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Table of Content

1.0 INTRODUCTION ..............................................................................................................................1


1.1Tanzania Economic Overview: Performance and Outloo...............................................................1
1.!Economic Develo"ment C#allen$e%.................................................................................................!
!.0&TO .....................................................................................................................................................'
....................................................................................................................................................................'
!.1(unction% of &TO................................................................................................................................'
!.!&TO (undamental Princi"le%...........................................................................................................)
!.*(uture for Tanzania Econom+ in ,i$#t of &TO "rovi%ion%.............................................................-
*.0PROPO.ED (UTURE RE(OR/ (OR T0N10NI0 ECONO/2..................................................10
*.13alue 0ddition................................................................................................................................11
*.!Tec#nolo$+ 0dvancement..............................................................................................................11
*.*Re$ulator+ Coo"eration..................................................................................................................11
*.4 Develo"in$ framewor for Inve%tment..........................................................................................11
*.'Trade Ca"acit+ 5uildin$.................................................................................................................11
*.)Increa%in$ t#e role of t#e "rivate %ector i% anot#er one...................................................................11
*.60li$nment of t#eir trade re$ime% and for 7conver$ence8 9etween "referential trade a$reement%
and t#e multilateral tradin$ %+%tem......................................................................................................1!
*.:.tandard% Pu9lication%....................................................................................................................1!
4.0CONC,U.ION ..................................................................................................................................1!
RE(ERENCE...........................................................................................................................................1!
i
1.0 INTRODUCTION
1.1 Tanzania Economic Overview: Performance and Outlook
In !01! and into !01*; t#e Tanzanian econom+ e<"anded at an annualized rate of a""ro<imatel+ 6=.
T#e main driver% of Tanzania>% ra"id economic $rowt# continue to 9e a %mall num9er of fa%t $rowin$;
ca"ital inten%ive %ector%; "articularl+ t#e communication%; financial %ervice%; con%truction;
manufacturin$ and retail trade %ector%. T#e %ervice %ector; driven 9+ t#e e<"an%ion of tran%"ort;
communication%; retail trade and financial %ervice%; recorded t#e #i$#e%t rate of annual $rowt# in !01!;
at :.0=. 5+ contra%t; la9or inten%ive %ector%; "articularl+ t#e a$ricultural %ector; in w#ic#
a""ro<imatel+ :0= of #ou%e#old% are "rimaril+ en$a$ed; recorded an avera$e annual $rowt# rate of
onl+ 4.!=. .imilar trend%; wit# #i$#er rate% of $rowt# recorded 9+ t#e le%% la9or inten%ive %ector%; were
o9%erved acro%% t#e 9oard durin$ t#e fir%t two ?uarter% of !01*.
Over t#e "a%t decade; Tanzania>% econom+ #a% 9ecome %i$nificantl+ more o"en. T#e trade@to@ADP
ratio #a% increa%ed from 1*.'= in !000 to more t#an *0= in !011; t#e #i$#e%t rate amon$ t#e Ea%t
0frican Communit+ countrie%; wit# t#e value of Tanzania>% merc#andi%e e<"ort% multi"l+in$ 9+ a
factor of five over t#i% "eriod. T#e lar$e%t contri9utor% to t#e e<"ort 9a%et continue to 9e "rimar+
commoditie%; "articularl+ $old; coffee; tea; ca%#ew nut% and cotton. 0t t#e %ame time; t#e volume of
manufactured e<"ort% #a% %ur$ed in recent +ear%; wit# t#e lion>% %#are of t#e%e e<"ort% $oin$ to maret%
wit#in t#e re$ion.
T#e inflation rate continued to decline in !01*; reac#in$ a rate of ).*= 9+ Octo9er !01*. 0t t#e end of
!011; t#e inflation rate #ad reac#ed almo%t !0=. T#i% %tead+ and %i$nificant decline #a% 9een t#e re%ult
of a com9ination of t#e im"lementation of %tricter monetar+ "olic+ and a decline in food and ener$+
"rice%. 0% a re%ult; Tanzania>% rate of inflation i% now rou$#l+ e?uivalent to t#at of nei$#9orin$ U$anda
and Ben+a. T#e decline #a% al%o contri9uted to t#e %ta9ilization of t#e real e<c#an$e rate; w#ic#
a""reciated 9+ almo%t !0= in !011C1! a% t#e re%ult of t#e lar$e inflation differential 9etween Tanzania
and it% trade "artner%. T#i% %ta9ilization of t#e real e<c#an$e rate al%o #a% "o%itive im"lication% for
e<"orter%.
T#e Tanzanian Aovernment #a% im"lemented a relativel+ ti$#t monetar+ "olic+ to reduce monetar+
e<"an%ion and #a% increa%ed $uidin$ intere%t rate%. &#ile t#i% #el"ed to reduce inflation; it re%ulted
nevert#ele%% in increa%e% to t#e co%t of credit; im"o%in$ increa%ed 9urden% on 9orrower% and t#ere9+
ne$ativel+ im"actin$ t#e e<"an%ion of t#e real econom+. Dowever; t#e ma$nitude of t#i% ne$ative
im"act ma+ not 9e dramatic; a% t#e ratio of total credit to ADP wa% onl+ !4.:= in !01!; com"ared to a
fi$ure of more t#an 1*0= in emer$in$ countie% %uc# a% T#ailand and /ala+%ia.
T#e overall fi%cal deficit for !01!C1* i% e%timated to reac# a value e?uivalent to ).:= of ADP. T#i%
re"re%ent% a %i$nificant increa%e com"ared to !011C1!; w#en t#e deficit %tood at a value e?uivalent to
onl+ '= of ADP. T#e deterioration in t#e fi%cal account% durin$ !01!C1* wa% t#e re%ult of t#e
Aovernment>% overe%timation of revenue% and undere%timation of e<"enditure.
1
T#e deterioratin$ financial %ituation of %everal "ara%tatal% and "u9lic a$encie% #a% continued to "o%e a
maEor c#allen$e for fi%cal "lannin$. In re%"on%e to t#e deterioratin$ financial %ituation of t#e "u9lic
electricit+ com"an+ T0NE.CO; Aovernment at t#e 9e$innin$ of !014; rai%ed "ower tariff% for 9ot#
dome%tic and indu%trial u%er% 9+ an avera$e of 40=. De%"ite t#e tariff increa%e; Tane%co will continue
to 9e %u9%idized 9+ t#e Aovernment a% t#e "rice of it% electricit+ %till doe%n>t cover "roduction co%t%
until new inve%tment% in "ower to $a% 9ecome $raduall+ o"erational 9+ !01'C1). T#e deterioration of
t#e financial %ituation in %everal "en%ion fund% i% al%o a %ource of concern.
0n accelerated drive for t#e develo"ment of %ocial and "#+%ical infra%tructure i% underwa+ on t#e
recentl+ launc#ed F5i$ Re%ult%; Now> initiative G5RNH. T#e 5RN initiative i% in%"ired 9+ a %imilar
/ala+%ian "ro$ram wit# t#e %tated aim of facilitatin$ t#e ac#ievement of Tanzania>% Develo"ment
3i%ion !0!' t#rou$# t#e identification of a %erie% of "riorit+ area% for e<"enditure. Dowever; t#e
Aovernment mu%t tread t#e ti$#t ro"e and find t#e 9alance 9etween t#e u%e of "u9lic e<"enditure to
"romote economic $rowt# and t#e need to maintain fi%cal and de9t %u%taina9ilit+ over time.
&it# Tanzania>% current rate of $rowt# of ADP $rowt# %tandin$ at a""ro<imatel+ 6= "er annum; no
maEor c#an$e% are e<"ected in t#e countr+>% $rowt# traEector+ over t#e ne<t few +ear%. T#e %ector%
w#ic# #ave driven Tanzania>% economic $rowt# over recent +ear%; "articularl+ t#e ca"ital inten%ive and
ra"idl+ e<"andin$ communication% and financial %ervice% %ector%; will continue to do %o into t#e future.
Economic $rowt# will al%o 9e driven 9+ increa%ed activit+ wit#in t#e con%truction %ector; "articularl+
wit# Tanzania>% ra"id ur9anization and t#e Aovernment>% renewed focu% on t#e develo"ment of "u9lic
infra%tructure.
T#e mo%t %i$nificant tran%formative factor on t#e econom+ i% t#e lar$e natural $a% re%erve% t#at were
recentl+ di%covered. If mana$ed well; t#e%e $a% re%erve% #ave t#e "otential to tran%form Tanzania>%
economic future. &#ile t#e mo%t %i$nificant im"act% of t#i% di%cover+ on t#e local econom+ will not 9e
felt for at lea%t %even to ten +ear%; w#en e<"loitation will %tart at full %cale; t#e di%cover+ will
nonet#ele%% drive increa%ed economic activit+ durin$ t#e con%truction "#a%e. In t#e lon$ term; t#e
ma$nitude and timin$ of t#e im"act of t#e di%cover+ remain uncertain. Careful mana$ement of t#e
revenue% derived from t#e newl+ di%covered natural re%ource% will 9e re?uired to en%ure t#e o"timal
u%e of t#e%e revenue% and to ac#ieve inclu%ivene%%.
In t#e meantime; if Tanzania i% to follow t#e e<am"le of %ucce%%ful emer$in$ countrie%; it will need to
im"rove "olic+ a%"ect% in t#e area% of #uman develo"ment GTanzania i% currentl+ raned 1'!nd out of
1:! countrie% on t#e DDI inde<HI it% 9u%ine%% environment G1*4t# out of 1:' countrie%HI and
$overnment effectivene%% G1*'t# out of !1! countrie%H. (or t#e la%t two indicator%; Tanzania>% ranin$
#a% deteriorated over recent +ear%.
1.2 Economic Development Challenge
In Novem9er !01*; t#e Aovernment announced t#e new official "overt+ fi$ure% indicatin$ t#at
a""ro<imatel+ !:.!= of t#e "o"ulation live% 9elow t#e "overt+ line J con%idera9l+ lower t#an t#e
corre%"ondin$ fi$ure of **.)= in !006. Re$ardle%% of t#e %i$nificance in t#e decline of "overt+ over
recent +ear%; Tanzania remain% a "oor countr+. In !01!; it% avera$e "er ca"ita income %tood at U.K
'60; "lacin$ it in t#e 16)t# "o%ition out of 1-1 countrie% in t#e world. Even 9+ t#e mo%t o"timi%tic
"overt+ e%timate%; t#ere are %till a""ro<imatel+ 1! million "oor "eo"le livin$ in Tanzania; w#ic# i%
!
a""ro<imatel+ t#e %ame num9er a% in !001. Im"rovin$ t#e %ocio@economic circum%tance% of t#i% lar$e
$rou" of citizen% mu%t t#erefore remain a to" "riorit+ for Tanzanian "olic+ maer%.
TanzaniaL% ran in t#e United Nation% Develo"ment Pro$ram>% GUNDPH Duman Develo"ment Inde<
#a% im"roved %ince 1--'; 9ut it% "ro$re%% toward t#e /illennium Develo"ment Aoal% G/DA%H #a%
9een uneven. T#e countr+ i% e<"ected to reac# onl+ t#ree out of %even /DA% 9+ !01'. Tanzania i% on
trac to meet t#e /DA% related to com9atin$ DI3C0ID. and reducin$ infant and under@five mortalit+
9ut i% la$$in$ in "rimar+ %c#ool com"letion; maternal #ealt#; "overt+ eradication; malnutrition; and
environmental %u%taina9ilit+.
T#e %election of t#e Education %ector 9+ t#e Aovernment a% one of it% "riorit+ area% under t#e new
initiative; t#e 5RN wa% a""ro"riate. &#ile acce%% to education #a% im"roved over t#e "a%t decade; t#e
?ualit+ of education #a% %uffered. &#ile enrollment #a% im"roved; reac#in$ univer%al education in
"rimar+ %c#ool%; t#e main "ro9lem in t#e education %ector i% "oor outcome% at t#e "rimar+ and
%econdar+ level%. .ervice deliver+ i% wea wit# %low $rowt# in t#e num9er of ?ualified teac#er% and
in%ufficient %u""l+ of te<t9oo% and ot#er in"ut%. T#e ?ualit+ of %econdar+ education #a% 9een affected
9+ low ?ualit+ at t#e "rimar+ level. T#e 5RN a""roac# involve% t#e e%ta9li%#ment of deliver+
la9oratorie% in t#e %i< %elected "riorit+ area% Geducation; water; ener$+; a$riculture; re%ource
mo9ilization and tran%"ortH; wit# eac# $eneratin$ re%ult% framewor%. T#e a""roac# #in$e% on
"rioritization; monitorin$ and accounta9ilit+ in term% of "erformance.
(uture economic $rowt# will al%o de"end on t#e a9ilit+ of t#e Aovernment to remove e<i%tin$
con%traint% on 9u%ine%%e%. T#e mo%t %i$nificant con%traint on $rowt# a% re"orted 9+ :0= of 9u%ine%%e%
o"eratin$ in Tanzania; relate% to t#e "rovi%ion of electrical ener$+. On tran%"ort infra%tructure;
Tanzania #a% made nota9le "ro$re%% in t#e re#a9ilitation and e<ten%ion of t#e countr+>% road networ.
Dowever; rural road% need more im"rovement% a% t#e+ rai%e "roduction co%t% in t#e a$riculture %ector;
and t#e rail %+%tem% are not effectivel+ o"erated wit# "oor infra%tructure and e?ui"ment "ro9lem%.
Overall; Tanzania>% 9u%ine%% environment remain% unattractive; re%ultin$ in in di%a""ointin$ ranin$%
in Doin$ 5u%ine%% and 0frica Com"etitivene%% Re"ort%.
Tanzania need% com"etitive la9or@inten%ive %ector% to a9%or9 t#e $rowin$ +out#ful la9or force;
au$mentin$ 9+ a""ro<imatel+ :00;000 ever+ +ear. T#e current %mall maret %#are of new; la9or@
a9%or9in$ e<"ort@oriented indu%trie%; to$et#er wit# inade?uate #uman ca"ital develo"ment G%ill
%#orta$eH; create% a medium@term ri% of #i$# +out# unem"lo+ment. Arowt# in em"lo+ment #a% %o far
lar$el+ come from dome%ticall+@oriented indu%trie% wit# t#e e<ce"tion of touri%m. T#ere i% a need to
"romote com"etitivene%% $ain% in la9or@inten%ive %ector% %uc# a% manufacturin$ and %ervice%.
T#e a$ricultural %ector contri9ute% to a""ro<imatel+ one ?uarter of ADP and "rovide% em"lo+ment to
a""ro<imatel+ t#ree ?uarter% of all Tanzanian worer% and it remain% an area w#ere %i$nificant
ac#ievement% can 9e made wit# even %mall undertain$%. T#e .out#ern 0$ricultural Arowt# Corridor
of Tanzania G.0ACOTH initiative ma+ facilitate t#e e%ta9li%#ment of lina$e% 9etween %mall@#older%
and lar$e commercial farm%; t#u% "romotin$ "roductivit+ $ain%; w#ile t#e increa%ed u%e of modern
irri$ation %+%tem% and modern in"ut% G%eed%; fertilizer%H ma+ al%o re%ult in increa%ed "roductivit+; at
lea%t in %ome %"ecific area%.
*
On t#e ot#er #and; t#e ra"id develo"ment of t#e communication% and financial %ervice% %ector% ma+
al%o contri9ute to an acceleration in overall economic $rowt#. Not onl+ doe% t#e $rowt# of t#e%e
%ector% contri9ute directl+ to increa%e% in ADP; it al%o #a% an indirect; "o%itive im"act on ot#er %ector%.
(or in%tance; t#ere i% a clear "o%itive correlation 9etween monetization and economic develo"ment.
0dvance% in mo9ile tec#nolo$+ and a dramaticall+ increa%ed rate of u%a$e of t#i% tec#nolo$+ #a%
driven t#e develo"ment of new 9u%ine%% %+%tem%; ena9lin$ t#e e%ta9li%#ment of lina$e% 9etween
entre"reneur% wit# t#eir cu%tomer%; %u""lier%; 9aner%; and $overnment official%. Toda+; a""ro<imatel+
#alf of all Tanzanian adult% u%e mo9ile tele"#one%; wit# around :0= of u%er% #avin$ utilized mo9ile
tec#nolo$+ to %end or receive mone+. Rate% of "enetration and u%a$e are e<"ected to continue to $row;
"articularl+ in rural area% and amon$%t low income #ou%e#old%.
&#ile Tanzania wa% for a lon$ time on t#e forefront of "u9lic %ector reform%; "ro$re%% in recent +ear%
#a% 9een onl+ mar$inal for t#e core "u9lic %ector reform%. 5+ !006; Tanzania #ad com"leted t#e fir%t
two %ta$e% of "u9lic %ector reform%; w#ic# included 9ud$et di%ci"line t#rou$# control of t#e wa$e 9ill;
down%izin$ t#e civil %ervice; im"rovin$ ta<ation; and introducin$ "erformance mana$ement in t#e
"u9lic %ector. T#e t#ird %ta$e of reform%; w#ic# include% dee"enin$ of t#e reform% a% well a% en%urin$
t#eir %u%taina9ilit+ and lina$e% to %ervice deliver+; #a% 9een difficult and more c#allen$in$. Over t#e
"a%t few +ear%; "ro$re%% wa% mar$inal for t#e core "u9lic %ector reform%. Di%"aritie% in %ocial %ervice%@
related %"endin$; a% reflected in allocation of #uman re%ource%; remain amon$ di%trict%. Continued
c#allen$e% e<i%t in low level% of accounta9ilit+ in t#e event of low "erformance; le%% t#an ade?uate
monitorin$ of re%ult% de%"ite #avin$ t#e re?uired tool%; and t#e a9%ence of incentive% for im"roved
"erformance.
T#e $overnment need% to continue to fi$#t corru"tion and %tren$t#en tran%"arenc+ and accounta9ilit+
acro%% %ector% and at all level%. T#e $overnment #a% made $ood "ro$re%% in im"lementin$ t#e
E<tractive Indu%trie% Tran%"arenc+ Initiative; w#ic# will 9e increa%in$l+ im"ortant in t#e conte<t of
natural $a% develo"ment. .tren$t#enin$ "u9lic financial mana$ement in t#e countr+; 9ot# at t#e central
and local $overnment level%; i% e%%ential for #i$# ?ualit+ infra%tructure inve%tment%; more effective
%ervice deliver+; and attractin$ "rivate inve%tment. 0not#er c#allen$e i% to addre%% t#e %o@called 7?uiet
corru"tion;8 %uc# a% teac#er and #ealt# worer a9%enteei%m; w#ic# i% le%% vi%i9le t#an 9i$@time
corru"tion 9ut occur% acro%% a muc# wider %et of tran%action% directl+ affectin$ a lar$e num9er of
9eneficiarie%.
Tanzania i% one of t#e mo%t inde9ted nation% in t#e world. T#e lar$e de9t 9urden ma+ 9e an o9%tacle to
it% trade and economic develo"ment.
4
2.0 WTO
Key: Map of World Trade Organization members and observers.
Members
Members, dually represented by the European Union
Observers
Non-members
2.1 Functions of WTO
mong the various fun!tions of the WTO, these are regarded by analysts as the most important"
#t oversees the implementation, administration and operation of the !overed agreements.
#t provides a forum for negotiations and for settling disputes.
dditionally, it is the WTO$s duty to revie% and propagate the national trade poli!ies, and to ensure the !oheren!e and
transparen!y of trade poli!ies through surveillan!e in global e!onomi! poli!y-ma&ing.

nother priority of the WTO is
the assistan!e of developing, least-developed and lo%-in!ome !ountries in transition to ad'ust to WTO rules and
dis!iplines through te!hni!al !ooperation and training.
(i) The WTO shall fa!ilitate the implementation, administration and operation and further the ob'e!tives of this
greement and of the Multilateral Trade greements, and shall also provide the frame %or& for the implementation,
administration and operation of the multilateral Trade greements.
'
(ii) The WTO shall provide the forum for negotiations among its members !on!erning their multilateral trade relations in
matters dealt %ith under the greement in the nne*es to this greement.
(iii) The WTO shall administer the Understanding on +ules and ,ro!edures -overning the .ettlement of /isputes.
(iv) The WTO shall administer Trade ,oli!y +evie% Me!hanism.
(v) With a vie% to a!hieving greater !oheren!e in global e!onomi! poli!y ma&ing, the WTO shall !ooperate, as
appropriate, %ith the international Monetary 0und (#M0) and %ith the #nternational 1an& for +e!onstru!tion and
/evelopment (#1+/) and its affiliated agen!ies.
The above five listings are the additional fun!tions of the World Trade Organization. s globalization pro!eeds in
today$s so!iety, the ne!essity of an #nternational Organization to manage the trading systems has been of vital
importan!e. s the trade volume in!reases, issues su!h as prote!tionism, trade barriers, subsidies, violation of
intelle!tual property arise due to the differen!es in the trading rules of every nation. The World Trade Organization
serves as the mediator bet%een the nations %hen su!h problems arise. WTO !ould be referred to as the produ!t of
globalization and also as one of the most important organizations in today$s globalized so!iety.
The WTO is also a !enter of e!onomi! resear!h and analysis" regular assessments of the global trade pi!ture in its
annual publi!ations and resear!h reports on spe!ifi! topi!s are produ!ed by the organization. 0inally, the WTO
!ooperates !losely %ith the t%o other !omponents of the 1retton Woods system, the #M0 and the World 1an&.
2.2 !TO "undamental Principle
The WTO establishes a frame%or& for trade poli!ies2 it does not define or spe!ify out!omes. That is, it is
!on!erned %ith setting the rules of the trade poli!y games.

0ive prin!iples are of parti!ular importan!e in
understanding both the pre-3445 -TT and the WTO"
3. Non-discrimination. #t has t%o ma'or !omponents" the most favoured nation (M0N) rule, and
the national treatment poli!y. 1oth are embedded in the main WTO rules on goods, servi!es, and
intelle!tual property, but their pre!ise s!ope and nature differ a!ross these areas. The M0N rule
re6uires that a WTO member must apply the same !onditions on all trade %ith other WTO
members, i.e. a WTO member has to grant the most favorable !onditions under %hi!h it allo%s
trade in a !ertain produ!t type to all other WTO members. 7-rant someone a spe!ial favour and
you have to do the same for all other WTO members.8 National treatment means that imported
goods should be treated no less favorably than domesti!ally produ!ed goods (at least after the
foreign goods have entered the mar&et) and %as introdu!ed to ta!&le non-tariff barriers to
trade (e.g. te!hni!al standards, se!urity standards et al. dis!riminating against imported goods).
9. Reciprocity. #t refle!ts both a desire to limit the s!ope of free-riding that may arise be!ause of the
M0N rule, and a desire to obtain better a!!ess to foreign mar&ets. related point is that for a
nation to negotiate, it is ne!essary that the gain from doing so be greater than the gain available
)
from unilateral liberalization2 re!ipro!al !on!essions intend to ensure that su!h gains %ill
materialise.
:. Bindin and en!orcea"#e commitments. The tariff !ommitments made by WTO members in a
multilateral trade negotiation and on a!!ession are enumerated in a s!hedule (list) of !on!essions.
These s!hedules establish 7!eiling bindings7" a !ountry !an !hange its bindings, but only after
negotiating %ith its trading partners, %hi!h !ould mean !ompensating them for loss of trade. #f
satisfa!tion is not obtained, the !omplaining !ountry may invo&e the WTO dispute settlement
pro!edures.
5. Transparency. The WTO members are re6uired to publish their trade regulations, to maintain
institutions allo%ing for the revie% of administrative de!isions affe!ting trade, to respond to
re6uests for information by other members, and to notify !hanges in trade poli!ies to the WTO.
These internal transparen!y re6uirements are supplemented and fa!ilitated by periodi! !ountry-
spe!ifi! reports (trade poli!y revie%s) through the Trade ,oli!y +evie% Me!hanism (T,+M). The
WTO system tries also to improve predi!tability and stability, dis!ouraging the use of 6uotas and
other measures used to set limits on 6uantities of imports.
'. $a!ety %a#%es. #n spe!ifi! !ir!umstan!es, governments are able to restri!t trade. The WTO$s
agreements permit members to ta&e measures to prote!t not only the environment but also publi!
health, animal health and plant health.
There are three types of provision in this dire!tion"
arti!les allo%ing for the use of trade measures to attain non-e!onomi! ob'e!tives2
arti!les aimed at ensuring 7fair !ompetition72 members must not use environmental prote!tion
measures as a means of disguising prote!tionist poli!ies.
provisions permitting intervention in trade for e!onomi! reasons.
E*!eptions to the M0N prin!iple also allo% for preferential treatment of developing !ountries, regional free
trade areas and !ustoms unions.
&TO Trade (acilitation
The ne% WTO greement on Trade 0a!ilitation (WTO, 9;3:b) !omprises t%o se!tions" .e!tion #, dealing
%ith trade fa!ilitation measures and obligations2 and .e!tion ##, fo!using on fle*ibility arrangements for
developing and least developed !ountries (other%ise &no%n as <spe!ial and differential treatment=).
This guide %ill fo!us mainly on .e!tion #.
T&e speci!ic iss'es t&at &a%e "een areed
6
The trade fa!ilitating issues in .e!tion # are set out in 39 arti!les, arranged as follo%s"
rti!le 3" ,ubli!ation and availability of information
rti!le 9" ,rior publi!ation and !onsultation
rti!le :" dvan!e rulings
rti!le 5" ppeal or revie% pro!edures
rti!le >" Other measures to enhan!e impartiality, non-dis!rimination and transparen!y
rti!le ?" /is!iplines on fees and !harges imposed on or in !onne!tion %ith importation and e*portation
rti!le @" +elease and !learan!e of goods
rti!le A" 1order agen!y !oordination
rti!le 4" Movement of goods under !ustoms !ontrol intended for import
rti!le 3;" 0ormalities !onne!ted %ith importation and e*portation and transit
rti!le 33" 0reedom of transit
rti!le 39" Bustoms !ooperation
Imp#ementation iss'es
$pecia# and di!!erentia# treatment !or de%e#opin co'ntries
#t is %idely re!ognised that there is a !ommon interest in redu!ing trade transa!tion !osts for all WTO
members. /espite the $%in-%in$ out!ome that most !ommentators !onsider %ill flo% from the agreement,
Member .tates that are developing or least developed !ountries have sought enhan!ed fle*ibility in
implementing it C %hat is &no%n as $spe!ial and differential treatment$.
To help developing !ountries and D/Bs to implement trade fa!ilitation reforms, therefore, the agreement
provides for staged implementation, over long periods %here ne!essary. This %ill be based on national
needs assessments to determine assistan!e needs and !osts, and a s!heduling of !ommitments at
individual Member .tate level. /eveloping !ountries and D/Bs %ill be able to lin& their !ommitments to the
re!eipt of te!hni!al assistan!e and support for !apa!ity building, monitored by WTO.
(o) t&e areement )i## "e imp#emented
lthough the agreement %ill be binding in its entirety on all developed !ountries from its entry into for!e, it
re!ognizes that some Member .tates %ill re6uire te!hni!al assistan!e before they !an implement some or
all of the obligations to %hi!h it binds them. Bonse6uently, it has been agreed that !ommitments by
developing and least developed !ountry members %ill be implemented a!!ording to different !ategories of
!ommitments.
#t %ill fall to ea!h developing and least developed Member .tate to determine the timing and entry into
for!e of its !ommitments, a!!ording to the follo%ing !ategories"
Bategory !ommitments are those that a Member .tate has designated for implementation upon
entry into for!e of the agreement2
Bategory 1 !ommitments are those that a Member .tate has designated for implementation on a
date after a transitional period2
Bategory B !ommitments are those that a Member .tate has designated for implementation on a
date after a transitional period and the a!6uisition of implementation !apa!ity through the provision
of te!hni!al assistan!e and support for !apa!ity building.
This %ill be done on a $negative list$ basis, in that a !ountry %ill spe!ifi!ally identify and notify to WTO its
!ategory 1 and B !ommitments. ny !ommitments not notified %ill be deemed to fall under Bategory .
0or Bategory B !ommitments, ea!h !ountry !on!erned %ill see& from donor agen!ies the te!hni!al
assistan!e andEor !apa!ity building that it re6uires, %ith a vie% to se!uring an agreement to provide it.
On!e su!h agreements have been rea!hed, ea!h !ountry !on!erned is to notify WTO of its e*pe!ted
:
implementation date. !omple* early-%arning pro!edure has been established to !over situations %here a
!ountry e*perien!es diffi!ulty in obtaining the support re6uired, or %here it e*perien!es diffi!ulty in
implementation %ithout te!hni!al assistan!e, and needs to transfer !ertain !ommitments from Bategory 1
to Bategory B. #n su!h !ases, notifi!ation to the Bommittee on Trade 0a!ilitation is envisaged.
Bommitments %ill form part of the agreement. #ndividual s!hedules of !ommitments %ill therefore be
published. There are a number of areas that %ill be of interest to business to &no% about"
Understanding %hen a !ountry intends to implement a !ommitment gives business an indi!ation of
%hen to e*pe!t trade fa!ilitation improvements, and avoids !reating unrealisti! e*pe!tations2
2.# "uture for Tanzania Econom$ in %ight of !TO proviion
0ccelerated reform% undertaen %ince 1--' in Tanzania #ave re%ulted in a %i$nificantl+ li9eralized
trade re$ime e%%entiall+ 9a%ed on tariff%. Tanzania #a% eliminated it% e<"ort re%triction% and forei$n
e<c#an$e control% and #a%; overall; made a concerted effort to create an environment conducive 9ot# to
dome%tic and forei$n inve%tment. Dowever; TanzaniaL% %everel+ limited e<"ort ca"acit+ #a% #indered
an+ %i$nificant e<"ort@led $rowt#.
TanzaniaL% main tradin$ "artner% are t#e Euro"ean Union; Ma"an; India and Ben+a. It% e<"ort% are
"rimaril+ a$ricultural commoditie% wit# coffee; ca%#ew nut%; to9acco and cotton con%titutin$ t#e lar$e%t
%ector%. Tanzania im"ort% mainl+ mac#iner+; tran%"ortation e?ui"ment; indu%trial raw material%; and
con%umer $ood%. 5ecau%e of t#e decrea%e in a$ricultural "roduction durin$ t#e "a%t few +ear%;
attri9uta9le to adver%e climatic condition%; food and food%tuff% im"ort% #ave increa%ed %#ar"l+.
Tanzania #a% "artici"ated in t#e Inte$rated (ramewor for Trade@Related Tec#nical 0%%i%tance to ,ea%t
Develo"ed Countrie% GI(H.Dowever; de%"ite it% involvement in t#e I(; and t#e tec#nical a%%i%tance it #a%
alread+ received from it% develo"ment "artner% %uc# a% t#e &TO and ot#er mem9er% of t#e I(;
Tanzania i% in need of %u9%tantial on$oin$ tec#nical a%%i%tance in a wide ran$e of trade@related area%.
Tanzania i% activel+ "ur%uin$ a re$ional inte$ration %trate$+; It i% a %i$nator+ of t#e Common /aret
for Ea%tern and .out#ern 0frica GCO/E.0H @ alt#ou$# it #a% announced it% intention to wit#draw @ and
it i% a mem9er of t#e .out#ern 0frican Develo"ment Communit+ G.0DCH. Tanzania al%o aim% to
%tren$t#en t#e Ea%t 0frican Coo"eration GE0CH a$reement wit# nei$#9orin$ Ben+a and U$anda.
Under t#e ,omN Convention; Tanzania receive% t#e full ran$e of aide made availa9le to 0CP countrie%
9+ t#e Euro"ean Union. 0% a re%ult; man+ Tanzanian e<"ort% to t#e EU are e<em"t from im"ort dutie%.
,iewi%e; TanzaniaL% $ood% enEo+ non@reci"rocal "referential acce%% to t#e maret% of ot#er develo"ed
countrie% t#rou$# t#e Aeneralized .+%tem of Preference%. Dowever; due to TanzaniaL% limited e<"ort
ca"acit+; t#e 9enefit% t#at Tanzania rea"% from t#e%e "referential arran$ement% are minimal.
T#e recent reform of TanzaniaL% cu%tom% dutie% #a% re%ulted in a %im"lified five@tier %tructure wit# a
%im"le avera$e of a""lied im"ort dutie% of 1).!=. T#i% tariff %tructure i% %omew#at e%calator+ wit#
man+ "roce%%ed "roduct% facin$ a #i$#er effective rate of "rotection alon$ t#e "roce%%in$ c#ain. .uc# a
tariff %tructure "rovide% %u9%tantial im"ort "rotection to #i$#er@level "roce%%in$ activitie%; cau%in$
re%ource mi%allocation and inflictin$ #i$#er co%t% to Tanzanian con%umer%.
-
T#e Aovernment of Tanzania relie% #eavil+ on revenue% from tariff% and 30T and t#at con%e?uentl+
t#ere i% "re%%ure to maintain revenue% t#rou$# #i$# tariff level%. T#i% "re%%ure could 9e reduced @ a%
could tariff rate% @ if t#e e<tent of e<em"tion% $ranted were reduced or eliminated.
Tanzania i% neit#er an o9%erver to; nor a %i$nator+ of; t#e "lurilateral 0$reement on Aovernment
Procurement. TanzaniaL% own "rocurement "rocedure% are a confu%in$ a$$lomeration of memoranda
and ot#er under%tandin$% t#at var+ from mini%tr+ to mini%tr+. Tanzania #a% 9een "ur%uin$ an a$$re%%ive
"olic+ of "rivatization in conEunction wit# %u""ort it receive% from international financial in%titution%.
Tanzania #a% al%o 9een amendin$ it% intellectual "ro"ert+ ri$#t% le$i%lation to conform wit# &TO
re?uirement% and i% currentl+ addre%%in$ it% lac of enforcement mec#ani%m%.
TanzaniaL% a$ricultural %ector con%titute% over '0= of it% national ADP and "rovide% a maEorit+ of t#e
countr+L% e<"ort earnin$%. T#e %ector #a% 9een %u9%tantiall+ li9eralized %ince t#e mid 1-:0% and maret
force% #ave 9een allowed to "revail. It #a% 9een noted t#at t#e Aovernment #a% wit#drawn from direct
involvement in "roduction; "roce%%in$; and maretin$ activitie% and #a% retained onl+ it% role in %ettin$
"olicie%. Tanzania #a% in t#e "a%t few +ear% e<"erienced %evere food %#orta$e% and var+in$ level% of
e<"ort earnin$% due to 9ot# drou$#t% and flood%.
T#e TanzaniaL% mineral %ector; focu%ed "rimaril+ on $old "roduction; offer% one of t#e 9e%t
o""ortunitie% for $rowt#. &it# over U.K)00 million of new inve%tment in t#i% %ector liel+ to 9e
realized in t#e ne<t !@* +ear%; t#e mineral %ector "romi%e% to 9e an increa%in$l+ im"ortant contri9utor to
ADP and e<"ort earnin$%. Dowever; t#e via9ilit+ of Tanzanian $old "roduction i% clo%el+ tied to
international $old "rice%; w#ic# #ave %#own continued volatilit+.
T#e TanzaniaL% manufacturin$ %ector i% underdevelo"ed. T#e %ector i% dominated 9+ food "roce%%in$;
9evera$e%; a$ri@9u%ine%%; and li$#t manufacturin$; alon$ wit# %ome te<tile and footwear "roducer%. It
#a% 9een #am"ered 9+ #i$# in"ut co%t%. In "articular; t#e tariff; w#ic# "rovide% for #i$# level% of
"rotection for value@added $ood%; mae% it difficult for Tanzanian manufacturer% w#o mu%t %ource
in"ut% from out%ide t#e countr+.
T#e %ervice% %ector; lie t#e re%t of t#e econom+; #a% under$one %i$nificant li9eralization in a num9er
of area%; includin$ telecommunication%; in%urance and financial %ervice%. T#e touri%m con%titute% t#e
lar$e%t com"onent of %ervice% ADP and #old% "romi%e for continued $rowt#. Tanzania i% a net im"orter
of %ervice% and intend% to underline it% commitment to telecommunication% li9eralization 9+ main$
%"ecific 9indin$% under t#e Aeneral 0$reement on Trade in .ervice% GA0T.H.
3.0 PROPOSED FUTURE REFORM FOR TA!A"A ECOOM#
.ucce%%ive &TO ne$otiatin$ round%; 9ilateral trade a$reement% and unilateral trade o"enin$ #ave
%i$nificantl+ reduced t#e relative wei$#t of tariff% in $lo9al trade 9ut it i% 9ecomin$ clear t#at creatin$
new trade o""ortunitie% and reducin$ t#e co%t of tradin$ will re?uire addre%%in$ non@tariff 9arrier%
GNT5%H. T#e NT5% t+"icall+ addre%% concern% over #ealt#; %afet+; environmental ?ualit+ and ot#er
%ocial con%ideration%.
(or a %ucce%%ful $lo9al trade o"eration% Tanzania #a% to focu% on t#e followin$ area%:
10
#.1 &alue 'ddition
To reco$nize t#at im"ort% are an e%%ential in$redient of a countr+>% e<"ort com"etitivene%%. .o t#e e+
i% not #ow to e<"ort more 9ut #ow to add more value and to u%e trade to e<"and a countr+>% econom+
more ?uicl+.
#.2 Technolog$ 'dvancement
Increa%ed $overnment inve%tment in tec#nolo$+ and al%o develo"in$ t#e ICT %ector. Introduction and
%u%tained u%e of e@commerce; e@$overnment and e@learnin$.
#.# (egulator$ Cooperation
T#e "riorit+ i% to reduce t#e im"act of non@tariff 9arrier% 9+ ac#ievin$ re$ulator+ coo"eration and 9+
avoidin$ t#e u%e of NT5% for di%criminator+ "ur"o%e%.
#.) Developing framework for *nvetment
Effort i% needed to develo" a common framewor for inve%tment. Priorit+ %#ould 9e $iven to ena9lin$
and encoura$in$ inve%tment in creatin$ and 9uildin$ t#e "roduct% and %ervice% re?uired to meet toda+>%
c#allen$e%. ,ocal and international intere%t% need to 9e 9alanced to en%ure real %ocietal "ro$re%%.
Inve%tment acro%% 9order% can 9e e<"ected to increa%e a$ain. Develo"in$ countrie% %tand to win a%
muc#; if not more; a% develo"ed countrie% if $overnance %+%tem% ena9le talent and re%ource% to
flouri%#.
#.+ Trade Capacit$ ,uilding
(or man+ "oor countrie%; trade o"enin$ cannot tran%late into $rowt#; develo"ment and Eo9% wit#out
trade ca"acit+ 9uildin$. /ovin$ forward; we #ave to %ee #ow to 9etter levera$e t#e contri9ution of t#e
"rivate %ector to %u""ort t#i%. 0t a time w#en commitment% to t#e 0id for Trade initiative are on t#e
decline; it i% im"ortant to find new wa+% of 9rin$in$ %u""ort to develo"in$ countrie% %o t#at t#e+ can
continue to increa%e t#eir %#are in world trade. .out#@.out# "artner%#i"% are e+ in t#i% endeavour.
#.- *ncreaing the role of the private ector i another one.
0n im"ortant in$redient toward% t#i% $oal i% en%urin$ t#e availa9ilit+ and afforda9ilit+ of trade finance.
&#ile t#e "icture in trade finance #a% im"roved %ince t#e colla"%e we %aw at t#e 9e$innin$ of t#e cri%i%
in !00:; t#ere remain concern% t#at %mall and medium@%ized
enter"ri%e%; e%"eciall+ t#o%e in low@income countrie% lie Tanzania; do not #ave ade?uate acce%% to t#e
$uarantee% t#e+ need to enter full+ into t#e $lo9al maret"lace. /ultilateral develo"ment 9an% #ave a
ver+ im"ortant role to "la+ #ere %o t#e recent launc# of a trade finance "ro$ram 9+ t#e 0frican
Develo"ment 5an w#o%e initiative com"lement% t#e effort% of ot#er re$ional "la+er% i% crucial to t#i%.
11
#.. 'lignment of their trade regime and for /convergence0 1etween preferential trade
agreement and the multilateral trading $tem.
T#e i% a need for $reater co#erence 9etween trade and ot#er dome%tic "olicie%; %uc# a% education; and
9etween trade and "u9lic "olic+ non@tariff mea%ure%. T#e role of t#e &TO i% to %ee out new initiative%
t#at can 9rin$ a9out t#e%e aim% in coo"eration wit# ot#er international a$encie% and non@$overnmental
or$anization%.
T#e re%"on%i9ilit+ of $overnment% in de%i$nin$ economic recover+ mea%ure%I t#e im"ortance of
international coo"eration amon$ com"etition a$encie% for "romotin$ an under%tandin$ acro%% re$ime%
in order to ac#ieve conver$enceI and related to RT0 com"etition "rovi%ion%.
#.2 3tandard Pu1lication
T#e im"lementation of t#e .P. notification %+%tem need% to 9e im"roved at t#e national level; in
"articular in develo"in$ countrie%. &TO mem9er% %#ould al%o 9e encoura$ed to "rovide more detailed
information on t#eir notification%. 0lt#ou$# im"ortin$ countrie% %#ould alwa+% #ave t#e ri$#t to refu%e
an im"ort a""roval re?ue%t if t#i% i% %cientificall+ Eu%tified; t#e+ mu%t "rovide more timel+ and
%u9%tantive re%"on%e% to %uc# re?ue%t%. Auideline% could 9e drafted in t#e .P. Committee to clearl+
%"ell out %uc# re?uirement%. Trade "ractitioner% would 9enefit from increa%ed effort% to "rovide an
im"roved; com"re#en%ive overview of national re$ulator+ "roce%%e% and .P. mea%ure%. Clearer
e<"lanation of t#e rea%on% for non@ad#erence to internationall+ a$reed %tandard% i% re?uired. Effort% to
determine t#e trade im"act of .P. mea%ure% %#ould continue %o t#at t#e e<i%tin$ "iecemeal information
can 9e tran%lated into a com"re#en%ive data9a%e t#at could al%o 9e u%ed to monitor im"rovement% in
maret acce%% and focu% attention on remainin$ "ro9lem%.
$.0 COC%US"O
In conclu%ion; innovation in t#e a$ricultural %ector can #ave %i$nificant 9enefit% for develo"in$
countrie%. Pu9lic@"rivate develo"ment "artner%#i"%; in "articular; #ave enormou% "otential to 9rin$
a$ricultural innovation to local farmer%. 2et in order to ena9le t#e %#arin$ of %uc# innovation;
a""ro"riate re$ulator+ framewor% J t#at "rotect innovation and t#u% allow t#e value% and economic
9enefit% of %uc# innovation to 9e %#ared wit# local communitie% J #ave to 9e "ut in "lace.
REFERECE
#tt":CCwww.a%.comC?ue%tionCdifferent@t+"e%@of@e@commerce
#tt":CCen.wii"edia.or$CwiiCEconom+OofOTanzania
#tt":CCwww.world9an.or$CenCcountr+CtanzaniaCoverview
1!
#tt":CCwww.inde<mundi.comCtanzaniaCeconom+O"rofile.#tml
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