ABSTRACT
Over two decades, Egypt has significantly liberalized its external trade. Trade reforms led to a substantial increase in both exports and imports. After 2011, and with a severe decline in foreign reserves, several restrictive measures have been imposed. Yet, despite these developments (between liberalization and protectionism), exports, imports, or foreign direct investment (FDI) has not changed much. Such a performance can be attributed to four main reasons: first, domestically, there is no clear vision for an efficient industrial policy and the business environment does not attract investors. Second, exports are mainly concentrated in traditional and low value-added products and are highly dependent on imported inputs. The same analysis applies to FDI that failed to generate jobs or create global value chains since they are concentrated in the oil sector. Third, most of the agreements Egypt signed are shallow, leading to a trivial increase in exports. Fourth, Egypt imposes on and faces from its partners several nontariff measures that hinder both exports and imports. Clearly, while some of these nontariff measures are politically motivated, others must be addressed in order to boost Egypt’s exports.
