European Union Sees Egypt’s New Import Restrictions ‘Damaging’by
Says the measures create uncertainty, lack transparency
EU envoy says this isn’t the way to solve forex shortage
The European Union hopes the Egyptian government will cancel new regulations on imports that have created an unnecessary barrier to trade, its ambassador to Egypt said.
New measures requiring the registration of factories that export to Egypt add uncertainty for foreign investors, will make it harder for Egyptian companies to sell to the European market and lack transparency, European Union Ambassador James Moran said in an interview in Cairo. The EU, Egypt and other parties have been involved in talks over the issue, he said.
The next step would mean going to the World Trade Organization’s dispute panel, which is a long, heavy and complicated process,” Moran said.
“We very much hope to solve this between us in the meantime, but if this does go on further for an extended period of time, I imagine all options have to be considered because it is hurting businesses and the trade flow between us,” he said.
Opposition to new import regulations, issued in December last year and applied in March, complicates Egypt’s efforts to spur growth through foreign investment and end the worst foreign currency shortage in more than a decade. The new rule would allow the government to limit imports through selective registration and thereby save dwindling foreign currency.
Central bank Governor Tarek Amer said in January that rules to curb what he described as unnecessary imports may save about $20 billion this year. Imports fell to $18 billion in the first four months of 2016 from $22.5 billion in the same period last year, Trade Minister Tareq Qabil said last month.
“I think when the results of all this are better known, maybe towards the end of the year or before that, perhaps they will realize they were misguided,” Moran said. “This isn’t the way to solve shortage of foreign exchange.”