to speed up the 
privatization process and restructure public enterprises.  
67. The new Ministry of Investment and Pub lic Enterprises announced the first batch of 
companies and assets for privatization as part of  its 2004-2007 privatization program. They include 
enterprises involved in cotton, spinning and weavi ng; trade; metallurgical industries; chemical 
industries; food industries; housing, tourism and cine mas; maritime and inland transport; and ten other 
companies operating in a range of fields.   
68. The Ministries of Transportation, Housing and New Communities, and Power and Electricity 
continue to offer Build-Own-Operate-Transfe r (BOOT) schemes. The Government welcomes 
contractual agreements, according to which the private sector finances, constructs, operates and 
maintains the facility. 
(5) B
ANKING SECTOR AND FINANCIAL SERVICES REFORM  
69. Banking reform is underway with the objective of making this key sector stronger and more 
dynamic and competitive.  In this regard, financ ial instruments, which are consistent with the 
increasing needs of markets and capital providers, are being established. We are also activating existing instruments, like mortgages under our new Mo rtgage Law. These financial issues are handled 
by a newly established Ministry of Investment  Development that sets clear, transparent and 
predictable guidelines for domestic and intern ational investors' activity in Egypt.  
70. The privatization program also encompasses reform of the banking sector, including the 
privatization of one or more of the four public banks, establishment of the Arbitration Committee in 
the Central Bank of Egypt, and the establishment of  a new unified financial supervision system for 
banks, capital markets, mortgages, and insurance. State-owned banks will sell their holding in joint 
venture banks within a timeframe of 12-18 months.  The Bank of Alexandria, the fourth largest state-
owned commercial bank in Egypt, has been selected as the first bank to be privatized by the end of 
2005/early 2006 at the latest.  
71. The Government has taken various measures to  bring Egypt's capital market closer to 
international standards. Companies listed on the CASE are required to use international accounting 
and disclosure standards. New listi ng and delisting rules have been issued for stricter standards and 
the quality of the listed companies. Egypt's capita l markets are regulated by Law 95/1992 and its 
Executive Regulations issued by Ministerial Decree  135/1993. The Law covers joint-stock companies 
that publicly offer their shares, as well as comp anies that deal in securities and shares. The Law 
defined the rights and obligations of the Capital Market Authority as the main supervisory body. 
Particular attention is being pa id to provisions on shareholders rights in listed companies and on 
obligations to disclose information.      
72. As for insurance services, the government is committed to privatizing 4 state-owned 
insurance companies as allowed unde r Insurance Law no. 10/1981 amended by Law 156/1998. These 
companies are currently evaluated by international in vestment banks. Whether under public or private 
ownership,   The Egyptian Insurance Supervisory Au thority (EISA) is responsible for the enforcement 
of the Insurance Law and for regulati ng the Egyptian insurance sub-sector.   WT/TPR/G/150 Trade Policy Review 
Page 14 
 
 
(6) INDUSTRY MODERNIZATION PROGRAM AND INDUSTRY RESTRUCTURING  
73. The Industry Modernization Program, implemen ted in cooperation with EU is a program 
initiated to assist existing and potential private sect or industrial establishments perform in a more 
liberalized and private sector dominated environment that results from the implementation of the Egypt EU partnership Agreement. One of the main areas of focus for the program is the initiative to 
upgrade private sector enterprises in Egypt. Th e Industrial Modernization Council provides the 
strategies and guidelines for the Industry Modern ization Center. Currently, the IMC focuses on 
technical support in areas of standards, metrolog y, quality, testing, R&D, productivity and SME 
extension. It also works with bodies of the Ministry  of Foreign Trade and Industry to upgrade their IT 
infrastructure and other services that support indus tries in identifying and integrating in global 
markets while overcoming the disadvantage of being a late comer.   
74. In addition to enterprise upgrading, the IMC provides sectoral support through the 
establishment of twenty business-resource centres throughout Egypt and the identification and 
promotion of local or sectorial clusters of en terprises sharing the same needs including new SME 
business associations. IMC also provides policy support that aims at strengthening the legal and policy environment as a means to ensure sustainab ility of efforts after completion of the program. 
(7) T
OURISM SECTOR GROWTH  
75. Tourism remains the service contributing most to  Egypt's services account in the Balance of 
Payments, and thus one of  Egypt's main four sources of foreig n exchange rate. Tourism receipts in 
current account receipts were $ 2.9 billion rising to $ 5.5 billion in 2003/04, an increase of close to 90%. The most significant annual increase in revenues happened between  2002/03 and 2003/04 from 
$ 3.8 billion to $ 5.5 billion.  
76. The number of tourists arriving in Egypt s hows a corresponding pattern, with the number of 
tourists arriving in 2003 reaching 6 million touris ts, up from 3.9 million in 1997. In the period from 
January to September 2004 only, 6. 1 million tourists were recorded, raising expectations that Egypt 
will receive around 8 million tourists in 2005. European  tourists from Wester n and Southern Europe 
represent the highest share in arrivals repr esenting around 60% of total tourist arrivals. 
77. The World Travel an Tourism Council estimates that Egypt's tourism activity contributes 
around 8.3 % of Egypt's GDP and around 7% of total employment. Adding the indirect effect of the 
activity, the shares rise to 15%, and 13% respec tively. These estimates are echoed in studies 
conducted by the Ministry of Tourism which suggest that tourism industry is one of the most 
important services sectors in Egypt to contribute to strategic goals of employment and service exports.  
78. The Government of Egypt's current plans focus on expanding geographic markets currently 
not sufficiently represented in tourist arrivals, stre ngthening their efforts in non-traditional types of 
tourism such as business tourism, R&R and sports  tourism. Plans also include expanding resort 
tourism activity that produced positive results on the Red Sea resorts in Sharm and Hurghada to the 
North Western Coast between Alexandria and Matrouh. 
(8) P
LAIN LEVEL FIELD FOR INVESTMENT AND REDUCED BUSINESS AND INCOME TAXES  
79. A draft income tax law is being discussed at Parliament. The new law reduces and unifies 
income taxes in Egypt. Top brack ets are reduced from 40% and 32% to 20%. Personal exemptions are 
also raised to reflect better cost of living ch anges. The new law consolidates different sources of 
income and is perceived to bring Egypt's income ta x burden closer to that in other countries. With 
efforts to expand the tax base, the lower rates will produce a positive impact reducing tax evasion, 
increasing the perception of fairness and reduce various distortions in the system. Egypt WT/TPR/G/150 
 Page 15 
 
 
80. Similarly, the proposed law removes tax holidays for new investment. Lower rates are used to 
attract investment, local and foreign, without crea ting incentives to invest in projects with short 
turnover cycles.   
81. Law 13/2004 was passed to simplify administra tive procedures required for establishment of 
new investments under the General Authority for Investment (Law 13/2004) 
(9) NATIONAL COMMITTEE TO UPDATE COMMERCIAL AND BUSINESS LAWS  
82. A National Committee was established under the ausp ices of the Prime Minister's Office to 
review economic regulations that are necessary for laying the foundation for efficient performance of 
economic and financial la ws and institutions.  
83. On the list of laws already on the agenda of the Committee are the law on governing the 
accounting and auditing profession, the new customs law, the companies law, and economic courts 
law.  Additional laws that require revi ew can be presented to the Commission.  
(10) CONSUMER PROTECTION LAW  
84. With a more liberalized economy, it is important  to ensure that mech anisms are in place to 
protect the consumer. Serious attenti on is being paid to this area, not just in terms of the passing and 
implementation of the Consumer Protection Law, but also through education, transparency and building the necessary trust in private producers and government on one side , and consumers on the 
other. A draft for a new consumer protection law is currently before the Cabinet before presentation to 
Parliament. The new law is perceived as a necessary tool for allowing Egypt to move further in the 
direction of trade liberalization and encouragement of private participation without compromising the 
government's obligation to provide legiti mate protection to consumers.    
VI. FUTURE ECONOMIC POLICY DIRECTION  
85. The direction of future economic policy, and necessarily foreign trade policy, stems from the 
strategic objectives of the country. These are summarized in following two strategic objectives: 1) creating productive employment opportunities for Eg ypt's growing young popul ation;  2) improve 
the quality of life for lower income groups in Egypt.  
86. Pillars to achieve these objectives are categori zed under six sub-areas where the government 
has action plans to set the priority of short, medi um and long term objectives for the country in the 
current phase of economic development. The six areas are the following:  
− poverty reduction and standard of living alleviation for lower income groups; 
− ensuring the well-functioning of competition in  various markets and the enhancement of 
protection provided to Egyptian consumers; 
− overhaul of taxes and customs systems c onducive to improving business environment for 
Egyptian and foreign firms; 
− effective management of public sector assets that  are accumulated over the past five decades; 
− reform of the financial sector in its broad sense; 
− guarantees on the disclosure and transfer and communication of statistics and information 
necessary for the operation of various parties in the market.  
87. Under each of these pillars, the government of Egypt has developed medium term objectives 
that move the country toward the long-term goals.   WT/TPR/G/150 Trade Policy Review 
Page 16 
 
 
Table A1 
Macroeconomic Overview, Selected Economic Indicators, 1998/99-2003/04  
  1998/9 1999/00 2000/01 2001/02 2002/03 2003/04 
Real GDP Growth Rate (%) 5.4 5.9 3.4 3.2 3.1 4.1 
Average Annual Inflation  (%) 3.8 2.8 2.4 2.4 3.2 4.9 
Unemployment Rate (%) 8.1 9 9.2 9 9.9 9.9 
Fiscal Deficit / GDP (%) 2.9 3.9 5.5 5.9 6.1 5.9 
Current Account/GDP (including official tr ansfers) % -1.9 -1.18 -0.04 0.7 2.8 4.8 
Foreign Debt (% GDP) 31.2 28.2 28.5 32.6 35.6 37.8 
Total Debt % Exports (G&S) 182.4 156 141.5 171.3 154.1 123.5 
Debt Service Ratio 7.2 8 7.3 9.5 9.8 9.2 
Reserves/months of imports 12.7 10.2 10.4 11.6 12 9.9 
Source:   Quarterly Economic Digest, Ministry of Fo reign Trade and Industry, October-December 04. 
Table A2 
Balance of Payments, 1997/98- 2003/04 
(Million $) 
 97/1998 98/1999 99/2000 00 / 2001 Jan -02 Feb -03 03 / 2004* 
Trade Account Balance 11771- 12563- 11472- 9363- - 7517- 6615- 7834- 
Export Proceeds 5128 4445 6388 7078 7121 8205 10453 
Petroleum Exports 1729 1000 2273 2632 2381 3161 3910 
Other 3400 3445 4115 4446 4740 5045 6542 
Imports 16899- 17008- 17860- 16441- 14637- 14820- 18286- 
Services (net) 4692 5970 5630 5588 3878 4949 7318 
Receipts 10455 11026 11426 11696 9618 10441 12981 
Transportation, of which 2457 2637 2635 2704 2715 2965 3755 
Suez Canal 1776 1771 1781 1843 1820 2236 2848 
Travel and Tourism 2941 3235 4314 4317 3423 3796 5475 
Investment Income 2081 1933 1833 1850 938 641 485 
Government Services  303 308 110 190 188 253 179 
Other Receipts 2673 2913 2535 2636 2354 2786 3086 
Payments 5764 5056 5796 6109 5740 5493 5663 
Transportation, of which  362 377 457 429 420 393 668 
Travel 1307 1104 1028 1054 1208 1372 1315 
Investment income, of which 868 928 901 778 842 749 692 
Interest paid 716 789 770 728 689 626 586 
Other payments 2371 2136 2943 3260 2609 2524 2499 
Balance of Goods and Services 7079- 6593- 5843- 3776- 3638- 1666- 516- 
Transfers 4600 4869 4680 3742 4252 3609 3934 
Official (net) 883 1097 932 769 1144 664 888 
Private (net), of which: 3718 3772 3747 2973 3109 2946 3046 
Remittance of Egyptia ns working abroad  --  --  -- 2843 2953 2963 3000 
Current Account Balance 2479- 1724- 1163- 33- 614 1943 3418 
Capital and Financial Account 3387 919 1199- 542- 964- 2734- 5016- 
Direct Investment Abroad 137- 56- 43- 27- 15- 30- 156- 
Direct Investment in Egypt 1104 711 1656 509 428 701 407 
Portfolio Investment Abroad (net) 56- 43- 12- 5- 3- 16- 113 
Portfolio Investment  in Egypt (net) 248- 174- 473 261 999 405- 226- 
Bonds  --  --  --  -- 954 218- 148- 
Other Investments Abroad 2724 481 3273- - 1280- 2373- 2983- 5155- 
Net Borrowing 858 191 492 268 -71 144 1509 
Medium and Long Term Loans 54- 339- 532- 559- 585- 587- 642- 
M.T Suppliers' Credit 322 110- 95- -112 -207 -340 68 
S.T. Suppliers' credit (net) 591 639 1119 939 721 1070 2083 
Other Assets 97 143 3112- 2281- 1862- 3068- 5705- 
Central Bank   --  17- 22- 17- 21 32- 21- 
Banks   --  2126 198- 1034 227 493- 2593- 
Other   --  1966- 2891- 3298- 2110- 2542- 3090- 
Other Liabilities 1769 147 654- 734 439- 59- 959- 
Central Bank    --  200- 3- 495* 7 4 17- 
Table A2 (cont'd) Egypt WT/TPR/G/150 
 Page 17 
 
 
 97/1998 98/1999 99/2000 00 / 2001 Jan -02 Feb -03 03 / 2004* 
Banks   --  347 651- 238 446- 63- 943- 
Errors and Omissions  1043- 1312- 664- 296- 107- 1337 1440 
Overall Balance 135- 2217- 3027- 871- 456- 546 158- 
Source:  Ministry of Foreign Trade and In dustry website at:  www.mofti.gov.eg. 
Table A3  
Regional Distribution of Exports and Imports, 1998/99-2003/04  
Exports  Imports  
98/99 99/00 00/01 01/02 02/03 03/04   98/99 99/00 00/01 01/02 02/03 03/04 
 (million $) 
Total  4445 6388 7078 7121 8205 10453  17007 17859 16441 14637 14820 17975 
              
EU 1370 1700 2007 2099 2797 3429  7205 7286 6145 5297 5109 5765 
Other European 308 343 323 379 377 619  1743 1550 1267 1323 1365 1643 
USA 1709 2894 2889 2621 3057 3701  3226 3821 4415 3684 3732 4303 
Arab countries 511 444 817 943 934 1273  623 841 754 847 866 1284 
Asian countries 464 918 766 836 859 1077  2996 2956 2554 2097 2190 2642 
African 
countries 18 37 41 65 74 216  93 119 124 132 103 150 
Russian 
Federation and CIS 35 12 16 44 37 66  285 259 251 254 288 222 
Australia 3 5 3 3 3 20  254 270 247 225 155 351 
Other  27 34 216 131 67 52  583 758 684 778 1012 1615 
 (per cent)  
Total 100.00 100.00 100.00 100.00 100.00 100.00  100.01 100.01 100.00 100.00 100.00 100.00 
              
EU 30.82 26.61 28.36 29.48 34.09 32.80  42.36 40.80 37.38 36.19 34.47 32.07 
Other European 6.93 5.37 4.56 5.32 4.59 5.92  10.25 8.68 7.71 9.04 9.21 9.14 
USA 38.45 45.30 40.82 36.81 37.26 35.41  18.97 21.40 26.85 25.17 25.18 23.94 
Arab countries 11.50 6.95 11.54 13.24 11.38 12.18  3.66 4.71 4.59 5.79 5.84 7.14 
Asian countries 10.44 14.37 10.82 11.74 10.47 10.30  17.62 16.55 15.53 14.33 14.78 14.70 
African 
countries 0.40 0.58 0.58 0.91 0.90 2.07  0.55 0.67 0.75 0.90 0.70 0.83 
Russian Federation and CIS 0.79 0.19 0.23 0.62 0.45 0.63  1.68 1.45 1.53 1.74 1.94 1.24 
Australia 0.07 0.08 0.04 0.04 0.04 0.19  1.49 1.51 1.50 1.54 1.05 1.95 
Other  0.61 0.53 3.05 1.84 0.82 0.50  3.43 4.24 4.16 5.32 6.83 8.98 
 
Trade Balance 98/99 99/ 00 00/01 01/02 02/03 03/04 
All Regions -12562 -11471 -9363 -7516 -6615 -7522 
EU -5835 -5586 -4138 -3198 -2312 -2336 
Other European -1435 -1207 -944 -944 -988 -1024 
USA -1517 -927 -1526 -1063 -675 -602 
Arab countries -112 -397 63 96 68 -11 
Asian countries -2532 -2038 -1788 -1261 -1331 -1565 
African countries -75 -82 -83 -67 -29 66 
Russian Federation and CIS -250 -247 -235 -210 -251 -156 
Australia -251 -265 -244 -222 -152 -331 
Other  -556 -724 -468 -647 -945 -1563 
Source:  Quarterly Economic Digest, October-December 2004,  Ministry of Foreign Trade and Industry. 
 
__________