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Tuesday, 28 February 2017

European car makers are not happy with the automotive directive

Shockingly, European car makers and local importers of their wares are not in love with the so-called “automotive directive,” which would give tax breaks to local manufacturers and protect them against unfair advantages now enjoyed by EU, Turkish and Moroccan imports. The automotive directive will not only harm European exports to Egypt but also violates the terms of free trade agreements with the EU, the companies complained in a letter to the European Commission picked up by Al Borsa.

Trying to keep the Masry gravy train rolling, EU-based manufacturers argue that the bill offers tax breaks and incentives to local manufacturers that could prove harmful to exporters in the long run. Then came the not-so-veiled threat: The directive — which grants incentives along the value chain to encourage local manufacturing — will affect future European investments in Egypt’s auto industry. Members of the Federation of Egyptian Industries said it was unlikely that the government would take the European concerns into account, maintaining that the directive does not violate trade agreements. The bill is presently before the House Industry Committee.

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