Trade and Industry Ministry form committee to resolve issues with the automotive directive
Trade and Industry Ministry forms committee to break deadlock over automotivedirective: The Trade and Industry Ministry is forming a committee of Federation of Egyptian Industries and Industrial Development Authority (IDA) officials to look into resolving the deadlock on the automotive directive, Al Borsa reported last Thursday. The move is the latest in an attempt to push for progress on the bill — which offers incentives to encourage local assemblers to move further up the value chain into manufacturing — and has been lingering in the House of Representatives’ Industry Committee due to opposition from car importers.
Are importers willing to hammer out a compromise? Importers and the bill’s detractors, including Bavaria Auto Group and Fiat Chrysler, have been lobbying for amendments to the legislation that would reduce the minimum requirement for local content a vehicle would have to include as a condition of benefiting from incentives under the law, said Samir Allam, head of the FEI’s transportation division. This could be their opening position in the talks set to take place to reach a compromise. The ministry had said last month that it would revisit unspecified sections of the legislation to ensure that none of its clauses violate any of Egypt’s trade liberalization agreements with the European Union.
The central bank had earlier backed into forming its own task force to study alternatives to the legislation and was expected to submit its report sometime in the beginning of June. The CBE’s authority to look into the issue remains an open question.