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Monday, 13 August 2018

Gov’t to have automotive directive ready by the fall

LEGISLATION WATCH- We’ve heard this one before — gov’t to have automotive directive ready by the fall: The Trade and Industry Ministry is planning to have the automotive directive drafted and ready before the House of Representatives reconvenes for the fall legislative session in October, Nassar said at a presser on Monday, according to Amwal Al Ghad. The legislation had been “almost ready” since 2016.

Clues that major changes to the act are coming: The legislation is currently under review, said Nassar in a ministry statement. While he did not delve into specifics, there were some clues that confirm that major changes to the policy are taking place. First, Nassar assured that the legislation that will come out of the review process would adhere to past agreements signed with foreign partners. The EU, and Germany in particular, have not been fans of the original automotive directive, as it would have developed a local manufacturing base nationwide which would compete with EU imports. Customs on EU imports are set to fall to zero at the end of the year. Nassar also confirmed for the first time that the review of the act is currently being conducted by a committee made up of the ministries of trade, finance and investment.

Other clues coming out of the press seem to indicate that the ministry has fired the consultancy hired by former Trade and Industry Minister Tarek Kabil to review the act. In its stead, the ministry appears to be conducting a survey of the entire auto industry in Egypt, Amwal Al Ghad reports.

Background: A senior government source revealed to us last month that a committee made up of the three ministries was planning to scrap the automotive directive, which sets a nationwide system of incentives and tariffs for manufacturing and exports for the auto industry, in favor of a Moroccan-style incentives system and special economic zones. This was corroborated by two other well-placed sources. While Nassar denied that the automotive directive was scrapped, he did confirm that the entire policy was under review.

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