United Republic of Tanzania

Tanzania does not have any formally enunciated overall trade policy objectives, but government policy-makers focus on the promotion of Tanzanian exports and the maintenance of open markets abroad, with particular emphasis on those areas where Tanzania has export capacities such as in agriculture. In 1996, the Government drafted its "Sustainable Industrial Development Policy" (SIDP) for the period 1996-2020. The statement presents the framework for Tanzania's industrial development policy and indicates that a new trade policy will be formulated to take into consideration "the market economy conditions". In particular, it outlines some objectives, including the streamlining of "mechanisms regarding export development strategy, transit trade, border trade, importation management, internal marketing and distribution, fair trade practices, business licensing, and related institutional framework".

Tanzania recently reformed its customs duties regime which 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%.

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 The Government has withdrawn from direct involvement in production, processing, and marketing activities and has retained only its role in setting policies.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.

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.

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

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.

INSTITUTIONAL FRAMEWORK

Trade policy implementation is primarily the responsibility of the Ministry of Industry and Trade, which is responsible for regulating imports, promoting exports, ensuring fair trade, protecting intellectual property rights, and setting and enforcing standards. The Ministry also has responsibility for regional initiatives such as COMESA, SADC and the EAC, as well as WTO and other multilateral economic issues. The Ministry of Finance is responsible for the collection of taxes and import duties through the Tanzanian Revenue Authority (TRA), which acts as the Government's collection agency and the Ministry of Agriculture is responsible for sanitary and phytosanitary standards.

There are no formal coordinating bodies for the formulation and implementation of trade policy, although ad hoc bodies can be created, as needed. One ongoing committee is the Inter‑Institutional and Technical Committee on the WTO, which meets annually to review issues pertaining to Tanzania's responsibilities vis-à-vis the WTO. It consists of 18 members under the chairmanship of the Ministry of Industry and Commerce and includes four members representing the private sector.

The private sector provides input into trade policy formulation primarily through trade associations such as the Confederation of Tanzanian Industries (CTI), and through the Tanzanian Chamber of Commerce, Industry and Agriculture (TCCIA). The process is largely informal but these organizations have played a role on issues such as taxation policy and the development of a National Business Policy. The consultative process with the private sector is usually by invitation to roundtables.

TRADE AGREEMENTS

Bilateral

Tanzania has not signed any preferential bilateral treaty. However, Tanzania is a beneficiary under the United States' African Growth and Opportunity Act (AGOA) and the European Unions' "Everything but Arms" initiative. In addition, Tanzania benefits from preferential tariff treatment under the Generalized System of Preferences (GSP) and Global System of Trade Preferences (GSTP), receiving benefits from the EU, the United States, Japan, Canada, Australia, New Zealand, India, and Turkey.

Regional

Tanzania is a member of the Southern African Development Community (SADC) and the East African Co-operation (EAC) agreement. Tanzania withdrew from COMESA in September 2000. Tanzania is currently negotiating an Economic Partnership Agreement with the EU through the SADC configuration.

Multilateral

Tanzania is a founding Member of the WTO and grants at least MFN treatment to all its trading partners. Tanzania has GATS commitments in only one sector.

NEED PRIORITIES  

Tanzanian officials have indicated that some notification requirements have been particularly burdensome and have requested technical assistance in this area.

Source: World Fact Book, WTO Secretariat.