By Abdel Qadar Ramadan and Mustafa Salah
The Ministry of Trade and Industry will finalise next week the features of a law which encourages industry and the protection of domestic products, and, in coordination with the Federation of Industries, the ministry will submit the law to the cabinet for approval.
Hesham Rageb, adviser to the Ministry of Trade and Industry for legal and legislative affairs, revealed features of the law that protect local products. One feature includes determining that the proportion of domestic components in the product is between 40% and 60% in order for it to be considered a local product subject to protection.
Rageb emphasised that the law does not consider products assembled in Egypt as domestic products if all the components are imported.
He added that the law includes exceptions, allowing the government to buy imported goods from the domestic market if there are no products with identical specifications available on the market to meet the government’s needs in terms of quality and efficiency.
According to Rageb, the law includes sanctions for those who violate the law deliberately, or by failing to buy domestic products as agreed upon.
Two past decisions by the government were never implemented, one by Prime Ahmed Nazif (decision 2070 of the year 2008), and another from the Kamal Ganzouri government (decision 736 of the year 2012), despite government agencies committing themselves to not importing products parallel to those on the domestic market and encouraging national industry.
Ragab added that the directives issued by Mehleb’s cabinet in May, mandating that government bodies purchase local products, were not merely directives to implement former government resolutions, and were not issued in the form of a formal decision by the government thus far.
The goal of the law as laid out by the Ministry of Trade and Industry is to grant local products priority in purchases paid from the public treasury under the condition that the quality and price are acceptable and appropriate for the government agency.
Abu Al-Qamsan, adviser to the Minister of Trade and Industry for Foreign Trade, said that the regulations of the World Trade Organization as well as the trade agreements signed by Egypt are not inconsistent with the law prepared by the Ministry of Industry to protect and encourage local producers and require government agencies to favour them.
Abu Al-Qamsan said that “government procurement” is not subject to these rules and that all countries of the world encourage their governments to purchase and favour local producers.
In this context, eight major industrial establishments demanded in a lawsuit presented to the Administrative Court that the Presidential Decree limiting government agencies’ dealings to local products only be amended and a resolution be adopted determining the qualities that should be present in local products in order for them to be used.
The lawsuit, to be decided by the Investment Department in the Administrative Court next month, was filed by Arab Company for Industry and Trade, the Arab Company for Office Equipment, the National Company for Development, Andalus, Kalex Trading Company, Egypt and Middle East Import-Export Ltd. Co, Egypt to German Office Supply, and Matco. They claimed that the Ministry of Industry did not establish clear and just standards with respect to limiting government agencies to purchase local products only.
