Manufacturers launch attacks on import tariff cuts

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CAIRO: Leaders of Egyptian industrial chambers have expressed strong reservations with the government’s recent decision to curb tariffs by 25 percent on imports of certain manufactured goods, including home appliances, processed food, plastics and medical products.

Hamada El-Kalyoubi, chairman of the Textiles Committee at the Egyptian Federation of Industries, attacked the government initiative saying that it would prove harmful for local garments manufacturers. “The majority of local garments producers lack the capacity to stand in competition with imports in the domestic market at present, he said.

The Ministers of Finance and Trade and Industry defended the decision to curb import tariffs on Monday, claiming that it was in the interests of consumers. The tariff cuts would focus on food products, manufactured consumer goods.

Sherif Ezzat, chairman of the Medical Appliances Committee at the Federation of Industries, said the government’s initiative would only benefit foreign exporters at the expense of local producers, who should have been encouraged to improve their competitiveness in the plastics and medical products industries.

Ezzat attacked the decision as inconsistent with the government’s rhetoric about promotion and encouragement of manufacturers. The tariff amendment will cut import taxes on medical products to 20 percent from 40 percent.

But Ehab Al-Desouki, professor of economics at the Sadat Academy in Cairo, expects the impacts of the recent amendments on consumers’ welfare to be limited as the majority of exemptions are on production inputs for manufacturers. “Those manufacturers will not immediately pass the tariff cuts to lower consumer prices, he said.

The Ministry of Finance expects the new tariff cuts to cost the public treasury as much as LE 1.4 billion.

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