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A New Internal Trade Body is Establ

A New Internal Trade Body is Established: The New Body Reports to the Ministry of Trade and Industry and Aims at Developing Internal Trade and Improving Market Efficiency
Presidential Decree Number 354 of 2008 was issued, establishing the Internal Trade Development Agency (“Agency”). The new Agency reports to the Ministry of Trade and Industry, has an independent juristic personality, and aims at developing internal trade, encouraging investment in wholesale and retail trade, and simplifying procedures for commercial registration.
The Decree provides the new Agency with a number of functions, including:
• Determining and making available to investors lands required for internal trade, • Developing internal trade markets, • Supporting commercial chambers by way of training and skill development, • Undertaking all functions of the Commercial Registration Agency which has been merged into the new entity, • Determining the conditions for commercial licensing, • Supporting efforts to strengthen intellectual property rights, • Establishing data bases for internal trade markets. The Presidential Decree further states that the new Agency shall have a Board of Directors where both private and public sectors are represented, as well as an independent budget. Moreover, other governmental agencies shall be required to provide it with information concerning internal trade and investment.
Conclusion
The establishment of the new Agency is an indication of the growing interest of the State in developing internal trade markets and developing the retail sector due to its importance in improving market efficiency and price responsiveness, thus realizing gains for both producers and consumers.
However, whereas the intentions may be sound and noble, the new Decree is overambitious and seeks to achieve more than can be accomplished by Presidential Decree. This, in all cases will require further monitoring in the coming weeks.
The Decree raises the following concerns:
1. One of the most problematic aspects of developing internal trade is the lack of available lands that are suitable for the needs of large companies interested in developing warehousing, sales and marketing capabilities. And in spite of the fact that establishing a new Agency partially dedicated to this issue may be a step towards resolving it, it will not be effective unless the State makes land available for investment. This may be possible in new communities and in remote areas where there is availability of land owned by the State, but will be more difficult in “old” cities. 2. According to the Decree, the new Agency has a number of powers which are not compatible with its legal framework. To state that it shall establish the conditions for commercial licensing for example is not compatible with other laws that have not been abrogated. The same applies to its powers to develop local markets, and to support intellectual property rights. 3. Merging the Commercial Registration Agency into the new entity is a risk and should not have been undertaken for two reasons: the first is that Commercial Registration is an old, big bureaucracy which has nothing to do with developing internal trade. It may thus drain the resources of the new Agency in following up on procedural matters without advancing its primary goals. Secondly, Commercial Registration should have been reformed first prior to joining another agency because it continues to be a slow administration that lacks transparency, and thus may inflict the new administration with its own problems.
Presidential Decree Number 354 of 2008 was issued, establishing the Internal Trade Development Agency (“Agency”). The new Agency reports to the Ministry of Trade and Industry, has an independent juristic personality, and aims at developing internal trade, encouraging investment in wholesale and retail trade, and simplifying procedures for commercial registration.
The Decree provides the new Agency with a number of functions, including:
• Determining and making available to investors lands required for internal trade, • Developing internal trade markets, • Supporting commercial chambers by way of training and skill development, • Undertaking all functions of the Commercial Registration Agency which has been merged into the new entity, • Determining the conditions for commercial licensing, • Supporting efforts to strengthen intellectual property rights, • Establishing data bases for internal trade markets. The Presidential Decree further states that the new Agency shall have a Board of Directors where both private and public sectors are represented, as well as an independent budget. Moreover, other governmental agencies shall be required to provide it with information concerning internal trade and investment.
Conclusion
The establishment of the new Agency is an indication of the growing interest of the State in developing internal trade markets and developing the retail sector due to its importance in improving market efficiency and price responsiveness, thus realizing gains for both producers and consumers.
However, whereas the intentions may be sound and noble, the new Decree is overambitious and seeks to achieve more than can be accomplished by Presidential Decree. This, in all cases will require further monitoring in the coming weeks.
The Decree raises the following concerns:
1. One of the most problematic aspects of developing internal trade is the lack of available lands that are suitable for the needs of large companies interested in developing warehousing, sales and marketing capabilities. And in spite of the fact that establishing a new Agency partially dedicated to this issue may be a step towards resolving it, it will not be effective unless the State makes land available for investment. This may be possible in new communities and in remote areas where there is availability of land owned by the State, but will be more difficult in “old” cities. 2. According to the Decree, the new Agency has a number of powers which are not compatible with its legal framework. To state that it shall establish the conditions for commercial licensing for example is not compatible with other laws that have not been abrogated. The same applies to its powers to develop local markets, and to support intellectual property rights. 3. Merging the Commercial Registration Agency into the new entity is a risk and should not have been undertaken for two reasons: the first is that Commercial Registration is an old, big bureaucracy which has nothing to do with developing internal trade. It may thus drain the resources of the new Agency in following up on procedural matters without advancing its primary goals. Secondly, Commercial Registration should have been reformed first prior to joining another agency because it continues to be a slow administration that lacks transparency, and thus may inflict the new administration with its own problems.