Tanzania: February 2000
Accelerated reforms undertaken since 1995 in Tanzania have resulted in a significantly liberalized trade regime essentially based on tariffs. A new WTO report on the trade policies of Tanzania says that Tanzania has eliminated its export restrictions and foreign exchange controls and has, overall, made a concerted effort to create an environment conducive both to domestic and foreign investment. However, the report also notes that Tanzania's severely limited export capacity has hindered any significant export-led growth.
Impact of accelerated reforms in Tanzania constrained by its limited export capacity
A least-developed country, Tanzania is one of the most indebted nations in the world. The report says that a large debt burden may be an obstacle to its trade and economic development.
The new WTO Secretariat report, along with a statement by the Tanzanian Government, will serve as a basis for the trade policy review of Tanzania which will take place in the WTO Trade Policy Review Body on 1 and 3 March.
The report says that Tanzania's main trading partners are the European Union, Japan, India and Kenya. Its exports are primarily agricultural commodities with coffee, cashew nuts, tobacco and cotton constituting the largest sectors. Tanzania imports mainly machinery, transportation equipment, industrial raw materials, and consumer goods. The report notes that because of the decrease in agricultural production during the past few years, attributable to adverse climatic conditions, food and foodstuffs imports have increased sharply.
Tanzania has participated in the Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries (IF). However, the report notes that despite its involvement in the IF, and the technical assistance it has already received from its development partners such as the WTO and other members of the IF, Tanzania is in need of substantial ongoing technical assistance in a wide range of trade-related areas.
Tanzania is actively pursuing a regional integration strategy, the report says. It is a signatory of the Common Market for Eastern and Southern Africa (COMESA) - although it has announced its intention to withdraw - and it is a member of the Southern African Development Community (SADC). Tanzania also aims to strengthen the East African Cooperation (EAC) agreement with neighbouring Kenya and Uganda.
Under the Lomé Convention, Tanzania receives the full range of aide made available to ACP countries by the European Union, the report notes. As a result, many Tanzanian exports to the EU are exempt from import duties. Likewise, Tanzania's goods enjoy non-reciprocal preferential access to the markets of other developed countries through the Generalized System of Preferences. However, the report states that due to Tanzania's limited export capacity, the benefits that Tanzania reaps from these preferential arrangements are minimal.
The report notes that the recent reform of Tanzania's customs duties has resulted in a simplified five-tier structure with a simple average of applied import duties of 16.2%. This tariff structure is somewhat escalatory with many processed products facing a higher effective rate of protection along the processing chain. The report states that such a tariff structure provides substantial import protection to higher-level processing activities, causing resource misallocation and inflicting higher costs to Tanzanian consumers.
The report notes also that the Government of Tanzania relies heavily on revenues from tariffs and VAT and that consequently there is pressure to maintain revenues through high tariff levels. The report says that this pressure could be reduced - as could tariff rates - if the extent of exemptions granted were reduced or eliminated.
Tanzania is neither an observer to, nor a signatory of, the plurilateral Agreement on Government Procurement. The report notes that Tanzania's own procurement procedures are a confusing agglomeration of memoranda and other understandings that vary from ministry to ministry. The report says that Tanzania has been pursuing an aggressive policy of privatization in conjunction with support it receives from international financial institutions. Tanzania has also been amending its intellectual property rights legislation to conform with WTO requirements and is currently addressing its lack of enforcement mechanisms.
Tanzania's agricultural sector constitutes over 50% of its national GDP and provides a majority of the country's export earnings, the report says. The sector has been substantially liberalized since the mid 1980s and market forces have been allowed to prevail, the report notes. The Government has withdrawn from direct involvement in production, processing, and marketing activities and has retained only its role in setting policies. The report notes that Tanzania has in the past few years experienced severe food shortages and varying levels of export earnings due to both droughts and floods.
The report says that Tanzania's mineral sector, focused primarily on gold production, offers one of the best opportunities for growth. With over US$600 million of new investment in this sector likely to be realized in the next 2-3 years, the mineral sector promises to be an increasingly important contributor to GDP and export earnings. However, the report notes that the viability of Tanzanian gold production is closely tied to international gold prices, which have shown continued volatility.
The report notes that Tanzania's manufacturing sector is underdeveloped. The sector is dominated by food processing, beverages, agri-business, and light manufacturing, along with some textile and footwear producers. The report says that it has been hampered by high input costs. In particular, the tariff, which provides for high levels of protection for value-added goods, makes it difficult for Tanzanian manufacturers who must source inputs from outside the country.
The services sector, like the rest of the economy, has undergone significant liberalization in a number of areas, including telecommunications, insurance and financial services. The report notes that tourism constitutes the largest component of services GDP and holds promise for continued growth. Tanzania is a net importer of services and intends to underline its commitment to telecommunications liberalization by making specific bindings under the General Agreement on Trade in Services (GATS).
Notes to Editors
trade policy reviews are an exercise, mandated in the WTO agreements, in which member countries trade and related policies are examined and evaluated at regular intervals. Significant developments which may have an impact on the global trading system are also monitored. For each review, two documents are prepared: a policy statement by the government of the member under review, and a detailed report written independently by the WTO Secretariat. These two documents are then discussed by the WTOs full membership in the Trade Policy Review Body (TPRB). These documents and the proceedings of the TPRBs meetings are published shortly afterwards. Since 1995, when the WTO came into force, services and trade-related aspects of intellectual property rights have also been covered.
For this review, the WTOs Secretariat report, together with the policy statement prepared by Tanzania, will be discussed by the Trade Policy Review Body on 1 and 3 March 2000. The Secretariat report covers the development of all aspects of Tanzanias trade policies, including domestic laws and regulations, the institutional framework, trade policies by measure and by sector.
Attached to this press release is a summary of the observations in the Secretariat report and parts of the government's policy statement. The Secretariat report and the governments policy statement are available for the press in the newsroom of the WTO internet site (www.wto.org). These two documents and the minutes of the TPRBs discussion and the Chairmans summing up, will be published in hardback in due course and will be available from the Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bangladesh (1992), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992 and 1996), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996 and 1998), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995), Côte dIvoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995 and 1997), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995 and 1998), Kenya (1993 and 2000), Korea, Rep. of (1992 and 1996), Lesotho (1998), Macau (1994), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991 and 1996), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994), the Philippines (1993), Poland (1993), Romania (1992 and 1999), Senegal (1994), Singapore (1992 and 1996), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991 and 1996), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).
The Secretariat s report:Back to top
POLICY REVIEW BODY: TANZANIA
Report by the Secretariat Summary Observations
Situated on the east coast of Africa, the United Republic of Tanzania is one of the world's least developed countries. Tanzania, which includes the islands of Zanzibar and Pemba, became independent in 1961. With a per capita GNP of US$210, the economy is essentially dependent on agriculture.
From independence in 1961, Tanzania followed a socialist model of economic development. This essentially non-market approach resulted in the nationalization of businesses and industries and the collectivization of agriculture. Over time, the failures of this strategy became apparent as the economy stagnated and suffered significant setbacks. Since 1985, Tanzania has implemented a series of economic reforms, but progress has been inconsistent. However, since 1995, the pace of reform has accelerated and Tanzania has focused on macroeconomic stabilization and fiscal reform supported by international financial institutions.
Tanzania's GDP has grown over 3% over the past few years and is forecast to grow at even higher rates through 2001. Tanzania is one of the most heavily indebted nations in the world. This large debt burden may be an obstacle to economic development as costs associated with debt servicing prevent the allocation of resources to activities that could serve to improve economic capacity, competitiveness, and increased investment. Because of Tanzania's programme of structural reform and fiscal restraint, it is in line to receive debt relief under the IMF and World Bank's Heavily Indebted Poor Countries (HIPC) programme.
Tanzania's main trading partners are the European Union, Japan, India, and Kenya. Tanzania's exports are primarily agricultural commodities with coffee, cashew nuts, tobacco and cotton constituting the largest sectors. Machinery, transportation equipment, industrial raw materials, and consumer goods constitute the major portion of imported products. Because of the decrease in agricultural production during the past few years, attributable to climatic conditions, food and foodstuffs imports have increased sharply. Tanzania is a net importer of services.
The Constitution of the United Republic of Tanzania was adopted in 1977 with amendments passed in 1984 and 1992. The Constitution calls for a parliamentary form of government with a separation of powers among the executive, legislative, and judicial branches of government.
Tanzania's President, Vice-president, and National Assembly members are elected by direct popular vote for five-year terms. The President serves as Head of State and selects his Cabinet from among National Assembly members. The Cabinet is responsible for government policy planning, and formulation. The National Assembly, a unicameral body, exercises legislative power over all Union matters. Zanzibar has its own President and a House of Representatives, which exercises legislative power over non-Union matters. The semiautonomous relationship between Zanzibar and the mainland is manifested in a number of policy areas, although harmonization in most areas related to trade matters has been moving forward. Foreign investment is considered a non-Union matter and therefore falls separately under the oversight of the Zanzibar Government.
Tanzania has a body of statutes that govern imports, customs duties, foreign investment, business licensing, intellectual property, export control, competition policy, and other related matters. The Investment Act of 1997 was enacted to help create an attractive commercial environment, and to provide incentives for inward investment. With a few exceptions, 100% foreign ownership is permitted in most economic activities. A separate statute focuses on investment opportunities in the mineral sector. The Mining Act of 1998 similarly liberalizes opportunities for foreign investment and provides special incentives to investors.
The Government of Zanzibar oversees its own foreign investment procedures. Zanzibar permits 100% foreign ownership except in some small retail areas and small tourist services. Zanzibar has also enacted legislation for the creation of economic processing zones and provides support services and other incentives for businesses that export 80% or more of their output.
Tanzania is a founding Member of the WTO, having signed the Final Act of the Uruguay Round and the Marrakesh Agreement on 15 April 1994. Tanzania grants at least MFN treatment to all its trading partners. As with other WTO Members, Tanzania has adopted in their entirety the results of the Uruguay Round. As a least developed country, Tanzania benefits from the special and differential treatment afforded developing countries in the form of exemptions or delayed implementation of certain provisions. Tanzania is not currently involved in any dispute settlement proceeding under the WTO.
Tanzania faces many challenges and obstacles to its trade and economic development. Tanzania has participated in the Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries (IF) by preparing an assessment of its needs for trade-related assistance and by engaging in a Roundtable Meeting with its development partners. Despite its involvement in the IF, and the technical assistance it has already received from its development partners such as the WTO and other members of the IF, Tanzania is in need of substantial ongoing technical assistance in a wide range of trade-related areas.
Tanzania is also actively pursuing a regional integration strategy. It is a signatory of the Common Market for Eastern and Southern Africa (COMESA), although it has announced its intention to withdraw from COMESA. Tanzania is also a member of the Southern African Development Community (SADC), which it has indicated is more compatible with its national interests. More recently, it has been moving forward with the strengthening of the East African Co-operation (EAC) agreement with neighbouring Kenya and Uganda. All of these regional efforts are intended to harmonize economic policy and facilitate trade although long-term plans call for the EAC to become a political federation with authority to represent the common interests of member States.
Under the Lomé Convention, Tanzania receives the full range of aid made available to ACP countries by the European Union. Under Lomé IV, many Tanzanian exports to the EU enjoy non-reciprocal preferential treatment in the form of exemption from import duties. Likewise, Tanzania's goods enjoy non-reciprocal preferential access to the markets of other developed countries through the Generalized System of Preferences. Due to Tanzania's limited export capacity, the benefits that Tanzania reaps from theses preferential arrangements has been minimal.
The reforms that Tanzania has undertaken since 1985 and at a more accelerated pace in the past few years have resulted in a trade policy framework that has been significantly liberalized and that is essentially based on tariffs. Export restrictions have been eliminated as have foreign exchange controls. Tanzania has been making a concerted effort to create an environment that is conducive both to domestic and foreign investment. In keeping with the Government's desire to promote Tanzanian exports, particularly agricultural products, it has placed emphasis on open markets abroad. Nevertheless, its severely limited export capacity has hindered any significant export-led growth.
The recent reform of Tanzania's customs duties has resulted in a simplified five-tier structure with tariff rates of 0%, 5%, 10%, 20%, and 25%. This tariff structure is somewhat escalatory with many processed products facing a higher effective rate of protection (ERP) along the processing chain. Such a tariff structure provides substantial import protection to higher-level processing activities, causing resource misallocation and inflicting higher costs to Tanzanian consumers. The simple average of applied import duties is 16.2%.
In addition to import duties, Tanzania introduced a 20% VAT in 1997. Excise taxes are also levied on petroleum, alcoholic and non-alcoholic beverages, and tobacco products. The Government of Tanzania relies heavily on revenues from tariffs and VAT; consequently, there is pressure to maintain revenues through high tariff levels. However, this pressure could be reduced as could tariff rates if the extent of exemptions granted were reduced or eliminated. In 1999, 42% of duties were not collected on the mainland, while in Zanzibar, the corresponding rate was 33%. VAT exemptions constituted 31% of collections.
The Tanzanian Revenue Authority (TRA) has a preshipment inspection contract with COTENCA Inspection S.A., which took effect on 1 March 1999. COTECNA is responsible for inspecting all imports whose f.o.b. value exceeds US$5,000. Tanzania still uses the Brussels definition of value (BDV). Although Tanzania has notified the WTO of deferred application of Article VII, TRA officials do not believe that they will be able to make the changeover to transaction value until 2001, and will be seeking an additional extension along with technical assistance to implement Article VII. Tanzania has no national legislation regarding anti-dumping, countervailing, or safeguard measures, although the authorities suggest that such measures may be introduced in the future.
The Tanzania Bureau of Standards (TBS) is charged with the administration of standards issues, which include 572 published standards. TBS is a member of the International Organization for Standards (ISO) and has been notified to the WTO as the contact point for issues related to the Agreement on Technical Barriers. Most Tanzanian standards are voluntary in nature and TBS adopts international standards whenever they exist. Sanitary and phytosanitary standards are the responsibility of the Ministry of Agriculture and Cooperatives, which conducts an inspection and certification programme for all imports of plant and animal products.
Tanzania is neither an observer to, nor signatory of, the Uruguay Round Plurilateral Agreement on Government Procurement. Except for procurement regulations imposed as part of aid and loans provided by international financial institutions, Tanzania's own procurement procedures are a confusing agglomeration of memoranda and other understandings that vary from ministry to ministry; procurement issues are under review and new legislation may be forthcoming.
Tanzania has been pursuing an aggressive policy of privatization in conjunction with support it receives from international financial institutions. The intention of the Government is for all parastatal entities to be either privatized or liquidated, although no target date for the completion of this process has been announced. Major privatizations are currently under way in the telecommunications and utility sectors as well as in financial services. Although there is legislation on competition policy in Tanzania, enforcement has been informal, because regulations and procedures have not yet been formalized.
Tanzania's Registrar of Companies oversees intellectual property matters, which are governed by legislation on patents, trade and service marks, and copyrights. Tanzania has been amending its legislation to conform with WTO requirements; the most recent is the Copyright Act of 1999. It intends to meet its obligations in other areas by 2006. Tanzania is a member of the African Regional Industrial Property Organization (ARIPO) as well as the World Intellectual Property Organization (WIPO). It is a signatory to the Paris Convention and the Berne Convention and other international protocols. Tanzania's lack of enforcement mechanisms for intellectual property infringement is currently being addressed and the Government has indicated that enforcement procedures will be strengthened.
Tanzania's agriculture sector constitutes over 50% of national GDP and provides a majority of the country's export earnings. The sector has been substantially liberalized since the mid 1980s and market forces have been allowed to prevail. The Government has withdrawn from direct involvement in production, processing, and marketing activities and has retained only its role in setting policies. Traditional export crops include coffee, cashew nuts, tobacco, and cotton, although efforts are being undertaken to promote non-traditional crops such as spices, horticultural items, and oilseeds. Climatic conditions in Tanzania in the past few years, fluctuating between drought and flood conditions, have led to unpredictable agricultural production. This has resulted in severe food shortages and varying levels of export earnings.
Tanzania's mineral sector, focused primarily on gold production, offers one of the best opportunities for growth.
With over US$600 million of new investment in this sector likely to be realized in the next 2-3 years, the mineral sector promises to be an increasingly important contributor to GDP and export earnings. However, the viability of Tanzanian gold production is closely tied to international gold prices, which have shown continued volatility. Any further downward pressure on gold prices will put prospects in this area at risk.
Tanzania's manufacturing sector is underdeveloped. The sector is characterized by food processing, beverages, agri-business, and light manufacturing, along with some textile and footwear producers. Despite efforts to take advantage of opportunities arising from regional integration, the manufacturing sector has been hampered by high input costs. In particular, the tariff, which provides for high levels of protection for value-added goods, makes it difficult for Tanzanian manufacturers who must source inputs from outside the country. These costs, along with high energy prices, have resulted in a generally uncompetitive manufacturing sector with low capacity utilization.
The services sector, like the rest of the economy, has undergone significant liberalization. Privatization efforts are under way in a number of subsectors including telecommunications, insurance, and financial services. Tourism constitutes the largest component of services GDP and holds promise for continued growth as the Government is focusing its efforts both on the supply side (infrastructure) and the demand side. Privatization of the telecommunications sector is moving forward with the recognition that telecommunications infrastructure is an essential component of overall economic development. Tanzania intends to underline its commitment to telecommunications liberalization by making specific bindings under the General Agreement on Trade in Services (GATS).Back to top
POLICY REVIEW BODY: TANZANIA
Report by the Government - Part III and IV
1. Tanzania has been implementing a number of policy measures to create a stable liberalized external sector. The policy measures were geared towards creating favourable conditions for quick economic recovery and eventual achievement of sustained higher rates of growth under conditions of internal and external financial stability. From mid 1980s there has been gradual liberalization of the external sector by relaxing the foreign exchange controls, which culminated into the replacement of the Exchange Control Ordinance (Cap. 294) by the Foreign Exchange Act of 1992. The new Act opened up the external sector to market forces of demand and supply, and government eased/removed external trade restrictions (except for very few items on which control is necessary for health, security and preservation purposes) by simplifying export and import documentation procedures. All exchange control documents i.e. import and export licences were abolished in 1992/93 period.
2. This went hand in hand with liberalization of foreign exchange system shifting from fixed exchange rate system to a market-determined exchange rate in April 1993. In 1996, Tanzania has gone further with liberalization measures by adopting Article VIII of the International Monetary Fund (IMF) that requires liberalization of all current account transactions. This was followed by a partial liberalization of the capital/financial account that allowed foreigners to participate in direct investment activities in the country.
3. Simplification of export procedures, relaxation of exchange controls, privatization of state-owned companies and new investments particularly in the mining sector has led into improvement in performance of Tanzania's exports. As a result, merchandise exports has increased on average by 8.5% from US$397 million in 1992 to US$588 million by end 1998. The highest earnings of US$763.8 million were recorded in 1996. On the other hand, non-tangible exports i.e. services recorded a significant performance during the period. Throughout the period under review receipts from non-tangible exports increased on average by 26% from US$167.5 million in 1992 to US$555.2 million in 1998.
4. Imports of goods have remained almost unchanged over the period under review. Measured in current dollars, total imports (f.o.b) increased marginally from US$1,317 million recorded in 1992 to US$1,366 million in 1998.
5. On the domestic trade, restrictions on the previously controlled commodities have been removed. Notably progress was achieved in reducing non-barriers including elimination of import quotas and bans, as well as import licensing requirements. Moreover, the monopoly power previously exercised by state marketing boards or state controlled enterprises in regard to exporting, importing, and price controls was significantly reduced during the review period. Private institutions and individuals were encouraged to participate in the procurement and marketing of both food and cash crops.
6. Trends in merchandise trade have great influence to the performance of the country's current account. Improvement in the export sector together with inflows under current account transfers has resulted in reduction of current account deficit from US$708 million in 1992 to US$559 million in 1997.
7. Over the period under review gross international reserves of the Bank of Tanzania increased to cover up to about 13 week of imports. The reserves increased from US$358.5 million (about ten week of imports) in 1993 to about US$599 million by end of 1998.
8. Apart from various economic reforms, Tanzania's external sector has been under pressure from 1992 to 1998. In 1992, the deficit in the overall balance of payments was US$407.5 million growing a bit to US$736.6 million in 1993 and declined since then to US$231.2 million in 1996 before rising again to US$636.7 million in 1998. Foreign trade (imports plus exports) has grown by an average of 14.1% since 1992, from US$1,714 million to US$1,955 million in 1998. Exports grew steadily from US$397 million to US$763.8 million in 1996 before falling slightly to US$752.6 million and further to US$588.5 million in 1998. On the other hand, imports (f.o.b) increased slightly by 3.7% from US$1,316.6 million in 1992 to US$1,366 million in 1998. On average, trade balance improved with a reduction in deficit by 15.5% from US$919.6 million recorded in 1992 to US$777.5 million in 1998.
9. Major trading partners of Tanzania include EEC and Asia that accounted for 29.4% and 23.7% respectively of the total imports. The same continents account for 38.4% and 32.3% of the Tanzanian exports. Moreover, SADC member countries account for 11.7% and 10.9% of the country's imports and exports respectively. On the other hand, the EAC member countries accounted for 5.5% of total exports from Tanzania while imports from these countries accounted for 6.9% by end 1998.
10. Apparently, the structure of the export sector largely remained unchanged with traditional exports dominating over non-traditional exports. Traditional exports on average accounted for about 58.8% of the export receipts for the entire review period of 1992-1998. On the other hand, the share of import categories to total imports was dominated by capital goods during the same period of review. On average, share of capital goods accounted for about 44% followed by intermediate goods which, accounted for about 30% of the total import during 1992-1998 period. The remaining 28% was for imports of consumer goods.
11. This is the first trade policy review for Tanzania by WTO Secretariat. The review is therefore based on the actual situation compiled from the facts obtained on the ground. Around the mid 1980s Tanzania moved away from the reliance on control mechanism and government ownership of the means of production. She has since then moved steadily towards a market based and a private sector led economy. The Government now sees the private sector as the engine of growth for the economy and aims to encourage the emergency of a strong private sector capable of creating jobs and wealth as well as the major source of increased government revenue through the payment of taxes.
12. It should be noted that Tanzania does not have a comprehensive trade policy document. However, concerted efforts to consolidate sectoral trade related policies into a national policy document are under way. The development of trade policy in Tanzania can be traced back from the days of price controls and price fixing, trade restrictions, single marketing channels, and confinement policies. In the mid 1980s trade reforms measures were initiated. The measures initiated led to the trade liberalization which implied the removal of barriers and restrictions, rationalization and reduction of import duties through unilateral, bilateral, regional and multilateral measures.
13. The systematic and gradual reduction and elimination of different barriers and obstacles to trade, such as bureaucratic formalities, advance authorization, administrative controls, supervision, has made a significant contribution to facilitating foreign trade by improving the country's allocation of resources. Tanzania has simplified and facilitated export and import procedures through the use of a Single Entry Bill document for customs purposes.
14. Tanzania is a member of several regional integration groupings. These include, the Common Market for Eastern and Southern Africa (COMESA), Southern Africa Development Community (SADC), East African Cooperation (EAC) and Indian Ocean Rims-Association for Regional Cooperation (IOR-ARC).
15. Under COMESA, all tariffs on trade among its Member States are scheduled to come to zero by October 2000. Tanzania has formally notified the COMESA Secretariat of her intention to withdraw from COMESA membership effectively by September 2000; in the meantime Tanzania continues to discharge her obligation in the COMESA Treaty. Under SADC, a Free Trade Area has almost been concluded which will bring the import duty to zero eight years from the date of its conclusion. Similarly, moves are in the process under the recently signed East African Treaty to negotiate a trade protocol with a view of eliminating almost all tariffs, non-tariff barriers and non-tariff measures. This exercise has been given a time span of four years. Tanzania is also a member of the charter bringing together 14 countries forming the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC). The grouping has the objective to facilitate and promote economic cooperation bringing together representatives of government, business and academic.
16. Tanzania is a contracting party to the outcome of the Multilateral Trade Negotiations (MTN) which were launched in Punta Del Este in Uruguay at the end of 1986.
17. Tanzania participated in the negotiations which took eight years but, her effective participation in every inch of the way, clause by clause, word by word, like any other least developed country was severely constrained by her limited capacity technically and financially. This is very well reflected at our Permanent Mission in Geneva where the resources, including the personnel resources, are over stretched because of very heavy demands by a series of formal and informal meetings and discussions going on in the WTO simultaneously.
18. Tanzania's weakness in the concluded Multilateral Trade Negotiations are further reflected by the difficulties we are facing in complying with the obligations in the WTO Agreements in terms of notifications and other requirements. This has in turn also affected Tanzania's smooth integration into the Multilateral Trading System.
19. Tanzania is currently a beneficiary among selected least developed and African countries in a Joint Integrated ITC/UNCTAD/WTO Technical Assistance Programme (JITAP), which is based on the Singapore WTO Ministerial Declaration of 1996. Under this technical assistance, understanding the implication of the Uruguay Round Agreements for Tanzania's economy is considered as a priority need by the public sector officials and private sector executives. Activities aimed at enhancing the understanding of the Agreements are targeted to policy makers in public, academicians and private sector executives.
20. The understanding and awareness of the Agreements in the long run are expected among other things to facilitate the integration of Tanzania into the Multilateral Trading System.
21. In Tanzania awareness and understanding of the WTO Agreements are very weak within both the public and private sectors, and this explains why no action has yet been taken with regard to the implementation of the Uruguay Round Agreements (notifications and legislation). This is partly attributed to lack of or limited capacity in understanding what is to be done. Having signed the Final Act of Uruguay Round and the Marrakesh Agreement establishing the World Trade Organization, all the WTO Agreements became binding on Tanzania.
22. The effective implementation of WTO commitments by Tanzania continue to be hampered by lack of adequate financial, institutional, technological, and technical capacities, a situation that will exacerbate our participation in new and future negotiations. Tanzania therefore calls for renewed commitment to technical cooperation through adequate provision of resources in the regular budget of the WTO and other core agencies according to their mandates. We further emphasize the need for improved coordination in the delivery of this assistance as a necessary requirement to facilitate effective participation on our part. Tanzania has, however, in spite of those shortcomings made efforts to comply with certain requirements such as establishing a National Enquiry Point and Acceptance of Code of Good Practice on Voluntary Standards.
23. The primary purpose of the ITC/UNCTAD/WTO Joint Integrated Technical Assistance Programme to Tanzania is to help the country in building national capacity for the understanding and thus servicing her obligation arising from being a Member of WTO. The Integrated Framework (IF) for Trade Related Technical Assistance to Tanzania which was endorsed by the High Level Meeting on Integrated Initiatives for LDC's Trade Development is progressing well and will eventually increase the benefits that Tanzania derive from the trade-related assistance provided by the core agencies and other development partners. An Inter-Institutional Technical Committee on WTO has been established but needs to be strengthened.
24. Tanzania reaffirms its commitment to respect the timetable for reviews, negotiations and other tasks already agreed upon and established in the Marrakesh mandate and the second Ministerial Conference held in Geneva in May 1998. In our view the central challenge of future negotiation is to ensure that issues of development are addressed decisively. Meeting this challenge will serve to strengthen the multilateral trading system, enhance its legitimacy and create a sustainable basis for a new round of global economic growth from which all WTO Members can benefit. The next WTO Conference should represent an opportunity to place the development objective at the centre for future negotiations. Similarly, the inadequate capacity of developing countries and especially the LDCs to effectively participate in broad-based negotiations should be taken into account.
25. Regarding development of future negotiations Tanzania is of the view that they should achieve the objectives spelt out in the preamble to the Marrakesh Agreement and should enable the world community to share fully and equitably the achievements of the Multilateral Trading System.
26. This will bring in our view, a sustained rise in the income of developing countries and would offer real prospects for economic growth and poverty eradication. Sufficient attention should be devoted to ensuring degrees of flexibility to accommodate constraints faced by the developing countries.
27. The justification for special and differential treatment to Tanzania remains valid in so far as it is designed to assist developing countries and other least developed countries and small economics to overcome inherent handicaps, which prevent them from deriving meaningful benefits from their participation in the Multilateral Trading System. In this regard, special and differential treatment should be firmly established in future negotiations, implemented and made contractual.
28. The Government of Tanzania believes that agreements, rules and disciplines that emerge from future negotiations should be designed to level the playing field by enhancing predictability, consistency and transparency in the system. They should among other things include:
(i) support efforts for building our productive capacities and strengthening our supply capabilities;
(ii) provide flexibility in the use of appropriate policy instruments to enhance the process of growth and structural transformation of our economies;
(iii) improve market access for products of export interest to Tanzania;
(iv) advance our regional integration objectives; and
(v) define more clearly the terms and conditions of special and preferential treatment.
29. As regards the mandated negotiations, Tanzania acknowledge the vital role of the agricultural and service sectors to its economic growth and development. The development of the agricultural sector in Tanzania is crucial to our trade growth, employment creation, social cohesion and environmental protection. In this light, the ongoing reform and liberalization of international agriculture trade must lead to improve access to world markets for all our agricultural exports (primary and processed). This should be achieved through:
(i) the elimination of tariff escalation/and tariff peaks;
(ii) reduction in domestic support in the developed countries;
(iii) the elimination of export subsidies which displace agricultural exports of developing countries or impact negatively on their domestic production; and
(iv) the obligation to formulate disciplines on export credits.
30. Tanzania recognizes the importance of addressing the vital issues of, food security and the development of rural economies among other things, taking into account inherent constraints of diversification for developing countries. Specifications of small economies like Tanzania should be given due attention and accommodated in future negotiations on agriculture.
31. Tanzania remains deeply concerned at the marginalization of LDCs in the world economy. To reverse this trend Tanzania supports the view that the next conference should adopt a decision whereby developed countries would extend bound, duty free and quota free treatment to all products of export interest originating from LDCs. Developed countries should also make the necessary financial commitment to enable the effective implementation of the integrated initiative in favour of LDCs.
32. Progressive liberalization of trade in services should respect both existing architecture of GATS and the flexibility provided to developing countries under Article XIX of GATS including the principle for granting credit for an autonomous liberalization since previous negotiations as provided for in this Article. Article IV of GATS, should be strengthened and made fully operational.
33. Tanzania fully endorses the proposals put forward by the Africa Group in Geneva with regard to future work in the area of Intellectual Property. In particular we would support a decision to extend the moratorium on the application of the non-violation provision under Article 64.3 of the TRIPS Agreement, which expired in January 2000, until Members agree by consensus that sufficient experience has been gained with the application of the Agreement.