6 April 2014

Tanzania Grapples With Bali Agreement Trade Challenges

TANZANIA is working round the clock to see how it can best implement and gain from the challenging Bali WTO Agreement by making a needs' assessment as well as working on trade facilitation awareness creation at ministry and stakeholder level. Trade facilitation is a main component of the Bali deal.

According to the WTO, the objectives of the trade facilitation deal are: to speed up customs procedures; make trade easier, faster and cheaper; provide clarity, efficiency and transparency; reduce bureaucracy and corruption, and use technological advances.

These are encompassed in more than 24 key disciplines of the Agreement, which also include reduced documents and formalities, utilising common customs standards, promoting use of single window and uniformity in border procedures and documents.

The Bali Trade Facilitation Agreement was hailed by the Office of the US Trade Representative as saving money, boosting trade and raising incomes worldwide. For Tanzania, the Agreement has brought some difficult challenges.

It is an open secret that Tanzania imports more and exports less. Eventual ratification of the Trade Facilitation Agreement within the next 12 months implies that Tanzania shall be compelled to import even more goods from developing countries, thus further threaten its ailing local industries and ignite job losses.

In January 2014, Tanzania recorded a balance of trade deficit of more than USD 450 million. This deficit can only be cleared by a huge increase in exports, a feat that is too difficult for Tanzania to accomplish as things stand at the moment, given its low capital base for local manufacturers, harsh loan conditions for factory owners, farmers and dairy industries; crippled train haulage services, chronic power woes and ever escalating power tariffs, among others.

Moreover, Tanzanian producers find it difficult to meet international competitiveness standards and other technical standards, this being an area which still needs a lot of capacity building.

Yet Tanzania is part and parcel of the global multilateral system, and is bound to adhere to this crucial international agreement. Quite interestingly, Tanzania was among LDC countries which played a key role in the signing the breakthrough agreement at the MC9 in Bali, Indonesia.

At the WTO headquarters in Geneva, where all member countries are represented at ambassadorial level, the LDC group at WTO have their own system. Every year they choose among themselves the LDC coordinator. Last year (2014) the coordinator was Nepal. This year it is Uganda.

But they also have LDC group focal points on different issues that the LDCs groups have to turn attention to. For example, last year on the run up to Bali, Tanzania was a leader of a group focal point on trade facilitation.

Trade facilitation was a big chunk of the Bali ministerial meeting in December 2013. In the run up to Bali, Lucas Songora, a senior diplomat in Tanzanian Embassy at the WTO headquarters, spearheaded the negotiations on trade facilitation modalities. He was recalled in November 2013, just a month before the Bali Ministerial meeting.

The work was thus capped by his successor at the Tanzanian Embassy in Bali. Songora is now the Director of Trade Integration at the Ministry of Trade and Industries. The Bali outcome is thus a clear reflection of increased LDC capacity to negotiate.

Some of the observers who have been at the WTO for a very long time say they have seen the strength go up very steeply in the latest years. Credit also goes to the WTO for its Joint Integrated Programme for technical assistance assessment of export and market potential (JITAP), through which it has been building the human capacity of LDCs on trade negotiations, legal capacity, development and implementation of trade policies and regulations etc.

In order to take advantage of the Trade Facilitation Agreement, Tanzania has no option other than increasing its exports, in spite of the aforementioned obstacles. For its existing products that are available for export, Tanzania must build its capacity to meet international product and service standards.

In that sense, the Bali Agreement is a blessing in disguise due the challenges it has brought. For the sake of boosting agricultural exports, more efforts need to be made for putting in place group certification agreements for Tanzanian farmers.

Discussing the issue, the immediate former vice-president of TCCIA Dar Regional Chamber, Mr Peter Lanya, says: "In Tanzania, the certification and accreditation process of crops is very expensive.

Attainment of crop standard and quality is largely the responsibility of government in the sense that it encompasses the availability of international standard laboratories. There is an organisation known as TAHOMA which deals with organic food certification, but it has no capacity to cover the whole country.

"The Tanzania Bureau of Standards provides certification services in phases, but has not reached the level of covering the whole country. This makes it impossible, for example, for a farmer in Rukwa who wants to export cereals to Zambia."

Lanya further states that crop certification requires proper recording of crop standard, starting with farm preparation, planting etc. "The certifying authority monitors all these stages up to harvest and storage.

I therefore lack the understanding how TBS uses a professional method to arrive at crop certification. This is because agricultural crop history is vital for certification," he says. There is also a problem on the side of EU and US authorities.

It is generally agreed that technical standards (Non-Tariff- Barriers or NTBs) increasingly shape the conditions of market access. However, there is a feeling that much as developed countries have agreed to open up their markets for LDCs' goods under the Bali Agreement, experience has shown that Non-Tariff Barriers (technical standards) are being used by the US and some EU countries as a tool to curb the flow of goods from LDCs, even though the standards are met.

"The issue was not properly addressed in Bali," says Songora. At the home front, Tanzania is working to actualise the deal. Recently, a WTO facilitation seminar took place in Dar es Salaam, during which a needs assessment was made so as to help the country identify what they want in order to implement the Trade Facilitation Agreement.

The assessment has helped Tanzania to categorise the measures. These are: (i) Measures which are already being implemented and do not need donor support. (ii) Measures that need time to implement and do not need donor support and (iii) Those which need time and donor funding to implement.

The draft of categorization still needs more work, and more meetings will have to take place before WTO is notified. The Ministry of Trade and Industry is working on trade facilitation awareness creation at ministry and stakeholder level.

Among the stakeholders involved in facilitating Tanzania's international trade are Customs Department, border agents such as Tanzania Bureau of Standards-- which certifies the quality of imported/ exported items, Tanzania Drugs Authority -- by certifying whether imported/exported drugs are of required standard, and Tanzania Atomic Energy Agency (which pinpoints whether imports/exports have atomic radiation).

Other local border agents earmarked for trade facilitation awareness are Plant and Animal Health Inspectors, Ports Authority, Ministries of Agriculture and Livestock, Police, and Mineral and Natural Resources departments. These are key stakeholders with a key stake in trade facilitation.

The training involves: - Lessons, discussions and deliberations on having general laws and procedures on trade facilitation to be crafted appropriately in line with the Bali Agreement.

- What are the trade facilitation measures at national level which need to be put in place.

- Self-assessment on the needs and priorities regarding trade facilitation in Tanzania. - What trade facilitation measures are already being implemented.

- Which measures need to be adjusted in terms of budget capacity.

- Which regulations need to be adjusted.

- Which trade facilitation projects need donor involvement. Resource persons who are involved in the trade facilitation awareness training are from USAID, World Trade Organisation, TradeMark East Africa and Chinese Taipei.

The other resource person is Ms Pili Mutani, who is Minister Plenipotentiary at the Tanzanian Embassy in Geneva. Another such seminar is dedicated for Mwanza.

It shall be funded by TMEA (TradeMark East Africa). Once these processes are completed, a draft legislation for ratification of the Agreement shall be sent to the Parliament of the United Republic of Tanzania.

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