Issue No. 595
Economy
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18 - 24 July 2002 Issue No. 595 Economy |
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| Published in Cairo by AL-AHRAM established in 1875 | Recommend this page | ||
Egypt's trade offices: The key to boosting exports?
Can trade representation offices abroad help boost Egyptian exports in international markets? Sherine Nasr investigates
Talk about increasing Egyptian exports seems never-ending. Amid a parade of export promotion studies, laws and regulations, exporters often enquire about how use is being made of Egypt's 68 commercial representation offices that are dotted around the world. Can they be used to improve trade connections and open new markets?
Click to view cartoon"Export opportunities that are extended through these offices are significant because, in most cases, it is the foreign partner who seeks the trade representation office to get information about Egyptian companies. This means that he is serious in his search," said Essam Ismail, head of the Information and Computer Department, in Egypt's commercial representation bureau.
Before the 1980s, the role of these offices in promoting Egyptian exports was insignificant. It wasn't until 1991, that these offices made their first forays into export promotion. An information and export service administration was set up and a trade net project was established to connect overseas offices to the central office in Egypt via Internet.
"The idea was to have a flow of information so that those seeking a service or a product could easily acquire the information they were looking for. Our ultimate aim in creating this service was to establish a trustworthy intermediary service between overseas buyers and domestic producers," commented Ismail.
The system, which is still in place, requires that foreign importers fill in an application form detailing the specifications of the product they are seeking. Egyptian exporters, particularly those anxious to expand their activities abroad, also fill in an application, giving full details of their products, their location, prices and other useful information.
However, despite the potential of this system, the role of these offices as export promoters is quite controversial. Indeed, many exporters have complained that they lack a vision over what markets to target at what times.
"Most Egyptian exporters have their eyes set on the European market. This is where many Egyptian products have been rejected, such as potatoes, onions and peanuts. These offices should advise us on what other markets to tackle," said Attiya El-Benhawi, an exporter. He added that Egyptian exporters do not really have a clue whether to venture into South American markets or to try COMESA (Common Market of the Eastern and Southern Africa) markets.
Yet, trade representatives object to this idea. "We have made 300 commercial and market studies of products in 26 countries which haven't been utilised by any Egyptian exporters," said El-Sayed Qasim, head of the Trade Representation Department at the Egyptian Foreign Ministry. He added that these studies are available and would cost a fortune if exporters conducted them on their own.
Qasim further criticised Egyptian exporters for rushing into new export markets before conducting comprehensive marketing studies. Thus, they often lose the opportunity to establish permanent trade relations.
Egyptian exporters were also criticised over their persistent lack of information about the business atmosphere surrounding them. This results in a lack of vision and poorly informed business decisions.
"It is vital that every company creates its own database of the markets in which it wishes to operate. This database should be always updated. This is an ongoing process that should be given top priority," said Dora Fiani, representative of Fiani and Partners, a pioneering company in business development, investment and promotion consultancy. "This is perhaps the only way a company or an exporter can get to know the new opportunities in any market before it heats up with competition from other exporters," she added.
Employees at Kompass, a leading global information network business, that has had a branch in Egypt since 1979, have noticed that there are far more foreign importers who visit their site to seek information about the Egyptian market, products and companies, than there are Egyptian exporters who look for information on overseas markets. "The culture of using the Internet to generate new export leads is new to Egyptian exporters," said Ismail.
It is also clear that many factors go towards making export leads sustainable. However, Egyptian exporters are often saddled with domestic obstacles that they find difficult to cope with. "In its attempt to encourage exports, the government has put many obstacles in the face of imports. In so doing, the government has overlooked the fact that many of our exports rely heavily on the raw materials we import from abroad," said El-Banhawi. He added that the more difficult the government makes it for imports, the harder it becomes for Egyptian exports to venture into these countries. "We should not ignore the fact that countries adopt the principle of reciprocity in their trade dealings," he added.
Although it has never been the role of the trade representation offices to determine customs and tax rates, many exporters have demanded that trade representatives play a role in this context. "If we truly believe that trade representation offices are a part of the Egyptian export system, trade representatives should have a say in whatever new taxes or customs the government imposes." El-Banhawi explained. This is because these representatives have a good understanding of export markets. Most importantly, they can anticipate the impact of new taxes on our exports abroad.
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