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report by the secretariat

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report by the secretariat

Egypt WT/TPR/S/150

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IV.

    trade policies by sector

    (1) INTRODUCTION

    1. Since Egypt's last TPR, in 1999, sectoral GDP shares have decreased slightly for most subsectors, while the contribution of petroleum production has increased strongly, mainly as a result of rising oil prices (Table IV.1). Agriculture contributes just under 16% to GDP, but is important in terms of employment. Egypt remains a net food importer, although the agricultural trade deficit has been decreasing in recent years due to increasing exports. The average tariff on agricultural goods was 5.8% in January 2005. The prices of most agricultural goods are market determined. No notifications have been submitted to the WTO Committee on Agriculture since 1999. Table IV.1 aGross domestic product at factor cost, 1996/97 to 2003/04

     1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 20003/04

    Total GDP (LE million) 247,028 266,758 282,578 315,667 332,544 354,564 390,623 445,173

    (per cent)

    Total commodity sector 48.2 48.0 48.2 49.9 49.9 51.3 51.2 51.8

     Agriculture 17.0 17.1 17.3 16.7 16.6 16.5 16.7 15.8

     Industry and mining 17.6 18.3 19.5 19.4 19.1 19.1 18.8 18.4

     Petroleum and products 7.1 5.8 4.6 7.4 7.9 8.9 9.4 11.6 b Electricity 1.7 1.6 1.6 1.6 1.6 2.1 2.1 2.0

     Construction and building 4.9 5.1 5.2 4.8 4.7 4.7 4.3 4.0

    Total production services 33.6 33.4 33.1 32.2 32.1 31.5 31.6 31.3 c Transportation 9.2 9.0 9.2 8.8 9.1 9.0 9.3 9.5

     Commerce, finance, and 22.8 23.1 22.6 21.8 21.5 20.7 20.3 19.4 insurance

     Hotels and restaurants 1.6 1.2 1.3 1.6 1.6 1.8 2.0 2.3

    Total social services 18.3 18.6 18.7 17.9 18.0 17.2 17.2 16.9

     Housing and real estate 1.8 1.8 1.9 1.9 2.1 3.9 3.8 3.6

     Government services (utilities) 0.4 0.4 0.4 0.4 0.4 9.9 10.2 10.2

     Social insurance 0.1 0.1 0.1 0.1 0.1 .. .. ..

     Government social services 16.1 16.4 16.2 15.5 15.4 3.4 3.2 3.2

    .. Not available.

    a Does not include net indirect taxes. b Includes water utilities subsector. c Includes Suez Canal.

    Source: Information provided by the Ministries of Planning, and of Foreign Trade and Industry.

    2. Petroleum and natural gas contribute only around 11.6% to GDP, but account for almost 40% of the value of commodity exports. While Egypt's production levels of crude oil have declined, the natural gas sector has been expanding rapidly in recent years. Foreign companies may engage in the exploration of petroleum and natural gas only through joint-ventures with the state-owned Egyptian General Petroleum Corporation.

    3. The manufacturing sector comprises a broad range of activities; the most important are metallurgy and metallurgical products, food processing, and chemical products. The contribution of this sector to GDP has oscillated around 19% during the period under review. The average tariff on manufactured products is 27.6% (January 2005).

WT/TPR/S/150 Trade Policy Review

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    4. The services sector remains the backbone of Egypt's economy, with a share of about 49% in GDP. State participation remains important in various services subsectors including financial services, telecommunication, and air transport. The tourism industry and fees for using the Suez Canal remain Egypt's most important sources of foreign exchange. Since Egypt's last Review, a new Telecommunications Law has been adopted; it establishes that Telecom Egypt will relinquish its monopoly over domestic and international fixed-line services by January 2006. Under the GATS, Egypt has bound measures affecting commercial presence and presence of natural persons for a number of individual service categories, most notably in telecommunications services, construction and related engineering services, financial services, tourism, and transport services. Egypt accepted the Fourth and Fifth Protocols to the GATS, in June 2002 and November 1998, respectively. (2) AGRICULTURE

    (i) Main features

    5. The contribution of agriculture to GDP declined from 17.3% in 1998/99 to 15.8% in 12003/04. However, the sector retains a significant role in employment, accounting for about 34% of the active labour force. On a per capita basis, Egypt’s area of cultivated land at 0.05 ha per head is

    among the lowest in the world. Farms are small, with an estimated 70% of holdings less than 0.42 hectares. Due to the low rainfall, agriculture is strongly dependent on irrigation from the Nile River. The agricultural land-base amounts to about 3.3 million hectares, consisting of 3.0 million hectares lying within the Nile basin and delta, and about 80,000 hectares of oasis and rain-fed land. Of the total area in the Nile basin and delta, some 2.5 million hectares are "old" lands, and the remaining 0.72 million hectares are new reclaimed lands. An elaborate crop rotation system is followed on the old lands. Most agricultural land is used for the cultivation of wheat, rice, and maize (Table IV.2).

    Table IV.2 Land use by crop, 2003-04 a (Million feddan)

    Crop Land area

    Wheat 2.5

    Maize 1.2

    Rice 1.5

    Sugar cane 0.323

    Sugar beet 0.131

    Cotton 0.750

     a1 feddan is equivalent to 0.42 hectare.

     Source: Information provided by the Egyptian authorities.

    6. All agricultural land is privately owned. Reclaimed new land, which was owned and operated by the Government through public enterprises, has been sold gradually. Around 80% of this new

    land is now operated by the private sector. Under Law 15/1963, foreigners may not purchase agricultural land (Chapter II(5)), although they may engage in long-term leasing contracts. The authorities indicate that legislation is under discussion to allow foreigners to acquire agricultural land. 7. The main winter crops are wheat, berseem (Egyptian clover), and broad beans. Among the summer crops, maize, rice and cotton are dominant. Vegetable crops, such as tomato, potato,

     1 GDP data are based on information from the Egyptian Central Bank, and the Ministry of Foreign Trade and Industry. Trade data are based on UNSD, Comtrade database.

Egypt WT/TPR/S/150

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