# _b. Non‐Tariff Measures_

Non‐tariff measures (NTMs) are meant to provide legitimate non‐trade objectives such as the protection of human health. Yet, the gradual removal of traditional trade barriers carried a temptation to use non‐tariffs measures as a protective mechanism for domestic production, hereby adding an additional (non‐directly measurable) cost. Excessive use of these measures in an increasingly globalized and competitive world hinders countries’ integration into global markets by affecting the ability and willingness of the private sector to invest and flourish. It also prevents the benefits of global integration to accrue to consumers, while many exporting firms, particularly the smaller ones, can exit the exports market because of the ensuing costs. The surviving firms will simply transfer this extra cost to the final price paid by consumers.

While NTMs can take the form of various technical and regulatory requirements, this section focuses on selected measures that are more relevant to Egypt and to its trading partners vis‐à‐vis Egypt’s exports. This is important for a better understanding of its exports ability to survive against NTMs that may be imposed against, and for an enhanced capacity to negotiate future arrangements on harmonization and mutual recognition, with the ultimate goal to enhance trade.

# i. Administrative Barriers to Trade

Administrative barriers are a major impediment to trade. Egypt’s performance on trading across borders (World Bank Doing Business) is lagging behind, ranking 171/189 in 2018, with its score showing a deterioration across time, from a peak of 71.1 in 2014 to an all time low of 42.2 in 2018. , affecting 20 percent of exporting firms. Trade procedures and documentation create a lengthy and costly clearance process for imported and exported goods, especially when compared to MENA and other lower middle income countries (see Figure 13 and 14 and Table 2). Regarding exports, the inefficiency seems to be more pronounced on the procedures time rather than on the cost side. Moreover, the administrative barriers to import are much higher than comparator countries on both the procedural and cost sides. This exerts a negative effect on exports, given the large reliance of domestic production on imported intermidate inputs.

From the firms’ perspective, customs and trade regulations are identified as a major constraint by 20 percent of the surveyed firms (World Bank, 2016), which shows a notable deterioration compared to the 9 percent of 2013 (Figure 13). Again, this is mainly due to a lengthier time to clear exports and imports, as time to import increased from 9.2 to 12.3 days while time to export remain relatively stable but high (Figure 14 and Table 2). This is primarily due to the high number of required documents and procedures,<sup>10</sup> in addition to the lack of clarity is some cases which gives officials a bargaining power in granting clearances. The lack of electronic processing in the customs clearance also contributes to unnecessary delays and gives room for discretionary decisions and corruption (World Bank, 2018). In some cases, security control of borders can cause additional delays. The process is further complicated by the involvement of multiple entities including the customs authority, the ports authorities, the General Organization for Export & Import Control (GOEIC),<sup>11</sup> among others.

Such cumbersome measures can be costlier than tariffs, as evidenced by the ad‐valorem equivalents (AVEs) of time to export and time to import (Figure 15). These AVEs are higher than tariffs for products that have a higher value‐added such as chemicals, non‐metallic products and machinery, which constitute an impediment to exports of sophisticated products.

> 10 For example, 28 steps are currently required to clear shipments at Alexandria port.

> 11 GOEIC is the authority in charge of ensuring the quality and standards of all imports of regulated products into the country.

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