In other words, new RTAs are not flooding the Egyptian market with new imports that could be competing with domestic production. Imports seem to have a weak connection with wages, informality, and female labor force participation. In the case of wages, the correlation we find is harmful to the manufacturing workers and, depending on the specification, for female workers. The correlation between informality and increasing imports is positive for manufacturing workers, at least in the short term. For women’s labor participation, estimates are less robust.

Two plausible factors limiting trade’s effects on Egyptian labor markets are the size of top importing industries and their capital-intensive nature. On the one hand –and as previously mentioned in Figures 3 and 4–goods from top importing industries are not the same top employer industries in Egypt. Thus, it is possible that we do not observe stark negative effects on labor markets due to the small size of the potential domestic production that would be substituted from increasing imports. In fact, most imported goods in Egypt are not produced domestically anyway, only 15% of imported goods are also exported when analyzing HS codes at the 6-digit level from UN Comtrade's database.

On the other hand, most papers studying the imports-labor market outcomes relationship that find adverse effects of increasing imports focus on labor-intensive and manufacturing industries (Feliciano, 2001; Autor, Dorn, and Hanson, 2013). All major imported goods in Egypt are capital intensive, particularly from the machinery, chemical, and mineral –mainly petroleum– industries. Even if imports were substituting for domestic production, since imported goods are not laborintensive, the impact on local labor markets would be low. Further, the total share of employment in the manufacturing industry is close to 10%, suggesting that changes in the local labor market outcomes do not necessarily rely on the latter industry.

Although estimating productivity gains is out of the scope of this study, it is possible that capitalintensive imported goods could be increasing the productivity of labor for Egyptian firms. For example, some of the main imported goods from each top industry: computers, telephones, medicaments, and pesticides, all could increase the marginal productivity of labor. Moreover, the positive effects of capital-intensive imports on labor markets could also compete with the adverse effects commonly found in the literature after liberalization efforts increase imports.

Another plausible hindering factor is that trade theory predicts that competing imports are most disruptive when countries trade with low-wage countries (Krugman, 2000). Following the Stolper-Samuelson theorem, trade with unskilled labor-abundant countries would reduce the relative price of unskilled labor-intensive goods in the receiving country and thus would lower wages for more minor educated workers. However, Egyptian imports mostly come from OECD countries which have higher wages. In 2009, Egyptian imports from the OECD accounted for 58.26% of total imports, and the US and EU alone accounted 40.13% (WITS, 2022). Other important trade partners such as Russia, Saudi Arabia, Japan, Brazil, and South Korea –accounting for 17.36% of total imports- have higher real wages, and only Turkey (4.92%) or China (9%) have similar or comparatively lower wages (ILO, 2021). Trade partners’ shares did not change dramatically in the following years.

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