CAIRO: Member states need to strengthen cooperation on existing trade agreements and the private sector needs to play a larger role in implementing these agreements, experts at a conference in Cairo said Wednesday.
Experts gathered for day two of the Forum on Trade and Investment Agreements and Protocols Wednesday to discuss the state and future of various Egyptian trade agreements.
The conference, which was put together by the Ministry of Trade and Industry, aimed to discuss ways to clarify and strengthen existing trade agreements that Egypt has with countries and regions around the world.
The first panel tackled the Pan-Arab Free Trade Agreement (PAFTA), which was established in 1997 as a means of reducing tariffs for trade among Arab states and of encouraging trade and investment between member states.
The point of these kinds of agreements is to create a free trade zone among Arabs and Africans while the broader trade landscape is worked out by developed countries, said Ambassador Gamal Bayoumi, of the Ministry of International Cooperation.
“These blocks can stand up to the US, the EU, etc., he said. “We are 330 million [speaking] the same language.
Bayoumi stressed that smaller developing countries are incapable of robust competition on the international scene, but he said that as a bloc, the collection of Arab states could be more powerful in affecting change in international trade in a way that would benefit each member state’s economy.
The discussion quickly turned to ways in which to strengthen PAFTA, which each panelist agreed suffers from flaws that are preventing the Arab states from forming a strong bloc.
Mahmoud Abbouel Allas of the Egyptian Customs Authority said that a “lack of efficiency with regard to customs in trade agreements was hindering progress.
Discussion leader Ashraf Mohamed Naguib, managing director of Global Trade Matters, argued that exclusion of the private sector from decisions surrounding the implementation of PAFTA had weakened the trade agreement.
“The Egyptian private sector needs to have more of a say, he said.
Bayoumi stressed that, with only two Arab economic conferences per year, government ministers from all participating states were too hands-off to foster effective cooperation.
Allas said that rules of origin, meaning defining value added and reassembly rules, have been poorly defined so far.
Loay El-Shawarby, an expert on international trade and competition laws at Zaki Hashem & Partners, dismissed a call by some to completely overhaul PAFTA, saying that creating a new trade agreement would work against Arab states.
“You don’t need to wake up every morning and sign a new free trade agreement, he said.
On common markets.
The second panel discussed Egypt’s involvement in the Common Market for Easter and Southern Africa (COMESA).
The panelists discussed the problems arising from Egypt’s image of itself as at a geographic crossroads. The country’s failure to commit fully to COMESA, some said, was a primary obstacle to progress.
Eighty percent of Egyptian exports to COMESA countries, said Mohamed Omran, an independent consultant and economist, go to Sudan and Libya.
Only 20 percent goes to other member states. Omran saw this as evidence that Egypt was unwilling to fully engage the continent as an important trading partner.
Abdel Monem Emara, former minister of youth and sport and current head of the Egyptian African Council, agreed.
“COMESA has very good ideas.. But what’s happened to them? he asked. “In all the ministries in Egypt, no one believes in Africa.
Some on the panel said that creating a situation in which the Egyptian private sector would lead the way could strengthen the trade agreement.
Egypt has to “strengthen the cooperation between firms and companies in COMESA countries, said Hussein Omran, first under-secretary at the Ministry of Trade and Industry.
Mohamed Omran said that giving each COMESA member state an equal voice in the decision process was key to strengthening the alliance.
.And qualified zones
The final panel of the afternoon discussed Qualifying Industrial Zones (QIZ) versus the Egypt-Turkey Free Trade Agreement.
The QIZ agreement, under which 150 companies in Egypt operate, is undergoing something of a transformation.
Ali Awni, head of the QIZ Unit at the Ministry of Trade and Industry, said that the two major projects his group was undertaking were the expansion of the industrial zones to Upper Egypt and in strengthening compliance.
During his recent visit to Washington, Trade Minister Rachid Mohamed Rachid and his counterparts approved two new locations for QIZ, one in Minya and another in Beni Suef
Such steps were necessary, he said, to keep growth under QIZ robust.
“Initially, we had very good growth, growth of 35 percent, he noted. Recently, though, growth has tapered off to 10 to 15 percent annually.
Though panelists were encouraged to compare QIZ to the Egypt-Turkey FTA, Mohamed Kassem, chairman of the World Trade Company, rejected any comparison.
“The FTA is a much wider agreement. It’s not specific to just granting access to the market, he said.
While each panel expressed optimism for the future of Egypt’s trade agreements, all agreed that there was much work still to be done.