EU v Egypt at the World Trade Organization: The European Union is challenging Egypt’s import registration rules at the World Trade Organization (WTO), calling them “arbitrary” and in violation of WTO rules, the EU Commission said in a statement on Wednesday. The EU says that exports to Egypt have fallen 40% since 2016, which it blames on the country’s compulsory import registration requirements.

The rules: The government in 2016 began requiring some foreign companies to register with Egyptian authorities before exporting goods to Egypt. Registration is currently required for 29 categories of goods, including agricultural and food products, cosmetics, toys, textiles, garments, household appliances, furniture, and ceramic tiles.

The rationale: Government officials said the move was designed to improve quality control of imported goods, while some observes had suggested at the time that it was intended to slow demand for foreign exchange.

The problem: The EU alleges that the registration process is arbitrary and can take years, and that authorities “have failed to process the applications of many EU companies,” despite appeals by the EU and the companies themselves. “These import restrictions are illegal under WTO rules and we regret that Egypt has not acted to remove these, despite our repeated requests and efforts to resolve this issue,” EU Trade Commissioner Valdis Dombrovskis said.

Our response: “The Egyptian government is keen to strengthen its economic and trade relations with the EU,” a Trade Ministry source said in an official statement. Egypt remains committed to international trade rules, they added.

Digitization to the rescue? The authorities are working on combining the import registration system with the new digital customs system Nafeza, which would house all importers on a single platform and possibly resolve the issue with the EU, Khaled Nassef, technology advisor for Egyptian Company for E-commerce Technology (MTS), which set up the ACI system, told us.

WTO action has been six years in the making: The threat of a formal complaint at the WTO has existed ever since the rules were introduced. The trade body wrote to the government in 2016 asking for an explanation for why it had introduced rules that were negatively impacting its trading partners, and the EU urged the Trade Ministry to scrap them from the outset.

Coming next: Egypt and the EU have 60 days in which to resolve the issue via consultations. If they fail to find a solution, the EU can ask the WTO to set up a panel to rule on the matter, according to the European Commission statement.