Trade Report- Q2/Q Trade Report QII + QIII 2017

Transcription

1 Trade Report QII + QIII 2017

2 Abstract The Foreign Trade Quarterly report acts as a surveillance of foreign trade being a fundamentally important aspect of focus, by providing an insightful update on emerging issues concerning trade, such as changes in foreign trade regulations that may impact different business sectors. This issue features the latest foreign trade regulations and free trade agreements news. The Foreign Trade Quarterly Report introduces new trade terms as part of its Trade Dictionary, as well as reviews a differen t trade agreement each quarter. The report also identifies and analyzes the latest foreign trade statistics, with a special focus on th e Egyptian Oil sector exports to the world; specifically, Turkey, the COMESA, PAFTA, EU, EFTA, and Agadir states.

3 What s New? REGULATIONS Importers Registry Law No. 7/2017 The law aims at restructuring the import procedures through the following : The minimum capital for the personal companies was raised from EGP 10,000 as stated in the current law, to EGP 500,000; and for the limited liability companies, the minimum capital was raised to reach EGP 2 Million, from the existing EGP15,000, and fina lly a minimum of EGP 5 Million for Shareholding Companies. The law also granted a grace period of 6 months to adjust according to the new capital and cash insurance requirements as par t of the process of registering at the Importers Registry. Industrial Licensing Law No. 15/2017 3rd of May, 2017 The law aims at facilitating and simplifying the procedures of granting industrial licenses, through reducing the documentary cycle and eliminating bureaucracy. The law paves the way for investors to kick -start their projects in a total period of one month, as opposed to two years as per the previous law. Minister of Trade and Industry Decree No. 879/ th of June, 2017 The Minister of Trade and Industry issued Decree No. 879/2017, on the 12 th of June requiring the General Organization for Export and Import Control (GOEIC) to be inspect all types of leather before being exported.

4 Minister of Supply and Internal Trade Decree No. 67/ th of March, 2017 The Minister of Supply and Internal Trade issued Decree No. 67/2017, requiring all entities operating in the production, manufacturing and importation of sugar and rice, to out the factory sale price, and the consumer price on each package. A grace period till the 15th of April was given to finish the stock of non-labelled packages. Another Decree (No. 91/2017) was issued on the 13 th of April, to extend he grace period till the 31st of May. Prime Minister Decree No. 947/ th of April, 2017 The Prime Minister issued decree No. 947/2017, to establish Small and Medium Enterprise (SME) Development Agency, in order to develop strategic plans and policies in efforts to develop SMEs. The Agency would therefore be responsible for: Managing all activities of the Social Fund for Development Provide funding for projects Contributing in market studies and feasibility studies Developing on human resources skills which working in those projects

5 FOREIGN TRADE NEWS Egypt targets more trade with Zambia H.E. Sameh Shoukry, the Egyptian Minister of Foreign Affairs, has met with his Zambian counterpart during his visit to Ethiopia early July; where he expressed Egypt s interest to increase trade with Zambia. Engaging in more trade with Zambia, would capitalize on th e existing relations as members of the African Union s Peace and Security Council, and send positive messages to the outside world. Argentina s Parliament Approves the Free Trade Agreement between Egypt and Mercosur: The approval of the Free Trade Agreement betwe en Egypt and Mercosur countries by the Argentinian Parliament, was followed by a discussion on Economic cooperation between the Egyptian president and the Argentinian Vice President in Cairo. The discussion s included proposed cooperation in the fields of agriculture, scientific research and technology, renewable energy, education, culture and sports. The President aalso approved the establishment of an Egyptian -Argentinian trade committee to strengthen ties and develop new common projects that would accelerate progress of economic relations. Egypt s Exports to the Spanish Market Increase: The first quarter in 2017, witnessed an increase of 77.6% (jumping from EUR99.9m to EUR177.4m) in the non -oil exports to the Spanish market, according to a statement by Eng. Tarek Kabil, Minister of Trade and Industry. Moreover, according to Ahmed Antar, Head of Egyptian Commercial Service, our fertilizers sector s exports to Spain have also doubled to reach EUR28m in Q12017 as opposed to EUR13m recorded same period last year.

6 The Egyptian Government Plans on Extending Rice Export Ban: The Government of Egypt (GoE) plans on extending the ban imposed on rice exports, in efforts to adjust the buying price of ri ce by farmers and secure local market needs. The shortage arises from the farmers demanding the GoE to increase its price from EGP3,000/tonne to EGP4,000/tonne, as it refuses to supply rice to the Ministry of Supply and Internal Trade at the low offere d price in comparison to that offered by the private sector mills, w hich is EGP4,500/tonne. India Aims at Increasing its Exports to Egypt The Indian ambassador in Egypt said that India targets increasing its exports of tea, rice and sugar to Egypt. Both, the Egyp tian and Indian side aim at restoring the trade peak of $5. 5 billion as achieved in FY 2012/2013. Egypt, Saudi Arabia, United Arab Emirates and Bahrain Notify the WTO with the Legality of the Procedures taken regarding cutt ing ties with Qatar Egypt, Saudi Arabia, United Arab Emirates and Bahrain notify the WTO o f the legality of the measures taken against Qatar; since the international law allows any country to undergo any practices to ensure its homeland security and sovereignty (consistent wit h article 21 of the GATT).

7 Egypt Participated in 3 WTO Meetings in Brussels in July, 2017 The Egyptian delegation, headed by Dr. Magdi Abd El Aziz, Head of Customs Authority, participated in Public Policy Committee meetings, and WTO board meeting, along with heads and general managers of customs authorities in MENA region from the 3rd till the 8th of July. The agenda included discussing the agreement on trade facilitation, as well as reviewing the measures taken by Egypt for star ting the implementation of the trade facilitation agreement. The agenda also includ ed the discussion of the security initiative adopted by the WTO to face terrorism and smuggling of explosives, small arms and financing terrorism. Finally, studying the possibility of inclu ding the nonmember states of the UN in the World s Customs Authori ty, was also part of the discussion. British Trade Delegation Arrives in Egypt, Exploring New Investment Opportunities UK Trade Envoy to Egypt, Sir. Jeffery Donaldson, arrived to Egypt on the 24 th of September, 2017 in order to explore new business opportunities, accompanied by a British trade delegation consisting of 14 companies including the renowned Rolls Royce and Bombardier, and other prominent companies in the fields of in frastructure, defense, healthcare and agriculture. The visit which extends for five days, witnessed a number of meetings including ones with The Egyptian Prime Minister, The chairman of the Suez Canal Economic Zone, the chairman of Egypt s New Administrative Capital, and the Ministers of Investment, Trade, Housing, Transport and Petroleum. According to the Foreign Commonwealth Office (FCO), the United Kingdom is ranked number one foreign investor in Egypt, with investment inf lows worth more than $43 Billion, and almost 1,500 active British business operations in Egypt.

8 Egypt Looking to Increase Canadian Investments in the Country According to a statement by Eng. Tarek Kabil, Minister of Trade and Industry, on the 27 th of September, Egypt is working towards increasing Canadian investments to exceed the current $2 Billion. The speech also highlighted that Egypt is targeting 21% of industrial sector contribution to GDP by 2020 as opposed to the current 17.7%, with the main sectors of focus being chemical, building materia ls, textile and engineering, where new investments in these sectors will be offered special incentives. Minister of Supply and Internal Trade Decree No. 217/2017 The Minister of Supply and Internal Trade has is sued Decree No. 217/2017, requiring all locally produced products to indicate their prices on the package, in efforts to control price increases in the market. The Decree has caused concerns amongst produc ers and raised many questions. With a grace period extending to the 1 st of January, 2018, the exact mechanism of im plementation is still being discussed in consultation with the Chamber of Food Industries.

9 Free Trade Agreements UPDATES The Tripartite Free Trade Agreement (TFTA) Economic Blocs Meet to Finalize Rules of Origin: The TFTA, which spans three African economic communities, namely the East African Community (EAC), the Southern African Devel opment Community (SADC), and the Common Market for Eastern and Southern Africa (COMESA), will become the continent s largest free t rade area, with a combined GDP of around 1.3 US$ trillion and a market comprising 57 percent of the African population; when successfully implemented. The 25th of July concluded the convention of 80 Governmental representatives of the member counties, in o rder to finalize the draft for the unified Rules of Origin, to be implemented after the complete merger of the blocs. Egypt targets accessing all the African markets, through the African Free Trade Area, using multimodal transport mechanisms referring to the implementation of the Alexandria Cape Town Road that passes through all the member countries in the agreement, as well as the new ports in the Suez Axis that link the ports of the African Horn that integrates with a number of navigation routes an d airports to facilitate the transfer of Egyptian exports to the markets of the landlocked countries. BRIEF Egypt-Mercosur Preferential Free Trade Agreement The Egypt Mercosur preferential FTA was signed by Egypt on August 2010 after six rounds of nego tiations during which Egypt was keen on actively participating with Latin American countries to ensure access to important privileges in commodity lists. The process of implementing the FTA was as follows: In August 2010, the Egypt Mercosur FTA was signed

10 Egypt Ratified the agreement in December Brazil, Uruguay and Paraguay finalized the ratification procedures in The Argentinian Parliament has recently ratified the agreement in May The agreement entered into force in September 2017, after enhancing the official ratification documents. The Mercosur countries coalition is considered o ne of the most successful South South economic blocs in Latin America. It originated as a Common Market in 1991 and it developed till it became a customs union in It consists of: Brazil, Argentina, Uruguay and Paraguay. The agreement aims at cutting off tariffs by 90% between Egypt and the Mercosur countries, as well as cancelling all custom duties on agricultural goods. This will diversify the Egyptian export market, ensure that Egypt will have its needs of food commodities at the best prices in the long run, and is expected to increase the volume of trade between Egypt and the Mercosur countries by the double. The Agreement is Composed of Five Chapters: Chapter 1: General Provisions Primary Provisions Trade in Commodities Investments and Services Institutional Provisions Chapter 2: Rules of Origin Protocol General Rules Governing all the Exchanged Commodities Specific Rules Governing the Exchange of Specific Commodities (Detailed Rules of Origin) Chapter 3: Preferential Safeguards

11 Chapter 4: Dispute Settlement Chapter 5: Final Provisions Note: N Gage consulting is in the process of issuing a report on the technicalities of the agreement and its implementation. Stay T uned! Trade Dictionary CUSTOMS VALUATION Customs valuation is defined as the process used to determine the customs value of an imported product. Essentially, if the applied tariff is calculated as an ad valorem customs valuation defines the price of the product in order to calculate the applied tariff. The Customs valuation process is managed in accordance to Article 7 of the GATT agreement, which lays down the guiding principles for the international system of valuation. The concept of customs valuation was first defined under the Brussels Definition of Value (BVD), whereby normal market prices defined as "the price that a good would fetch in an open market between a buyer and seller independent of each other," was determined fo r each product, according to which the duty was assessed. The Tokyo Round Valuation Code (also known as the Agreement on Implementation of Article VII of the GATT) later agreed on a more coherent system, composed of six methods that can be used to define the price actually paid or payable for the imported goods. The benchmark of the system used transaction value as the indicator of uniform prices. For cases where the transaction value cannot be used because the price has been distorted as a result of certain conditions, the Agreement la ys down five

12 other methods of customs valuation, to be applied in the prescribed hierarchical order. Overall the following six methods are considered in the Agreement: Method 1: Transaction Method Method 2: Transaction value of identical goods Method 3: Transaction value of similar goods Method 4: Deductive method Method 5: Computed method Method 6: fallback method

13 Trade Statistics FOREIGN TRADE STATISTICS (MILLION USD) Q1 Arab States Trade balance Exports Imports COMESA Trade balance Exports Imports Aghadir Trade balance Exports Imports EU Trade balance Exports Imports EFTA Trade balance Exports Imports Turkey Trade balance Exports Imports World Trade balance Exports Imports

14 FOCUS ON THE OIL SECTOR Q1 Arab States Trade balance Exports Imports COMESA Trade balance Exports Imports Aghadir Trade balance NA NA Exports Imports NA NA EU Trade balance Exports Imports EFTA Trade balance Exports Imports Turkey Trade balance Exports Imports World Trade balance Exports Imports

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