Syria imposes LE 25 on Ceramic meter exported from Egypt

CAIRO – 8 August 2018: The Syrian Ministry of Economy and Trade issued decree No. 695 to impose £S700 (LE 25) for each square meter of ceramic imported from Arab countries, which are members of the Greater Arab Free Trade Area, including Egypt.

The Greater Arab Free Trade Area is an economic alliance between Arab countries for economic integration and low-tariff trade. The Greater Arab Free Trade Area (GAFTA) came into force on January 1, 2005.

“The Syrian decision threatens the competitiveness of Egyptian ceramics in the foreign markets in general and the Syrian market in particular, which is one of the main promising markets for the Egyptian ceramic product,” member of the board of directors of the Ceramics Division of the Federation of Industries,Bahaa Abdel Majeed, said.

Abdel Majeed referred to Turkey, which is the biggest competitor to Egypt, saying that it cannot directly export to the Syrian market now.

He pointed out that Egypt’s exports of ceramics and tiles to Syria exceeded LE 500 million during the period between 2013 and 2017.

“The Syrian market comes in the seventh place in Egypt’s export list of ceramic and tile, representing 6 percent of the total exports of the sector to all countries," he stated.

Abdel Majeed affirmed that these fees will lead to a 50 percent increase in export priceswhich threatens the Egyptian ceramics to lose one of its most competitive advantages in foreign markets, especially the Syrian market, compared to exports of ceramics from competitorslikeIran, Turkey and some African countries.

Abdel Majeed called for supporting the cost of shipping to the Syrian market and providing grants for exports of ceramics, similar to the export support given to African countries and some sectors of Egyptian building materials.

He added that most countries competing withEgyptget an export support for shipping their products.

The Egyptian Ceramic Industry

Abdel Majeed stressed that the Egyptian ceramic industry is suffering from a large imbalance in marketing policies as a result of its policies in the competitive countries and the lack of a future vision that can help the industrycompete in international markets.

He added that the industry has become unstable especially after the hike in gas prices and production costs,and due to the industry's inability to compete internationally due to a difference in prices estimated at about $1.5 million per meter, which weakens the demand for Egyptian products.

"The industry has gone through a very critical phase, and some of the reform measures taken by the state have had a negative impact on many sectors. Therefore, we must listen to the manufacturers'demands to achieve the state's directives and increase exports," he said.

Abdel Majeedsaid that the decision to liberalize the exchange rate had positive results on exporters, butthe results were negative on the importers, which led to a large increasein exports and a reduction inimports.

He revealed that exports to Syria doubled 10 times and the rate of exports to some factories reached 40 percent, which confirms that the country is moving in the right direction and that the economic reform programis positively affectingthe market, but there are many variables that harm the future of Egyptian exports.

He called on the government to intervene in order tolimit the effects of these variables, primarily support shipping and support exporters.

Generally, ceramic exports recorded $55 million in the first four months of 2018, up from $43 million in the same period of 2017, with an increase of 26 percent.