Youssef Boutros-Ghali at AmCham

Egypt needs to develop the ability to pursue its interests successfully in the World Trade Organization, because that body offers developing countries the loudest voice, Minister of Economy & Foreign Trade Youssef Boutros-Ghali said in January.

"We need an infrastructure of lawyers," Boutros-Ghali told the businesspeople attending the monthly luncheon of the American Chamber of Commerce in Egypt. "We will have it by the end of the year. I promise you."

This proposed development might sound ominous to some. But the minister argued that the WTO, whatever its shortcomings, was unique in that it offers the same voting rights to developing and rich countries. Whereas the International Monetary Fund and the World Bank apportion voting rights by population, the WTO follows the principle of one country, one vote. And since poor countries outnumber rich countries, the process could offer strong advantages to the developing world.

The WTO is "an organization that actually has the mechanism to take care of us," Boutros-Ghali said. "We have to preserve this."

The key, the minister argued, is for the developing world to produce experts who can work the mechanisms of the WTO to their advantage, who can keep developing countries from negotiating from weakness as they did in the Uruguay round.

"The existence of rules does not mean they're fair," the minister said. "We need to think together."

In particular, the developing world will need to push for renegotiation of the restrictive agricultural regime, much-abused antidumping provisions and tight time frames that have disadvantaged its efforts to successfully compete. But freer trade and reduced barriers to imports should remain the goal. Most of Egypt's industry depends in some fashion upon inputs that come from abroad. Imports don't have to increase, the minister said, but they do have to move in and out more quickly.

"Efficiency in exports starts with efficiency in imports," Boutros-Ghali said. "The more efficient you can trade, the more efficient your economy becomes."

One obstacle to a more efficient trade regime is Decree 619, imposed in late 1998 by the previous minister of trade & supply in order to slow the growth in imports by erecting administrative hurdles.

It appeared late last year that Boutros-Ghali, the new minister of trade, had watered down the decree, but press reports were confusing.

At the AmCham lunch, the minister confirmed that he had amended Decree 619. Now, an official invoice from a manufacturer, its subsidiary or its certified agent is all importers need to present to customs officials to meet the decree's proof-of-origin requirement. "That's all you need," the minister said.

In the question and answer period that followed his speech, Boutros-Ghali was asked to explain the government's policy toward the Egyptian pound and to clarify how it would balance the competing goals of preserving the pound's virtual peg to the dollar and encouraging the economy to grow. Here, the minister became less clear.

"We don't have a structural imbalance. We have a circumstantial imbalance," Boutros-Ghali said of the mismatch between dollar supply and demand. "There is at work a process that deals with institutions and policies that address what is seen as a circumstantial imbalance that is on its way to being resolved. How and where, you will see as it happens."

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