(MENAFN- Daily News Egypt) Egypt has refused EU demands to lift the import restrictions that were set in motion by the Egyptian government in March. 'The European Union has held some meetings with the World Trade Organisation (WTO) to discuss the negative results of the new restrictions as they restrict trade between the two parties,' James Moran, EU ambassador to Egypt, told Daily News Egypt on Saturday.
In December 2015, Minister of Industry and Foreign Trade Tarek Kabil issued a decree that was published in Egypt's official gazette Al-Waqa'ia Al-Masriya that said only foreign factories registered in the record of the General Organisation for Export and Import Control (GOEIC) will be allowed to export to Egypt. This was put into effect in March 2016.
'We held different meetings with Egypt's Ministry of Industry and Foreign Trade in an effort to convince the Egyptian side to cancel these restrictions. The new measures will negatively affect not only foreign investments, but also the European exporters and the Egyptian importers,' Moran said.
Egypt is a major trading partner for the EU in the Southern Mediterranean. Egypt and the EU signed the Association Agreement (Partnership Agreement), which came into force in 2004, establishing a free trade area over a 12-year transitional period.
Consequently, EU-Egypt bilateral trade has increased significantly from 11.8bn in 2004 reaching a peak of 23.9bn in 2012. This bilateral trade made up almost 22.9% of Egypt's total trade volume in 2013. Imports from the EU decreased to 5.72bn in the first four months of 2016 compared to 6.737bn in the same period in 2015.
In an interview with Bloomberg on Thursday, Moran said that the EU is currently trying to resolve the issue through direct talks between the two parties, but all options will be considered. He explained that if the talks fail, the EU will go to the WTO to protest the new measures, which disrupt the trade flow and damage business.
Moran explained to Daily News Egypt that as of yet the EU has only initiated talks with the WTO to discuss the negative impacts of the Egyptian restrictions, despite international law giving the EU the right to protest against Egypt in the WTO dispute panel.
Moran added that he believes that by the end of the year the Egyptian government will realise that they were misguided, and that these new restrictions are not the way to resolve Egypt's foreign currency crisis.
Kabil told Daily News Egypt that the import restrictions introduced follow WTO regulations, explaining that the ministry informed the WTO before making such a decision, and that the ministry is ready to deal with any escalations from the EU.
He said that Egypt has the right to take all the necessary legal actions required to protect its economy and regulate the imports the same way the EU sets regulations, adding that most of the factories registered in the GOEIC records are from the EU, and there are no obstacles facing factories that want to register. The ministry will attend to any enquiries relating to the registration process.
Moran refused to comment on Kabil's statement regarding registration obstacles saying: 'What I know is that European factories are facing many difficulties because they are unable to get the registration licence.'