denominator and a positive numerator. In this case, the true rate of protection is given by the absolute value of the ERPs, which we indicate by placing the estimates associated with this sector in parentheses.

But more intuitively interesting, is the case of agriculture. Agriculture’s, ERP declines when considering NTBs relative to excluding NTBs, because the NTBs applied to intermediate inputs used by agriculture. NTBs act to “disprotect” agriculture.

By contrast, textiles are protected by NTBs. By excluding them from the estimates the ERP due to tariffs on textiles is negative – tariffs act as a net tax on the sector (-7.5%) – but energy subsidies offset the tariffs for a total ERP of 20.3% . But including NTBs in the estimates raises the ERP to 50%, meaning that NTBs provide a net protection. There is a NTB tariff-equivalent of 6.39% protecting textiles, without much NTB protection on the intermediate inputs used by the activity.

# **8. Concluding Discussion: The Unexpectedly High ERP Dispersion and Strong Effect of Energy Subsidies**

This study has addressed four themes. First, it has compared for several selected disaggregated industries current ERP estimates derived from tariff schedules with those of a decade ago when at the initial stages of trade reforms. Second, it has presented recent effective rates of protection measure across the Egyptian economy using 23 aggregated sectors from available input-output matrix information. Third, it has incorporated and estimated the importance of energy subsidies in these ERP estimates, taking advantage of the fact that the input-output matrix has five disaggregated energyrelated sectors for which we have subsidy estimates. Fourth, it has incorporated estimates of the tariff-equivalents of non-tariff barriers into ERP estimates. Key results are presented in Tables 4 and 5, and show that, broadly speaking, trade liberalization since the late-1990s has had a considerable impact in reducing protection of some industries. Nevertheless, some sectors, such as the food and tobacco sector, remain relatively hightly protected, due to tariff escalation and NTBs on the trade side, and due to energy subsidies on the input side. Energy subsidies are not formally sector specific but favor sectors that are energy intensive, and of particular note is the electricity sector.

Since the mid-1980s the Egyptian government has moved towards a reliance on private economic activity and trade openness, pursuing trade liberalization, elimination of quantitative restrictions on imports, and reduction in tariffs overall. Although Egypt is still a case of obvious tariff escalation, greater openness to trade appears to have reduced the levels of both nominal protection and effective protection in the selected industries for which we have information, although ERPs remain high for some, and even higher if NTB equivalent estimates are taken into account. On average, Table 4a shows that ERPs in the private sector have declined over the past the decade from 86 percent to 45 percent, and nominal rates of protection have declined generally across the board. (But these comparisons over time exclude NTBs, because NTBs estimate were not available for the late 1990s.) The dispersion of ERPs across these selected industries, as measured by the standard deviation, fell between 1999 and 2009 from 192 to 57 percent. Nevertheless, certain industries increased their ERPs, because, although tariffs fell on the final product, they 20