WORLD TRADE
ORGANIZATIONWT/TPR/M/55
6 August 1999
(99-3335)
Trade Policy Review Body
24-25 June 1999
TRADE POLICY REVIEW
EGYPT
Minutes of Meeting
Chairperson:  H.E. Mr. Jean-Marie Noirfalisse (Belgium)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF EGYPT 4III. STATEMENT BY THE FIRST DISCUSSANT 6IV. STATEMENT BY THE SECOND DISCUSSANT 8V. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 10VI. REPLIES BY THE REPRESENTATIVE OF EGYPT AND
ADDITIONAL COMMENTS 21
VII. CONCLUDING REMARKS BY THE CHAIRPERSON 28ANNEX I ADVANCE WRITTEN QUESTIONS AND REPLIES FROM THE
DELEGATION OF EGYPT 30WT/TPR/M/55
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I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The second Trade Policy Review of Egypt was held on 24-25 June 1999.  The Chairperson,
H.E. Mr Jean-Marie Noirfalisse (Belgium) welcomed  H.E. Dr Ahmed Goueli, Minister of Trade and
Supply, as head of the Egyptian delegation, H.E. Ambassador Mounir Zahran, the delegation from
Cairo and the Egyptian Mission in Geneva.  He also introduced the discussants, AmbassadorNarayanan (India) and Mr Wells (Australia) and reminded Members that they would speak in their
personal capacities and not as representatives of their respective governments.  In accordance with the
established procedure, the discussants had made available in advance, an outline of the main issues
they intended to raise.
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meeting.  The report by the Government of Egypt was contained in document
WT/TPR/G/55 and that of the WTO Secretariat in  document WT/TPR/S/55.  Copies of advance
written questions, submitted by Canada, New Zealand, Australia, the Republic of Korea, Switzerland,
Hong Kong, China, the United States, Japan, and the European Union had been transmitted to the
delegation of Egypt.  Replies to these and other questions raised during the meeting are reproduced in
Annex I.WT/TPR/M/55
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II. OPENING STATEMENT BY THE REPRESENTATIVE OF EGYPT
3. The representative of Egypt said that as a WTO Member since 30 June 1995, Egypt was
committed to its Uruguay Round commitments, even though this had represented a major challenge to
the economy when compared to the relatively minor benefits.  Egypt had launched comprehensive
economic reforms to create an open, outward-oriented market economy, of which trade policy was animportant component.  During the first phase Egypt had improved its fiscal deficit, including through
a reduction in government expenditure.  The second phase had aimed at structural reform, and
liberalization of the trade and investment regimes and markets.
4. Egypt had changed its economic and financial strategy to improve institutional capacity,
enabling better integration into the world economy.  This included progressive tariff reductions, and a
gradual, unilateral and voluntary removal of non-tariff barriers.  As a result, Egyptian industry
operated in a more competitive environment.  The achievements of trade liberalization had beencrowned by its active participation in the GATT and the WTO.  In parallel with MFN liberalization,
Egypt had signed preferential regional and bilateral free-trade agreements such as the Common
Market for Eastern and Southern Africa (COMESA)  in June 1998, and the Greater Arab Free-Trade
Area (GAFTA) in January 1998, which envisaged a removal of all tariffs between participating
countries.  Egypt had also signed bilateral agreements with Morocco, Tunisia, Lebanon, and Jordan,and was negotiating an agreement with Saudi Arabia.
5. In addition to the trading system, economic reform had covered and substantially benefited
several sectors.  Egypt had a dynamic agricultural sector, highly integrated manufacturing capacity,
and a variety of tourist attractions.  With the introduction of a market-based economy, Egypt had used
the optimal strategy to manage these diverse sectors.
6. The first half of the 1990s saw the culmination of the previous decade's reforms, making
Egypt into a full fledged, market-based, liberal, private sector led economy, which had the means, the
institutions and the capabilities to face global competition in the 21
st century.  Egypt today was poised
to reap the benefits of these reforms as it had the will, the resources, and a sustained reform
programme.  In this respect, foreign investment was essential for higher economic growth.  TheGovernment was committed to real growth rates of three times the rate of population growth,
continued liberalization, and higher standards of living for all Egyptians.  This would require
integration in the global economy and a competitive Egypt which was open for business.  After a long
journey, begun eighteen years ago under President Mubarak, Egypt was evolving into a modern,
liberal, private sector led, market driven economy, with a new society which was respectful of private
initiative, mindful of the needs of all.  The Government was a mediator of economic progress and the
architect of an enabling environment in which prosperity was shared and steady growth assured.Under the President's leadership, the economic fabric  of Egypt had been fundamentally altered.  The
country had entered a new era of economic prosperity in harmony with the world economy and the
21
st century. Macroeconomic signals remained promising and he believed that the economy had the
momentum needed to ensure continued growth.  Trade liberalization had reduced the maximum tariff
from over 100% to 40%, and further reductions were being contemplated.
7. The privatization programme was a fundamental component of reform, and reflected
significant policy commitment away from state management and controls, towards a central reliance
on the market mechanism and the private sector.  Egypt's privatization programme included
Government divestment in public sector companies and encouragement of private sector investment
in sectors historically controlled and operated by the public sector, including ports, airports, roads,and communications.  Egypt was keen to attract foreign investment for several reasons, including the
acquisition of new technology, management, and marketing capabilities.  FDI was also needed for
faster growth (7-8%), to create employment for new labour market entrants, and to reduce
unemployment.WT/TPR/M/55
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8. The reform programme comprised a set of mutually compatible and reinforcing policies
consistent with the Government's objectives.  The success of the programme lay primarily in its
"home grown" nature and could be attributed to gradualism which introduced liberalization, sectoral
reform and subsidy reductions, along with the provision of a social safety net.  The Government was
taking precautions to ensure that growth was not at the expense of the sound economic and socialfoundation it had worked hard to build, and that  every family in Egypt benefited from growth.
9. Economic reform would continue.  The Government's priority was first to generate greater
investment and to reform legislation.  Since 1996, over 80 laws relating to economic activities had
been amended and this would be continued.  The commercial code had recently been completed,
while work was being undertaken on anti-trust legislation, the Capital Markets Law, dispute
settlement procedures, and intellectual property.  The second priority was to increase savings to
support higher levels of investment.  In this respect the insurance sector, capital markets, and thesocial security system were being developed to improve the range, quality, and efficiency of these
services.
10. Finally, export promotion, and improvements in the competitiveness, marketability, and
quality of Egyptian products were the most important policy initiatives needed to lead Egypt into the
next century with a strong, dynamic, and diversified economy.  A number of export promotioninitiatives were under way and should help Egypt attain its rightful position as a regional trading
partner.  These strands of economic reform were interconnected and only through increased savings,
investment, and export could the Egyptian potential be fulfilled.  These policies were supported by
transparency in economic management, predictability in macroeconomic policies and regulation, and
accountability.  The process redefined the role of government in the lives of Egyptians.  He believedthat the Government should act as facilitator and mediator of competing claims to Egypt's resources
and as the architect of the enabling environment that would sustain high and equitable income growth.
11. The success of economic reform in Egypt was dependent on accompanying legal and
institutional reforms.  Egypt thus endeavour ed to control population growth, enhance human
capabilities and raise standards of living.  To this end, Egypt would continue to improve basic andhigher education, to develop its vast human capital efficiently and above all to promote technology
transfer to complement its comparative advantage.  He said that Egypt stood at a milestone in its
development and only by doubling its efforts could the Government ensure the rebirth of a more
prosperous Egypt that took care of its own, and that could forge ahead for generations to come and
bring back the strength and prosperity of ancient times.
12. To conclude, he hoped that the Review would achieve positive results and enable Egypt to
fulfil its obligations to the multilateral trading system and preserve its rights, as there was anestablished principle in the WTO that there must be a balance between Members' rights and
obligations.WT/TPR/M/55
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III. STATEMENT BY THE FIRST DISCUSSANT
(i) Macroeconomic scenario
13. The first discussant (H.E. Ambassador S. Narayanan) noted that any assessment of the
macroeconomic scenario in Egypt would have to begin with the success of economic stabilization,
initiated in 1990/91. This included a halving of the rate of inflation, reduced unemployment and
substantially improved economic growth.  Growth had been mainly driven by increased domestic
demand with exports playing a smaller role. The Go vernment aimed for GDP growth of some 8% a
year, thus meeting the challenge of a rapidly grow ing labour force.  The appropriateness and success
of reform was supported by almost a doubling of per capita income between 1991/92 and 1997/98.  In
future, however, increased exports and private investment would be the key to GDP growth.
Although it was evident that private investment had risen, especially in sectors that had been
reformed, the expected export growth had not been realized. Moreover, traditional foreign exchange
earnings from tourism, workers remittances, the Suez Canal, and petroleum had been declining,suggesting a need for Egypt to diversify and expand exports.
14. Efforts to reduce the fiscal deficit, which fell from 5.5% of GDP to 0.9%, had been successful
although fiscal revenue, which was mainly funded by tax revenue and contributions from the Egyptian
General Petroleum Company and the Suez Canal Authority, could be raised by perhaps widening the
tax base.  Tax reform was planned by the Government.  The balance of payments was positive but haddeclined between 1991/92 and 1995/96. Although factors such as debt forgiveness, rescheduling, and
portfolio flows had helped, a long term-plan to improve the balance of payments was required. One
way of doing this would be through an export strategy, which perhaps had to be based on export
diversification and less reliant on traditional exports.  The question for Egypt was the pace of reforms,
and specifically, the priority sectors for such re form.  He suggested that Members might like to
address this issue in assessing Egypt's performance.
15. According to the Secretariat's figures, gross domestic investment, after declining, rose to
around 18% of GDP in 1996/97, mainly due to grow ing private sector investment. He complemented
the Government for its emphasis on domestic investment. It was clear that in the post-reform period,
the economy had started to rely more on private savings and, to some extent, on foreign investment.
The IMF suggested that current rates of investment  were lower than their pre-reform levels, excess
capacity and improved productivity resulting from re form being partly responsible for the decline. An
apparent paradox thus seemed to be that reform had led to lower investment.  However, it was
obvious that increased  savings and further recovery in investment were essential for accelerating
growth. He requested the Egyptian delegation and others to address the question of the decline in
investment in the face of a far reaching reform programme.
16. The Secretariat report pointed out that, with few exceptions, foreign direct investment (FDI)
in Egypt had been liberalized and was, in the main, granted national treatment.  Foreign investment
averaged around 1.3% of GDP a year between 1992 and 1996, growing to 2.4% in 1994 before
declining.  With a new Law of Investment Guarantees and Incentives, consolidating investment rules
and incentives and liberalizing investment, FDI was expected to grow.  He asked whether Members
believed the measures taken by Egypt were sufficient to attract FDI or whether additional steps wereneeded to realize the full potential of the liberalization already undertaken.
(ii) Trade regime includi ng laws and regulations
17. Egypt's main international trade legislation was in Customs Law 66/1963, Import Law
118/1975 and the Import and Export Regulations. The applied customs tariff was issued by
Presidential Decree in 1994 and modified through Presidential Decrees.  While tariff cuts had been
impressive, he asked whether Egypt's trading partners might be concerned about reducedWT/TPR/M/55
Page 7
predictability in the trade regime due to freque nt changes in trade-related laws, and discretionary
powers to issue amendments.
18. There were, nevertheless, several positive features of Egypt’s trade regime including, as noted
by Egypt in its report, no pricing restrictions, no quantitative import restrictions except for clothing
items, no import bans, no export bans, no tariff quotas, no voluntary export restraints, and no itemsrequiring prior import approval. All this, by developing or developed country standards, was very
impressive and he congratulated the Government.  He expected that the Egyptian delegation would
explain the justification for maintaining quantitative restrictions on clothing till 2002, since this did
not appear to fit in with the very liberal trade regime to which Egypt was so obviously committed.
(iii) External trade relations
19. He noted that Egypt’s largest trading partner was the European Union, accounting for 42%
and 38% of Egypt's exports and imports, respectivel y. The new agreement with the EU, when signed,
would build on the 1977 cooperation agreement between the two partners. The new agreement mightprovide duty-free access for Egyptian exports of industrial products to the EU and it was therefore
worth watching closely the shape taken by the agreement.  Egypt was a member of the Greater Arab
Free-Trade Area (GAFTA) formed in February 1997, and had implemented a 10% tariff reduction for
GAFTA signatories in 1998.  Egypt also became a member of the 51 nation Common Market for
Eastern and Southern Africa (COMESA), in June 1998, whose goal was a free-trade zone in Africa by2004.  Egypt enjoyed GSP treatment from several countries and granted tariff concessions to
signatories on specific products under the GSTP.
20. Two important issues arose concerning Egypt's external trade relations: the dependence of
Egypt’s external trade on specific markets and the question of how to expand its trade with new and
non-traditional markets;  and ensuring that bilateral and regional initiatives supported multilateral
trade liberalization and strengthened the multilateral trading system.  On the former, he asked whether
this could be addressed through deeper economic reform alone or whether additional efforts needed tobe made.  Reconciling the trade benefits from bilateral and regional arrangements with the ideals of
the multilateral trading system was not an easy task for any country, and Egypt’s commitment to
multilateral trade liberalization and the significant role it played in the WTO had to be appreciated.
He was sure that the interface between the regional and multilateral approaches would be discussed.
(iv) Impact of external trading environment
21. The external trading environment played a significant role and no country could be looked at
in isolation, particularly in a trading context.  Egypt had rightly pointed out some of the areas that had
presented difficulties, such as trade remedy measures taken by some developed countries;  measuresclaimed to have been taken under the TBT and SPS Agreements;  the lack of commercially
meaningful commitments for cotton-producing countries under the Agreement on Textiles and
Clothing;  the inadequacy of transition periods under some agreements;  and the lack of
implementation by developed country partners of special and differential treatment provisions in the
various Agreements.  These had undeniably affected anticipated market access.  Greaterunderstanding of the situation of net food importing countries had also been urged.  Egypt was also
concerned about attempts to use environmental standards as new barriers to trade against exports of
interest to developing countries.  Although these points were valid, it was important to take into
account the weight given to external factors vis-à-vis Egypt's internal trade regime, as a country’s
economic performance was always a dynamic interaction between the two.
22. The key aspects on which he wished to provoke a debate were the pace and direction of
further reforms that Egypt needed to undertake;   the relationship between economic reform and
investment in Egypt;  transparency and predictability of Egypt’s laws and regulations;  and Egypt’s
need to diversify its exports, and the difficulties faced because of the adverse external trading
environment.WT/TPR/M/55
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IV. STATEMENT BY THE SECOND DISCUSSANT
23. The second discussant (Mr Ric Wells) noted that the Egyptian economy was displaying
considerable resilience in the face of external shocks.  Despite lower earnings from oil and tourism
and an increase in imports, the economy had grown by more than 5% in 1998.  The stabilization plan
had remained in place while private investment seemed to be growing fast.  The trade regime hadbecome more liberal and transparent;  tariff and non-tariff protection had been reduced;  and services
liberalization had begun in earnest.  He focused on two areas in which improvements could be made:
transparency in the formulation and implementation of trade measures;  and reform in agriculture and
manufacturing and their contribution to export diversification.
(i) Transparency
24. Developments in various areas indicated that Egypt could improve transparency and create a
more predictable and secure trade environment.  Despite significant liberalization, Egypt seemed to
have a complex tariff and exemptions structure.  While customs duties, including a 1% customsservices fee and a 2-3% surcharge, were relatively high, a range of exemptions and duty reductions
resulted in the forgoing of considerable revenues.  The result, according to the WTO Secretariat, was
a simple average tariff of 16% rather than 30%, raising the question of whether Egypt would be better
off in trade and revenue terms with lower tariffs and fewer exemptions.  Applied tariff rates on about
12% of Egypt's tariff lines were above WTO bindings, and he asked whether Egypt was implementingthese applied rates or whether they were covered by exemptions and reductions.
25. He noted that a tendency to changes in import regulations did not contribute to a stable
trading environment.  It had been reported in March 1999 that banks issuing letters of credit to
importers asked for cash collateral of 100% rather than 10% for a range of imports.  He presumed that
the measure was not intended to control the flow of imports.  At the same time, foreign exchange
reserves were reported to be high, implying the measure was not used for balance-of-payments
reasons.  He asked why the measure had been taken, whether it had been applied consistently, if it wastemporary, and if it had been announced, allowing traders to comment.
26. Similar questions could be asked about the November 1998 Ministerial Decree that all
imported consumer goods be shipped to Egypt directly from their country of origin.  According to the
Secretariat Report, this regulation had caused problems for importers and a clarification had been
issued.  He asked whether the exact nature of the measure had been clarified.  The Report also saidthat despite an increase in the number of appeals against customs valuation decisions, the number
settled through primary arbitration had fallen considerably over the last five years, implying a greater
number of complaints and a greater proportion going through a second stage of arbitration.  He asked
why this had been the case and the number of appeals that had been settled satisfactorily.  It was
notable, however, that Customs had made efforts to improve inspection and clearance, and hadreduced average clearance times to between 30 minutes and three days.
27. According to the Secretariat Report, because the formulation and enforcement of standards
were carried out by different organizations within different ministries, administration was complex.
He asked whether the Government had given any thoug ht to rationalizing the situation.  He noted that,
in 1997, out of 1,000 Egyptian standards 107 were mandatory although Egypt had notified only sixmandatory standards or technical regulations to the WTO.  He asked whether the other mandatory
standards pre-dated the Agreement on Technical Barriers to Trade or if there were institutional
reasons which made it difficult for Egypt to provide this information allowing the comments of other
WTO Members to be taken into account.  He believed that this would also be a problem of
coordination since the Egyptian Organization for Standardization and Quality Control circulated draft
mandatory standards within Egypt to interested pa rties for comment.  Standards were also reviewed
periodically to ensure their relevance to current requirements.  Irrespective of notifications to theWT/TPR/M/55
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WTO, he asked whether Egypt made provisions for foreign parties to comment during this review
process.  Egypt's increasing use of mandatory quality control measures also raised questions about
transparency, including whether the measures were based on mandatory standards, why previously
banned imports had been put on the quality control list, and whether the measures had been notified to
the WTO.
(ii) Sectoral trade reform
28. The Government had set an ambitious export growth target of 10% a year, to rise in later
years.  However, recent export growth had been disappointing, despite sound macroeconomicmanagement, including in sectors where Egypt could be expected to do well.
29. Agricultural reform had taken place at an early stage.  As a result there appeared to have been
a shift towards the production of cereals, a puzzling development given low world cereal prices with
the exception of a few years.  The Secretariat's figures showed that the shift had slowed, while
horticulture production had been increasing, making sense in trade terms since Egypt could purchasecereals relatively cheaply and specialize in horticultural production for export.  He noted that for
agricultural exports Egypt faced a dilemma.  The obvious market for horticulture was the European
Union, which maintained a highly protectionist trade regime in agriculture.  It was not clear that
Egypt's strategy of seeking preferential access to the EU through the Euro-Med Agreements would
work.  With market access problems such as these, he understood Egypt's traditional concerns aboutfood security.  Although Egypt's foreign exchange si tuation was strong and food prices relatively low
and not significantly affected by the Uruguay Round results, protectionism in its major market was
not an incentive to modify its position on food security.
30. Growth in manufactured exports had been disappointing.  The Secretariat Report argued that
industries least exposed to reform and competition were far from achieving their full potential.  There
had been some success in sectors such as processed foods, whose exports seemed to have increased
considerably, both absolutely and as a share of manufactured exports.  Tariff escalation in the sectorwas also less than in other sectors and the average tariff on imports of food and beverages was
relatively low at about 22%.  For textiles and clothing the situation was more complicated.  Tariff
protection was high for both textiles and clothing.  In the textiles sector losses by the public sector
companies had been growing rapidly, and a lack of investment had led to lower productivity and
quality.  Private sector clothing companies appeared to have been more responsive than textilescompanies to market changes.  This was reflected in figures for the utilization of quotas with the
United States, with Egypt on the whole having more success in filling its quotas for clothing than for
textiles.  He wondered why an established industry such as textiles and clothing with a skilled, low-
wage work force should not be doing better, and whether Egypt was adequately preparing its industry
for the intensified competition that would accompany liberalization.
31. The motor vehicle industry seemed to have grown considerably due to investment by
automobile companies in Egypt because of improved investment conditions and high tariffs.  While
there had been some reduction, tariff levels remained high, up to 98% for passenger motor vehicles.
The Secretariat Report described investment in this  sector as tariff jumping in nature, raising the
question of whether the industry would be encour aged to become efficient enough to contribute
substantially to exports.  He believed that manufacturing would have to be the engine of Egypt's
export growth but it was not clear that the pace and comprehensiveness of trade liberalization were
pushing all important manufacturing sectors in this direction.WT/TPR/M/55
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V. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
32. Members commended the Government of Egypt and the WTO Secretariat for their reports
and thanked the discussants for their comments.  Several delegates also expressed appreciation for
H.E. Ambassador Zahran's services to the WTO and wished him well for the future.
33. The representative of Canada said that a long standing and multi-faceted bilateral relationship
existed between Canada and Egypt including significant two-way merchandise trade, which had
averaged more than C$200 million over the previous two years.  Large and medium-sized companies
were interested in conducting business with and investing in Egypt, notably in construction, energy,
and transportation.  Canada congratulated Egypt on its economic performance over the past eight
years.  The Government's sustained focus on economic stabilization had yielded positive growth rates,
low inflation, a stable currency, and substantially improved balance-of-payments and foreign currency
reserves.  Sound fiscal policy combined with Egypt's proximity to major markets in Europe and theMiddle East and its relatively skilled and low cost labour force had spurred investor interest.  She also
commended Egypt on its structural adjustment efforts, particularly its privatization programme, which
sought to reduce the size of the civil service, expand private sector shares in the economy, and boost
savings and investment rates.  Privatization of the state telecommunications company, and the
anticipated sale of one of the four public sector banks and an insurance company clearly showedEgypt's commitment to reform.
34. Attracting higher levels of foreign investme nt was the key to long-term economic growth.
For this, renewed effort was required to improve the business environment and transparency in
Egypt's trading regime.  Recent restrictive banking and import regulations, designed to protect the
value of the Egyptian pound, were likely to discourage foreign investment.  However, Canada wasconfident that Egypt would continue to work towards the creation of a positive investment climate.
Steps such as the installation of the newly automated trading system at the Stock Exchange, by
Canada's EFA Software Services, would increase the liquidity and transparency of the system and
improve risk management.
35. Trade reform would continue to be a critical element in Egypt's economic policy in its efforts
to form stronger trading links with WTO Members and fully meet its WTO obligations by 2005.
Under the leadership of the Minister of Trade and Supply, these obligations were being integrated into
domestic legislation and it was necessary to ensure that economic pressures would not lead to a
retrenchment of trade liberalization initiatives.  It would be unfortunate if measures dealing with such
pressures were inconsistent with trade reform goals and thus offset the significant progress made in
attracting foreign investment.  While there were challenges ahead, Canada was confident that trade
liberalization would be continued in order to integrate Egypt further with the global economy andincrease prosperity for all Egyptians.
36. The representative of New Zealand congratulated Egypt on its economic stabilization
programme and the resulting significant improvement in its main economic indicators since 1992.
These had been outlined by the first discussant, whose analysis New Zealand agreed with, in
particular the suggested development of an export strategy.  The discussant's questions on theinvestment regime were also pertinent and she look ed forward to further information from Egypt and
comments from other Members.  She also commended the Government for its progressive approach to
trade liberalization, noting that many trade barriers that had previously hindered trading relations with
Egypt had been lowered, and hoped that the remaining barriers would be dismantled in the near
future.
37. The successful negotiation of free-trade agreements with Arab and African partners was also
evidence of the trade liberalization approach.  These agreements, coupled with the potential free-trade
area between the EU and other Mediterranean countries, suggested that more WTO Members would
enjoy the benefits of a liberalized trading relationship with Egypt over the next decade.  New ZealandWT/TPR/M/55
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hoped that this open attitude to trade and economic liberalization would spread to remaining WTO
Members who may not be traditional trading partners.
38. New Zealand was pleased that Egypt's average MFN tariff had fallen from 42% to 27%
between 1991 and 1998.  This, coupled with the removal of many non-tariff barriers and the
liberalization of investment rules, represented a strong commitment to liberalization within themultilateral trading system.  There was, however, concern about some current practices that tended to
reduce trade flows, such as the standards regime for imported foodstuffs.  While efforts had been
made to increase the conformity of Egyptian stan dards with international standards, only 25% to 30%
of Egypt's product standards conformed with the relevant international standard.  Furthermore, the
majority had no equivalence to international standards and some of these did not appear to have either
a solid rationale in science or an easily discernable purpose.  Such standards could cause considerable
added expense for exporting countries.  In addition, some standards seemed unnecessarily complexand the customs procedures used to enforce them appeared at times to be rigid and lacking in
transparency.  New Zealand, along with other exporting countries, had been working with the relevant
authorities in Cairo to assist in implementing an improved and more transparent standards regime. She
looked forward to Egypt's responses to written questions submitted earlier.
39. The representative of Australia said that, as the fourth largest destination for Australian wheat
exports and an important market for a range of other agricultural commodities, Egypt had a strong
economic relationship with Australia.  He congratulated Egypt on its progress with trade liberalization
and deregulation since 1992.  The decline in the simple average applied MFN tariff from 42.2% to
26.8% between 1991 and 1998 represented significant liberalization and he urged Egypt to continue
tariff reform and its efforts to improve the transparency and predictability of the trading environment.
40. However, Australia felt that greater progress could be made on non-tariff measures.  The
Secretariat Report highlighted potential trade impediments caused by customs procedures;  rules of
origin such as Decree 619 of 1998;  and certain product labelling requirements.  The Report also
mentioned the low proportion of new standards conforming to relevant international standards.  These
and other non-tariff measures could inhibit trade with Egypt and work against Egypt's general policyof liberalization and of streamlining government regulations.  He encouraged Egypt to continue to
improve the regulatory environment for business, and suggested that Egypt might wish to consider
establishing a comprehensive process of regulatory reform, enabling all government regulations to be
reviewed for their potential impact on competition.  One priority for Australian traders was to see
greater adoption of relevant international standards in the establishment of new and revised Egyptian
standards.  He also looked forward to receiving responses on questions submitted earlier.
41. The representative of the Republic of Korea said that Korea was happy to see Egypt achieve
stability and growth as a result of economic reform and restructuring programmes implemented
consistently and successfully since 1991.  Such initiatives included exchange rate stabilization, a
reduced fiscal deficit, financial liberalization, privatization, foreign investment, and market opening,
as confirmed by the Secretariat Report.  As a country affected by the recent financial crisis, the
Republic of Korea felt that Egypt was a fine example of how to overcome economic difficulties.
42. The Republic of Korea established diplomatic relations with Egypt in 1995 and bilateral trade
between the two countries currently amounted to over US$800 million.  Given the potential of further
expanding such trade, Korea was particularly intere sted in Egypt's current Trade Policy Review and
hoped that an exchange of views would help make Egypt's trade policies and practices more open and
transparent.  In this respect some questions on Egyptian trade practices and policies, namely on thetrade policy framework, customs procedures, textiles and quality control had been submitted. The
summary observations of the Secretariat Report noted that frequent modifications to trade-related
legislation, including recent changes requiring imports to be shipped directly from country of origin,
reduced predictability in government policy and may have created uncertainty among traders.  He
asked about measures being taken, or those under consideration, to improve this situation.WT/TPR/M/55
Page 12
43. According to recent publications, banks providing letters of credit to importers required a
100% cash collateral, rather than 10% previously, for consumer products, intermediate goods, and
inputs.  If the aim in taking these measures was to restrict imports, then he believed this was in
violation of WTO principles such as the elimination of quantitative restrictions.  He wondered about
the purpose of this restriction and whether the Government would consider reducing the measure.  Heasked for responses to written questions submitted by Korea on these and other issues.
44. The representative of Switzerland noted the many positive and encouraging signs in Egyptian
economic policy, which had led to substantial progress in the macroeconomic situation.  He
encouraged Egypt to continue this process despite recent difficulties in the world economy, which had
affected Egypt negatively.  There were also weak nesses in Egypt's performance, which to some extent
were linked to structural adjustment but which needed nevertheless to be addressed in order not to
endanger future development.  Switzerland hoped for a response to questions submitted in advance onsome of these issues.
45. Four areas were of concern.  First, despite considerable progress in reducing tariffs, the
average level was still very high.  A significant amount of much-needed state revenue appeared to be
forgone as a result of imports entering through non-official channels.  He was also astonished to learn
about the high percentage of tariff lines currently above bound rates, and asked for clarification.Second, although Egypt had taken steps to provide a conducive framework for foreign investment,
there appeared to be a number of administrative and bureaucratic hurdles facing potential investors.
Third, he believed that the one year, on average, required to register intellectual property rights in
pharmaceutical or food products was too long.  Finally, on technical requirements, he noted that less
than a third of Egyptian standards conformed with international standards, a rate that had fallenfurther recently.  He looked forward to  Egypt's detailed answers in writing.
46. The representative of Pakistan noted with satisfaction the improvements in most
macroeconomic areas as a result of the reforms undertaken.  The commitment to privatization,
financial services liberalization, insurance sector re structuring, the introduction of an outward looking
unified Law of Investment Guarantees and Incentives in 1997, along with structural reforms in othersectors of the economy were likely to contribute towards enhanced growth.  He hoped that, with
continued reform and a commitment to an open trade regime, the Government of Egypt would
achieve its target of annual GDP growth of 8% by the year 2000.  He shared Egypt's concerns in the
areas of anti-dumping and countervailing measures, the TBT and SPS Agreements, technical
assistance, special and differential treatment provisions, and the need for implementing WTO
Agreements.
47. The representative of Hong Kong, China said  that Hong Kong, China was keen to foster
closer economic and trade ties with all trading partners and, from this perspective, Egypt's trade policy
objectives of creating an open, outward-oriented, market economy were encouraging.  He
congratulated Egypt for the progress made in reducing trade barriers since 1992, including reducing
its MFN tariff rates, binding over 98% of its tariff and gradually removing all import bans.  He hoped
that liberalization under the multilateral framework would continue and encouraged a removal of allremaining import bans, on products such as clothing, as soon as possible.
48. He sought clarifications in a few areas related to the trade regime. He noted that tariff rates
remained high and there was significant tariff escalation.  In addition to the 26.8% average applied
MFN rate in 1998 there was a 2-3% surcharge and a flat 1% service fee.  Some products, such as
poultry, textiles and motor vehicles, were subject to high tariffs while the applied rates of some 12%of tariff lines exceeded their bound rates.  In the interest of promoting international trade, he asked
whether Egypt would accelerate the pace of tariff reductions and whether there were plans to address
tariff escalation.  Significant reductions in the import prohibition list were welcomed and he noted
that the list was to be reviewed every six months.  In addition, requirements for import licences and
prior approvals for imports had been eliminated.  He asked about new requirements imposed onWT/TPR/M/55
Page 13
textile products since 1 January 1998, including the checking of all imports by the relevant Egyptian
authorities;  labelling and documentation requirements;  and the restriction of imports to certain
Egyptian ports.  He asked whether and when Egypt would remove such measures, to facilitate trade.
49. He noted from the Secretariat Report that for all government procurement a 15% price
preference was given to Egyptian bidders;  since mo st procurement was based on the lowest bid price,
the preference could represent a substantial advantage to Egyptian bidders over foreign suppliers and
result in correspondingly higher procurement costs for the Government and taxpayers.  He urged
Egypt to consider lowering and eventually eliminat ing the price preference in order to provide a level
playing field for all suppliers and help achieve the best value for money.  He understood that the new
Tenders Law improved its procurement regime although it continued to provide considerable
discretion to government departments to limit procurem ent to selected suppliers.  He also noted that
information on the total annual value of procurement by various departments of the EgyptianGovernment was not available.  He therefore encouraged Egypt to continue improving its
procurement system, for example through improved transparency.
50. Egypt's efforts in making commitments in the Fifth Protocol to the GATS, particularly in
insurance, and privatization and foreign investment liberalization in financial services were
welcomed.  Hong Kong, China was pleased that the Egyptian Government was taking steps to removerestrictions on private and foreign investment in the insurance sector and to relax the requirement for
an "economic needs test" for life, health, and personal insurance in 2000, and for non-life insurance in
2002.  He noted that foreign equity ownership for bo th life and non-life insurance, currently capped at
49%, was to be raised to 51% in 2000 for life insurance and in 2003 for non-life insurance.  A further
relaxation of foreign equity restrictions in the next round of services negotiations was urged.
51. Hong Kong, China appreciated the severe strains placed by implementation of the Uruguay
Round commitments on Egypt, and shared its concerns that certain anticipated benefits of the
Uruguay Round Agreements had not been fully realized, especially market access opportunities under
the integration programme of the Agreement on Textiles and Clothing.  Hong Kong, China was also
sympathetic to Egypt's concerns about the failure of Members to honour and give effect to the specialand differential provisions in the WTO Agreements, and increasing recourse to anti-dumping
measures.  While not wishing to give the impression that Uruguay Round commitments could be
opened for negotiation, Hong Kong, China believed it  healthy for the system if Members experiencing
genuine difficulties could develop and submit concrete proposals in areas of concern so that they
could be addressed at an early date during preparations for the Third Ministerial Conference.
52. He believed that a balanced and broad-based round of multilateral trade negotiations, paying
particular attention to the special needs and concerns of the developing country Members, was thebest way to maximize gains for all WTO Member s.  The new round should therefore encompass
proposals that represented a balance of interests among all WTO Members.  This required developing
countries to articulate their interests from the next trade round and the developed members to make
genuine efforts to accommodate their interests.  This need for mutual accommodation of interests
explained why Hong Kong, China favoured a broad-based round of multilateral trade negotiations.
53. The representative of the United States emphasized the importance of the special partnership
that existed between the Governments of Egypt and the United States.  She noted that with U.S. firms
accounting for around 84% of foreign direct investment in Egypt in 1998, Egypt was also an
important partner for American business.  The United States had thus reviewed the Egyptian
Government and the Secretariat Reports with great interest.
54. She welcomed the actions undertaken by Egypt since its last Review in 1992 to liberalize
trade, including efforts to replace non-tariff barriers with tariffs and to reduce its maximum tariff rate.
She also noted that Egypt had bound over 98% of its tariff as a result of the Uruguay Round and
encouraged it to continue down this path of tariff reduction and rationalization.  However, the UnitedWT/TPR/M/55
Page 14
States was very concerned that some 12% of Egypt's tariffs had applied rates in excess of their bound
levels and almost 2% of tariffs had applied rates in excess of their initial Uruguay Round base rates.
She urged Egypt to bring its tariff into conf ormity with its Urugua y Round commitments without
further delay.
55. While Egypt had taken some steps since the last Review to liberalize its investment regime,
there was concern about recent administrative actions, which had had a trade restricting effect and
could deter the very investment and export potential that Egypt was trying so hard to attract.  As noted
by the Secretariat Report, investment growth had primarily taken place in non-tradeable sectors.
Discretionary, non-transparent actions by the Government, which had made it more difficult to
conduct trade, Egypt's tariff rate, which was higher than its emerging market competitors, and an
exchange rate that had not been adjusted in eight years were negatively affecting investment
decisions.
56. The Government was strongly encouraged to step up the pace of trade reform in order to
increase investment in sectors that would lead to export growth.  In particular, recently implemented
trade-restrictive measures, which had reduced investor confidence, should be eliminated or, where
appropriate, replaced with measures to protect consumers that minimized their trade impact and were
fully WTO-consistent.  The existing measures harmed Egyptian, U.S. and other firms dependent onimports for conducting business, providing employment, and generating exports.  The United States
also encouraged Egypt to take the necessary step s to comply with its WTO commitments.  In this
regard she stressed the importance of long overdue compliance with its TRIPS obligations, which
Egypt, as with other developing countries, undertook to implement under the transitional period by
1 January 2000.
57. She noted that international trade made an  important contribution to earnings and
employment opportunities for workers.  Governments could ensure that their citizens benefited from
globalization through effective policies in the areas of social protection systems, labour laws and
industrial relations, education, and training.  The United States believed that serious difficulties
existed in Egypt with respect to core labour standards, with legal restrictions on freedom ofassociation and collective bargaining.  There appeared also to be no right to strike, and child labour
was extensively employed in several sectors.  She asked about Egypt's plans to address these areas in
line with recommendations from the International Labour Organization (ILO).
58. In a spirit of friendship and support for the growth and development of Egypt's economy, the
Government was urged to deepen economic reforms to meet its development objectives.  The
United States had submitted written comments and questions and she looked forward to Egypt's
response.
59. The representative of Japan emphasized the importance of trade relations with Egypt, valued
at around US$1 billion in 1997.  Japanese companies were also keen investors in Egypt, with total
direct investment at the end of fiscal year  1996 valued at around US$82 million.  Japan also
appreciated Egypt's active contribution to various WTO activities and expected that as one of the
leading developing country members, Egypt would make further contributions in the forthcoming
trade round.  He expressed appreciation for Egypt's trade reforms, which were aimed at reducing tariff
and non-tariff restrictions and at enhancing the transparency of the trading system.
60. Japan believed that Egypt's participati on in the COMESA, the GAFTA and the Euro-
Mediterranean Partnership would promote trade liberalization.  The representative believed that Egypt
would play an important role in ensuring the conformity of regional agreements with the WTOAgreements and in complementing and strengthening th e multilateral trading system.  In this regard,
he asked how Egypt planned to bring such regional agreements into full conformity with
Article XXIV of the GATT and with Article V of the GATS, and whether these regional agreements
included commitments in services sectors.WT/TPR/M/55
Page 15
61. Regarding government procurement, a 15% price preference granted to Egyptian bidders had
been mentioned.  Japan expected Egypt's government procurement to be non-discriminatory, open and
competitive.  As none of the African countries were signatories to the WTO Agreement on
Government Procurement, and since Egypt had shown rapid economic growth, Japan hoped that
Egypt would become a signatory to the Agreement at an early stage.
62. Although Egypt had made progress in liberalizing its trade regime, there were concerns about
discriminatory measures facing Japanese companies when investing in or trading with Egypt.  For
example, all persons or companies importing goods in Egypt were required to be Egyptians;  the
number of foreign personnel employed by companies was limited to 10% of the total;  and ownership
of desert land was restricted.  In addition, due to a rapid increase in imports and the trade deficit since
autumn 1998, Egypt had introduced several import restricting measures and was requested to review
these measures, which lacked fairness, transparency, and predictability.  For example banks required a100% cash collateral when providing letters of credit to importers.  Although products such as sugar,
steel, and passenger vehicles were said to be over-stocked, Japan was concerned at the application of
this requirement to all consumer goods, without a grace period, and only through an administrative
order by the Central Bank.  Import regulations had been strengthened since September 1998, for
example through Ministerial Decree 619.  He said that it was common for multinational companies toincrease commercial efficiency by holding a depot in each region, and restricting such operations was
contrary to the spirit of free trade and disadvantaged the importing country.  Additional concerns were
expressed about requirements for bills of lading, country of origin certificates, import restrictions on
passenger cars, and time-consuming import procedures.  As Egypt's reforms emphasized transparency
and predictability, Japan expected that its concerns could be addressed.
63. On intellectual property rights, the representative said that pirated software and cassette tapes
could be found easily in Egypt.  The authorities were encouraged to further enforce the laws and
regulations for the protection of intellectual property rights.  In its services commitments under the
Uruguay Round, Egypt limited national treatment on the acquisition of land, and placed restrictions
on the number of foreign personnel to 10% of the total personnel employed in a company.  Sector-specific commitments were limited to four sectors, construction and related engineering services,
tourism and travel related services, financial services, and maritime transport services.  However, as a
result of the negotiations on financial services, Egypt was committed to allowing majority foreign
equity ownership as of December 1999.  Such efforts were highly appreciated and Japan expected
Egypt to consider making further commitments in the forthcoming negotiations, especially in sectors
not already scheduled.
64. The representative of the European Union welcomed the opportunity to discuss trade policy
issues with the Egyptian delegation and noted that the development of trade between Egypt and the
EU was likely to be positively affected by a new Association Agreement between the two parties to be
signed in the near future.  This would be the cornerstone of an ambitious Euro-Mediterranean free-
trade area to be established in the early years of the next century.  The European Union had been
impressed with the Egyptian Government's successful reform and stabilization programme, launchedin 1991, which had led to relatively healthy and sustained macroeconomic stability.  Egypt's trade
policy was linked to this stabilization programme, and liberalization had been broadly successful.
65. Egypt's multilateral trade commitments and unilateral trade liberalization measures had
substantially reduced tariff protection over the last few years.  Apart from a few exceptions, maximum
tariff rates had been reduced from 160% before 1990 to 50% in 1997, narrowing the tariff range to 5-50%.  Presidential Decree 243, of September 1998, further reduced applied rates from 50% to 45%,
45% to 35%, and 40% to 30%, respectively.  Duty rates applicable to cars, tobacco, and alcohol
remained high, prohibitively so for alcohol.  The representative acknowledged the sensitivity of the
latter item but wondered if the prohibitive rates were conducive to the further development of a
healthy tourism industry.WT/TPR/M/55
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66. Although tariffs had declined, the nominal unwei ghted average tariff fell only slightly, from
33% in 1988 to 24.6% in 1998, while the trade weighted average tariff was 28% in 1998 according to
the Ministry of Trade and Supply.  This latter figure significantly exceeded the world average of 8.2%
and was higher than the average tariff levied by developing countries (21.4%).  Along with other
factors, the cascading tariff structure created an anti-export bias estimated at 19.4% in 1997, which fora transition economy like Egypt could undermine efforts to increase productivity and improve
resource allocation.
67. The EU had noted the efforts made by the Egyptian Government to reduce non-tariff barriers
and to abolish import bans on textiles and poultry.  However, the positive developments noted above,
which had contributed to a decline in overall protection in the Egyptian economy, were in danger of
being reversed by recent developments or by a fail ure to respect undertakings already entered into.
For example, the EU was concerned that applied tariffs for many products were still above WTObound rate ceilings while recently introduced regulations limited the scope of the reform process and
created new burdensome and unnecessary technical barriers to trade.  These measures were already
having a detrimental effect on trade with the EU, and the Commission had expressed its concern to
the Egyptian Government.  Although disputes between  trading partners were inevitable, he hoped that
disputes between the two partners could be resolved  calmly and soon.  Specific EU concerns had been
submitted in advance and he looked forward to receiving explanations and clarifications from the
Egyptian delegation and to a continued fruitful cooperation with Egypt in all other fields of common
interest, both bilaterally and in the comprehensive new trade round.
68. The representative of Hungary welcomed the improvement in Egypt's macroeconomic and
trade indicators resulting from the stabilization programme started in the early 1990s.  This could be
attributed to a reduction in trade barriers, as a result of which overall protection provided through
tariffs and non-tariff barriers, had been reduced significantly.  In this context, the removal of some
non-tariff barriers, such as export and import bans, the significant reduction of applied MFN duties,
and the moderation of tariff escalation were of particular importance.  The introduction of the
Harmonized System (HS) nomenclature in the tariff in 1994 was welcomed.
69. There was, however, more to be done to reduce the distortions remaining in the economy,
particularly as a result of widespread state intervention, and to further the structural reforms, which, to
some extent, remained uneven.  He understood the difficulties of reducing state intervention in the
economy and welcomed acceleration of the privatization programme and the related relaxation of
price and distribution controls.  On trade measures, tariff peaks and escalation, and the relatively high
degree of discretion in the system could be reduced, and the list of products subject to quality control
inspection could be reviewed.
70. He noted that although Egypt was an important traditional trading partner, there had been a
tendency for bilateral trade to stagnate during the last few years.  He expected and hoped that bilateral
trade would improve in value and volume terms partly because of Egypt's efforts to reduce protection.
71. Clarification was sought on a few specific measures.  Ministerial Decree 619, issued in
November 1998, requiring all imported consumer goods to be shipped directly from the country oforigin to Egypt, had caused practical difficulties for Hungarian companies.  The representative asked
Egypt to provide justification for this measure, its policy objectives, and questioned whether this was
the least trade distortive way to achieve these objectives.  He noted that as import bans were removed
and quantitative restrictions were relaxed in the 1990s many items were added to the list of products
subject to mandatory quality control, raising the number of products restricted in this way from lessthan 70 to over 180.  There was also uncertainty in conducting trade with Egypt due to  the possibility
of rejection of imports at the border and the seemingly high degree of discretion granted to customs,
because there appeared to be no clear, transparent inspection criteria.  This measure increased the risk
of exporting to Egypt and discouraged Hungarian exports to Egypt.  He asked for responses to
questions raised earlier.WT/TPR/M/55
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72. The representative of India noted that the Egyptian economy had grown since 1992, and some
measure of fiscal stability had been achieved.  India believed that the maturity of the Egyptian
economy was well reflected in the resilience it had exhibited to external shocks and other force
majeure  events.  Egypt's economic strategy was based on a phased approach to economic and trade
reform and liberalization and it was important to appreciate that the gradual removal of trade barriershad been undertaken autonomously.  The continuity and durability of economic and trade reforms in
Egypt was sought through social consensus, which was not surprising given the objective of reduced
government intervention, and the continued major concern of unemployment.
73. Although in hindsight it could be said that  reform may have been deeper and more
widespread, since economic risk assessment was not a precise science national authorities naturally
tended to be cautious.  The margin between commitments and application allowed economic
operators to adjust better to policy changes.  Reform had also encompassed all sectors of the economyalbeit with differing levels of intensity.  India also noted that the benefits of economic and trade
reform were not evenly spread.  Egypt's trade defici t showed steady increases in imports with erratic
export growth, and foreign exchange earnings were dependent on petroleum exports, tourism receipts
and workers remittances.  Egypt's share in world exports had also declined and merchandise exports
relied heavily on petroleum and cotton, which were vulnerable to price fluctuations.  Perhaps thecomplementarities implicit in different elements of  policy reform needed to be better used in future
stages of the reform process.
74. Egypt had recently focused on preferential trade agreements to increase its trade with key
partners.  Although Egypt was traditionally its largest trading partner in Africa, India was not a party
to any preferential trade agreement with Egypt and it was significant that trade between the two
countries had been rising steadily over the years.  However, the Secretariat Report suggested that
trade diversion and increasing complexity in the trade regime may result from Egypt's preferential
trade arrangements.  Egypt was requested to notify recent statutory changes to its preferential rules of
origin so that all aspects of its preferential trade arrangements could be examined in the WTO.  India
also noted that notifications on the GATS, safeguards, and import licensing were outstanding andasked Egypt to notify these as soon as possible.
75. Since the last review, there had been a consistent attempt to reduce the number of products
subject to non-tariff barriers such as import licensing arrangements and export controls.  Egypt had
also undertaken to remove balance-of-payments measures on fabrics by 1 January 1998 and on
apparel and other made-ups by 1 January 2002;  it had fulfilled its commitments of 1 January 1998.
Egypt had bound nearly 98% of its tariff lines as a result of the Uruguay Round, which compared
favourably with the average 73% for developing countries.  Egypt also increasingly relied on tariffs asthe key trade policy instrument, and was reducing tariffs and rationalizing and simplifying trade
administration.  It appeared that tariff dispersion and exemptions had increased and that tariff
escalation was high in some sectors, such as food, beverages, tobacco, textiles and leather.  He asked
whether Egypt planned to reduce such distortions in its tariff structure.
76. A complex system of certification, quality control and sanitary and phytosanitary controls and
procedures was applied on certain products.  In particular, the Egyptian General Organization for
Veterinary Services had banned the import of fresh or frozen fish from India, following the European
Union's ban on fish and fish products from Indi a as these products were allegedly infected with
salmonella.  While the EU had since lifted this ban for companies that conformed to international
standards, Egypt had so far not followed suit.  An import ban on milk and milk products was also inplace despite the fact that new guidelines issued by the OIE would fully address Egypt's concerns.  He
requested Egypt to lift such restrictions on imports from India.
77. He shared Egypt's concerns regarding th e implementation of Uruguay Round commitments
by various Members, as well as the indifferent application of special and differential treatment.  TheWT/TPR/M/55
Page 18
Uruguay Round Agreements had not reversed the marginalization of developing countries in trade and
the global economy.
78. The representative of Indonesia congratulated the Government of Egypt on its successful
economic reforms consolidated since the first half of the 1990s.  The beginning of the decade
following Egypt's previous Review in 1992 had also seen much progress in the reduction of trade
barriers.  Egypt's economic stabilization progra mme initiated in 1991/92 had been marked with
significantly positive results in most macroeconomic areas.  Its economic performance had been
characterized by strict fiscal and monetary policy, economic growth and a reduction in unemployment
which were pivotal to underpin the sustainability of the programme.  The comprehensive programme
of economic reform had been closely related to its trade policy, whose goal was to create an open,
outward oriented, market economy.  Egypt had actively participated in the GATT and subsequently in
the WTO.  Under the programme of trade policy reform it was planning to introduce gradually a morecompetitive environment for Egyptian industry and to reduce its structural trade deficit through
increased export diversification.  Tariffs had remained the main policy instrument since the last Trade
Policy Review; reforms undertaken between 1996 and 1998 had substantially amended a number of
tariff rates.
79. Indonesia shared the WTO Secretariat's view that the Egyptian authorities strongly favoured
trade liberalization through the multilateral framework despite concerns about the difficulties of
implementing WTO Agreements, the application of the special and differential treatment clause for
developing countries, and market access for develo ping country products.  Indonesia shared most of
these concerns about the implementation of WTO Agreements.  In preparing for the Third Ministerial
Meeting of the WTO and the work to be undertaken in the next Round of negotiations, Indonesia hadfrequently exchanged views with Egypt on various WTO-related issues.  Being a developing country,
Indonesia would maintain and nurture this fruitful relationship not only in the interest of both
countries but also for the WTO membership, especially those representing the developing world.
Indonesia believed that the outcome of this Trade Po licy Review would be valuable for Egypt as well
as its trading partners.  Egypt's WTO commitments and its continued ambitious stabilization andrestructuring programme would bring about a more prosperous future.
80. The representative of Turkey said that his country considered Egypt to be a long-term friend
and valuable partner and had always taken pride in its special relations with Egypt.  Their two
countries shared cultural affinities, and common goals and aspirations towards regional peace and
stability.  Egypt was an important player in its region and had exercised its benevolent influence and
leadership for the welfare and solidarity of all nations.  Turkey had therefore followed Egypt's
modernization and reform efforts with great interest.
81. It was clearly demonstrated in the Secretariat Report that since Egypt's last Review in 1992 a
number of very positive developments had taken place in the reduction of trade barriers.  For
example, most non-tariff barriers had been substantially reduced;  MFN duties currently averaged
27% versus 42% in 1991;  and over 98% of the tariff was bound.  Price controls had been lifted on all
but a few industrial products and  Egypt had adopted or was in the process of adopting legislation toensure compliance with WTO Agreements.  At the same time Egypt had reduced its fiscal deficit,
GDP growth had been around 5% annually since 1993, and inflation had fallen from 21% in 1991 to
3.8% in 1998.  Thus healthy economic growth had been achieved with price stability.  Nevertheless,
Turkey also realized that reform was ongoing in Egypt and that additional measures might be needed
to accelerate the growth of exports, which had a far greater potential than achieved thus far.
82. The Secretariat Report noted that in 1998 some 12% of the tariff had applied rates in excess
of their bound levels.  On the other hand, Egypt had bound over 98% of its tariff as a result of the
Uruguay Round, a level much above the average 73% for developing countries.  He welcomed further
comment from Egypt on the policy background of the tariff system and how it was implemented.WT/TPR/M/55
Page 19
Also according to the Secretariat Report, the quality control list had 182 items in 1998, and he asked
for justification of these measures.
83. The representative of Morocco said she was particularly pleased to participate in Egypt's
second Review, especially since Egypt was an African country which had agreed voluntarily to
participate in the Review, demonstrating Africa's contribution to the multilateral trading system and totransparency.  She stressed the importance of the Review process, whose aim was not to provide
lessons to the country under review but to allow the country to draw lessons it considered appropriate.
84. Morocco's relations with Egypt were exemplary in  the African context.  In this respect the
two countries had recently reached an agreement for mutual cooperation, in the fields of trade,
industry, agriculture, fisheries, energy, air transpor t, health, basic equipment, and higher education, at
the third session of the High Joint Moroccan Egyptian Commission held on 12 and 13 June 1999 in
Morocco.  Morocco and Egypt also signed on 13 June 1999 a cooperation agreement between theMoroccan Centre for Export Promotion and the Egyptian Centre for the Development of Exports.
The programme included information and statistical exchange that would benefit business in both
countries.  This was part of an effort to strength en cooperation between the two countries to meet the
challenge of globalization.
85. The representative welcomed the courageous effo rt by Egypt to further open its economy and
stimulate investment in the face of external shocks.  Its stabilization programme had borne fruit by
improving most macroeconomic indicators especially the resumption of growth and a decline in
inflation and unemployment.  Referring to the Singapore declaration on trade unions and workers
rights, which were within the mandate of the International Labour Organization, she said that Egypt
respected minimum labour standards.  She also believed that the WTO was not the appropriate forumto discuss these matters and Egypt was not obliged to answer any questions relating to this issue.
86. The representative of Romania said that specia l recognition should be given to improvements
in private sector participation in the economy, the pro-investment policy, reform in the services
sectors, and trade liberalization.  She noted with interest the steps taken by the Government to bring
national intellectual property rights legislation into conformity with the TRIPS Agreement, and
commended Egypt's active participation in WTO activities.
87. Romania looked forward, as a traditional trade partner of Egypt, to continuing trade relations.
This was one of the reasons for following Egypt's trade policies and practices with great interest.  She
asked for further information on two issues:  first, as noted in the Secretariat Report, it appeared that
the number of appeals against customs decisions between 1992 and 1997 had more than doubled.  She
asked why these had increased and for a list of goods most affected by these appeals.  Second, on
behalf of Romanian exporters, she asked for information on the import regime for cement, includingdocumentation required.  Clarification was sought on any import restrictions or safeguard measures
applied to cement, the rationale for any such measures, and the expected date of their notification to
the WTO.  She was confident that the recent positive developments in the economy would continue to
produce benefits, rewarding Egypt for its openness.
88. The representative of Norway commended Egypt on its economic restructuring programme
and its success in achieving a relatively stable economy despite external shocks.  The drop in average
MFN tariffs since 1991 was a significant step in the right direction, and Egypt was encouraged to
continue liberalization including reductions in tariff and non-tariff barriers.  He commended Egypt for
its commitments on maritime transport.  A gradual liberalization of the sector had taken place in
recent years and Norway hoped that Egypt would make  binding commitments in the sector as part of
the forthcoming negotiations.  He sought information on the amount of public sector cargo as a share
of total cargo arriving in Egyptian harbours, and whether the system would be considered cost
efficient if compared to a situation that allowed competition.  He also asked whether public sector
suppliers or importers had taken advantage of the decision to open up the chartering of foreignWT/TPR/M/55
Page 20
vessels.  From the Secretariat Report it appeared that discounts offered on supplies and use of
infrastructure by Egyptian flagged vessels discriminated against foreign flagged vessels as did
discharging, loading, and storage charges.  He suggested that discrimination of this nature might
hamper trade and reduce the international competitiveness of Egyptian industry and asked if there
were plans to change these rules.
89. On public procurement, he asked whether Egypt was planning to join the WTO Agreement.
He also noted that Norway's provision of GSP treatment was omitted from the Secretariat Report.  In
light of Egypt's dissatisfaction with the implementation of the WTO Agreement on Agriculture, he
asked if it were possible for Egypt to provide additional information on the particular problems it
faced with regard to the implementation of this Agreement and how these concerns could be
addressed in the forthcoming negotiations.
90. The representative of the Czech Republic said that as Egypt was one of his country's most
significant partners in terms of trade and economic cooperation in Africa, the Czech Republic had a
special interest in furthering these bilateral ties.  The recent official visit to Egypt by the Minister of
Industry and Trade of the Czech Republic stressed the significance of such cooperation.  The
development of trade and economic relations between the two countries was facilitated by preferential
access granted to Egyptian exports by the Czech Republic under the GSP.  The Czech Republicappreciated the importance of its relationship with Egypt but believed that the trade and economic
potential of mutual cooperation could be improved.  Egypt's approach to industrial property was to be
credited and there was no conflict with Egypt on this matter.
91. The high level of cooperation with Egypt was based on the stability of Egypt's economic
system, including its financial system, which allowed Egypt to deal effectively with financial crisesabroad, notably the Asian financial crisis.  Gradual and continuing economic changes based on the
principles of gradual liberalization, deregulation, and restructuring of the economy had proven to be
correct in the last decade.  These changes, includ ing the privatization programme, priorities given to
infrastructure, and the free flow and transfer of capital, were at the core of the successes of the foreign
investment programme, despite the volatility of portfolio investment.
92. The Report suggested unevenness in the application of Egyptian quality control measures on
some products and that if the quality control approach was different for equivalent imported and
domestic goods it would discriminate against imports.  He asked whether the Egyptian delegation
could confirm that such differences in access existed.   He expressed appreciation for the economic
results attained by Egypt and praised its constructive work in the WTO.  He looked forward to
working with the Egyptian delegation to reach positive and balanced results in the preparations for the
next Ministerial Conference in Seattle.
93. The representative of Cuba said that his country had long-standing trade relations with Egypt.
Cuba exported sugar and other products to Egypt and imported cotton and other products from Egypt.
However, bilateral trade flows were below their potential and could be expanded as through a recently
signed agreement under the GSTP framework.  He praised the autonomous liberalization policies of
Egypt, an important developing country, which had been carried out without any external pressure.The reform programme had made it possible for Egypt to achieve favourable economic results with
high GDP growth despite a fall in oil prices and a drop in earnings from services.  He praised and
supported the development model adopted by Egypt, which attached high priority to the provision of
social assistance to its population.  Cuba shared Egypt's concerns about economic and trade policies in
the WTO context, in the non-aligned movement and in the Group of 77.  In particular, Cuba believedthat there should be an improvement in special and differential treatment for developing countries, in
particular because of imbalances in implementation of the various Uruguay Round Agreements.  Cuba
also shared a number of other concerns.  The representative regretted that one delegation continued to
emphasize aspects related to labour standards at Trade Policy Reviews.  There was no legal basis for
this and Egypt should not feel obliged to respond.WT/TPR/M/55
Page 21
VI. REPLIES BY THE REPRESENTATIVE OF EGYPT AND ADDITIONAL
COMMENTS
94. The representative of Egypt said he was encouraged by the positive tone of the various
statements made by Members.  He reiterated that the pace at which Egypt had reformed and
liberalized its economy had been unprecedented.  The uniqueness of these reforms was their gradualnature, supported by the provision of social safety nets to minimize the negative effects particularly
on the poorer segments of society.  Around 35% of the national budget was spent on social services.
The Government had also established the Social Development Fund to assist small and medium-sized
enterprises in job creation and income generation through the reform period.  Egypt was determined
to continue its policies of trade liberalization and openness.
95. The trade deficit had grown from US$6.2 billion in 1991/92 to US$11.8 billion in 1997/98
demonstrating Egypt's increased openness and liberalization.  At the same time, Egyptian exportsfaced a number of market access difficulties such as anti-dumping measures and technical standards,
as well as the non-implementation of various provis ions of interest to Egypt in WTO Agreements.
Egypt was striving to diversify its exports in order to address the widening deficit.  On Egypt's
strategy for export promotion, he said that Egypt was focusing on the rehabilitation of the industrial
sector in order to improve competitiveness.  The Government also aimed to improve the exportinfrastructure, in particular in finance, risk-i nsurance, marketing and transportation.  Egypt was
hoping to expand exports through regional trade agreements, while ensuring their consistency with the
multilateral trading system.  He emphasized the consistency of all regional agreements signed by
Egypt with its WTO obligations and said that by encouraging furthering liberalization, the agreements
contributed positively to the multilateral trading system.
96. On privatization, Egypt had made remarkable progress, a fact that was recognized
internationally.  He stressed that privatization would continue.  Measures to deal with non-profitable
enterprises were ongoing through labour, financial, and management restructuring.  A number of
enterprises were being split into smaller units and sold separately.  The Government was considering
selling them below valuation costs and extending tax holidays to investors to buy these companies.The sale of publicly owned hotels was being undertaken and foreign ownership was permitted.
97. He regretted that foreign investment had not been as forthcoming as hoped despite
liberalization in the investment regime.  The fact that investment was not flowing into the tradeable
sector was a source of concern to the Government and it was hoped that the encouragement given to
investment in general and to a number of specific tradeable sectors through the new Investment
Guarantees and Incentives Law would attract FDI to these sectors.  The Law also reduced
bureaucratic delays and substantially speeded up approvals.  Egypt attached importance to the issue oftransparency in investment and provided information through various channels including the General
Information Authority and the Monthly Economic Dige st issued by the Ministry of Economy, as well
as the Egyptian Trade Point.  Before a definitive decision on investment and other areas was taken by
the Government, an intensive consultation process took place with business associations, federations
of industry and chambers of commerce, ensuring transparency in decision making.  The Governmentwas in the final stages of preparing an anti-trust law with assistance from UNCTAD, the United States
and the European Union.
98. The first discussant was impressed with the n eed to maintain consensus in the economy and
believed that Egypt's efforts in this respect should be noted.  He agreed that investment in social
services was an appropriate approach for the Government.  He had also noted the extent of opennessof the Egyptian economy indicated by an increase in imports, and the difficulties faced by Egyptian
exporters.  Egypt had emphasized the fact that its regional agreements were in compliance with the
WTO Agreement.WT/TPR/M/55
Page 22
99. On investment he approved of the fact that the emphasis was on increased domestic savings
and investment while welcoming FDI.  No country, especially developing countries, could progress
simply by relying on FDI, and domestic savings were a critical input for development.  On tariff
jumping FDI, while tariff reduction was essential, it was important to be sensitive to the fact that FDI
tended to dry up when tariffs were significantly liberalized.
100. The second discussant questioned the marginal gains from completing regional agreements,
notably that with the EU, given especially the relatively low rate of the EU's common external tariff.
With the exception of textiles and clothing, it was not clear that the marginal gains of having duty-free
access to the EU for Egypt's manufacturing industry would be significant;  he asked whether, in
agriculture, increased quota access to the EU market would be sufficient for Egyptian agricultural
exports.  He believed that although it was legitimate for countries to seek foreign investment to build
up domestic industries behind high tariff barriers, this might create a problem in the long run becausethe industry might not be internationally competitive.  He also believed that companies now
considered both investment and trade, and wondered whether companies, especially small companies,
might be deterred from investing in Egypt because of the complex tariff structure.
101. The delegate from Egypt believed that attracting foreign investment was important for
technology upgrading, management, and marketing skills in addition to increased investment.  Egypt
was simultaneously placing emphasis on improved domestic savings.  Egypt's regional agreements
would increase access to foreign markets and the Government had been careful to ensure that they
were not trade diverting.  With regard to the Euro-Med Agreement, Egypt already had duty-free
access for industrial goods but sought access for horticultural products.  There had been some
problems in terms of market access recently such as anti-dumping and SPS measures.  He hoped thatthe agreement would be a real partnership.  He note d that the major challenge for Egypt was its trade
deficit for which exports and market access were important.  Anti-dumping actions such as a measure
applied to unbleached cotton in 1998, which cost Egypt over 40% of its exports of textiles and
clothing, were reducing Egypt's market access;  he hoped that the agreement with the EU would be
useful to both partners.
102. The representative of the United States asked whether other areas and disciplines, for example
intellectual property rights, would be covere d in the Euro-Med Agreement with the EU.
103. The representative of Japan hoped that regional trading agreements would encourage trade
within the region and also with third countries.  He asked if the Euro-Med Agreement would include
services.  He also asked for responses to written questions submitted on transparency (contact points)
in Egypt's investment regime and hoped that further efforts would be made by the authorities to allow
foreign enterprises access to relevant information more smoothly.   He also asked for a response oncompetition policy, including whether a summary of the new competition policy could be provided.
104. The representative of Egypt said that other disciplines such as TRIPS and services would be
included in the agreement with the EU.  On contact points, he mentioned the Trade Point of Egypt and
the Commercial Representation Office.  Further information could be obtained from the Ministries,
including the Ministries of Economy and Trade and the General Authority for Foreign Investment(GAFI).  Notifications had been made to the WTO on agriculture and other areas.  Details on
competition policy legislation could be provided to the delegation of Japan.
105. On trade policies and practices, he began by clarifying the requirements of Ministerial Decree
619.  The decree required a certificate of origin, which was a basic requirement for customs clearance.
This was essential to accord MFN or preferential treatment to imports.  Another requirement of theDecree was the direct shipment from the country of origin for imports of consumer goods.  This latter
requirement was to stop the surge of counterfeited goods and products of unknown origin flooding the
market, and to protect consumers.  A number of products, such as medicines, vaccines, medical
equipment and pesticides, were exempt from the Decree because the authenticity of these goods couldWT/TPR/M/55
Page 23
be verified.  The Decree would be reconsidered in the light of the completion of the programme on the
harmonization of rules of origin.
106. On applied tariff rates exceeding bound rates, he emphasized that any international agreement
once ratified by the People's Assembly became law in Egypt.  Thus when the applied rate was below
the bound rate, WTO Members benefited from these lower rates.  However, when applied ratesexceeded bound rates, the customs authorities applied the bound rate for WTO Members.  Customs
users fees were charges that were collected against services rendered and hence not a duty.
107. Several Egyptian standards needed to be review ed and aligned with international standards
but Egypt was moving in this direction as it would help to attract technology, facilitate trade, and
promote exports.  In this regard Decree 180 stipulated that any imported or domestic product and
commodity should conform with one of six standa rds:  Egyptian;  ISO/IEC;  EN;  American;
Japanese;  or Codex.  Egypt was also autonomously applying these six standards without any specificagreements with the countries and organizations concerned.  Exceptions to this were around 400
Egyptian standards listed in Decree 179.  Thus, most imports were subject to international standards.
International standards were also basic references for setting and reviewing Egyptian standards.  The
Egyptian Organization for Standardization and Qual ity Control (EOS) also applied the TBT Code of
Good Practice and ISO/IEC directives
108. The review of existing standards was initially carried out by a relevant technical committee in
the EOS, which issued a new draft.  After being ci rculated for comment within 60 days, the final draft
was submitted for approval to the EOS Council.  WTO Members were able to submit their comments
during the review process.  On technical assistance, Egypt currently relied on its own resources for
formulating and implementing standards, although if  technical assistance were required in the future
Egypt would approach the international community.  Standards on frozen meat and liver were set for
health, safety, and consumer protection purposes.  The technical information justifying these
standards had been submitted to the WTO.  On questions about stringent labelling requirements for
meat and other food products, he said that these measures had been taken in response to the use of
false documents by importers or exporters of meat to circumvent consumer protection regulations, and
were in compliance with the TBT Agreement.
109. Several questions had been raised about the transfer of products from the list of banned
imports to imports subject to quality control inspection.  He clarified that this was normal practice and
that once an import ban was lifted, it became necessary to ensure that the imports were of a high
quality.  The requirements also applied to similar domestically produced goods.  Egypt was
developing a system to register and link importers with specific products;  importers associated with
consistently meeting specified quality requirements could import products more quickly without beingsubject to the same degree of inspection as others.  Sampling was performed in accordance with
international requirements.  On a question about quality control of ceramic tiles he indicated that the
condition requiring importation of first degree products had been modified.  In addition, there was no
discrimination between local and imported products for labelling requirements.
110. Egypt had notified a new trade remedies law, No. 161, on the "Protection of the national
economy from the effects of injurious practices in international trade", passed in 1998.  Investigations
were conducted by the Egyptian Investigating Authority in accordance with the relevant WTO
provisions.
111. Customs appeals had increased in line with the increased level and diversification of imports.
He believed that the final settlement of any dispute relating to customs decisions had to be judged onthe basis of a final settlement and not primary arbitration.  He confirmed that Egypt would implement
the WTO Customs Valuation Agreement by the end of the transitional period on 1 January 2000.WT/TPR/M/55
Page 24
112. Responding to the questions about the letters of credit, he confirmed that there were no
directives from any official source that prohibit ed banks from financing imports of any kind or from
any country.  Importers normally had access to different means of finance in cases where banks
hesitated to provide letters of credit for operations perceived to be risky.
113. Egypt would lift its quantitative restrictions on textiles and clothing as scheduled.  Imports of
poultry parts were restricted mainly to ascertain that slaughtering had been carried out according to
Islamic rules.  This was possible to do with whole poultry imports but not for poultry parts.  There
were no restrictions on cement imports, while restrictions on imported cars to the current year of
production were for environmental protection.  Regarding the nationality of importers, foreigners
were allowed to import products required for manufacturing and could sell these products on the local
market.  However, foreigners were not allowed to import and distribute products.
114. Although Egypt was not a member of the WTO Agreement on Government Procurement, the
new Tenders Law introduced a number of positive elements, which were mentioned in the Secretariat
Report.  The Law also guaranteed transparency for domestic and foreign bidders.  On intellectual
property, he reaffirmed that Egypt was committe d to fulfilling its obligations under the TRIPS
Agreement.  In this regard, a new patent law was under consideration by the People's Assembly.
Egypt was also preparing legislation, in cooperation with the WIPO, on other intellectual propertyrights such as trade marks, geographical indications, and undisclosed information.  Italy and the
United States were providing technical and financial assistance.  He noted that Egypt already provided
exclusive marketing rights for patents on pharmaceutical and agricultural chemical products, whose
main features were included in Egypt's replies raised in the TRIPS Council.
115. The first discussant appreciated that Decree 619 would be reconsidered and hoped Members
would work to ensure that the work by the Committee on Rules of Origin would be completed
expeditiously.  He also appreciated the explanation for why Egypt's applied tariff was higher than the
bound rates for 12% of all tariff lines;  similarly, the answer given on government procurement was
clear.  He reminded Members that the phasing out of quantitative restrictions for textiles and clothing
items had been agreed in the Committee on Balance-of-Payments Restrictions, and Egypt had beengiven until 2002 to do so.
116. The second discussant suggested that, since Decree 619 was implemented to stop the import
of counterfeit goods, its rationale may not be necessary once Egypt had implemented its TRIPS
obligations by 2000.  He was still interested to know why the applied rates were above the bound
rates.  He noted that WTO Members could submit comments during the process of setting and
reviewing standards.  He asked about the reason for quality control standards and mandatory
inspection on imports.  He suggested that all quality control measures, as well as the standards theywere based on, be notified to the WTO.  On customs valuation, he asked how many cases had been
settled through final arbitration.  He also questioned the reason for the changes to letters of credit.
117. On letters of credit the representative of Egypt said that the reason was probably based on
developments in 1998 when, for example, low international sugar prices led to a glut in the Egyptian
market, followed by low domestic prices and a default on loans by importers of sugar.  As a result, forsome products, banks required 100% collateral rather than 10%.  He emphasized that there was no
link to government policy on this matter.  Decree 619 was a consumer protection measure and was not
implemented to restrict imports, especially since a large percentage of Egyptian imports were raw
materials and intermediate goods required by Egyptian industry.  The number of counterfeit products
in the Egyptian market had doubled in 1998, creating the need for a requirement of certificates oforigin.  Under the new decree, around 83% of imports were not required to be shipped directly from
their country of origin.  The remaining 17% were mainly products requiring quality control such as
food and medicines.  He reiterated that Decree 619 would be re-evaluated once efforts to harmonize
rules of origin had been completed.WT/TPR/M/55
Page 25
118. Egypt's bound rate commitments had become law with the ratification of the WTO
Agreement and hence the use of applied rates in excess of their bindings for WTO Members would be
illegal.  On quantitative restrictions Egypt was committed to the agreed phase out by 2002.  The new
law on government procurement ensured transparency.  Egypt was also working to upgrade the
inspection process so as to reduce delays at the border due to quality control or standards procedures.In this respect technical assistance was being provided by US AID and Italy.  Egypt was also
committed to implement its obligations under the Agreement on Customs Valuation and on TRIPS.
He thanked the United States and WIPO for their s upport in helping Egypt to upgrade its legislation
and enforcement on intellectual property rights.
119. The representative of the European Union was pleased that Decree 619 would be reconsidered
and hoped a less distortive measure could be f ound.  He asked whether Egypt could publish its 1999
MFN tariff, which would dispel any confusion about applied rates breaching their bindings.  Hewondered if the increase in customs appeals might be related to the lack of published data on tariffs
and suggested that technically non-viable standards might inhibit trade.
120. The representative of Egypt agreed to make the ap plied tariff available.  He said that labelling
requirements were mainly related to foodstuffs, especially that slaughter be in accordance with
Islamic traditions.  Egypt was also discussing this issue further with its trading partners, notably theUnited States and the EU.
121. The representative of the United States asked whether Egypt could notify the rates that were
being applied at bound levels for WTO Members, and amend the information provided to the
Integrated Database in light of the discussions on the applied and bound tariff.
122. The representative of Japan welcomed the commitment to implementation of the TRIPS and
Customs Valuation Agreements.  He also welcomed that Decree 619 would be reconsidered and
hoped it would be replaced by a less distortive measure.  On letters of credit he had understood that
they applied to all consumer goods. He understood the situation with regard to sugar imports and that
the amendments had been made under guidance from the Central Bank of Egypt.  He was concerned
that changes to import procedures through administ rative guidelines rather than legislative change
suggested a lack of transparency.  Referring to an  earlier statement on environmental standards being
technical barriers to trade, he asked for concrete examples.  Egypt had also requested assistance for
access to environmentally sound technology and he asked for concrete examples.
123. The representative of Egypt reiterated th e commitment to implementation of the TRIPS
Agreement.  On letters of credit he said that the banking system was independent of the Government
and had its own union.  Changes to letters of credit were made according to risks associated with
certain products and were not permanent.  The Government had no input on the matter.  He wouldrefer to the environment in the final theme.
124. The representative of the Republic of Korea appreciated Egypt's commitment to the
multilateral trading system and to the trade policy review process.  He questioned the rationale of a
requirement regarding labelling requirements for textiles, that the name of the importer and country of
origin be inscribed every 30 metres.  On import inspection he believed that sampling procedures bycustoms could be improved.
125. The representative of Egypt said that all sampling was done according to international
standards.  Egypt was currently implementing a programme to register imports meeting particular
standards, to avoid delays caused by sampling.  There was also a Committee that examined all
complaints relating to standards.  The answer on textiles would be provided in writing.
126. Moving to the final theme on sectoral policies, the representative of Egypt noted that
manufacturing reform had taken place within the context of the privatization programme, includingWT/TPR/M/55
Page 26
privatization of public sector companies, early reti rement for excess labour, capacity building through
human resource development and management, and the introduction of total quality management.
These were intended to raise efficiency and competitiveness locally and internationally.
127. Egypt had actively participated in the Uruguay Round negotiations on services and made
commitments in four important sectors, financia l services, construction, maritime transport, and
tourism services.  It had also carried out autonomous liberalization in several other sectors and had
accepted the Fifth Protocol on financial services.  Privatization had also taken place, notably in
banking, telecommunications, and maritime services.  Telecommunications, which included
participation from foreign suppliers, would be part of future multilateral negotiations.  Professional
services were regulated in a transparent manner.  Egypt was also actively participating in the
discussion under the newly established GATS working group on domestic regulation, and in
establishing the multilateral rules and disciplines in accountancy services.  Egypt also looked forwardto benefiting from future services negotiations which would create market access for services and
modes of supply in which Egypt enjoyed a comparative advantage.
128. In the agricultural sector, all government in tervention and controls on cropping patterns,
marketing and pricing had been removed.  Farmers were free to cultivate in the manner they thought
fit and to respond to market signals.  Egypt's strategy had also shifted from self-sufficiency to foodsecurity in general, emphasizing the production of goods in which Egypt had a comparative
advantage, such as cotton, rice, vegetables, fruit, medicinal and aromatic plants, and cut flowers.
Egypt had a surplus of these products and was seeking access to EU, Arab, African and other markets,
while importing products in which it did not have a comparative advantage, such as red meat, oil, and
wheat.
129. Egypt also expressed its concern that the decision on net food importing countries, which
agreed to establish appropriate mechanisms to en sure that the impact of the Uruguay Round on trade
in agriculture did not adversely affect the availability of basic food on reasonable terms to developing
countries, had not been implemented.  Food aid levels to the net food importing developing countries
had declined at an alarming rate from 1978 to 1997, while the expectations of the affected countries inareas such as concessional finance, export credit, and technical assistance, had not been met.
130. To conclude he reiterated Egypt's position on several issues.  On trade and the environment,
he believed the importance of the issue required international cooperation and further in-depth
examination.  Environmental standards, requirements, and schemes should not constitute barriers to
exports, especially those from developing countries.  Egypt also believed that the issue of labour
standards and child labour was not the mandate of the WTO and should be followed in the ILO.
Finally, Egypt attached the highest priority to implementation;  difficulties encountered should beaddressed earnestly and to the satisfaction of all, particularly the developing countries.  Egypt was
also committed to the built-in agenda under vari ous WTO Agreements while the issues initiated in
Singapore required further study.  A commitment to negotiate new issues at this stage was premature.
131. The second discussant suggested that Egypt's large trade deficit made it necessary to make the
manufacturing sector competitive and that high tariffs might not be the way to achieve this;  indeed it
appeared that it was the least protected sectors that had performed well.  In the services sector,
telecommunications would provide vital infrastructure, and it was encouraging to see the introduction
of limited competition.  However, figures in the Secretariat Report pointed to a long waiting list for
access to services and he wondered about further plans to liberalize the sector.  He agreed that the
issue of the impact of the Uruguay Round on net food importing countries was complex and had beendiscussed in the WTO.  He suggested that since the import bill for wheat, the largest agricultural
import, had remained relatively static since 1992, Egypt had achieved the right policy balance in
terms of cereal production.  A further fall in cereal prices in recent years might also suggest that the
impact of the Uruguay Round on net food importing countries was not nearly as great as expected.WT/TPR/M/55
Page 27
132. The first discussant said that since telecommunications was to play a crucial role in the future
development of the country, it was necessary to have a modern sector.  In this regard he felt that
Egypt would do what was necessary to modernize the sector.  He hoped that future negotiations would
provide some satisfaction to countries such as Egypt with an interest in the movement of natural
persons.  In agriculture, he agreed that food security was important for all countries and a fundamentalresponsibility for all governments.  He also agre ed that environmental standards should not become
technical barriers to trade and should be discussed in  the multilateral forum.  On labour standards, he
said that the TPR forum was not the correct place to  address these issues since they were not a WTO
mandate.  He also supported Egypt's position that implementation was the most important issue and
that it was not a good idea to enter into new areas.
133. The representative of Egypt agreed with the second discussant on manufacturing.  Egypt
would emphasize sectors such as textiles and clothing for technology upgrading, while tariffs would
continue to be reduced.  He also agreed on the importance of restructuring, and the provision of
incentives for exports.  In telecommunications, there had been a revolution in Egypt over the previous
two years, with increased private sector participation and the corporatization of Egypt Telecom.
Egypt recognized the importance of the sector, and was encouraging the development of value-added
services like the Internet.  Agriculture was the first sector to be liberalized and productivity hadimproved.  Egypt aimed to increase the production and export of horticulture.  He agreed that in
general wheat prices had fallen but had created difficulties for food importing developing countries in
some years.  Food security was important for Egypt, thus the food subsidy programme had been
continued.  Regarding his concluding commen ts about environment, labour standards and
implementation, he said that this was Egypt's stand from the previous Ministerial Conference in 1998.
134. The representative of the United States en couraged Egypt to improve its commitments in
telecommunications and related areas, such as th e Information Technology Agreement to which Egypt
was not a party.  He was also pleased that Egypt was considering an expanded role for the Internet
and electronic commerce.  On labour standards, he said that the question was not intended to be
provocative but was raised in relation to trade liberalization, economic reform, and consensusbuilding.
135. The first discussant emphasized that as the TPR was not a legal forum but discussed trade
policies in a non-confrontational manner, labour standards would most appropriately be discussed
elsewhere as they created tensions in the TPR forum.
136. The representative of Japan asked whether the list of items subject to import prohibitions
presented in the Secretariat Report was correct.  He was encouraged to hear about liberalization in the
telecommunications sector and that Egypt was planning to make commitments in the sector.  Hesuggested that Egypt follow the principles mentione d in the Reference Paper to the Fourth Protocol as
these were important for developing competition in the market.
137. The representative of Egypt said that liberalization in the telecommunications sector had been
voluntary.  Egypt was considering joining the Agreement on Information Technology.  Egypt was
also trying to improve competitiveness in textiles and clothing by upgrading technology,management, and marketing in the sector, and would lift the import ban on clothing by 2002.WT/TPR/M/55
Page 28
VII. CONCLUDING REMARKS BY THE CHAIRPERSON
138. The second Trade Policy Review of Egypt was conducted on 24 and 25 June 1999.  These
remarks, prepared on my own responsibility, summariz e the main points of the discussion;  they are
not a full report.  Details of the discussions will be fully reflected in the minutes of the meeting.
139. The discussion developed under three main themes:  (i) economic environment;  (ii) trade
policies and practices;  and (iii) sectoral policies.
(i) Economic environment
140. Members congratulated Egypt on its economic reform initiated in 1990/91, in which trade
liberalization had been important;  macroeconomic indicators and growth had improved significantly
and GDP per capita had virtually doubled.  Members felt that for Egypt to achieve its objective of
annual growth of 7-8%, it would need to expand  and diversify exports, attract more foreign
investment, and improve confidence through greater transparency and predictability in its economicenvironment.  Members welcomed Egypt's commitmen t to the multilateral trading system and noted
the importance of its increased participation in regional agreements remaining in accord with
multilateral rules.
141. In response, the Egyptian delegate emphasized that reform would continue.  Efforts to expand
and diversify exports were under way, including through export promotion, but Egyptian exportsfaced market-access constraints, particularly anti-dumping measures and technical requirements.
Investment would be encouraged, including by an increased national capacity, the further removal of
restrictions, and by improving accountability and predictability of the trade regime.  Egypt's economic
reform emphasized private sector participation and market based competition, supported by an
adequate social safety net such that benefits were distributed among the population.  Egypt remainedcommitted to the multilateral trading system, with regional and other links fully in compliance with
WTO obligations and seen as a step towards increasing exports.
(ii) Trade policies and practices
142. Members congratulated Egypt on its wide-ranging trade reform.  They noted that most non-
tariff barriers had been removed, tariff rates had been reduced and rationalized, although a degree ofescalation remained.  There was concern that some 12% of applied tariffs appeared to breach WTO
bindings.  Some Members asked about the requirement that goods be shipped directly from their
country of origin and about recent changes raising margins on letters of credit.  Questions were asked
about customs procedures, the application of standards, and about quality controls on imports.
143. Members commended Egypt for the removal of export controls. Egypt was encouraged to
bring its intellectual property rights and trade defence legislation into conformity with WTO
Agreements.  Some Members asked when Egypt would accede to the Agreement on GovernmentProcurement and suggested that the 15% preference for Egyptian bidders might lead to inefficiencies.
144. In response, the Egyptian delegate noted that special shipment requirements were a response
to a surge in imports of counterfeit consumer goods;  the requirement would be reconsidered as part of
a programme to harmonize rules of origin.  Customs ensured that applied tariffs did not breach WTO
bindings.  Egypt intended the timely implementation of its WTO obligations on TRIPS, textiles andclothing, and customs valuation.  Trade defence legislation had been notified to the WTO, and was
applied in accord with multilateral rules.
145. The Egyptian delegate detailed the application of technical requirements, stressing that most
imports were subject to international standards, but he agreed that there was scope for greater
harmonization of domestic standards with international norms.  Quality controls had been necessaryWT/TPR/M/55
Page 29
to ensure compliance with standards.  The increas ed appeals against customs decisions reflected the
high level and diversification of imports.  Banks were not subject to restrictions on financing imports,
including by letters of credit.
(iii) Sectoral policies
146. In agriculture, Members noted that there now remained virtually no controls on trade.  Some
saw Egypt as having a comparative advantage in exports of horticultural products but wondered about
market access for these products. The manufacturing sector was seen as a future area of growth
especially in industries such as food processing and textiles and clothing.  Some Members asked why
textiles and clothing remained subject to quantitative restrictions and it was noted there appeared to be
restrictions on cement and poultry.  In the automobile sector, some Members questioned the recent
ruling restricting imports of motor vehicles to their year of manufacture.
147. Services were seen as crucial infrastructural support and their further reform was thought vital
for continued economic growth. Financial services and telecommunications were particularly
important for attracting foreign direct investment, and a Member urged further liberalization of
maritime transport.  Members looked forward to Egypt's continued participation in future services
negotiations in the WTO.
148. In response, the delegate from Egypt mentioned various steps being taken to raise
productivity in the manufacturing sector.  On textiles and clothing, restrictions would be phased out
by 2002.  All imported goods, including automobiles, had to be new.  There were no import
restrictions on cement, and whole poultry slaughtered according to Islamic law could be freely
imported.  In services, he noted that the ongoing liberalization and privatization of key activities
allowed Egypt to look forward, in future negotiations, to an opening of markets in areas where itenjoyed a competitive advantage.  Liberalization and privatization in agriculture had been far-
reaching, the policy focus having shifted from self-sufficiency to food security and export-competitive
production.  However, Egypt remained deeply concerned that the expectations of net food importing
developing countries at the end of the Uruguay Round had not been met.
*******
Conclusions
149. In conclusion, it is my feeling that Members greatly appreciated Egypt's reform programme,
particularly on the trade front,  which had produced results in a relatively short period of time.  Not
only has economic growth been strong, but Egypt has successfully withstood the effects of external
shocks.  Egypt's emphasis on a strong social safety net, to support reform, is particularly welcome.
Egypt was strongly encouraged to build on these achievements and to accelerate its trade reforms,
including by improving the predictability and transparency of its economic environment, which couldlead to improved trade and investment flows.  It is also my feeling that Members welcomed Egypt's
commitment to the multilateral trading system and that the system should support the Egyptian reform
effort, particularly by keeping markets open.WT/TPR/M/55
Page 30
ANNEX I
ADVANCE WRITTEN QUESTIONS AND REPLIES FROM THE DELEGATION
OF EGYPT
I. REGIONAL AGREEMENTS
(i) Advance written questions
1. Canada
With reference to Paragraphs 110 and 112, has Egypt lowered its tariff and other barriers to
trade with COMESA countries?  To what extent?
2. New Zealand
Do the Egyptian authorities intend to apply the COMESA common external tariff of 30% in
respect of beverages and motor vehicles by 2004?
3. Australia
Could Egypt comment on the relationship between its regional and multilateral trading
arrangements, with particular emphasis on the Europe-Mediterranean Partnership, the Greater Arab
Free-trade area (GAFTA) and the Common Market for Eastern and Southern Africa (COMESA).
How will Egypt ensure that regional and bilateral initiatives support the process of
multilateral trade liberalization and strengthen the multilateral trading system?
4. United States
Has Egypt notified its preferential rules of origin under COMESA and GAFTA?Under a new preferential trade agreement, Egypt will allow apple exports from Lebanon to
enter Egypt duty free (WT/TPR/S/55, page 40, section 35).  Although not detailed in this report,Lebanon reportedly will allow potato exports from Egypt into Lebanon duty free.  Please explain the
terms of the Egypt-Lebanon agreement, which has not been notified as required under GATT
Article X.  Moreover, Egypt should explain how the agreement is consistent with GATT Article XXIV,
especially the "substantially all trade" provisions under paragraph 8?  Could Egypt also please
explain how this agreement is justifiable under the most-favoured-nation provisions of GATTArticle I.
(ii) Reply
Egypt participates in regional trade agreements  in accordance with the WTO rules. Regional
Trade Agreements aim at facilitating and promoting trade amongst its contracting parties and thus,
serving the purpose of enhancing international trade.  Egypt applies a tariff reduction of 90% as of the
year 1999 and the application of a zero tariff  as of Jan. 2000 without exceptions except for the goods
related to health and religion (tobacco and its products, alcoholic beverages), taking into consideration
the principle of reciprocity in case any member country would decide to do otherwise.WT/TPR/M/55
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II. PRIVATIZATION
(i) Advance written questions
1. Canada
With reference to chapter III, section 4, sub-section iii, does Egypt intend to continue its
privatization programmes?  What measures, if any, are envisaged to deal with unprofitable public
assets?
2. Hong Kong, China
We note that the Government is privatising the hotels owned by the affiliated public sector
companies.  When will this be implemented, and will foreign investment be permitted in the
privatization programme?
3. United States
Banking and securities:  Egypt's banking sector remains dominated by the large state-owned
banks and is reforming far short of its potential.  Over the past two years, the Egyptian Government
has deferred its pledge to privatize one of the state banks.  Will the Egyptian representative please
provide the Government's latest time for this critical move?
(ii) Reply
The Egyptian Government took the following main measures to deal with the privatization of
non-profitable public enterprises:
1. The restructuring and reform of these non-profitable enterprises. This restructuring and
reform include:
- Excess labour force restructuring through early retirement scheme and other
appropriate programmes
- Debt banks settlements- Management and organization restructuring
2. Technical restructuring through splitting the units and factories and selling them as separate
assets.
3. The Government had amended the Executive Regulations of Law 203 permitting the general
assembly of the holding company to approve the  sale  transaction if the market price of the enterprise
to be privatized is below its valuation.
4. The Egyptian Government is studying now the extension of the tax holiday to investors
buying losing public enterprises.
As far as privatization of hotels is concerned, the Egyptian Government is already privatizing
the public and the joint-ventures hotels. Until June 1999, five hotels were already sold. Two otherpublic hotels were advertised on 24 June, 1999, they are now in the phase of the due diligence. Two
other big hotels will be offered for sale by September 1999 to be transferred into private ownership
before the end of this year.  All the remaining  public hotels should be privatized before the end of the
year 2000. Foreign investors are very welcomed in the Egyptian privatization programme either asWT/TPR/M/55
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portfolio foreign investors or as strategic partners.  Many foreign investors have bought and are still
buying public enterprises and hotels.
The Egyptian privatization programme is an important integral part of the Egyptian economic
reform programme.  The Egyptian Government will continue privatizing most public enterprisesproducing commodities and services.
It also starts to privatize banks, insurance co mpanies and public investments in utilities and
infrastructure.
Until today, 124 big public enterprises were completely privatized through IPO's, strategic
investors, and ESAs or through asset sales.  48 enterprises are offered for sale this year (1999) tostrategic investors.  All our remaining public enterprises will be privatized through the year 2000 and
2001.
III. INTERNATIONAL STANDARDS
(i) Advance written questions
1. Canada
With reference to Chapter 3, section 2, sub-section xiv, how does Egypt view harmonization
of product standards with accepted international norms?  Is there more that could be done to promote
such harmonization?
2. New Zealand
What is the process for reviewing an Egyptian standard?  How many mandatory standards
have been reviewed and altered since 1 January 1995?  Do other WTO members have the opportunity
to submit comments during the review?
Have the Egyptian authorities identified the need for further technical assistance from other
WTO members in reviewing and updating elements of the standards regime. In what ways has
previous technical assistance, such as the 1997 USAID Review of Selected EOS Food Standards, beenuseful to Egypt in this area?
Can the Egyptian authorities advise what differences exist between the standard for frozen
meat and the standard for chilled meat, and explain why these differences exist.  We are also
interested to know whether chilled meat undergoes a different inspection procedure to frozen meatand if so what the rationale is for the different treatment?
We note that in 1997 there were approximately 1,000 standards, of which 107 were
mandatory.  Have the Egyptian authorities considered moving to a simpler standards regime, where
standards regulating  individual foods are replaced by more general standards applying across a
range of producers similar to the regime used by  ANZEA?  If so, what conclusion was reached ?
We note that "only 25% to 30% of Egyptian st andards conform with international standards".
We also note the emphasis the WTO TBT Agreement places on the adoption of relevant international
standards.  What strategies are the Egyptian authorities employing to raise the percentage ofEgyptian standards which are comparable with international standards?
We are pleased to note that the Egyptian authorities have committed to a "greater emphasis
on bringing Egyptian standards up to international levels".  Can Egypt please advise what percentageWT/TPR/M/55
Page 33
of the standards which it has adopted or altered since joining the WTO has been notified under the
WTO SPS or TBT Agreements?
We note that Egyptian Standard No's 1522 (Frozen Meats) and 1473 (Frozen Liver) were not
subjected to the WTO notification process.  In this context and with regard to the requirements of theWTO SPS and TBT Agreements, could Egypt provide an explanation of the technical and scientific
justification for parts 3/1/2, 3/2/3, 3/2/8, 3/2/ 9, 3/2/11 and 4/6 of Egyptian Standard No. 1522, and
parts 3/1/2 and 4 of Egyptian Standard No. 1473, and relate these explanations to the corresponding
internationally adopted standards and norms, such as those offered by Codex or the ISO?
Could the Egyptian authorities please explain why the Egyptian Standard for Labelling of
Meat Products is significantly more stringent than both the relevant international standard and thecorresponding standards in other major Middle East economies?
3. Australia
The Secretariat  report mentions (at pages 47 and 48) that Egyptian standards most often
differ from international product standards and that only 20 per cent of new standards since 1992
have, on average, been equivalent to ISO or IEC standards.  Does Egypt have a policy of moving
towards international standards?  Are there mechanisms by which the relevant ISO or IEC standards
are reviewed or considered when establishing new Egyptian standards?
4. Switzerland
We applaud Egypt's efforts to align Egyptian standards with international standards.  With
regard to existing standards, could we have further information on Decree 180 which stipulates that
Egypt  may recourse to the international standards of five identified countries? Has Egypt signedspecial agreements with these countries? According to the Secretariat report, only 25% to 30% of
Egyptian standards conform to international standards. Does Egypt plan to harmonize a higher
percentage of its national standards with international standards in accordance with the provisions of
Article 9 of the TBT Agreement ?
5. Japan
It is reported that where there are no specific Egyptian standards, the national standards of
certain countries can be used.  Please explain the procedures to determine which standards to be used
by a country.
6. Hong Kong, China
(WT/TPR/S/55, PP.47-48, Paras.62-68)
We note that only a relatively small portion of the Egyptian standards (25 - 30% out of about
1,000 standards) conforms with international standards.  Bearing in mind the potential trade
restrictive effect of standards, we would like to know whether the Egyptian authorities would speed upthe pace in adopting international standards so as to facilitate exporting economies to conform with
its product requirements.
The Egyptian Organisation for Standardization and Quality Control (EOS) issues quality
marks to local industrial products conforming to specific standards.  We would like to know whetherthe scheme is voluntary and whether imported industrial products can also apply for the quality
marks and, if yes, whether local and imported products are subject to the same standards.WT/TPR/M/55
Page 34
(ii) Reply
Several questions were raised regarding harmonizing Egyptian standards with international
standards and the pace with which Egypt moves towards promoting the process of harmonization.
More questions were raised by Canada, New Zealand, Australia, Switzerland and Hong Kong, China.
We should be aware of the fact that Egypt has started with standardization activities in the
year 1957 (since the establishment of EOS) and a large number of Egyptian standards need to be
reviewed. This requires efforts and time. We are convinced of moving towards harmonization for a
number of reasons among which to attract high te chnology, facilitate trade and promote  exports.
The Egyptian policy in this regard is based on the following:
1. For setting new standards, the basic references are the international standards.2. For reviewing national standards, international standards are also basic references.
3.  In the absence of the Egyptian mandatory standards, the Ministerial Decree N° 180/96 allows
the application of international standards.
4. EOS applies also the TBT code of good practices as well as ISO/IEC directives.
In addition to the above, Egypt has exerted efforts to educate the industrial sector by
disseminating relevant information, providing necessary training and arranging for specialized
seminars. These efforts could be enhanced through the following:
(i) Providing technical and financial assistance to participate effectively in developing
international standards.
(ii) International standardization bodies should take into account the work programmes
submitted by developing countries in the WTO in its standardization process.
(iii) The exchange of experience among WTO members in the process of harmonization.
Upon recognition of the need for reviewing standards, the EOS starts the process according to
the following steps :
- Study and review the standard by the relevant technical committee in the EOS, which
issues a new draft standard.
- Circulation of the draft standard to the st akeholders for comments within a  minimum
period of 60 days.
- Technical Committee examines the comments received. In the case that those
comments would significantly  alter the draft standard, it is recirculated among the
stakeholders for an additional period of 60 days for further comments.
- The final draft is then presented to the EOS council for final approval.
WTO Members may submit comments during the review.
A total of 54 standards have been received since January 1995.We are currently relying on our domestic resources in this process. If any technical assistance
is required at a future date, we will seek such assistance from the international community.WT/TPR/M/55
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Egypt did not issue a standard for chilled meat. The Ministerial Decree 180/1996 can be
followed in this case, provided that the technical regulations concerning the shelf life and labelling as
well as any sanitary requirements applied to meat in general are respected.
It seems that numbers had been misprinted. The correct numbers are: 4000 standards, 10% of
which are mandatory. The Egyptian standard regime is conforming with the international code of
good practice and most of the international requirements are followed. Regulations concerning food
products are currently under review.
About 1% of the standards issued since joining the WTO has been notified under the WTO
TBT Agreement.
Although  both standards ES 1522 and ES 1473 related to frozen meat and frozen liver have
been issued in 1991 and 1990 respectively, i.e., well before the WTO Agreement, the following
justifications are given:
Frozen meat standard ( ES1522)Item 3.1.2 Hormones
Item 3.1.3 Residues of Antibiotic
Justification:
These items have been specified according to the relevant decrees issued by the Ministry of
Agriculture to ensure that meat is free from the residues of hormones and antibiotics taken by animals
before slaughter.
Item 3.2.8  Specification of fat percentage( Direct consumption - Processing).
Justification:
Fat is considered a storage for hormones, antioxidants and residues of drugs taken by animals
before slaughter.
Fat it a fast degenerated material.
Fat is a hard digested material of high melting degree. A high percentage of fat precipitates in
the human body and therefore results in great harms to human health.
Item 3.2.9 Shelf life
Justification:
A long storage and handling period for meat leads to possibilities of spoilage and decrease in
the nutrition value of meat.  Shelf life has been specified taking into account the storage and handling
period, in addition to the climatic conditions and high temperature.
Item 4.6 Percentage of total volatile nitrogen
Justification
The existence of these components comes as a result of the decomposition of the protein of
the tissues of meat due to long storage and handling period in addition to climatic conditions of
preservation and handling.WT/TPR/M/55
Page 36
Frozen liver standard ( ES 1473)
Item 3.1.2 Hormones
Justification
These items have been specified according to th e relevant decrees issues by the Ministry of
Agriculture to ensure that meat is free from the residues of hormones and antibiotics taken by animals
before slaughter.
Item 4  specifications1. Specification of the percentage of total volatile nitrogen.Justification
A long storage and handling period for meat leads to possibilities of spoilage and decrease of
nutrition value of meat. The validity period has been specified taking into account the storage and
handling  period, in addition to the  climatic conditions and high temperature.
2. Microbiological requirementsJustification
These requirements have been fixed by the concerned health authorities to ensure suitability
of liver for human consumption and to protect human beings from infection and harmful diseases.
Decree 180/1996 states that without breaching the provisions of the Decree  179/1996 pertaining to
mandatory standards, any product or commodity must be conforming to one of 6 specific standards:
Egyptian standard
ISO/IEC standards
EN standards, and if not available BS,DIN, or NF standards could be used
American national standardsJapanese industrial standard
Codex standards
This decree allows producers or importers to bring products that conform with any of these
standards (after a statement by the producer), provided that this product is not listed in Decree 179obliging conformity with Egyptian standards.
Egypt has autonomously taken this measure without special agreements with any of these
countries.
The Egyptian quality mark scheme is voluntary, any producer may apply for the licence to
affix this mark on his products. It is usually used for promotional purposes and represents a
recognition of the high level of product quality and confidence in the quality system.  Of course,
imported products can apply for the quality mark, and in this case they will be subjected to an
assessment by EOS identical to that carried out with domestic producers.WT/TPR/M/55
Page 37
IV. GOVERNMENT PROCUREMENT
(i) Advance written questions
1. Canada
With reference to chapter III, section 4, sub-section v, is Egypt considering joining the WTO
Agreement on Government Procurement?
How does Egypt ensure that suppliers have information on individual procurements?  Does
Egypt publish:
- Procurement notices?
- Information on applicable laws, regulations, policies?- Evaluation criteria?
- Information on awards?
2. European Union
Egypt is not a signatory to the WTO Agreement on Government Procurement.  Procurement
by the Egyptian Government is currently governed by the Tenders Law 89 of 1998, which replaced
Law 9/1983.  This new law is an improvement on the previous legislation but it continues to provide
considerable discretion to governmental departments to limit procurement to selected suppliers.  In
addition, in all procurement, a 15% price reference is given to Egyptian bidders which givessubstantial advantages to Egyptian bidders over foreign suppliers.  Does Egypt consider joining the
GPA and bring its legislation into line with this Agreement?
3. United States
Egypt's new Tenders Law 89 makes several important improvements over previous laws.
However, it continues to allow government contracts to be awarded, when the Prime Minister
determines that it is "necessary", without publication or competitive bidding.  Contracts can also be
awarded in that manner when there is a "jus tified decree" by the competent authority.
Please provide the following clarifications on the Tenders Law.  In particular:
- Does the Egyptian law or specified regulations define under what conditions the
Prime Minister may determine that a closed, non-competitive contract award is
"necessary"?  Does it define what constitutes a "justified decree" on the part of
another procurement authority?
- What percentage of the Egyptian Government's total annual procurement is
conducted without publication or competitive bidding?
- When a procurement authority decides to award a contract without publication or
competition among potential suppliers on the basis of a "justified decree", is itrequired to publish that decree?  If so, where?
- Has Egypt assessed the costs to the Government, in terms of potentially higher
contract prices or lower technical quality of goods or services purchased, of
conducting procurement through closed, non-competitive procedures?
- Does Egyptian Law require that tenders conducted under limited tender, local
tender, direct agreement and limited practice (negotiations) be advertised in dailyWT/TPR/M/55
Page 38
newspapers in Egypt and abroad.  If not, what are the publication requirements for
such tenders?
- Paragraph 157 notes that "[l]imited tenders are applied in cases where the nature of
the product requires participation by selected suppliers in Egypt and/or abroad.How is it determined that the nature of the product requires participation by selected
suppliers?  Is there a list of definition set out in Egyptian laws or regulations?
- Paragraph 158 states that "[i]n urgent and exceptional cases, contracting can take
place through direct agreement …".  Is there a definition of what constitutes "urgent
and exceptional cases" or is a list of examples set out in Egyptian laws or
regulations?
Have regulations implementing Tenders Law 89 of 1998 been promulgated, and if so, when?Egypt does not currently have a process that would allow suppliers to challenge specific
procurement decisions.  In the absence of a bid challenge process, does Egypt have procedures forensuring that procurement authorities are held  accountable for the proper implementation of
procurement laws and regulations?  What is that process?
(ii) Reply
Egypt is not a party to  the Plurilateral Agreement on Government Procurement, however the
new Law No. 89/1998 which replaced  Law No. 9/ 1983 has included provisions guaranteeing
transparency for both local and foreign bidders, as well as many positive aspects reflected in the
Secretariat report. It is worth noting that Egypt is participating actively in the Working Group on
Transparency in Government Procurement.
V. EXPORTS
(i) advance questions
1. New Zealand
We note that Egypt's share of world exports has dropped to 0.07%. What strategies have the
Egyptian authorities devised te promote new Egyptian exports?
(ii) Reply
The monitored decline in Egyptian exports thr oughout the past two years could be attributed
to the circumstances facing the Egyptian traditional markets, namely in South Asia and Eastern
Europe and even some Arab countries, in addition to the deterioration of petroleum prices which
represents 50% of the Egyptian exports.
Egypt thus developed a scheme to promote its exports mainly through concluding a number
of free trade agreements and establishing free-trade areas on the bilateral or regional levels.
Egypt is laying great importance on the necessary rehabilitation of the industrial sector aiming
to raise its competitiveness and improve the exporting infrastructure, especially in the field offinancing, marketing and transportation.WT/TPR/M/55
Page 39
It is worth noting that Egypt is currently facing problems in the field of market access
especially what concerns Egypt's exports to some countries using technical barriers to trade and
sanitary and phytosanitary measures to hinder the flow of these exports to their markets.
VI. IMPORTS
A. MINISTERIAL DECREE 619
(i) Advance questions
1. New Zealand
Can the Egyptian authorities, please clarify the current scope of Ministerial Decree 619.  In
particular, we are interested to know which goods are currently exempted from the decree and in
what situations the decree is applied?
2. Republic of Korea
In paragraph five of summary observations, it is mentioned that frequent modifications to
trade related legislation including recent changes that require imports to be shipped directly from the
country of origin, reduce predictability in government policy and may create uncertainty among
traders. Enhanced transparency with respect to laws and regulations would help consolidate the
considerable gains achieved in this  area since the previous Review.  It would be appreciated if theEgyptian delegation could comment on this formulat ion and elaborate on measures being undertaken,
or those under consideration, with a view towards improving this situation.
3. Switzerland
Requiring certificates, such as certificates of origin to prove that imported goods come
directly from their respective countries of origin, as well as some bureaucratic procedures constitute
technical barriers to trade and have effects contrary to the prevailing WTO spirit of openness .  What
measures does Egypt plan to implement  in order to  counter these trading constraints? What are the
reasons for requiring certificates? For what products are they required?
4. United StatesPlease provide clarification on Decree 619 of 1998.  In particular, we would like to receive:
- the government's rationale for implementation of this decree;
- a copy of the government's notification to  exporters on what specific products are
covered by the decree and thus prohibited from entry unless shipped directly from
point of origin with an accompanying certificate of origin;
- a copy of the rules of origin which are applicable in preparing certificates of origin.
Prior to the November 1998 issuance of Ministerial Decree 619, Ministerial Decree 553 of
October 1998 required that all goods be clearly labelled and carry a "certificate of origin".  The
Secretariat's report [III(2)(i)(8)] describes what  documentation must accompany all goods imported
into Egypt, but it does not include the requirement of a "certificate of origin".  We understand thatEgypt has not published non-preferential Rules of Origin or notified non-preferential Rules of Origin
to the WTO.  Please confirm our understanding that Egypt does not have a method by which
importers and exporters can obtain assessments, in advance of trade being conducted, of the originWT/TPR/M/55
Page 40
that Egypt would accord to a good – contrary to Egypt's obligation under Article 2(h) and
paragraphs 3(d) of Annex II of the Agreement on Rules of Origin.
The Secretariat reports that a February 1999 clarification of Decree 619 exempts goods
shipped from the producing country through a tr ansit port and goods assembled from intermediate
products produced in different countries. We would welcome receipt of the document which provides
this clarification and an explanation of the  effect of this clarification on the application of Article 619
by Egyptian customs authorities in   light of the fact that U.S. exporters continue to experience
difficulties in shipping products to Egypt that would appear to benefit from this "clarification."
We understand that a further  regulation regarding certificates of origin required under
Decree 619 was implemented in April 1999.  Could you please provide a copy of that regulation andexplain its purpose.
The Secretariat's report [III(2)13] indicates that the Government has commenced a pilot
scheme for pre-shipment inspection (PSI), although we had understood that the Government of Egypt
had decided not to proceed with such a system.  Please explain the purpose and operation of the pilotPSI regime.
The Secretariat notes that the Government of Egypt (III(2)15) imposes a service and
inspection charge of 1% of the c.i.f. value on all imports and an additional service charge of 2% or
3% on goods subject to import duties of 5% and above.  Please confirm our understanding that thisfee does not reflect the approximate cost of services rendered, or explain otherwise, including how
such a fee was calculated in terms of th e approximate cost of services rendered.
5. European Union
Decree 619/98, (p. 32 secretariat document) introduced by Egypt last year, imposes a direct
shipment requirement for a wide range of consumer goods and makes obligatory the legalisation of
certificates of origin. The requirement for "direct shipment" of consumer products to Egypt from the
"originating country" causes serious problems for exporters whose international distribution
channels are organised on the basis of rationalised cost-efficiency criteria.
The EC considers that the direct shipment obligation, which prohibits shipments from
countries other than the country of origin, is in contravention with Egypt's international commitments
and in particular with the principles of most favoured nation treatment and the obligation not to
resort to quantitative restrictions at the border set out in Article I and XI of the GATT Agreement.
Therefore the EC requests Egypt to abolish the direct shipment requirement.
6. Hungary
On Ministerial Decree 619 requiring that all imported consumer goods be shipped directly
from the country of origin to Egypt:  we would be  interested to hear from the delegation of Egypt
about the justification of this measure, the policy objectives they wish to achieve by applying it andwhether this measure is the least trade distortive in effect that could be used in pursuing the policy
objectives.  We also would be interested to kn ow, how long Egypt intends to apply the Decree and
whether there are plans to change the regulation on rules of origin, in particular Decree 619, in the
coming period.WT/TPR/M/55
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(ii) Reply
Providing a certificate of origin is a basic and legitimate requirement for customs clearance
and is an essential  prerequisite to accord a certain preferential treatment.  Thus a certificate from the
country of origin documented and legalized is required.
Consumer protection, avoiding importation of goods of unknown origin or forged,
circumvented products was the main justification fo r the shipment of consumer's goods directly from
the country of origin.
These rules are applied to imports of consumer goods from all countries without
discrimination, as there are no WTO specific rules of origin as yet, Egypt considers to revise its rulesin this concern upon the formulation of a WTO rules of origin .
Taking into consideration that a certificate of origin is usually an acknowledged one as long
as it is legalized from the exporting country's  authorities and it doesn't go through any channels of
verification if all the data concerning the shipment were identical to the data stated in the certificate .
It is also to be noted that until now Egypt doesn't apply any special procedures concerning
rules of origin as there are still ongoing negotiations within the WTO to elaborate such rules. Thus the
main reason reflecting the importance of the  certif icate of origin is the determination of the final
producing country, as for the assembling industry the final producing country  has to be stated.  Thegoods are classified according to the national classification formulated by the Central Body for
Statistics, as for the consumer goods, it is governed by the prevailing statistical classification.
A number of products in this category such as, medicine, vaccines, medical equipments,
pesticides, etc. are exempted from the application of this decree due to the fact that we can ensure the
authenticity of such products.
B. T
ARIFFS
(i) Advance written questions
1. Australia
We congratulate Egypt on its progress with tariff reform since the last review. The fall in the
simple average applied MFN tariff from 42.2% in 1991 to 26.8% in 1998 represents significant
liberalization. There are, however a number of tariff peaks in some industrial sectors and according
to the Secretariat report, 12% of tariffs exceed their bound rate.  Are there any plans to  bring thesetariffs  back down within  their  bound rates?
2. Switzerland
While the average applied MFN tariff is well below the average bound rate, tariffs on a
number products are applied in excess of bound rates (this seems to be the case for some 12% of tariff
lines, according to para 31 and following and of para 10 of the summary observations).   Which
provisions of GATT are those excessive rates based on?
In 1994, a "Customs user fee" or "surcharge" of 2-3 % was introduced. Originally, the
intention was to abolish the surcharge altogether with by 1995, but until now this has not happened.
What are the reasons and justifications for the Egyptian Government to continue to surcharge? For
when is their abolition envisaged?WT/TPR/M/55
Page 42
In 1996, Egypt informed about reserving its  right under Art. XXVIII of GATT to modify its
schedule of concessions, beginning from 1 January 1997 (see paragraph 34).  Is Egypt envisaging to
do so for the next three-year period?  Other contracting parties have, in turn, the right to  modify, in
accordance with the same procedures, concessions initially negotiated.  Were there any reactions in
that sense, i.e. which concessions  we re modified, on what terms, and by whom?
While there are  (for religious reasons) prohibitively high tariff rates on alcoholic beverages,
it seems - as stated in the Secretariat's report (see para 27) - that similar locally  produced products
are not subject to equivalent high taxes, whereby  the intended effect on consumption of such
beverages becomes questionable and a discriminatory effect on the source  of the beverage (country
of origin of the producer) would be evident .  Could the Egyptian delegation elaborate on that ?
3. Hong Kong, China
We note that, to counterbalance the tariff reductions, a flat 1% "customs service fee" is
charged on all imports since 1993, and since 1994 a 2% or 3% surcharge is levied respectively for
imports subject to customs duties of 5% 29% or  30% and above.  We understand that the Egyptian
Government had originally intended to abolish the surcharge altogether by 1995, but has until now
not yet done so.  We would like to know the Egyptian Government's latest plans for abolishing the
surcharge.
4. United States
The Secretariat reports that 12% of tariffs have applied rates in excess of their bound rates.
For example, Egypt exceeds its bindings on applied tariffs for several dairy products of interest to the
United States.  Could the Egyptian delegation please advise us of his government's plans to bring
applied rates into compliance with Uruguay Round commitments?
According to paragraph 72 of the Egyptian Government Report, the maximum tariff now
stands at 40%, with the exception of motor vehicles and parts, alcoholic beverages and tobacco
products.  However, it is our understanding that the tariff for poultry is currently set at 70%.  Egypt's
use of a minimum reference price for poultry, raises this 70% rate to an effective tariff rate well
beyond Egypt's bound tariff rate for this product.  What are Egypt's plans to bring this rate within its
tariff bindings?
5. Japan
It is reported that in addition to the statutory MFN rate, a flat 1% fee for the services
provided by Customs is charged on all imports, and t hat a 2% or 3% surcharge is levied for imports.
Should such charges be considered as additional customs duties rather than services charges? (para
23, p 33, of the Secretariat Report)
Some products, such as alcohol beverages and passenger cars, are subject to high import
tariff rates.  Does Egypt have any intention to reduce tariff rates on these products? (para 27, p.34, ofthe Secretariat Report)
It is reported that alcoholic beverages are subject to prohibitive import tariff rates.  What is
the actual rate of domestic taxes on these products?
6. European Union
The EC is very concerned at Egypt's apparent violation of its WTO tariff bindings and the
secretariat's TPRM report confirms (p. 38) that the applied basic tariffs exceed WTO bound tariffs for
12% of the tariff, or some 704 HS positions.  The Commission is systematically verifying theWT/TPR/M/55
Page 43
compliance of WTO Members with their bound tariff schedules.  A comparison between WTO bound
rates and applied rates for the situation after 30 June 1999 (date of entry into force of Egypt's WTO
obligations) would result in over 1000 HS positions where Egypt's applied base rates violate its
bound tariffs, unless Egypt reduces its tariffs.  The bound tariff violations are concentrated in very
important sectors of EC exports, notably in the dairy, poultry and food preparations sectors inagriculture and in the chemicals, metals and machinery sectors in the industrial sector.
Egypt also applies a customs surcharge of 2% of the value of the consignment if the   rate of
duty applicable is between 5% to 30% inclusive, or 3% of the value of the consignment if the rate of
duty applicable is over 30%.  The surcharge has not been listed in Egypt's tariff schedule and
therefore would appear to be a new surcharge applied in violation of Article II.1 b) of GATT. The
same applies to the 1% service fee applied by Egyptian customs.
Does Egypt have the intention to bring its applied tariffs into line with its tariff schedule?
(ii) Reply
Egyptian  schedules of concessions  within the WTO became an integral part of the Egyptian
legislation and are applied accordingly, it is to be noted that if the currently applied tariff is below the
bound rate, Egypt thus applies the low rate according to the MFN treatment.
Taking into consideration that if tariffs were to exceed the bound rate, Egypt is committed to
apply the bound tariff rate illustrated in its schedules of concessions. The importer's right to raise a
complaint in case of the violation of the bound tariff rate is preserved by law. As far as the case of
poultry is concerned, Egypt applies the rate agreed upon in accordance with its commitments in the
field of agriculture, and which will be reduced gradually to reach 60%.
As concerns the so-called  customs user fees, we would like to clarify that Egypt collects fees
against  services rendered i.e. it is not a tax or customs duty.
C. P
ACKAGING AND LABELLING REGULATIONS
(i) Advance written questions
1. Australia
Egyptian packaging and labelling regulations are restrictive.  The Secretariat report notes (at
pages 49-50) the extensive labelling requirements for poultry and meat imports, including that the
name and address of the importer is required to be listed inside the meat packaging . We urge Egyptto review these requirements with a view to bringing down the costs of exporting to Egypt, while
preserving the health and customs objectives of the regulations.
Are there any processes of review currently in place or planned for the future?
2. Republic of Korea
The Secretariat's report mentions in paragraph 9 on page 30 that for textiles, the name of the
importer and country of origin must be inscribed on the selvage of the fabric if the cloth is 30 meters
long or more.  What is the rationale for requir ing that the importer's name be indicated every 30
meters?  Doesn't this requirement create an unnecessary obstacle to trade, which will incur high cost
to domestic consumers as well as traders?WT/TPR/M/55
Page 44
3. Switzerland
Would it be possible to have further information on labelling requirements and in particular
the requirements on packaging of products?
4. European Union
Egypt ended its import ban in the textiles sector on fabrics on 1 January 1998 but introduced
on the same date extremely burdensome labelling requirements.  These included an obligation to
mention the name of the importer on the selvedge of every thirty meters of imported cloth (p. 30).
Similar requirements apply in other sectors such as foodstuffs, glass and ceramics.  In December
1998, the Egyptian authorities issued a new circular (No. 12/98,which immediately entered into force)which revived old labelling requirements for all products.  A strict implementation of these measures
would make trade virtually impossible.
5. United States
We are interested in the basis for Egypt's labelling requirements on imports of meat and
poultry (WT/TPR/S/55/page 53, section 77).  We note that in its WTO notification of this measure
(G/TBT/Notif.98.127), Egypt justifies its new labellin g regulations in terms of consumer protection,
although they appear to be aimed at preventing customs abuses.  Egypt's labelling requirements add
significant cost to imports and are unprecedented elsewhere.
(ii) Reply
It is noted, in the international market for meat and poultry, there have been many cases
where circumvented  documents have been used, by either importers or exporters. These incorrectdocuments have been used to circumvent regulations on imports from some countries of origin. This
circumvention has forced several countries to halt importation from some countries, and in addition to
stop dealing with some companies. It was found necessary to apply measures  to ensure the protection
of Egyptian consumers. It is also necessary to  protect the Egyptian consumer from the injurious
effects of this practice, and ensure the supply of meat to the consumer in accordance with their
religious beliefs. These requirements comply entirely with the provisions of the Agreement on
Technical Barriers to Trade (Article 2-2).
Labelling requirements are not new, but the methods of labelling are new. It has been
established by examination that the present labelling system using  labels on the exterior of the
packing is subject to deception whether by the producer, exporter or importer.
This use of deceptive labels has resulted in serious consequences for consumers, raising the
risk of the spread of diseases such as BSE. The perception of consumers is that deceptive labelling of
meat is disrespectful of Islamic religious beliefs.
It is clear that writing the importer's name is a significant procedure to guarantee that the
imported meat belongs to certain importers from the start of the slaughter process.WT/TPR/M/55
Page 45
D. CUSTOMS
(i) Advance written questions
1. Hong Kong, China
We note that between 1992 and 1997, the number of appeals against customs decisions
increased from 1,248 to 2,929, and the percentage of  settlement by primary arbitration dropped from
74% to 51 %.  We would like to know the reasons for the drop in the percentage of settlement by
primary arbitration.
2. Japan
(para 14, p.31, of the Secretariat Report)
Does Egypt intend to fully implement the Agreement on Customs Valuation as of
1 January 2000 when the transitional period ends?
3. European Union
Customs duty assessment is not transparent and rates charges are subject to arbitrary
decisions taken by customs officials.  Under-invoic ing of the "Egyptian selling price", on which the
tariff rate is based, is assumed by the customs of ficials, who then increase customs values by 10 to
30%.  In the automobile sector, it has been reported that Egyptian customs officials have used end-user prices in the Community (as published in auto magazines) which include VAT and other taxes as
the "Egyptian selling price", and then levied duties on this inflated price.
4. Romania
The number of appeals against customs decisions between 1992 and 1997 are reported in
Table AIII.1, page 113.of the Secretariat Report.  Please explain which are the main goods subject of
appeals against customs decisions as well as the reason of the increase, more than twice, of the
number of appeals against customs decisions.
5. United States
How does Egypt plan to comply with its responsibilities under the Customs Valuation
Agreement, which requires that Egypt phase out the use of minimum reference prices by the end of
1999?  It would be helpful if Egypt could also explain its justification for claiming an additional
three-year delay in its full implementation of the agreement (WT/TPR/S/55/page 31, section 14).
The Secretariat reports [III(2)(I)10-11] that Customs decisions may be appealed.  Complaints
regarding customs inspection procedures and results must be made in writing within 72 hours, and a
decision must be taken by the government committee within 48 hours.  While complaints regarding
customs valuation must be submitted in writing within 72 hours, there appears to be no deadline by
which the Government must respond to these complaints.  Please confirm and if there is nogovernment deadline, please advise what plans the Government has to institute one.
According to the Secretariat's report [III(2)(ii) 15], the transaction value forms the basis for
customs valuation under Egyptian legislation.  The valu e is determined by the c.i.f. price of the good
at the date of registering the customs statement.   We understand that in practice, however, tariff
valuation is based on either the world wide price list received annually from foreign
producers/distributors, or if that is not available, the Customs Authority takes the highest price of the
product available in the local market.  We further understand that Egyptian customs often assume
under-invoicing.  In these cases, customs authoriti es may add from 10% to 30% to the invoice valueWT/TPR/M/55
Page 46
of imports for customs valuation purposes.  What is the legal basis under which such additions are
applied to the transaction value presented by importers?
(ii) Reply
There should not be horizontal judgment because of the differences among cases the
complexity and simplicity differs from one case to another.
As for the application of the Customs Valuati on agreement, Egypt is committed to implement
fully the said agreement after the termination of the transitional period.
As for the inquiry concerning the reduced rate of settled appeals, consideration should be
given to the settlement of such appeals and decisions taken in the final phase. The increasing number
of appeals could be attributed to the augmentation of imports and the increase in the number of
importers, which resulted from trade liberalization and lifting import bans. In addition the customs
disputes are not restricted to a certain type of products or a specific customs procedures.
E. NATIONALITY OF IMPORTERS
(i) Advance written questions
1. United States
Document [III(2) 6] states that according to Egyptian Law 121/1982, all registered importers
must be Egyptian nationals.   What is the reason behind this requirement? Does this law apply to both
individuals and corporations?  Is a foreign corporation manufacturing in Egypt not allowed to
import?  Is a foreign corporation which wishes to distribute or sell at retail in Egypt not allowed toimport?  Is an individual who wishes to sell at retail or distribute in Egypt not allowed to import?
2. Hong Kong, China
The laws of Egypt require that all registered importers must be Egyptian nationals and fulfil a
number of other conditions.  We would like to know the rationale for such restrictions and whether
the authorities have any plan to remove the restrictions.
(ii) Reply
The current legislation permits foreigners to import production requirements for their projects
whether operating in the field of goods or services, as well as the related tools, machines or capitalgoods.  They are permitted as well to sell their products locally or in the foreign markets.  The only
field where foreigners are not allowed to operate is the field of importing and dealing with goods.
This aimed at regulating and organizing the dealings in the local  market.
F. L
ETTERS OF CREDIT
(i) Advance written questions
1. Republic of Korea
According to recent publications, as of March 1999, banks providing letters of credit to
importers require a 100% cash collateral rather  than the 10% previously required for consumer
products, intermediate goods and inputs (paragraph 7 on page 30 of the Secretariat's report). TheWT/TPR/M/55
Page 47
Egyptian Bank's aim in drastically raising the requirements for the letters of credit is to restrict
imports, then this would be in violation of WTO principle such as elimination of quantitative
restrictions.  What is the purpose of this restriction?  It would be appreciated if the Authorities could
elaborate on its rationale, and also consider reducing it.
The above mentioned measures are permissible only when it is recognized by Article XII
(restrictions to Safeguard the Balance of Payments) that the country's external financial position and
its balance of payments need safeguarding.  If the aforementioned measures concern only specific
items or apply in an uneven manner, they may not be permissible at all.
2. United States
Please provide clarification of the Governm ent's requirement that in order for banks to
provide letters of credit to importers, a 100% cash collateral is required, rather than the 10% deposit
previously required for consumer products, in termediate goods and inputs.  We would welcome
receipt of the instruction from the Central Bank on this requirement.
3. European Union
This requirement (p. 30) has been the subject of complaints of EC operators.  Obviously there
is not much point in obtaining a letter of credit if it has to be entirely covered by a cash deposit.  Are
reports and complaints about this measure correct?  What is the legal basis for such a measure?What is the reason for this measure?
(ii) Reply
There are no directives from any source to prohibit banks from financing imports of any kind
or from any country. Importers normally have access to different means of finance in cases where
banks hesitate to cover L/C for risky operations.
G. Q
UALITY CONTROL INSPECTION
(i) Advance written questions
1. Republic of Korea
According to Article 83 of the Import and Expo rt Regulations, a number of imported goods
are liable to quality control inspection.  The authority concerned is entitled to examine a random
sample of 1% of the total  number of packages in each consignment and up to 2% of the contents of
the chosen packages, if the chosen samples are not in conformity with regulations, the Authority may
search up to 2% of the remaining number of packages in the sample before rejecting a consignment
(paragraph 16 on page 31 of the Secretariat's report).  How often do the authorities act on this
entitlement to select certain packages for 2% inspections and furthermore, what criteria is used in
making these selections for inspection?
It is quite remarkable that the Customs Administration has stepped up efforts to improve
inspection and clearance activities (paragraph 17 page  31). This evolutionary  improvement implies,
to us, that Egypt has an overall strategy for co ntinued improvements in this area. Could the
delegation indicate to us what potential areas it sees as providing room for continued progress?WT/TPR/M/55
Page 48
2. Switzerland
Switzerland welcomes the easing of customs tari ffs and quantitative restrictions, in particular
in the early 1990's. Nevertheless, we note that the list of import products subject to mandatory quality
control has been increased (from 69 products to 182 in 1998). This concerns a very large range ofproducts for which it has not been possible to obtai n information as to whether similar measures are
applied to equivalent, locally-produced products.  Would it be possible to have further information on
this subject? How are these measures compatible with Article III of the GATT 1994 and the TBT
Agreement?
3. Hong Kong, China
We note that probably as a result of the lowering of tariffs and quantitative restrictions, the
list of imports subject to mandatory quality cont rol has increased by over 160% during 1992 to 1998
(expanded from 69 items in 1992 to 182 items in 1998) .  There is, however, no information on whether
the same quality control measures are applied also to domestic products.  We are concerned about
any discriminatory trade effects of the quality co ntrol measures on imported products.  We would like
to hear the Egyptian authority's comments on these observations.
4. European Union
European exports of ceramic tiles to Egypt are hindered by complex technical requirements
which are frequently modified.  Under article 74 bis (d) of Ministerial Decree 16/1993, only first
quality tiles can be imported.  This decree also imposes burdensome labelling requirements. Further
problems are posed by regulations on normalizat ion (document N.E. 240/271-1988) which, for
example, set very tight limits for water absorption.
5. Hungary
What is the  justification of this measure, how in the Egyptian delegation's view it is in
conformity with Egypt's commitments under the TB T Agreement?  What is the underlying policy
objective for applying this measure?  Are there similar measures applied to the same or like domestic
products?  If not, why not?  Why and on what basis are products otherwise subject to quality control
requirements are exempted from inspection if imported for industrial use?  What is the justificationfor charging different inspection fees based on the end user of a particular product? (As we
understand for a number of goods imported for industr ial use the fee is lower than what is charged
for the same product to be sold through retail trade.) According to paragraph 70 of Part 111 of the
Secretariat Report Egypt is currently reviewing the mandatory quality control system.  What is the
objective of reviewing the system.  When does Egypt expect to complete the review?
6. Czech Republic(A quality control question concerning whether there is  discrimination between the imported
products and its like locally produced goods in this field.)
7. United States
Egypt has substantially expanded the number of items that are subject to quality control
measures as noted in section [III(1)4].   We are interested in an explanation for why Egypt has chosennot to use existing international standards.
Are like domestic and imported products on the "quality control list" subject to equivalent
quality control restrictions in Egypt?WT/TPR/M/55
Page 49
Egypt has cited consumer protection (WT/TPR/G/ 55/page 17, sec.88) to justify bans on beef
imports with an arbitrary fat content of greater than 7%, excessive labelling requirements, and a ban
on transshipped goods, as well as other restrictions.  It would be useful to understand how Egypt's
definition of consumer protection and its use of these non-tariff barriers are consistent with WTO
guidelines.
(ii) Reply
As for the question concerning the means of samples selection for inspection purposes,
samples are taken for verification in accordance with the international standards in this concern.
As for the country's policy of raising the standards of performance in the field of procedures
control, this is being tackled through the enhanc ement of the human capacities of the inspection
personnel who takes their training in developed countries, as well as refining the labs through setting
schemes for its modernization and accreditation internationally.
As for the implementation of quality control rules related to imported goods, which are
subject to quality control, international standards applying to the local products prevails.
As for the question inquiring about the increase in the items subject to quality control and
whether it is applied to the like local products, it is worth noting that the increase in the number of
items for inspection purposes is attributed to trade liberalization of most of the products, whichentailed in turn adding the liberalized goods to the list of inspected products to ensure its conformity
with the standards which applies to the like local product.
As for the Ministerial Decree No. 16 for the year 1993, it was modified by eliminating the
condition of a first degree product. As for the labelling rules, there is no discrimination between theimported product and the local one.
H. P
RIOR APPROVAL TO IMPORTS
(i) Advance written questions
1. Switzerland
According  to para. 55 of the Government report the list  of items prior approval to import was
abolished in 1993, and there are no more import restrictions, except for emergency measures.
However, there is a new decree which prohibits the sale of certain products in the free zones.  What
are the reasons for such a decree and what are its consequences with regard to imports?
(ii) Reply
In accordance with the provisions of the law regulating the free zones, importation from such
zones is governed by the same provisions of organizing the importation from abroad.  Thus, there isno need to set special provisions for importation fr om the free zones which doesn't comply with the
general rules of importation.WT/TPR/M/55
Page 50
I. QUANTITATIVE RESTRICTIONS
(i) Advance written questions
1. Hong Kong, China
We note that Egypt's conditional prohibitions on textile items have been removed.  However,
import restrictions on clothing products will not be phased out until 2002.  Would the Egyptian
authorities advise whether they have any plan to speed up the phasing out of quantitative restrictions
on clothing products?
2. Japan
According to Egypt's notification to the TMB on 24 May 1995 a conditional prohibition on
textile items is maintained only until 1.1.1998.  However,  some textile items are included in the list of
"Banned Imports 1998"  (HS Chapters 51, 52, 54, 55, 58, 60 and 63) (Table AIII.5, p.115 of the
Secretariat Report).  Please explain why those products are included in the banned imports list.
Please provide from those Chapters a list in HS 6-digit level of such products that are subject to theimport ban.  Why does Egypt ban the import of these products?  Does Egypt have any intention to lift
this ban?  If so, please explain the expected schedule.
According to paragraph 57, p. 85, of the Secretariat Report, a recent study by UNCTAD finds
that Egypt's spinning and weaving industries are characterized by the lack of investment in newmachinery  and by poor maintenance, resulting in lower productivity and quality. A report submitted
by the Central Auditing Agency to the People's Assembly in 1997 stressed the need for a financial
restructuring of public sector companies in the textiles sector. Under these circumstances, the textiles
and clothing industry has been protected from imports through non-tariff and tariff barriers. On
another hand, as a result of the Uruguay Round, Egypt maintains a conditional prohibition on textileitems until 1.1.1998 and conditional prohibition on clothing items until 1.1.2003.  Please explain the
policy on how Egypt protects its textile and clothing industry, thereby keeping its policy in conformity
with the WTO  rules.  Please explain if Egypt is deliberating on introducing any new measure in this
sector.
3. European Union
Decree 580 (Article 6) of 1998 prohibits the import of all cars produced in the previous year
and before (p. 88).  Only cars produced in the current year can be imported.  Previously cars of up to
two years old could be imported.  Normal practice un til now consisted of stocking new cars in the free
zones and importing them into Egypt upon sale to a cl ient.  The sale now has to be made in the year of
production, which can obviously be problematic and resu lts in difficult management of stock.  What is
the reason for this very burdensome and unnecessary requirement, which would appear to be
incompatible with WTO rules?
Table III.5 page 115 of the Secretariat report: on 6 June 1999 Egypt enforced Ministerial
Decree 250 which banned EC agricultural  products in the wake of the Belgian dioxin scare. Forsome unknown reason wheat has appeared on the list of banned commodities. The EC and EC
industry (exporters of breakfast cereals are particularly adversely affected) would like to know why.
Is it meant that only wheat  products containing milk or eggs should be covered?
4. United States
In paragraph 56 of the government report, Egypt states that it has no import bans in any
sector.  We also note in paragraph 74 of the same report that Egypt states that quantitative
restrictions on poultry have been tariffied.  However, Egypt continues to maintain an import ban onWT/TPR/M/55
Page 51
poultry parts, which was imposed ten years ago, and is inconsistent with GATT Article XI and Article
4.2  of the Agreement on Agriculture. Please expl ain why this item was not referred to in the
government report and advise when the import prohibition on poultry parts will be eliminated?
The Secretariat reports [IV(4)(ii)(c)70] that "motor vehicles are no longer subject to
conditional import bans, although imports of second-hand cars are allowed only under special
conditions, which were made more stringent recently with the issuance of Decree 580 in 1998, which
defines 'second-hand' as the current year of manufacture;  previously, cars up to two years old could
be imported provided that they met the required standards."  Our understanding is that Decree 580
limits the importation of all foreign vehicles, not ju st second-hand vehicles, to the current model year.
This legislation appears to be inconsistent with GATT Article XI, therefore we would appreciate an
explanation of the rationale behind this measure and the Egyptian Government's plans to rescind it.
5. Romania
Could Egypt provide details on the import regime  for cement and the documents  required by
the authorities to be submitted?
(ii) Reply
Egypt is abiding by the time limit provided in its schedules of commitments concerning the
textiles & clothing.
The general rule in importing the various goods - not only cars - is to be new first hand goods,
and as far as cars importation is concerned, the application of this condition means that the imported
car should be of the same production year. This tends to evade any distortions to take place in the cars
market.
Egypt's spinning and weaving industries is currently undergoing a process of comprehensive
restructuring:  Machinery and equipment employed in these industries work at a very low level of
their capacities (40-50%). A substantial part of this machinery and equipment is not obsolete. The
plan of restructuring is based on raising the productivity and profits of the textile industry with
minimal amounts of investment.
As for the imports ban on poultry parts,  it should be noted that there are no restrictions
imposed upon the poultry as long as it fulfils the requirements of slaughter which complies with the
religious beliefs of the Egyptian consumer, which could be easily verified, on the other hand the same
verification cannot apply to the poultry parts as it is not possible to trace its method of slaughtering.
Thus, it was banned as it defies the beliefs of the Egyptian consumers.
As for the cement importation regime, it is governed by the importation general rules applied
to all goods, and there are no specific requirements for cement importation and there are no
quantitative restrictions imposed in this concern.
As for the ban imposed upon the live animals, meat, fish etc. from certain origins, this has
been undertaken according to the reports of th e concerned international organizations and Egypt
certainly considers lifting such bans regarding an y further positive developments in this concern.WT/TPR/M/55
Page 52
J. PRESHIPMENT INSPECTION
(i) Advance written questions
1. Hong Kong, China
We would like to know the purpose and the progress of the pilot scheme for preshipment
inspection and whether the Egyptian authorities have any plan to introduce preshipment inspection.
2. Japan
It is reported that preshipment inspection is not required by the Government, but that  a pilot
scheme has been initiated .  Does Egypt actually intend to introduce preshipment inspection?  If so,
please explain the expected schedule for such introduction.
3. United States
The Secretariat's report [III(2)13] indicates that the Government has commenced a pilot
scheme for preshipment inspection (PSI), although we had understood that the Government of Egypt
had decided not to proceed with such a system.  Please explain the purpose and operation of the pilot
PSI regime.
(ii) Reply
As far as preshipment inspection is concerned, it is still a subject for study at present.
K. TRADE REMEDIES ( ANTI -DUMPING )
(i) Advance written questions
1. Canada
With reference to chapter III, section 2, sub-section xii, and in view of the wording of Article
of the agreement on Implementation of Article VI  of the General Agreement on Tariffs and Trade,
which provides that an application be made "by or  on behalf of the domestic industry",  can the
Government of Egypt explain and clarify the role the ministries supervising any of the production
sectors would have under Article 5?
2. Switzerland
Egypt adopted a law on anti-dumping measures in 1998, but seems to have not complied yet -
according to G/ADP/N/14/Add.8 with Art. 16.5 of  the WTO Anti-Dumping Ag reement. Could Egypt
please notify its competent authority to the WTO members?
3. European Union
Article 55 of the Egyptian Law N. 161 of 1998 concerning the Protection of National
Economy from the Effects of Injurious Practices in International Trade sees that: "The Investigating
Authority may, at any time, carry out a review on its initiative if necessary" Article 11,2 of the WTO
Anti-dumping Agreement states. "The Authorities shal l review the need for the continued imposition of
the duty, where warranted, on their own initiative, or […] upon request by any interested party".
Which are the conditions under which the Investigating Authority may carry out an own-initiativeWT/TPR/M/55
Page 53
review?  How do they comply with the "where warranted" condition set in Article 11.2 of the Anti-
dumping Agreement?
Article 93 of the same law states, that "In cases where anti-dumping and subsidy
investigations, for the same product are involved simultaneously only one duty shall be imposed".Could the Egyptian authorities specify the methodology for the calculation of this single duty?
4. Romania
Did the Egyptian authorities initiate a safeguard investigation or impose any trade
restrictions concerning the imports of cement?  If yes, what is the rationale of this measure and when
does Egypt intend to notify it to the WTO?
(ii) Reply
The role of the Ministries supervising the production sectors under Article 5 of the Agreement
on implementation of Article VI of GATT is that those ministries may submit application on behalf ofproducers who don't have associations if requested, e.g. SME's or producers in agriculture and
industry which fall within Article 4 of the Anti-dumping Agreement and don't have associations to act
on their behalf.
As concerns notifying the competent authority in Egypt to WTO members, Egypt has notified
this information in December 1998 (Notification No. G/ADP/N/EGY/Rev.1.).
There is no specific list of conditions under which the Investigating Authority may carry out
an own-initiative review. The self initiation review will be conducted on case by case basis.
If a product was subject to anti-dumping and subsidy investigations simultaneously, the
investigating authority will conduct both investig ations according to the relevant WTO Agreement
and determine appropriate duty to be imposed by the aim of removing injury. We would note that
Egypt believes that the use of the provisions of Article 93 could be very rare.
No safeguard investigation has been initiated concerning the imports of cement.  It should be
noted that the Egyptian Investigating Authority did not receive any complaint from or on behalf of thedomestic industry concerning the import of cement.
VII. TECHNICAL BARRIERS TO TRADE/SANITARY AND PHYTOSANITARY
PRODUCTS
(i) Advance written questions
1. Switzerland
Para. 62:  Currently, different agencies attached to various ministries are responsible for
formulating and implementing standards and other technical requirements.  According to the
information obtained, the current system of standards is very complex.  Does Egypt intend to make its
system more transparent and uniform in compliance with the provisions and requirements of the TBT
Agreement (Article 5 and 7)?  Is there at present an enquiry point as stipulated in Article 10 of the
TBT Agreement?WT/TPR/M/55
Page 54
2. European Union
Burdensome, discriminatory and restrictive registration requirements for imported cosmetics:
In Egypt, cosmetics are subject to the same approval procedure as pharmaceuticals, i.e,
registration at the Ministry of Health. This procedure is time-consuming and burdensome, and
hinders industry when introducing innovative products into the market.  The procedure to be followed
is outlined in Decree No. 69 of 1994, as amended in 1996.
First of all a manufacturing licence must be obtained from the Ministry of Industry.  An
additional licence - must then be obtained from th e Ministry of Health.  In order to do this, a
registration file must be submitted, which takes between three and twelve months.  It contains verydetailed, complex and confidential information. The file is given a number, and samples are sent to
NODCAR for analysis, at a cost of 3,000 Egyptian pounds per product. The analysis takes between six
months and two years, and requires testing which is not always appropriate for cosmetics products.
Upon completion of the analysis, the Ministry of Health reviews the file once more, and registration
number is given.  The procedure is applied for  new products and for formulae changes.
In addition, standards exist for some categories of cosmetic products (e.g. shampoo,
toothpaste, soap) and these standards are not always compatible with the composition of the product
registered with the MoH.
Expiry dates must be printed onto the package, as is the case for drugs. This requirement is
unique for Egypt. Prohibition to import goods by non Egyptians.
Import prohibition for frozen meat with a fat degree of over 7%:
Imports  of frozen beef have been restricted since 1993 by a decree 1522/1991 of the Ministry
of Health.  This regulation distinguishes meat  for direct consumption and meat for industrial
transformation, and requires that imported frozen beef should have less than 7% fat in case of direct
consumption, and less than 20 % fat for me at to be transformed by industries.
According to business information, quantities of meat were arbitrarily rejected at the border,
without regard to the purpose (consumption or transformation) and without clear justification.  Thispractice seems intended to manage imports, and disc ipline the behaviour of private meat importers
competing with public meat processors.
3. United States
Egypt discussed its SPS requirements fo r meats and poultry (WT/TPR/S/55/page 52,
section 74) but did not justify the import ban on U.S. cattle which was implemented on the basis of
unsupported and unreasonable concerns over Leukosis.  Nor does Egypt justify these additional
requirements in WTO-consistent terms.  Despit e Egypt's National Treatment obligations, domestic
cattle are not under the same or similar restrictions although they pose similar risk.  Please explain.
(ii) Reply
Formulation of standards is the responsibility of the Egyptian Organization for
Standardization and Quality Control (EOS). Tech nical regulations are implemented by Control
departments. The control departments may be affiliated to different ministries. This does not mean
that the system needs to be more transparent and uniform. As for the enquiry point, Egypt has a TBT
enquiry point (EOS) (has been already notified to the WTO), and an SPS enquiry point (Ministry of
Agriculture).WT/TPR/M/55
Page 55
Kindly refer to our reply under the topic of international standards.
VIII.  INVESTMENT
(i) Advance written questions
1. Switzerland
The summary observations of the Secretariat's Report state that, so far investment appears to
have mainly taken place in the non-tradable sectors. What are the reasons for that?
Great effort has been given to attract foreign investment. Laws are concise and transparent in
design. The crucial point, however, is how such laws are, being applied  in practice.  Is there, from
the side of the Egyptian government, for example,  any surveillance or other mechanism which would
guarantee for a smooth and correct implementation of these laws?
2. United States
We are very concerned about reports that importers as well as investors face delays and/or
bureaucratic difficulties in gaining access to foreign exchange.  Paragraph 33 notes that capital and
profits are repatriated "freely".  Could the Egyptian delegate explain how the Government interprets
"freely", which should mean without delay?
Under the WTO Agreement on Trade-Related Investment Measures (TRIMS), Egypt was
required to notify the WTO of measures that are inconsistent with its obligations under that
agreement, and eliminate these measures by 1 January 2000.  In its TRIMS notification
(G/TRIMS/N/1/EGY/1), Eg ypt stated that it had no local-content laws or regulations.  However,
according to the Secretariat's report [III(3)(v )95 and IV(4)(ii)(c)71], Egypt maintains incentive
measures in the form of preferential tariff rates for auto parts, which are granted in exchange for
reaching specified levels of local content.  Please provide an explanation of this apparent discrepancy
and when Egypt intends to eliminate these local-content measures.
(ii) Reply
It is important to note that public investment is directed mainly to non-tradable sectors.
Private investment is currently participating in establishing electric power plants, airports,  roads and
maritime services. The Government is leaving most of investment in tradable sectors to the private
initiatives.
Laws and executive regulations governing investment in Egypt embodied certain self
mechanism ensuring their implementation.  Still, in vestors are able to access to higher authorities,
either in the implementing agencies such as GAFI or Co.Reg.Dep or step up to the Ministerial
committee in charge of investors complaints.
The Government started to emphasize the importance of increasing investment in different
directions. The investment GDP ratio increased of 18% in the early 1990s to reach about 22% by the
year 1998. In the meantime, the share of private investment to Gross Domestic Investment reached
56% compared with 45% in the early 90's. FDIs increased for about US$450 to reach more than
US$1.4 billion in the same period of time (petroleum excluded)WT/TPR/M/55
Page 56
IX. TRADE RELATED INTELLECTUAL PROPERTY RIGHTS (TRIPS)
(i) Advance written questions
1. Switzerland
The current patent law in Egypt extends patent protection only for a period of 15 years
whereas the minimum duration of protection under Art. 33 of the TRIPS Agreement is 20 years from
the date of filing. Egypt has until year 2000 to comply with the  obligations under the TRIPS
Agreement.  The weakness of the current patent legislation in Egypt is of great concern to the Swiss
Authorities.  Please  explain if the new Egyptian patent law, complying with the obligations under the
TRIPS Agreement will be in force by the year 2000?
Please explain how Art.39.3 of the TRIPS Ag reement is complied with under the Egyptian
legislation.
2. Japan
According to the Secretariat Report, the People's Assembly of Egypt is currently debating a
new patent law (para. 137, p.64). When is the law expected to be enforced?  Please also outline the
main points of amendment.  Does the new law full y conform with the TRIPS Agreement, including that
for providing protection for 20 years?
According to Table III.13, p.63, of the Secretariat Report, Egypt protects Geographical
Indications for 10 years.  This seems to be inconsistent with Article 22, which provides indefinite
protection for Geographical Indication.  Please explain the current relevant provisions regarding
Geographical Indications.  If Egypt is reviewing such a provision, please also provide the draft
revision.
Please also explain the current relevant provision regarding  additional  protection for
Geographical Indications for wines and spirits?
According to the Secretariat Report, no protection is provided for trade secrets through
legislation while commercially valuable information may be protected through a contractual
agreement between parties (para. 143, p. 65).  However, as long as protection through such aconditional agreement between parties cannot be sufficient protection against third parties, the
scheme will be inconsistent with Article 29 of the TRIPS Agreement.  Please provide the current
provision relating to the protection of trade secrets.  If Egypt is reviewing such provision, please
provide the draft revision,
3. European Commission
The Egyptian patent law (Law 132/1949) provides only for a term of patent protection of
fifteen years.  Article 12 of that law provides that this term may be extended, during the last year of
validity, on condition that the owner can prove the invention is of special importance and has notbeen worked sufficiently to obtain a suitable benefit.
Article 33 of the  TRIPS Agreement states that the term  of patent protection shall not end
before a period of twenty years counted from the fi ling date and does not allow for this term to be
dependent upon any conditions.
Could Egypt clarify how it applies the criteria of "special importance" and "suitable benefit"
for the patent holders?  Is Egypt in the process of modifying its patent term provisions in order to
comply with the minimum twenty year requirement of the TRIPS Agreement ?WT/TPR/M/55
Page 57
4. United States
Patents
III (4) (iv) (b) 13' ): We understand that Egypt is preparing a draft patent law to comply with
its obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) on or before January 1, 2000.  We would be interested in knowing if the draft law: eliminates
overly broad compulsory licensing provisions contained in the 1949 law; accepts the international
standard of granting compulsory licenses to non-working patents within four years from the date of
filing, extends the patent term to 20 years from the application date; extends patentability to
substances prepared or produced by chemical processes even if such products are intended to be usedas food or medicine; and clarifies infringement to include the use, sale, or importation of a product
made using a process patented in Egypt.
When do you intend to implement pharmaceutical patent protection?
III (4) (iv) (b) 133: Because Egypt does not provide patent protection for pharmaceutical and
agricultural chemical products, Egypt is obligated to  provide a system of exclusive marketing rights
(EMRS) for pharmaceutical and agricultural chemic al inventions pursuant to article 70.9 of the
TRIPS agreement.  We understand that Egypt provides exclusive marketing rights for
pharmaceuticals and agrochemical products, but has not "legalized" it by government law or decree.We understand the Government of Egypt intends to fo rmalize the system.  Plea se provide information
on when the system will be formalized.
III (4) (iv) (b) 137: We understand that Egypt has adopted a mailbox facility at the Egyptian
patent office for the receipt of product patent applications for pharmaceutical and agriculturalchemical products.  We would welcome in formation on how the facility operates.
We also would be interested in learning of Eg ypt's plans to ensure that a system to protect
undisclosed test data submitted for marketing approval of new pharmaceutical or agricultural
chemical compounds (TRIPS Article 39.3) is in place.
Trade Secrets
III (4) (iv) (b) 143: We understand that Egypt does not provide protection for trade secrets
through legislation, but allows for the protection of commercially valuable information through
contractual arrangements.  Do you plan to promul gate trade secret legislation to ensure TRIPS
compliance before the January 1, 2000 deadline, and if so when?
Copyrights
Please clarify the position of the Government of Egypt with regard to providing protection for
all copyrighted works dating from 1949 to the present, in accordance with Egypt's obligations underArticle 18 of Berne, as incorporated into the TRIPS Agreement.
We are particularly concerned that the Government of Egypt protect pre-existing sound
recordings, given that Egypt did not become a member of the Geneva Phonograms Convention until
1978 (and that agreement does not include retroactive protection).
If previously produced foreign sound recordings are not currently protected (pre-1978), what
steps is Egypt taking to come into compliance with its TRIPS obligations?WT/TPR/M/55
Page 58
Trademarks
The Secretariat [III(4)(iv)(b)138] suggests that only manufacturers and traders may register
their marks.  Under Egyptian trademark law, societies, associations of industrialists, producers and
merchants may also register their marks.   Also, the second to last sentence states that "therequirement for a trademark to be registered is that it be distinctive and not misleading or contrary to
public morals".  However, the language in (5)(b) of Egypt's trademark law states "contrary to
morality or public order".  Could your delegate please clarify the correct interpretation?
WIPO treaties
III(4)(iv)(b)142:  We understand that Egypt has ratified the Treaty on Intellectual Property in
Respect of Integrated Circuits, but it has not entered into force.   What is the status of your efforts to
enact this treaty?
Egypt is a leader in the development of new technologies in the Middle East, thus we are
interested in learning Egypt's plans to ratify and implement the 1996 WIPO  Copyright Treaty and
WIPO Performances and Phonograms Treaty.
Enforcement
Is the Government of Egypt aware of the TRIPs requirement (Article 61) to have in place
deterrent criminal penalties, at the minimum for commercial scale and or wilful infringement of
copyrighted works or trademarked goods?  It would be helpful in this regard to have an inventory
(with reference to statutory authority) of the relevant penalties set forth under Egyptian law (e.g. jail
terms available for copyright infringements, if monetary fines are levied per infringing copy, etc.).
III(4)(iv)(b)147:  We understand that in August 1996, copyright protection for software was
suspended for one year.  We would like to know if computer software currently receives copyright
protection.
III(4)(iv)(b)149: Although we are pleased to learn that the Government of Egypt has
increased enforcement actions to curb software piracy, the amount of trade losses incurred by the
U.S. software industry remain significant.  We  would be interested in knowing whether the
Government of Egypt plans to issue a decree regulating the legitimate use and purchase of software
in the governmental and public sector.
Opportunities for intellectual property right ho lders to avail themselves of injunctive and
other forms of provisional relief spelled out in  the TRIPs Agreement in Article 50, and effective
border enforcement measures found in Articles 51-60 of the TRIPS Agreement are critical to effective
IP enforcement and for TRIPS compliance.  We w ould appreciate any additional information that the
Government of Egypt can provide concerning these important areas.
(ii) ReplyAnswers to questions by Japan
The new patent law is currently under consideration by the People's Assembly, it is expected
to be enforced by the year 2000.  The new Law will be in full conformity with the provisions of theTRIPS Agreement.
The protection for geographical indications is provided under the trade mark law No. 57 of
1939 and the rules of unfair competition which means the use of false indications of source, so there is
no current specific new Egyptian law for geographical indication as such.WT/TPR/M/55
Page 59
The trade mark law which  currently covers the geographical indication is in conformity with
Article 22/2 of the TRIPS Agreement, however there is no specific provisions for the wine products .
Egypt currently has no law covering the protection of trade secrets, however Egypt is
committed to apply the relevant provisions of the TRIPS and relevant international Agreements,
Egypt is in the process of  preparing in cooperation with the WIPO, a new law on undisclosed
information.
Answers to questions by the United StatesPatents
Egypt confirms that the new patent law will be in full conformity with all provisions of the
TRIPS Agreement.
However, Egypt would avail itself with the transitional period embodied in the TRIPS
Agreement.
With regard to the exclusive marking rights(EMR s), Egypt has in fact a system in place for
providing EMRs, the main features and elements of this system included in Egypt's replies to the
questions by U.S. (document IP/C/W/136) dated 10 March 1999.
As concerns Egypt's plan to ensure a system to protect undisclosed data and trade secrets,
Egypt is committed to apply the provisions of the TRIPS Agreement and other relevant international
Agreements, Egypt is in the process of preparing  in cooperation with the WIPO, a new law on
undisclosed information, in the same time we appreciate any technical assistance from interesteddeveloped countries under the framework of  Article (67) of the TRIPS Agreement.
X. SERVICES
A. F
INANCIAL SERVICES
(i) Advance written questions
1. Switzerland
Please give some detail about the recent changes which have made the applied policy more
liberal than Egypt's GATS commitments (beside those in the insurance services sector). [para. 771]
The sound functioning of the financial sector provides a guarantee of trade freedom. In this
connection, liberalization of financial services has enabled the banking sector to become more
efficient [paragraph 42, WT/TPR/G/55] and will bolster further efforts to integrate Egypt into the
global economic system.  What is the justificat ion for banks ceasing to provide foreign-exchange
financing for letters of credit intended to cover certain imports of consumer goods?
Is our understanding correct that economic needs tests are still applied for foreign banks
wishing to establish branches in Egypt?  If so, what is the rationale and does Egypt intend to delete or
relax this economic needs test in the near future? [para. 89]
Furthermore, what are the reasons for having the Central Bank of Egypt involved in the
appointment of directors and senior managers of newly established banks?  [para. 89]WT/TPR/M/55
Page 60
Does Egypt intend to relax the requirement to reinsure  part of their direct insurance
transactions in Egypt with the Egyptian Insurance Supervisory Authority (EISA)? [para. 96]
Please give some details about the new insurance market law issued in 1998 removing
restrictions on private and foreign ownership. [para 44 of WT/TPR/G/55] .
2. Hong Kong, China
We note that the banking sector is dominated by four state banks.  Although legislation has
been enacted in May 1998 to allow privatization of these banks, and one of these banks should have
been privatized by the end of 1998, the privatization has not taken place.  We would like to know the
progress for the privatization plan.
Approval for the establishment of branches by foreign banks is based on an "economic needs
test".  What are the specific criteria for the economic needs test and does the Egyptian Government
have any plans to relax such requirements?
3. United States
Enquiry point:  The chart in paragraph 34 indicates that Egypt has not yet notified a services
enquiry point.  When is Egypt planning to do so?
Regional and bilateral trade agreements (paras. 36-40):   Please provide information on which
of the referenced agreements cover trade in services.  For each agreement including a services
component:  which modes of supply are covered?   Are any services sectors excluded?  Is
implementation immediate or according to a transitional period?
Insurance :  Insurance services can play a key role  in stimulating national capital formation
(Paragraph 90).  What steps has Egypt taken to simplify and make more transparent the process for
establishing a commercial presence in the insurance sector?  Can Egypt please provide an update of
regulatory changes in this sector?
Tourism services:  Why does Egypt believe it necessary to maintain economic needs tests in
this sector?
Professional and Business Services :  Please provide more information on the legal and
regulatory regime for professional and business serv ices.  Which services are regulated?  Are they
regulated in a transparent manner and in accordance with the requirements of GATS Article VI?
Energy services :   Please provide  more information on privatization and deregulation in this
sector. When does Egypt anticipate allowing foreign investment in this sector (current foreign activity
seems to be limited to BOOT).
Distribution services:  Please provide more information on the legal and regulatory system
for distribution services.  Can foreign service suppliers establish wholesaling, retailing and
franchising outlets?
(ii) Reply
Privatization of banks and insurance companies
Like any privatization process, privatization of banks and insurance companies require two
essential consecutive steps:  the first one is to pr epare a privatization legal framework, the second stepWT/TPR/M/55
Page 61
is to create a concensus on public opinion to support such transformation.  Since the first step is
already completed the Egyptian Government is embarking  the second step.
Economic needs test
Economic needs test is still valuable in a country having 62 banks. This test is important to
ensure sound performance and overbanking in the market.  Economic needs test is applicable in
accordance with the provisions of Article 16 of GATS.
The reason here is to ensure selection of good and efficient managers initially nominated by
banks themselves. The involvement of CBE, however, is to guide banks in selection of efficient and
good reputable key personal.  This is similar to practices applied in some developed countries.
According to Law 91 of 1995, insurance companies were required to reinsure part of their
direct insurance in Egypt.  They also have opti ons to reinsure elsewhere,  implementation of such
decision depends on the companies themselves.
Professional services are regulated in transparent manner under the syndicate's law of each
profession.  Egypt is actively participating in the discussion under the newly established GATS
working group on domestic regulation, to address issues related to the provisions of Article 6.4 of
GATS Agreement, and has actively participated in setting the disciplines on accountancy services.
Energy services are subject to the privatization and deregulation programme, foreign
investment is considered in this sector in accordance with the criteria and procedures in this concern.
B. TELECOMMUNICATIONS
(i) Advance written questions
1. Switzerland
What were the concerns of Egypt for not having participated in the negotiations on the Basic
Telecom Services [para. 80]?
Please explain the future plans to liberalize the telecommunication market [para 106] What is
the scope foreseen for  the liberalization of the telecommunication sector?  Will foreign  suppliers be
allowed to participate in the market.  Under what conditions? [ para 106 ]
Does Egypt intend to take commitments in the telecom sector in the coming services round
due to start by 2000 ? [para.8O]
2. Hong Kong, China
The Egyptian Government has planned to privatize the public Telecom Egypt by selling 20%
of its shares. We would like to know whether ther e is any concrete time table for implementation of
the plan, and whether foreign investment would be permitted.
It is mentioned that Telecom Egypt retains the monopoly on fixed telephone services, and that
international competition through call-back services is not permitted.  Would the Governmentconsider liberalizing fixed telephone and international voice services in future?WT/TPR/M/55
Page 62
3. United States
Telecommunications: We understand that Egypt is in the process of privatizing the
telecommunications sector (both for basic and value-added telecom) and encouraging foreign
investment in many of these services.  What is the status of these efforts?  Does Egypt recognize thebenefits of including market access commitments for these sectors in its GATS schedule?  Is Egypt
undertaking necessary efforts to structure its telecommunications regulatory system in a manner
consistent with GATS requirements?
(ii) Reply
Egypt didn't participate in the negotiations on Basic Telecom Services.  Our policy was not to
liberalize this critical sector at that time.  That policy has been changed and the door was opened
already to the private sector to participate in the investment and the operation of some activities in this
sector.  Competition has been introduced in four services, namely, GSM, Payphone Telephone, VSAT
and mobile satellite services.
Different laws have been issued :
- Law No. 19 of March 26, 1998 for reorganizing and transforming the authority of
Telecom Egypt to be a joint-stock company.
- Decree No. 101 of April 4, 1998 established the "Telecommunications Regulatory
Authority" (TRA) to monitor technical and financial performance of different
telecommunication services and upgrade to application by different companies.
- Foreign suppliers are allowed to participate in the market, all licences granted to
private sector are with participation of the foreign companies.
According to this new policy there will not be any restriction on the foreign sector to participate.
- According to the new policy, the Telecom sector in Egypt will participate in the
coming services negotiation round which will start by 2000.
Meanwhile, the Government has decided to privatize the Egyptian Company for
Telecommunications.  The percentage of its shares which will be privatized as a first step will be
defined. There will be a study carried out by international consultants to prepare for this purpose.
Until now, Egypt has restrictions on call-back and fixed telephone services.
C. T
OURISM
(i) Advance written questions
1. Switzerland
What are the reasons for imposing a mandatory  50% discount to Egyptian nationals residents
on prices charged by hotels? [para 124] Is Egypt' s subsidising of tourism through tax exemptions,
lower customs duty, price control, prior approval etc., justifiable from an  economic point of view[Table IV.9]?WT/TPR/M/55
Page 63
2. Hong Kong, China
We note that the Government is privatizing the hotels owned by the affiliated public sector
companies.  When will this be implemented, and wh ether foreign investment wi ll be permitted in the
privatization programme?
(ii) Reply
This is a sectoral incentive directed to the encouragement of the tourism sector as being
labour intensive and foreign currency generator.
D. GATS
(i) Advance written questions
1. JapanMaritime Transport  Services (para 109, p. 97 of the Secretariat Report)
It is reported that government or public-sector cargo may only be transported by state-owned
or Egyptian-owned vessels or by foreign flagged vessels chartered by the supplier or importer.  Is
there any restriction regarding the nationality of a vessel which can transport government or public
sector cargo?
(ii) Reply
Article 6 of Law 12/1964 was abol ished by Law 1 of 1998 to allow private sector contract for
transport cargos by sea. Around 75% of Egypt's national and international trade cargos are carried by
non-Egyptian fleets.
Norway  ( Maritime transport)
We would like to thank Norway for commending  Egypt for having made commitments in the
area of maritime transport.  As regards the question of Norway in the area of maritime transport, we
would like to indicate that around 25% of Egypt's international trade is carried out by the Egyptian
fleet (public and private).  The  public sector companies own only 24 out of 125 Egyptian vessels.
Moreover, foreign vessels have always participated in transporting domestic and foreign trade.
Furthermore, Law No. 1 of 1998 allows the private sector, foreign or domestic, to participate in all
maritime services.  As the advantages given to ships flying the Egyptian flag, this is an incentive to
further develop the Egyptian fleet.
We are committed to our obligations on maritime transport, in the context of GATS and we
hope that other WTO Members start to consider making commitments in this area.  Egypt, on its part,
is committed to participate constructively in future negotiations in maritime transport.WT/TPR/M/55
Page 64
XI. TRANSPARENCY
(i) Advance written questions
1. Japan
To improve transparency on the laws and system regarding trade and investment, it is
desirable to  strengthen the function of institutions , such as by establishing an information centre, or,
in other words, an "enquiry point".  Please explain how the Egyptian Government intends to tackle
the above point.
When changing a system, public announcement of the new system should be made well in
advance.  It is desirable to also make a public announcement concerning the detailed regulations forenforcement or administrative guidance.  Pl ease explain Egypt's view on these points.
(ii) Reply
Besides the inquiry and information offices of the General Information Authority that
disseminates quite sizable amount of information, there are also many channels that could be reached
through the normal postal system or on e-mail connections', as an example
- the monthly Economic Digest issued by the Ministry of Economy which is in the
website www.economy.gov.eg
A hard copy of the month of May's edition will be left with the Secretariat. The Ministry of Economy
established an enquiry point to answer any inquiries using e-mail minecon@ idsc1.gov.eg
- the Egyptian Trade Point, 69, Amed Erabi St.Imbaba Cairo, is a focal point for
answering questions dealing with trade rela ted matters such as transport, finance,
insurance, export opportunities, etc.  The Egyptian trade point is a part of the
Ministry of Trade and Supply and a member of the international trade point network.
Before taking a definitive decision that may affect business community, the Government used
to consult all business circles in the society.  The Government senior officials are in close contact with
business associations, federation of chambers of commerce, federation of Egyptian industries.
Moreover, the business leaders are members in the Egyptian American Business Council and
European Egyptian Partnership negotiating team and alike.  Such mechanisms guarantee
dissemination of information concerning the governme nt intention for taking any decision also to get
support from business community to ensure success of its decisions.
XII. COMPETITION
(i) Advance written questions
1. Japan
The Secretariat Report states in paragraph 161 (p. 67) that Egypt is currently drafting a new
antitrust legislation.  In the second session of th e Intergovernmental Group of Experts on Competition
Law and Policy by UNCTAD held on 7-9 June 1999, the Egyptian Delegation stated that the law isexpected to be adopted in the latter half of this year.  Please, outline the contents of the draft law.
Please also explain how Egypt intends to tackle issues regarding competition.WT/TPR/M/55
Page 65
(ii) Reply
Egypt is currently drafting a new competition and antitrust legislation, we appreciate the
technical assistance provided by the WTO and UNCTAD Secretariats in the formulation of the saidlaw.
Egypt will notify the Secretariat upon its ratification during the next parliamentary round
1999/2000.
XIII.  ENVIRONMENT
(i) Advance written questions
1. Japan
The Government Report states that Egypt is co ncerned about the fact that environmental
standards may be used as a new barrier to trade .  Please provide concrete examples for such new
barriers which Egypt is concerned about.
The Report also states that developing countries should be assisted in having easy access to
environmentally-sound technologies.  Please explain in which fields such technologies are needed.
(ii) Reply
Egypt opposes any attempt to include environment in the future agenda of trade negotiations.
Our view is that the Committee on Trade and Environment, and as mandated, is still engaged in andhas not concluded its work on the analysis of th e interrelationship between trade and environment,
and identifying win-win situations.
It is also our belief that any attempt to include environment in the future negotiations has the
potential of erecting new disguised barriers to tr ade and new obligations on developing countries e.g.
stringent, mandatory eco-labelling  schemes that would further limit market access opportunities for
developing countries, complaining from marginalization and economic and social constraints.
The issue of the full implementation of the Uruguay Round Agreements and decisions
represents paramount importance and priority and should be the focus of the third Ministerial
conference in Seattle and the future mandated negotiations.  Concrete satisfactory solutions to our
concerns and needs, including the enforcement of the Special and Differential treatment fordeveloping countries and full and faithful implementation for the WTO Agreements must be
addressed and satisfied before such negotiations.
XIV. RULES OF ORIGIN
(i) Advance written questions
1. Japan
Decree 553 of October 1998 says all goods are required to be clearly labelled and should
carry a certificate of origin Article IX of the GATT provides that "the contracting parties recognize
that, in adopting and enforcing laws and regulations relating to marks of origin, the difficulties and
inconveniences which such measures may cause to the commerce and industry of exporting countriesWT/TPR/M/55
Page 66
should be reduced to a minimum, due regard being had to the necessity of protecting consumers
against fraudulent or misleading indications".  Please explain the objective of the requirement.
Do domestically-produced goods also meet the same requirement?  If not, is this not a
measure which discriminates imported goods from domestically-produced goods, thus violating the
MFN principle?
(ii) Reply
The data rules are applied upon all goods whether imported or local without discrimination
taking into consideration the rules of Article 9 of GATT.
As for the minimum level of additional data concerning the imported goods i.e. importer's
name, country of origin. These data are essential as the consumers interest prevails.
XV. OTHER ISSUES
1. A question was raised by the United States Delegation about child labour in Egypt.
Egypt's record in respect of worker rights is very high in comparison with many countries
including developed countries.  While Egypt is party to all seven core labour conventions, it is to beunderlined that any question related to this subject-matter is out of scope of WTO.  Since it has been
agreed that labour standards are being set and followed up in the International Labour Organization
(ILO).
2. In reference to what has been raised  during Mr. Wells' intervention concerning agriculture
and manufacturing :
In the context of economic reform, privatization and liberalization programme in the
agricultural sector of Egypt, all governmental interventions and controls in cropping patterns,
agricultural marketing and prices have been removed.  Farmers are free to cultivate whatever they like
and sell it in the way they like, and in the framework of supply and demand and free marketmechanism.  Also, agricultural strategy has shifted from being based on self-sufficiency in the narrow
sense of the word to food security at large, i.e.  to better utilize our comparative and competitive
advantages and increase our production and exports from crops where Egypt has a better advantages
such as cotton, rice, vegetables, fruits, medicinal and aromatic plants and cut flowers. Egypt has a
surplus of these products and is seeking access to EU, Arab, African and other markets.  At the same
time, we import some commodities where we have less comparative advantage such as red meat and
oil crops.
As concerns the textiles industry, certain measures have been taken in the framework of the
economic reform programme:
- Privatization of public sector companies
- Encouraging early retirement for excess labour- Capacity building (human resource development and management)- Introduction of total quality management concept.
Those measures are included in a new project " industry modernization program" with the  EU  to
raise production efficiency of industrial sectors, and its competitiveness in the local and externalmarkets.
The high tariffs on imported cars is a temporary measure to allow this newly established
industry to increase local feeding industries.
__________