The row over recently imposed import controls rages on The decisions may be two months old, but winners and losers are still battling over whether controlling imports is good or bad for an economy in crisis, Nesma Nowar reports. Last November, the Ministry of Industry and Foreign Trade imposed new import regulations which stipulated that all imports of ready-made garments, textiles, coloured yarns, carpets, natural and artificial leather, shoes and bags should be accompanied by an inspection and quality certification before entering the Egyptian market. This certification should be approved by the International Laboratory Accreditation Cooperation (ILAC) or by any Egyptian or foreign governmental entity the minister of trade and industry decides upon. The certification should ensure that imported goods comply with the Egyptian standards and pass inspection by the General Authority of Export and Import Control (GOEIC). Mahmoud Eissa, minister of industry and foreign trade, stated that the new regulations are set to protect the Egyptian consumer from bad quality imported goods which are harmful for consumers' health. The new regulations would be implemented starting next March. In a quick response, Ahmed Shiha, head of Importers Division at the Cairo Chamber of Commerce, filed a lawsuit against the government claiming that these decisions are illegal. He explained that these decrees violate the world trade agreements to which Egypt is signatory. Importers, Shiha said, follow the standards of the international organisations that Egypt is affiliated with like the International Organisation for Standardisation (ISO). Shiha affirmed that these decisions are taken to hinder import activities in order to serve the interests of some business tycoons. He added that the format of the decision itself came very broad and unclear as it did not specify the exact entity from which importers are supposed to get their certification. "The main aim of these decisions is to limit imports," Shiha told Al-Ahram Weekly. Such decisions would harm importers, noted Shiha, while smugglers and monopolists would be the only beneficiaries. Yehia Zananiri, head of the garments producers association, agrees with Shiha that these decisions aim at banning imports and were issued in favour of some businessmen. He believes that the new regulations are issued to deprive garments manufacturers from the textiles needed for production favouring local textile producers. "The government claims that this is to support the local industry and we are not against that," Zananiri told the Weekly. "However, the local textiles industry cannot meet the demands of the market whether in the amounts or types needed." Like Shiha, Zananiri believes that such decisions encourage smuggling due to the difficulties importers would face to get their goods into the Egyptian market. In addition, he said the government would be deprived of income from customs duties. Moreover, Zananiri said, import difficulties would force garment manufacturers to buy their needs from smugglers at a higher cost. "This would cause a price hike in the final product available to customers." Zananiri stated that the ministry has taken such decisions without studying the results of its implementation on the ground and without consulting the Chambers of Commerce. While Zananiri and Shiha argue that the new decisions harm small local manufacturers and consumers, Yehia Zalat, head of the Leather Industry Chamber at the Federation of Egyptian Industries, argues that the decisions benefit and protect the Egyptian consumer from bad quality imported goods. He stated that in the past years, the GOEIC has not carried out its role in inspecting imports, thus allowing the entry of poor quality products to the Egyptian market. Zalat also stated that there have been many complaints concerning the bad quality of imports and that the government has the right to protect consumers from such products. In fact, he added, leather imports have increased this year by 30 per cent compared to last year. "Random import activities harm the economy and local industries." The new import regulations, according to Zalat, came at a time when Egypt desperately needs to boost its economy. "These decisions would help in enhancing the country's local industries and producing better quality products." Abdel-Khalek Farouk, an economic expert, shares a similar opinion. He believes that Egypt is in a dire need for protective policies in order to save local industries, regulate the market and boost production. However, he stressed that these protective policies should be accompanied by a new law which would protect competitiveness and prevent monopolistic practices in the Egyptian market. Meanwhile, Farouk explained to the Weekly that import activities have increased drastically which in turn had a destructive effect on the Egyptian production. He added that Egypt's imports amount to $50 billion leading to a large trade deficit. Consequently, Farouk stressed that it is necessary to rationalise imports and link importation with the needs of the Egyptian market and production.
