Simplification, transparency, and predictability are key solutions to increase Egypt’s exports, Rachid Benjelloun, Chief of Party, USAID TRADE, told Daily News Egypt.
Trade Reform and Development in Egypt (TRADE) is a five-year project funded by the United States Agency for International Development (USAID).It cooperates with the Government of Egypt (GoE) to improve the trade and investment policy environment and reduce trade barriers
Aiming to support the small and medium-sized enterprises (SMEs) in Egypt, the USAID TRADE and Go Global company are organizing the “Export Smart” conference, which is the only annual event where all export stakeholders meet, interact, discuss challenges, and explore market opportunities, this year’s edition will take place on March 14th, 2023.
Daily News Egypt interviewed Benjelloun to learn more about the event and the USAID TRADE Project.
What is the objective of the USAID TRADEProject?
USAID TRADE’smain objective is to help SMEs to export more, to export more sustainably, and to expand in other markets. So in order to achieve that objective we have to work on three result areas, one is to directly support the SMEs, or in other words to provide different technical assistance for those SMEs, including participation in trade shows, advising on which online marketplace to choose, helping them in obtaining certifications, and providing financing and investment advisory services.
Two is to strengthentrade support institutions including, the Ministry of Trade and Industry, Customs Authority, Export Councils, Business Associations, and private sector firms. Third is the enabling environment where we try to conduct some analysis and advice on how we can achieve a better enabling environment for trade and investment in Egypt.
I want to mention that the USAIDTRADEProject focuses on seven selected sectors: engineering products, food processing, home textiles, ready-made garments, chemicals, packaging and printing, and building materials.
How did the idea of Export Smart’s annual event originate?
Several years ago, another USAID-funded project called Trade Facilitation Project, launched a similar event called Export Souq, bringing together exporters and service providers in both Cairo and Alexandria. For USAID TRADE Export Smart comes within the second result area, which is to strengthen the trade support institutions. Let’s remember that a few years back, one of the weaknesses in the export ecosystem was that there weren’t a lot of service providers that can help SMEs to export effectively.So if you were an SME exporter, you werealways looking for the government to help you provide a service, rather than a combination of private sector and government. So what Export Smart tries to do is to bring all the service providers that provide these export related services to SMEs, we bring them under one roof and we bring the SMEs as well, so the two sides can then talk. The service providers can be private sector and they can also be public. They all come together to talk to the SMEs and figure out what services they need so they can work together. This is the whole idea behind Export Smart. And, and so that’s how it also fits within the objective of result two, which is to strengthen the ecosystem for service provision to these SMEs.
What should we expect in this edition?
The theme is different from last year, the theme was the journey to export, we talked about all the different steps on the way to export and we talked about all the service providers within each of those steps. This year, the theme is Africa, so we are talking about exporting into Africa. This year is also bigger as we expect about 1000 SMEs representatives, with45 exhibitors among private sector service providers, 24 public trade support institutions to come to attend Export Smart.
How does the USAID TRADEProject help Egypt improve its trade and investment policy and reduce trade barriers?
We are providing direct technical assistance to SMEs and we’re supporting the trade support institutions, which will have an impact but if we can improve or help improve the enabling environment, the policy framework for trading investment, the impact will be much bigger.
As regulations and fees and charges change continuously, SMEs have to navigate a complex set of steps and processes for exporting and importing. So we, as a project in cooperation with the Government and the private sector, try to shed some light on these complexities, advising on how we can improve based on international best practices, looking on what other countries have done in order to simplify these processes and then come up with some Egypt-based solutions that can help our SMEs to go through maybe a more simplified process.
I think that when we can manage to simplify these processes, I imagine that everybody benefits, small, medium, large, women owned companies, especially when all information is accessible and transparent. The trading process will become more predictable, simplified, and more SMEs will be keen to export. Actually,as the trading process becomes simpler, more transparent, and more predictable, more exporterswill join and the government will be able tocollect more revenue and more investors will be compelled to come.
In your opinion, how could the government increase Egypt`s exports and enhance the investment climate?
I think it`s critical to have more coordination between government agencies and the private sector and this coordination needs to be systematic, for example to give the private sector more lead timewhen it comes to issuing new fees or charges on exports and imports instead of doing it independently.
This is in addition to the three points that I mentioned before, which are simplification, transparency and predictability.
How could Egypt reduce the cost to import?
The major issue that’s happening now is the cost of raw materials because of the devaluation and other external events. But that’s not something that we can control and over time, things will improve.
But I would say that a well-coordinated risk management system would make a big difference in cost to import.It would allow border agencies to quickly, through a risk management engine, decide if a shipment is of high, medium, or low risk, which would facilitate legitimate trade and focus limited resources on higher risk shipments. Facilitating legitimate trade would, thus, reduce cost and time to import for those goods, which in turn would help exports that depend on imported inputs.
How could Egypt maximize the QIZ agreement?
I’m not an expert on the QIZ agreement, but I understand from talking to some Egyptian exporters that because the Israeli content requirements are fairly high that it’s difficult for Egyptian exporters to incorporate the Israeli content while still being competitive when exporting to the US market.
So what would make a bit of difference is if that content requirement was a bit lower, and maybe expanding the zones here in Egypt that would be qualified for Egyptian exporters to export from.
How many trade missions or visits have you organized?
We work through the export councils and with our SMEs, to co-organize trade missions and participate in trade shows. So, we’ve had about 15 of these trade shows and trade missions that work with our partners here in Egypt.
Recently, we organized with the Food Export Council a big trade mission to the Kingdom Saudi Arabia for food exporters. So that’s one big thing and they visited Mecca, Riyadh, and Jeddah, where they met potential buyers in Saudi Arabia. Similar missions are being planned elsewhere.