WORLD TRADE
ORGANIZATIONWT/TPR/M/66
2 May 2000
(00-1773)
Trade Policy Review Body
2 and 3 March 2000
TRADE POLICY REVIEW
TANZANIA
Minutes of Meeting
Chairpersons:  H.E. Mr Jean-Marie No irfalisse (Belgium) (First Session)
  H.E. Dr. Iftekhar Ahmed Chowdhury (Bangladesh) (Second Session)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF TANZANIA 4
III. STATEMENT BY THE DISCUSSANT 6IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 8V. REPLIES FROM THE REPRESENTATIVE OF TANZANIA AND
ADDITIONAL COMMENTS 13
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 16
ANNEX ADVANCE WRITTEN QUESTIONS 18WT/TPR/M/66
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The first Trade Policy Review Tanzania was held on 2 and 3 March 2000.  The Chairperson
welcomed the delegation of Tanzania, led during the first session by Ambassador Ali Mchumo in the
absence of Minister of Industry and Trade, Mr. Iddi Simba, who led the second session, and the
discussant, Mr. Albert Wright (Denmark).  As usual, the discussant spoke in his personal capacity andnot as a representative of his country.  In accordance with the established procedures, the discussant
had made available, in advance, outlines of the main issues he intended to raise.
2. The Chairperson recalled the purpose of the Trade Policy Review Mechanism and the main
elements of the procedures for the meeting.  The report by the Government of Tanzania was contained
in document WT/TPR/G/66/Rev.1 and its subsequent annex, and that of the WTO Secretariat in
document WT/TPR/S/66;  the main issues raised by the discussant were contained in document
WT/TPR/D/46.  Copies of advance written questions, submitted by eight delegations(Hong Kong, China;  Switzerland;  Canada;  Japan;  the European Union;  the Republic of Korea;  the
United States;  and India) were transmitted to the delegation of Tanzania.  These are reproduced at
Annex.  If full replies could not be provided during the meeting, supplementary written replies could
be provided later.WT/TPR/M/66
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF TANZANIA
(1) Economic environment
3. The representative of Tanzania stated that his country was pleased to participate in its first
Trade Policy Review exercise, the main purpose being to provide greater transparency and
understanding of the trade policies and practices of WTO Members.
4. Tanzania paid great attention to liberalization and globalization and continued to participate
effectively in formulating and implementing policies geared towards these objectives.  It appreciated
the role played by the WTO in advocating a rule s-based, transparent and predictable international
system.
5. The principal objectives of Tanzania’s trade and economic policies were poverty alleviation,
employment generation and sustainable use of environmental resources, such that the quality of life of
the Tanzanian people could be improved.  It was in this respect that the Government of Tanzania hadembarked on comprehensive and protracted economic and socio-political reforms modelled on prior
economic reform programmes – the Structural Adjustment Programmes (SAPS), the National
Economic Survival Programmes (NESP) and the Ec onomic Recovery Programme (ERP) of the 1980s.
The Government of Tanzania had recognized the importance of the private sector as the engine of
growth for the economy and had directed its ef forts towards implementing the following policy
measures:
- enhancing investment opportunities by enacting a new investment law embodying
fiscal incentives for investors;
- enhancing financial sector liberalization and establishing a stock exchange with the
attendant regulatory structure;
- promoting efficient utilization of domestic resources and restoring equilibrium on the
balance-of-payments front;  and
- participating in various regional integration initiatives, principally within the Eastern,
Southern African, and Indi an Ocean Rim subregion.
6. Tanzania considered the above measures as part of an appropriate strategy to turn its
command economy into a more market-oriented one, and in the process resume growth and sustain
economic and social development.
7. On economic management, Tanzania’s macroeconomic policies were aimed at controlling the
budget deficit and lowering interest rates with a view to creating an enabling environment for
domestic and foreign investment.  Following the structural adjustment and stabilization programmes
of the 1980s, there had been a marked improvement in GDP growth rates.  However, in the early
1990s there had been slippages in the implementation of economic reforms, due to discretionaryexemptions on import duties and other taxes and also because of government-instituted debt
conversion and gold purchase schemes, which had triggered inflation.  By 1995 though, the
Government had moved quickly to arrest the deteriorating economic and financial situation and
adopted a strong recovery programme, which had in turn led to the restoration of donor assistance
under the Enhanced Structural Adjustment Fa cility (ESAF) programme, beginning 1996/97.
8. Tanzania was a developing country with a free market economy, which would continue to
encourage and stimulate the private sector to play a pivotal role in the realization of economic growth
and social development objectives.WT/TPR/M/66
Page 5
9. Tanzania called upon its trading partners to rapidly and significantly remove distortions,
barriers, and other obstacles to trade and ensure that the benefits from the multilateral trading system
accrued to all and marginalized none.
(2) Trade policies
10. In the trade sector, Tanzania had undertaken necessary reforms in order to integrate its
economy into the multilateral trading system.  Key among these were: (i) simplification of export
procedures;  (ii) relaxation of exchange controls;  and (iii) privatization of state-owned companies and
new investments, particularly in the mining sector.
11. These efforts had led to an increased level of merchandise exports (8.5% between 1992 and
1998), increased reserves, equivalent to 13 weeks of import coverage (as against two weeks prior to
liberalization), and restoration of equilibrium in the balance-of-payments accounts.  Nevertheless, the
structure of Tanzania’s export sector continued to be dominated by traditional exports, although
efforts to diversify and introduce non-traditional exports were encouraging.
12. The Tanzanian Government recognized the potential contribution that capital markets could
make in its efforts to mobilize domestic resources and encourage private participation in the economy.
To this end, the Capital Market and Securities Agency was established in 1995 and the Dar-es-Salaam
Stock Exchange began trading in 1998.  Further, to usher in a new era of banking sector liberalization,the Banking and Financial Institutions Act of 1991 was enacted.
13. Over the years, the Government had undertaken deliberate efforts to encourage private
investment by creating the required positive environment to attract private investors, including
enactment of a new investment law embodying fiscal incentives.  Given that Tanzania possessed an
ample labour force, abundant natural resources, political stability, and a geographically strategicposition bordering the Indian Ocean and the hinterland of six countries, the Government of Tanzania
felt the country was a naturally attractive investment destination.
(3) Regional cooperation
14. Tanzania attached great importance to regional cooperation and viewed it as an important
building block towards integration into the global economy.  In this regard Tanzania was a member ofseveral regional integration groupings including the Southern African Development Community
(SADC) and the Indian Ocean Rim-Associat ion for Regional Co-operation (IOR-ARC).
15. As a Member of the WTO, Tanzania was committed to a strong and fair multilateral trading
system, and to implementing its multilateral commitments.  However, effective participation had been
constrained severely due to technical and financial capacity limitations and as a result, the
Government had been unable to implement its Uruguay Round commitments.  Further, there was a
limited understanding of the WTO Agreements within both the public and private sectors and effortswere needed to address this problem in conjunction with the WTO Secretariat.
16. In the area of capacity building, both at the institutional and human resource level, Tanzania
had received valuable technical assistance.  Nevertheless, given the special challenges being faced by
the LDCs and their marginalization within the multilateral trading system, it was essential that
capacity building and increased market-access programmes be actively implemented.  Theinternational trading community needed to ensure  that the on-going Integrated Framework for LDCs
was adequately funded and provision for resources in the regular budget of the WTO and other core
agencies committed towards technical assistance programmes was faithfully maintained.WT/TPR/M/66
Page 6
III. STATEMENT BY THE DISCUSSANT
17. The discussant (Mr. Albert Wright) wondered why a country, that had initiated a series of
reforms distancing itself from a command economy, especially since 1995, had failed to see its
exports grow faster than imports.  Despite taking a number of bold policy decisions, export growth
had continued to be sluggish and the export to import ratio had remained virtually unchanged foralmost two decades.
18. The following courageous and wise policy decisions had been taken by the Government:
- to abandon import substitution and pursue outward-oriented policies;
- to launch a programme for the privatization of previously nationalized industries, and
the de-collectivization of agriculture;
- to launch the Investment Act of 1997, guaranteeing national treatment for FDI and
permitting 100% foreign ownership in most sectors;
- to remove export restrictions in all major sectors, simplify export procedures and
remove foreign exchange controls;  and
- a disciplined approach to public expenditure and macroeconomic policy-making,
which had enabled a respectable GDP growth of well over 3%.
19. Nevertheless, Tanzania remained one of the poorest countries in the world with a per capita
GNP of about US$210 and a myriad of interconnected problems typical of many LDCs.  Setting aside
population increases, which had left real per capita growth at only 0.6% over the past five years, the
country continued to face a long-term production decline in agriculture and, since 1997, a sudden drop
in manufactured exports.  He was tempted to think that while decline in agricultural production was
perhaps due to price increases for imported inputs, elimination of fertilizer subsidies and non-attainment of export quality standards, manufactured exports were being impeded by the escalatory
nature of the tariff structure.  These, along w ith the extensive granting of duty exemptions, were
leading to an ever-larger misallocation of resources.
20. The Secretariat Report suggested a number of causes for this disappointing economic
performance on which it would be inappropriate to dw ell in a Trade Policy Review, e.g:  (i) concerns
about administration and governance;  (ii) inadequacies in the business infrastructure;  (iii) a newly
established financial structure, which was in need of strengthening;  and (iv) major supply side
constraints such as the insufficient provision of roads (only 5% paved), electricity (covering only 10%
of the population) and telecommunication services.
21. However, a few of the causes fell squarely within the remit of this Body.  Chief among them,
he believed, was the high average levels and escalatory nature of the tariff structure, which he
considered the biggest shortcoming in Tanzania’s trade policy regime.  Further, the high rate ofexemption from duties and taxes, implemented with perhaps a degree of arbitrariness, further
compounded the problems of resource allocation and even militated against their seemingly directed
purpose of revenue generation.
22. Another area of concern was the extent to which the various government institutions dealing
with trade matters were coordinated or integrated in to a coherent vision for export development.  In its
report for the Round Table Consultation on Trade- Related Assistance held in Dar-es-Salaam in
October last year, the Government of Tanzania itself had drawn attention to the fact that, while its
Civil Service Reform programme clarified these issues in theory, there continued to be different
interpretations of roles, responsibility and accountability in practice.WT/TPR/M/66
Page 7
23. This led to a number of questions.  How did the Tanzanian Government propose to
consolidate its sectoral trade-related policies, including that of encouraging FDI, into a single policy
focused on the goal of enhancing export growth?  What was the coherence of the trade policy advice
provided by the IMF, World Bank and other international organizations, given their inextricable
linkage with Tanzania’s economic development programmes? Tanzania was a recipient of trade-related assistance and had been working with several international institutions and bilateral donors
under the Integrated Framework mechanism.  Towards this end, what was the extent of efficient
cooperation and how were the problems of delayed implementation being tackled, given especially
that Tanzania had been among the earliest beneficiaries of this Framework? And what was the
expected economic and development impact of the new trade-related assistance projects, estimated at
approximately US$43 million, which were due to be tabled at a Consultative Group meeting in Paris
in May?
24. While heartened to note Tanzania’s membership in regional organizations, COMESA, SADC
and the EAC, he was disquieted to learn how little  trade took place between Tanzania and its trading
partners and perplexed by Tanzania's intention to withdraw from COMESA .  He wondered whether
concern about revenue losses arising from ongoing  COMESA tariff liberalization was the primary
cause.WT/TPR/M/66
Page 8
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
25. Members commended Tanzania for its efforts to promote economic development through
structural reforms, liberalization of external trade, privatization, and implementation of prudent
macroeconomic policies.  Members understood the problems Tanzania was facing and wished the
Government of Tanzania every success in its endeavours.  They encouraged Tanzania to pursuefurther liberalization of its trade and investment regime and to fully integrate itself into the
multilateral system.  Several Members had prepared a number of technical questions and looked
forward to receiving answers from  the Government of Tanzania.
26. The representative of the European Union praised the role played by Tanzania to promote
reconciliation and stability in the Great Lakes region by hosting the Arusha peace talks on Burundi
and the International Tribunal for Rwanda, as well as accommodating large numbers of refugees
within its borders.  The representative also ap preciated the Government’s efforts in stressing
macroeconomic stability and fiscal reform, particularly since 1995, which had restored donor
confidence and paved the way for access to future structural adjustment support and debt relief
through the Heavily Indebted Poor Countries programme (HIPC).
27. Nonetheless, fundamental problems relating to Tanzania’s economic development remained,
ranging from endemic corruption to the limited nature of its export capacity.  Given that Tanzania’sexport base was extremely vulnerable to fluctuating commodity prices and a depreciating currency,
concerted efforts towards building a more diversified and stable economic base were necessary.
Further, the need to institute good governance, ef ficient administration, honest tax administration, and
a broad institutional framework were crucial.  The EU recognized that the Tanzanian Government had
undertaken initiatives to combat this situation, including law reforms, introduction of a civil servicereform programmes and adoption of a national anti-corruption strategy, and suggested that the EU
would assist such important endeavours.
28. On the trade liberalization front, it was important for Tanzania to complete the transition to an
outward-oriented economy and the EU, through it s new partnership agreement with the 71 ACP
countries (which included Tanzania), would be s upportive.  Further, an important aspect of the
improvement of the EU trade regime for all LDCs was free access for essentially all products into the
EU market by the year 2005.  At the same time though, the representative was puzzled by the
Government’s announcement to withdraw from COMESA and queried the rationale behind the
decision.
29. The representative of Hong Kong, China appreci ated that Tanzania had pursued an aggressive
privatization programme since 1992 and did not re strict any foreign direct investment in the
privatization process.  He commended Tanzania for making efforts in revising its patent and trademarks legislation towards meeting its obligations under the TRIPS Agreement and encouraged
Tanzania to further deepen and broaden its services commitments.  While he was glad to note that the
standards requirements of Tanzania did not distinguish between imported and domestically produced
goods, labelling and packaging requirements for different products were regulated by different
institutions and he hoped that harmonization of such requirements would be instituted.
30. The representative of Switzerland expressed appreciation for Tanzania’s efforts to fight
corruption and implement policies emphasizing economic stability and liberalization.  Despite being
extremely poor and heavily dependent on agriculture, Tanzania had instituted policies that provided
greater support for primary education, basic health care and basic infrastructure.  While Switzerland
was committed to supporting the economic and social development of Tanzania, it would carefullymonitor the progress achieved in laying down the framework for an open economy and implementing
necessary structural reforms.WT/TPR/M/66
Page 9
31. The representative of Bolivia commended Tanzania’s efforts to liberalize its trade regime and
initiate important socio-economic reforms.  Though rich in natural resources and attractive as a tourist
destination, Tanzania continued to suffer from a number of economic problems, most notably an
increasing trade deficit.  Despite an open economic policy, there was no perceived improvement in the
trade deficit and, indeed in 1998, there had been a significant decline in manufactures.  She believed,that it was necessary to evaluate more critically the extent to which the application of the Uruguay
Round Agreements had promoted market access and better integration of the least developed
countries.
32. The representative of Mauritius complimented the Government of Tanzania for its strong
economic recovery programme, which had had a catalytic effect on other sectors.  The launching of
the independent Tanzanian Revenue Authority, adoption of the Enhanced Structural Adjustment
Facility, and consideration for bilateral and Paris Club debt relief were all measures of Tanzania’seconomic progress.
33. Nevertheless, Tanzania continued to be a poor, indebted country with low life expectancy and
high illiteracy and needed to continue its liberalization initiatives aggressively.  Particularly important
was the need to expand beyond the limited export capacity and diversify its product base so as to take
advantage of the easy access that Tanzania enjoyed in major markets, particularly the EU under the
Lomé Convention.  The gold sector, and jewellery in particular, were perhaps indicators of that
diversification and he asked the Tanzanian delegation to provide more information on efforts being
undertaken to develop that sector.
34. With regard to services, he noted that privatization was under way in a number of sectors,
notably telecommunications, insurance and financial services and hoped that this would lead togreater liberalization.  Mauritius also applauded Tanzania’s attempts to fulfil its obligations under the
GATS and TRIPS regimes and believed Tanzania deserved more technical assistance and support on
this front.
35. The representative of Canada welcomed Tanzania’s efforts since 1993 to convert from a
socialist, centrally directed, one party system of government to a multi-party democracy with an open,
liberalized economy.  She noted that Canada and Tanzania had shared common political and
economic goals, having worked together under the United Nations and the Commonwealth to fight
racism, apartheid and colonialism.
36. Canada was pleased that Tanzania had taken steps to reform its economy, attract private
sector investment, particularly in the energy and mining sectors, and was engaged in a dialogue with
the Confederation of Tanzanian Industries.  Nevertheless a number of problems currently faced by
private sector investors remained.  Tanzania needed to create a stable, predictable and non-discriminatory operating environment, its government departments and agencies needed to honour
investor agreements in full, and the contradictory, out-of-date or vague nature of business legislation
needed to be curtailed.
37. Canada looked forward to receiving responses to its specific questions concerning such issues
as trade and investment agreements, trade policy features, laws and regulations, services, and othermeasures affecting imports.
38. The representative of Japan commended Tanzania’s deregulation, privatization and trade
liberalization initiatives.  Japan welcomed the positive signs in Tanzania’s macroeconomic situation
and hoped that the reform process would be broadened and extended with the cooperation of the IMF
and the World Bank.  Apart from written questions already submitted Japan had specific queriespertaining to banking sector liberalization, the nature of hindrances in promoting investment, and the
types of difficulties faced by Tanzania in the course of its compliance with WTO obligations.WT/TPR/M/66
Page 10
39. The representative of the Republic of Korea appreciated Tanzania’s efforts to undertake
structural reforms and shift its focus from import-substitution to outward-oriented policies.  Though
Tanzania still had many economic problems to tackle, the Republic of Korea hoped that fluid trade
flows would accelerate economic growth and create new sustainable sources of wealth.
40. The primary concerns of the Republic of Korea were impediments faced by exporters, such as
high transportation costs and port-user fees, and irregularities relating to the Agreement on
Preshipment Inspection.  Further, tariff escalation was hampering the efforts of both foreign and local
firms to diversify production.  Though Tanzania relied on the tariff revenues, a pressing need
remained for the tariffs to be lowered with simultaneous reduction in the number of tariff exemptions.
41. The representative of Kenya congratulated the Government of Tanzania on its courageous
economic reform measures and for enhancing the country’s attractiveness for FDI.  Kenya recognized
the important role played by Tanzania in contribut ing to peaceful co-existence amongst and within the
countries of the subregion, concurred with Tanzania’s position regarding future WTO negotiations,
particularly on liberalization of agriculture, and welcomed Tanzania’s commitment to eliminate all
tariff and non-tariff barriers as scheduled in the regional integration initiative.
42. The representative of Norway commended the Government of Tanzania for the reforms
instituted and the efforts undertaken to attract greater foreign investment.  Tanzania needed to
continue reforms aimed at enhancing its export potential and address red-tape difficulties, which were
inhibiting new foreign investment and the operations of businesses.  A more serious challenge was to
encourage domestic savings, which were at an insufficient level.
43. With regard to effective implementation of WTO commitments and participation in present
and future trade negotiations, Tanzania was hampered by lack of adequate national expertise.  Norwayfelt it was necessary to increase the regular budget of the WTO with the aim of improving the
Secretariat’s capacity to respond to developing countries’ needs for trade-related technical assistance.
44. The representative of Uruguay commended the Government of Tanzania on having
introduced and undertaken structural reform measures.  Acknowledging the essential function of the
agricultural sector in ensuring economic development, the representative emphasized the importanceof providing special and differential treatment for the least developed countries within the
international trade regime, to hasten their integrati on into the multilateral system.  Similarly, it was
important that Tanzania’s financial and human resource limitations be taken into account while
proceeding with further negotiations on trade liberalization.
45. The representative of the United States acknowledged Tanzania’s demonstrated commitment
to rules-based trade and active implementation of its WTO obligations, including notifications
circulated to other Members whenever the Government felt it faced difficulties in implementing itsobligations on schedule.  The United States would endeavour to support continued technical
assistance so as to advance Tanzania’s broader interests within the multilateral system.
46. With regard to core labour standards, Tanzania was strongly encouraged to continue its
efforts to adhere to the various ILO conventions and, aided by technical assistance from the ILO,
bring its labour laws and practices into conformity with ILO norms.  The United States commendedTanzania on signing an open skies agreement with  the United States and for implementing noteworthy
liberalization initiatives.  However, Tanzania needed to progress further in areas of tax rationalization,
privatization, and reform and modification of the agricultural sector.
47. The representative of Australia acknowledged the important economic reforms that Tanzania
had undertaken since the mid 1980s and further accelerated since 1995.  Tanzania had benefited from
participation in the Integrated Framework for LD Cs and had made positive moves in various areas.
These included reform of customs duties and introduction of privatization in the telecommunications,WT/TPR/M/66
Page 11
utilities and financial services sectors.  Tanzania needed to make improvements in several areas of
trade policy, most notably, development of legisl ation on anti-dumping, countervailing, safeguard
measures, and government procurement.  The representative hoped that, while Tanzania would benefit
from its involvement with several regional groups, the Government would ensure that its regional
arrangements did not interfere with or diminish its commitments to the multilateral system.
48. The representative of the Czech Republic commended Tanzania’s important efforts to reform
the national economy.  Given that Tanzania had been increasingly exposed to external shocks,
extreme weather conditions and other constraints to its trade and economic development, the
economic results achieved were especially impressive.  The representative noted though that much
remained to be done and suggested that the WTO and the international community develop a
meaningful package of measures in favour of the least developed countries including duty and quota
free access to international markets for their products.
49. The Czech Republic had two specific questions regarding duty exemptions and manufactured
exports and looked forward to the responses.
50. The representative of Cuba noted the level of poverty and the critical situation of Tanzania
despite its structural reforms.  There was an urgent need for the country to change its production base.
The macroeconomic and social environment that Tanzania had to face had not been conducive toeconomic development.  He believed that developed countries needed to make an effort to facilitate
market access, which would give Tanzania the higher export revenue necessary to transform its
production base.  Restrictions maintained against Tanzania's exports should be removed and greater
technical assistance given to enable Tanzania to co mply with the technical standards that prevailed on
the market.  It was essential to increase official development assistance.  It was also very important tocancel Tanzania's debt as it was one of the highly indebted countries.
51. The representative of Madagascar praised the Government of Tanzania for its programme for
economic recovery, which included foreign trade liberalization measures.  Tanzania was to be praised
for having respected its commitments within the framework of regional integration and qualifying for,
and receiving, certain debt cancellations.  Nevertheless, the representative noted with concern thatTanzania, like other LDCs, remained marginalized within the multilateral trading system, due
primarily to its inability to adopt and fulfil WTO obligations.  In this regard, Madagascar supported
the call for further technical assistance to LDCs.
52. The representative of Nigeria congratulated the Government of Tanzania on having provided
good governance and internal stability and prudent macroeconomic policies.  He hoped that this
would be maintained as Tanzania continued its market-oriented path of economic development.
However, crushing debt burdens and destabilizing events such as natural disasters, floods and famineshad impeded Tanzania’s ability to implement WTO obligations, and it was hoped that the
international community would take these into account and take steps to assist Tanzania’s fuller
integration into the international economy.
53. The representative of Zimbabwe welcomed Tanzania’s economic liberalization measures and
paid tribute to their bilateral relationship and init iatives, which included participation in regional trade
arrangements.  Nonetheless, he expressed concern about Tanzania’s decision to leave COMESA and
looked forward to hearing the reasons that had prompted the decision.  He also noted that, despite
market access arrangements overseas and an extended programme of liberalization, Tanzania had
failed to increase its export capacity.  Hence, building capacity to manufacture and take advantage of
liberalization and market access arrangements was of primary importance and international assistancetowards this end was urgently called for.  He cautioned, however, that liberalization was not the
answer to all problems of development.WT/TPR/M/66
Page 12
54. The representative of India appreciated the macroeconomic and fiscal reforms instituted by
Tanzania and supported by the international financial institutions.  The simplification of export
procedures, privatization of state-owned companies, and new investments in the mining sector had led
to a continuous increase in Tanzania’s exports.  He noted though that, in spite of reforms and
participation in the multilateral trading system, Ta nzania remained one of the most highly indebted
nations in the world, and the structure of its export  sector had remained unchanged with traditional
exports dominating non-traditional exports.  Part of the problem perhaps was attributable to
Tanzania’s inability to benefit from the Uruguay Round Agreements due to lack of understanding of
these Agreements.  To that end, he hoped that trade-related technical assistance under the aegis of the
Integrated Framework and the Special and Differential Treatment provisions for the LDCs would be
meaningfully implemented.
55. With regard to specific areas of Indian concern, he noted problems in the drawing up and
implementation of technical regulations, in the setting of minimum dutiable value, and in the
registration process for companies wishing to export pharmaceutical items.  He requested that these
problems be addressed by the Tanzanian authorities.
56. The representative of Egypt commended Tanzania on its economic and trade liberalization
initiatives and stressed the long history of political and commercial links between their two
governments.  Egypt had some specific queries c oncerning Tanzania’s membership in COMESA and
looked forward to the Government’s response.
57. The representative of Jamaica congratulated Tanzania for its efforts to undertake
comprehensive structural adjustment and economic liberalization measures.  However, some
particularly troubling issues remained.  Despite the extended time frame of implementation ofstructural adjustment measures, per capita income had hardly increased from 1970s levels, traditional
exports continued to dominate, and the current account deficit remained excessively large.  In light of
such circumstances, the need for enhancing capac ity building and further developing the Integrated
Framework for trade-related assistance was increasingly urgent.  He hoped that preferential trade
arrangements extended to Tanzania (and other ACP countries) by the European Union under theLomé Convention would continue to be looked on favourably by the WTO, and inadequate
implementation of WTO Agreements, due to lack of technical capacity, treated sympathetically.  On
the positive side, Tanzania’s services sector had grown appreciably over the past few years and he
hoped that it would be further encouraged by the Tanzanian authorities.WT/TPR/M/66
Page 13
V. REPLIES FROM THE REPRESENTATIVE OF TANZANIA AND ADDITIONAL
COMMENTS
58. The representative of Tanzania thanked Members that had commended Tanzania on its
economic and trade liberalization measures.  He gave an overview of the detailed responses prepared
by his delegation.  Three topics had emerged from the various questions asked in the first-day session:(1) economic environment;  (2) trade policies by measure;  and (3) sectoral policies.
(1) Economic environment
59. The representative of Tanzania reiterated the commitment of his Government to pursue
economic liberalization and prudent macroeconomic management so as to ensure accelerated growth.
In response to the discussant’s fundamental query as to why Tanzania, despite having introduced a
series of market-oriented reforms, had failed to achieve sustained export growth, he noted that
economic liberalization, by itself, was not necessarily the panacea to all problems of economicdevelopment.  Factors impinging on Tanzania’s economic development included an export sector
largely dominated by traditional exports and lacking in  adequate financial, institutional, technological
and technical capacities.  In this regard, a substantial increase in technical assistance was called for, so
that Tanzania (and other LDCs) could break free from the vicious circle of poverty.
60. The Government was committed to encouraging the flow of FDI and the Investment Policy
placed a special emphasis on adding value to the country’s raw material supply.  Towards this end,
investment was being encouraged in the refineries, lapidary and jewellery production sectors, and
removal of investment impediments and red tape was being actively pursued.  A fast-track lane to
facilitate investors had also been established in all ministries.  Given that the civil service was in need
of further training, the Government, through the Tanzania Investment Centre, had started a civilservice sensitization campaign.  Meanwhile, the Tanzania Investment Centre was mandated to provide
all investment-related information to investors, facilitate work permits and even assign derivative
rights of land lease to foreign investors.  The Government had also established a Commercial Court,
which was fully functional and dealing with all cases of a commercial nature.
61. Regarding Tanzania’s decision to withdraw from COMESA, this was based on the need to
rationalize membership in regional trade arrangements.  Given the increasing costs of membership
and participation in these regional trading organizations, which were themselves continuing to
multiply, the decision to withdraw from COMESA was taken.  The decision was not based on
concerns of revenue losses stemming from tariff reduction, and eventual elimination of duties within
COMESA, nor was it taken with the aim of protecti ng local industry.  Notwithstanding the decision to
withdraw, Tanzania would continue to cooperate  with COMESA Member States through other
organizations, e.g. SADC and the EAC, and at the bilateral level.
(2) Trade policies by measure
62. The representative of Tanzania recalled that many of the delegates had taken note of
Tanzania’s low average tariff rate of 16.1% and clear progress in dismantling quantitative restrictions.
However, the gap between bound and applied rates and the problem of exemptions had drawn the
concerns.
63. He noted that the tariff structure was based on degree of processing, i.e. the applicable rate
was lowest for investment goods and highest on cons umer goods.  It was envisaged that, while such a
move would reduce government revenue in the short term, in the long run it would encourage
diversification, improve domestic production and enhance export of manufactures.  Exemptions,
meanwhile, were granted on the basis of various factors, such as statutory reasons;  fulfilment ofsocial obligation, due to agreements with international donor agencies; and bilateral agreements.
However, the Government had virtually stopped all discretionary exemptions and was consideringWT/TPR/M/66
Page 14
proposals to ensure that goods upon which exemption had been sought were being utilized as
expected.  In this regard, he also hoped that donor agencies, governmental and inter-governmental
agencies would also seek to abide by such disciplines.
64. With regard to possible plans to extend tariff bindings to cover other products and reduce the
gap between applicable and bound rates, Tanzania was fully committed to its WTO obligations andwould do everything commensurate with its ability to take on more responsibility.  With enhanced
technical assistance under the Integrated Framework, areas of further liberalization could be identified
and gaps between bound and applied rates reduced.
65. In the areas of inspection, standards and customs valuation, the Government of Tanzania had
deferred the application of Article VII on Customs Valuation until year 2001 so that proper
implementation arrangements could be put into place.  In this regard, the Committee on Customs
Valuation’s approval was highly appreciated.
66. The representative noted that the contract between the Government and COTECNA
(PSI agency) included provisions of technical assistance in the enhancement of capacity building.
Training programmes on customs management, valuat ion methods and data base establishment had
been undertaken.  The contract term provided time  for the customs authority to build capacity to take
over the responsibilities once PSI had been phased out after the two-year period in March 2001.Meanwhile, the Government had contracted an audit firm to ensure that PSI was operating as per
contract.  This audit process was not intended to be a re-inspection.
67. With regard to contingency measures legislation, various delegations had raised the issues of
export tax, minimum dutiable values, and the need to put in place trade remedy measures.  While the
Government did not have in place legislation and mechanisms for anti-dumping, countervailingmeasures and safeguards against "unfairly low priced goods," there was recognition that some imports
were priced unfairly low for purposes of tax evasion.  In this regard the Government had mandated
the TRA to determine and institute a moderate minimum dutiable value on those goods in a
transparent manner.  Further, all legislation and mechanisms being considered would be in conformity
with WTO rules.
(3) Sectoral policies
68. On the question of why Tanzania was not setting a deadline for the extension of the
privatization process, the representative noted that structural reforms had focused on the restructuring
and privatization of public enterprises.  A total of 295 out of 395 public enterprises had been divested
and others were in the process of divestiture.  In 1998/99 alone, a total of 36 privatizations were
related to utilities and large financial institutions.  These included the Dar Water and Sewage
Authority, (DAWASA), Tanzania Electric Supply Company (TANESCO), Air TanzaniaCorporation (ATC). Tanzania Telecommunicat ion Company Ltd. (TTCL), National Bank of
Commerce (1997) Ltd., National Microfinance Bank Ltd. (NMB) and National Insurance
Company (NIC).  The Co-operative and Rural Development Bank had already been privatized and
privatization measures, primarily due diligence proceedings, were also under way in the
telecommunication sector.  Meanwhile, the Government, through the Presidential Parastatal SectorReform Commission, was working on other institutions , and foreign participation was eagerly sought.
69. The discussant and the representative of the United States
 took note that, despite the
increasing number of private banks, credit facilities to SMEs was still low.  In this regard they asked
what were the financial facilities available to exporters from commercial banks.
70. The representative of Tanzania replied that, at present, there were no discriminatory financial
facilities provided to SMEs or exporters from the banking system.  However, high lending rates and
lack of collateral discouraged SMEs from usin g the banking system as a source of capital.WT/TPR/M/66
Page 15
Nevertheless, with the operationalization of National Microfinance, which targeted micro-businesses,
it was hoped that the situation would change.
71. In response to concerns about Tanzania’s falling agricultural production and deteriorating
terms of trade, the representative of Tanzania concurred that low rainfall followed by El Niño and
La Niña over the past three years had negatively affected the performance of the agricultural sector.Further, it had also affected the export and the manufacturing sectors, which depended in various
ways on agriculture.  However, the performance of the services sector and mining were picking up
considerably with huge investments going into the sector.  Imports of raw materials and capital goods
had also been rising.  Further, the weather forecast for the coming season was encouraging, and
therefore it was hoped that production would increase.  Additionally, in the agriculture sector there
were moves to encourage investors, including priv ate foreign investors, in irrigation activities with
areas specifically earmarked for investment.
72. The representative of Japan queried whether foreign-owned banks, or partly owned banks,
were operating in Tanzania and to what extent Tanzania envisaged further liberalization in the near
future.
73. The representative of Tanzania replied that there were 18 banks and 11 financial institutions
operating in Tanzania, of which only three were state-owned banks and only two were state-owned
financial institutions.  The rest were all privately owned.  With regard to privatization, all banks were
currently engaged in the process, and foreign banks were particularly invited and encouraged to open
businesses to boost the competitiveness of the sector.  The Government was also working on the
establishment of community banks in rural areas as a way of mobilizing and efficiently utilizing rural
resources.
74. The representative of Tanzania stated that a number of other questions raised by various
delegations would be answered later in writing.WT/TPR/M/66
Page 16
VI. CONCLUDING REMARKS BY THE CHAIRPERSON
75. We have had open and positive discussion on Tanzania's trade policies and measures.
Members of the TPRB have been clearly impressed by Tanzanian's progress on economic reform
begun in 1985, and pursued with renewed focus and vigour since 1995.  These policies have seen real
growth of Tanzania's GDP in the past few years.  However, it has been acknowledged by all Members
that, as one of the poorest nations in the global economy, Tanzania still has difficult challenges ahead,
in particular a large foreign debt whose servicing poses a constraint on its economic development.
76. The large number of questions and comments from Members is a testimony to the importance
of Tanzania in the region.  It is also an indication of the level of interest in Tanzania's process of
economic reforms.
77. Members commended Tanzania for its strong support of the multilateral trading system.
They were unanimous in commending Tanzania for its process of economic reform and liberalization.These steps have included the dismantling of import and export license procedures, the simplification
of the tariff structure, the elimination of foreig n exchange controls, and the broad efforts by the
Government to create an environment more conducive to both foreign and domestic investment.
Particular note was made of Tanzania's natural endowments.  It was felt that its recent successes in
attracting significant levels of investment to it s mining sector, which, it was anticipated, would
provide notable benefits to the economy.
78. Members expressed concern in a number of areas, focusing both on the growth of imports and
particularly on Tanzania's supply side constraints which prevents it from taking advantage of export
opportunities.  Mention was also made of governance issues and other regulatory obstacles which still
impede activities of the private sector.  Several Members referred to problems related to standards andto Tanzania's delay in implementing the WTO Agreement on Customs Valuation.  Appreciation was,
however, expressed of the fact that Tanzania had provided Members an early indication regarding this
matter.
79. Members noted that the difficulties faced by Tanzania in implementing some of its WTO
undertakings are not unique to Tanzania, but are shared by many Members.  As a consequence, therewas unanimous agreement that more attention needs to be given to the provision of technical
assistance regardless of whether such assistance come directly from the WTO, through the mechanism
of the Integrated Framework, or through other efforts such as the JITAP.
80. Members also asked for details in a number of more specific areas including:
- Tanzania's participation in regional integration agreements, and in particular, its
decision to with draw from COMESA;
- issues related to Tanzania's agricultural sector and plans for further diversification
and export development;
- reasons for the underdeveloped nature of the manufacturing sector and its significant
decline in 1997;
- Tanzania's ongoing process of privatizing its parastatal sector and the timetable for
further privatizations, particularly in its financial services and telecommunicationssector;
- the escalatory tariff structure and, in particular, the suspension or exemption of a very
high percentage of collectable duties;WT/TPR/M/66
Page 17
- the extent of tariff bindings and the significant gap that exists between applied and
bound rates;
- aspects of trade-related intellectual property rights, particularly the implementation of
Tanzania's TRIPS commitments and enforcement efforts;
- government procurement procedures and any plans to become a signatory to the
WTO Agreement on Government Procurement;
- the transparency and implementation of the investment regime and further efforts to
improve the business environment;
- implementation of safeguards and other trade remedy legislation;
- Tanzania's intention to make further services commitments under GATS, particularly
with respect to telecommunications and financial services;  and
- implementation of competition policy.
81. Plaudits are owed to Minister Simba for the frank and comprehensive responses provided by
him often made against the broad socio-economic matrix.  Also Ambassador Mchumo is to be
thanked for his role in this exercise.  Members look forward to further responses to those questions
which could not be specifically addressed during these two days.  Tanzania's assurances of continued
economic reforms and improvements in efficiency have been noted with satisfaction.  Members alsoacknowledged the importance of coherence among institutions that provide advice related to trade
issues and economic development.
82. In conclusion, it is my feeling that this has been a most successful Review of Tanzania's trade
policies.  Members welcomed Tanzania's determined efforts to improve its economic performance as
well as the quality of life of its people through the alleviation of poverty and other measures.Tanzania is to be commended for its commitment to  WTO principles and its leadership in both this
institution as well as those in which it participates in its region.  I encourage all Members to continue
their support for Tanzania's efforts.WT/TPR/M/66
Page 18
ANNEX
ADVANCE WRITTEN QUESTIONS
HONG KONG, CHINA
Tariffs (WT/TPR/S/66, p. 29, paras. 2-3, and pp. 32-35, paras. 15-19)
We appreciate that Tanzania maintains a simple tariff and does not apply any seasonal duties,
tariff quotas or variable levies.  However, we note that Tanzania's tariff bindings under the UR is
confined to a few tariff lines and the gaps between the bound and applied rates are rather significant.
We are interested to know whether Tanzanian authorities have any plan to extend its tariff bindings to
cover more products, and to narrow the gaps between the bound and applied rates.
Services (WT/TPR/S/66, p. 62, paras. 76-107)
It is noted that further liberalization is planned for various service sectors:  the privatization of
government-controlled banks (para.78), privatization of the National Insurance Company (para. 84)and commercialization of the state-owned Tanzania Telecommunications Corporation, Ltd.
(paras 99-101).  However, little information is provided about the plans.  Would the Tanzanian
authorities share with us more information, such as the time-frame and whether foreign participation
will be permitted on these liberalisation plans?
SWITZERLAND
Economic Policies
We commend Tanzania for the recent economic reforms and the progress made in the
ambitious privatization programme, especially in the financial sector.
Could Tanzania elaborate on the progress made in the privatization of national entities in the
fields of telecommunications and financial services?
Trade
The dismantling of quantitative restrictions, the rationalizing of the tariff structure, the
lowering of the average rate to 16.1 % are commendable steps.
What are the authorities' intentions towards limiting the numerous exemptions kept on
dutiable imports, which render a further lowering of rates more difficult?
There is no law regulating anti-dumping, countervailing and safeguards measures even
though the report mentions that the Government in tends to impose such measures in the future.  Do
the Tanzanian authorities consider adopting their own legislation regarding such instruments and if so,
when?  Could Tanzania be more specific on the choice of trade remedy measures?
Protection of high-value goods is higher than  the average, thus discriminating against
producers in the manufacturing sector.  Are there plans for reducing this distortion?
Regional integration
The IMF has conducted studies on the effects of the foreseen FTA (among COMESA) on
government revenues in the COMESA member countri es;  such a study on Zambia concluded that theWT/TPR/M/66
Page 19
benefits of free trade far outweigh its costs.  Has a study been conducted on Tanzania and what have
been its conclusions towards Tanzania's revenues and economic growth prospects?
Can the Tanzanian authorities explain the reasons behind their decision to withdraw from
COMESA?  Will this decision be implemented next August as planned?
CANADA
III. Trade Policies by Measure, (2) Measures Directly Affecting Imports, (viii) Government
Procurement, (WT/TPR/S/66, para. 48)
We note that the Tanzanian Government is currently reviewing its regulations on Government
procurement. What is Tanzania's intention with respect to both accession to the WTO Agreement on
Government Procurement and status as an observer to the Agreement?
IV. Trade Policies by Sector, (5) Services, (iii) Telecommunications, para. 107
Canada commends Tanzania on its measures to liberalise its telecommunications market.  We
note that Tanzania intends to make GATS-specific services commitments in order to reflect this
liberalisation. Will Tanzania be incorporating the Reference paper on Basic Telecommunications into
its commitments?
Summary Observations, (3) Trade Policy Features, (i) Trade policy instruments and their
impact, para.19
Could Tanzania provide an update on the privatisation process currently under way in the
telecommunications and utility sectors as well as in financial services?
Summary Observations, (3) Trade Policy Features, (ii) Policies by sector, para. 24
The report states that Tanzania intends to underline its commitment to telecommunications
liberalization by making specific bindings under the General Agreement on Trade in Services(GATS).  Does the Government of Tanzania intend to make specific bindings in other GATS-related
sectors where liberalization is currently under way, e.g. financial services?
II. Trade Policy Regime:  Framework and Objectives, (4) Laws and Regulations, (ii)
Investment code, para. 26
Could we have an update on the progress of the Land Act legislation that will allow for
foreign ownership of land?
II. Trade Policy Regime:  Framework and Objectives, (5) Trade and Investment
Agreements and Arrangements, (iii) Regional agreements, paras. 67 and 74
We note that Tanzania is a signatory to the Common Market for Eastern and Southern Africa
(COMESA) treaty as well as a member of the permanent Tripartite Commission for East African
Co-operation (EAC).  Both agreements have as an objective the liberalization of trade via the free
movement of people.  What progress has been made towards reaching this objective under theseagreements?WT/TPR/M/66
Page 20
JAPAN
Competition policy
It is reported that the Fair Trade Practices Act of 1994 does not apply to imports
(WT/TPR/S/66, p. 45, para. 86).  Please explain the reason why.
It is reported that the Government of Tanzania does not reserve any exclusive trade privileges
to state-owned enterprises (WT/TPR/S/66, p. 43, para. 74).  Does the Fair Trade Practices Act of 1994
apply to parastatals which are state-owned?
Does Tanzania have legislation to regulate anti-competitive behaviour by enterprises?
Please explain how the Tanzanian Government copes with trans-border anti-competitive
behaviour.
Investment
Does the Tanzanian Investment Centre (TIC) function as an enquiry point to improve
transparency of the investment regime?  Please explain if there are any other organizations from
which information on Tanzania's investment regime can be obtained. (WT/TPR/S/66, p. 15, para. 27)
It is reported that an entity needs to be legally established and registered as a Tanzanian
business with the Registrar of Companies and the Tanzanian Revenue Authority before the TIC can
issue certificates of investme nt. (WT/TPR/S/66, p. 15, para. 29)
Is this registration or the issuance of certificates made automatically, or do the authorities
have competence to examine whether such registration or issuance of certificates is appropriate?
If any examination is to be made upon the registration or issuance of certificates, please
explain the criteria for such examination.  Do the criteria comply with the MFN principle?
Which laws provide such criteria?Are there any procedures which allow applicants, who have been refused registration or the
issuance of certificates, to file an objection?
Has an independent organization for arbitration been established?
Customs tariffs
It is reported that the simple average of import duties calculated on Tanzania's tariff schedule
of 5,337 lines (HS 8-digit level) is 16.1% (WT/TPR/S/66, p. 33, para. 16)
On the other hand, most of the tariff lines remained unbound and, even for tariff lines which
are bound, the bound tariff rates remain as high as 120% for products such as silk fabrics, diesel
electric locomotives and antiques of an age exceeding 100 years.  There is a wide gap between bound
tariff rates and applied rates.  Does Tanzania have any intention to lower its bound tariff rates
bringing them more in line with the applied tariff rates?
Tanzania binds "other duties and charges" for certain products at 120%.  Does this mean that
Tanzania binds "other duties and charges'' of 120% in addition to "bound rate of duty" which is also
120%?  Or, does it mean that Tanzania binds at 120% as the sum of the "bound rate of duty" and
"other duties and charges".WT/TPR/M/66
Page 21
Standards, testing and certification
WT/TPR/S/66, p. 38, para. 42.  Please explain why the Tanzanian Government uses the term
"compulsory standards".  Does the term "compulsory standards" have the same meaning as "technical
regulations" used in the TBT Agreement?  If so, is it not more appropriate to use the term "technical
regulations'' in order to avoid possible confusion?
EUROPEAN UNION
Summary Observations
Given that Tanzania's agricultural production has fallen off in recent years, and that she has
experienced deterioration in her terms of trade, could her authorities please clarify what has been, and
will be the main source of economic growth?
I. The Economic Environment, (5) Outlook, para. 24
Could Tanzania clarify when significant increases in VAT revenue are expected to take
place?  Could Tanzania offer further comments on the potential scale of the resultant tariff reductions?
II. Trade Policy Regime:  Framework and Objectives, (5) Trade- and Investment
Agreements and Arrangements, (iii) Regional Agreements, para. 65
Could Tanzania explain the basis and rationale behind her decision to withdraw from
COMESA and join the SADC?  What is the justification for becoming involved in, and focussingupon, regional trade agreements which involve minimal tariff liberalization (and tariff revenue
losses)?  In what ways are these moves in Tanzania's economic interests and have they, and are they
likely to produce tangible benefits?
III. Trade Policies by Measure
(2) Measures directly affecting imports, (ii)  Inspection, customs valuation and customs
clearance
(P. 30, para. 7)
Does Tanzania receive any technical assistance from COTECNA, as part of the PSI contract,
to assist in developing capacity to enable Tanzanian authorities to carry out valuation and tax
administration?  If so, what is Tanzania's experience of the benefits of such assistance?  If not,Tanzania should consider including such a clause in any future contract with PSI companies, many
other WTO Members receive technical assistance in this way.
What is Tanzania's view of the perceived bene fits of allowing COTECNA to retain control of
the tax administration aspect of PSI, whilst Tanzania assumes responsibility for Customs Valuation?
Why cannot the Tanzanian authorities administer the tax themselves?
(Para. 9)
We are pleased to note that PSI is only a temporary means and may be phased out in about
two years.  But, more precisely, when will this be?  What steps are being taken by Tanzania to ensure
she will be able to carry out such inspections herself?WT/TPR/M/66
Page 22
(Para. 12)
What is the justification for Tanzania deferring her application of Article VII of the Customs
Valuation Agreement?
Could Tanzania provide WTO Members with a firm commitment that she would be making
the changeover to the transaction value in 2001?
(vii) Standards and ecological and other technical requirements, para. 45
What plans are there to harmonize labelling and packaging requirements in Tanzania?  Do the
different institutions setting requirements in this ar ea have the same criteria for their decisions, e.g.
risk assessment?
(viii) Government procurement, para. 48
Could Tanzania indicate her level of donor and non-donor procurement?
(3) Measures directly affecting exports, para. 70 (also para. 8 of the summary)
What is the justification for the existence of incentives in EPZs which are conditional on
exporting 80% or more of output, given that Tanzania also states that she does not subsidize any
exports of goods and services?
IV. Trade Policies by Sector
(2) Agriculture and related activities, (f) Oilseeds, p. 52, para. 28
Could Tanzania clarify whether it is the oilseeds themselves or the oil produced from seeds
which is undermining the Tanzanian market?
(3) Mining and energy, paras. 60 and 73
Could Tanzania provide an explanation as to why TANESCO has been unable to collect the
electricity tariffs on 50% of the power it produces?  And who, for example, is benefiting from free
electricity?
REPUBLIC OF KOREA
Customs and Transportation Costs
Korean exporters have experienced some problems when exporting goods to Tanzania.  For
example, both transportation costs and port user fees are often twice those in neighbouring countriessuch as Kenya, and South Africa.  Also, there have been cases where refunds of deposits to Tanzanian
customs authority were much delayed.  Moreover, although Tanzania has adopted the pre-shipment
inspection system, imported goods were re-inspected upon arrival at Tanzanian ports, which could
constitute a violation of Article 2 of the Agreement on Pre-shipment Inspection.
Are there any measures that the Tanzanian Government intends to take to address such
problems?  Korea believes that improvements in these areas would no doubt facilitate trade not only
for foreign companies but also Tanzanian exporters.WT/TPR/M/66
Page 23
Work Permits and Local Employees
It appears also that the procedure to obtain a work permit is rather complicated and also that
laws regulating the employment of local employees by foreign firms are rigid to a point that such
foreign firms' productivity is adversely affected.  Will Tanzania reform such hiring and work permit
regulations?  Are there any ongoing efforts in that direction?
Government Procurement
The Secretariat's Report mentions that Tanzania's government procurement procedures form a
complex web of regulations.  As it appears that Tanzania could benefit from greater uniformity, is
Tanzania considering joining the WTO Agreement on Government Procurement?
Tariff Structure
The Secretariat's Report highlights the tariff escalation used by Tanzania's duty scheme –
lower tariffs on raw material exports but higher tariffs moving up the production chain as value isadded.  Not only is this affecting foreign firms but also local ones as many of them need to import
finished (e.g., machine tools) or semi-finished goods to diversify their production.  It is our
understanding that Tanzania relies on the revenues provided by its current tariff schemes.  However,
as the Secretariat points out, it seems that such revenues could remain at their present level if the
Government were to lower the current tariffs but reduce the number of tariff exemptions.  Is the
Tanzanian Government contemplating a revision of its present tariff structure?
UNITED STATES
II. Trade Policy Regime:  Framework and Objectives
(3) Policy objectives, para. 20
Please describe the status of Tanzania’s “Sustainable Industrial Development Policy (SIDP),”
including steps that are being taken to ensure that standards and other technical regulations are
consistent with the TBT Agreement?
(4)(ii) Investment code
Paragraph 26 of the report indicates "Ownership of land is still subject to restrictions, but a
Land Act that will allow for foreign ownership in this area is currently being implemented."  Whatrestrictions will exist (if any) in regard to ownership of land after the Land Act is implemented?
(5)(i) Multilateral Agreements, Table II.4
Comment:  The United States notes Tanzania’s notification under the WTO Technical
Barriers to Trade Agreement during 1999 and encourages Tanzania to increase the transparency of its
technical regulations through continued notifications.  We look forward to notification in March of the
establishment of the National Enquiry Point and encourage Tanzania to continue to notify under the
TBT Agreement in a timely manner, so that interest ed parties will have time to comment and adjust to
proposed changes in technical regulations.
(5)(iii) Common Market for Eastern and Southern Africa (COMESA)
We note Tanzania’s intention to withdraw from COMESA.  Could you discuss why this
decision was taken and how Tanzania views the fu ture of COMESA, given so many of its membersWT/TPR/M/66
Page 24
are also members of SADC, and that some countri es with dual membership have opted for SADC
such as Tanzania?
In addition, Tanzania plans to maintain its strong membership with other AEC countries
(Kenya and Uganda), countries which are also CO MESA members.  It would appear that Tanzania
may become a bridge between SADC and AEC countries.  Will Tanzania use its SADC commitmentsas a model for its AEC commitments?
How will Tanzania handle tariff preferences and other commitments made with former
COMESA colleagues who are not memb e r s  o f  S A D C  o r  t h e  A E C .   W h a t  e f f e c t  w i l l  t h i s  h a v e  o n
regional trade for Tanzania?
What are COMESA’s prospects to establish a Free Trade Area by October 2000?  What are
the prospects that the SADC FTA will be established before the COMESA FTA?  How does
withdrawing from one in favor of the other af fect Tanzania over the medium to long run?
Please expand on the development of the common set of standards and technical regulations
within COMESA?  Will you continue to participate in this effort?  When do you anticipate these
standards and technical regulations will be notified to the WTO under the TBT Agreement?
Are there any standards currently under consideration, which will be notified soon under the
TBT Agreement?  We encourage Tanzania to notify these technical regulations with adequate time forinterested parties to adjust to the changes.
III. Trade Policies By Measure
(2)(iii) Import duties
Tanzania’s rescheduling of duties last year was a welcome reform.  However, we note that the
average rate is rather high, largely because there are no duties at the 15% level and few at the 5-10%level.  High rates on many semi-processed goods may not be conducive to encouraging the
manufacturing sector (see Chart III.3).   Please describe when and how Tanzania intends to examine
the effects of its tariff restructuring in relation to its overall strategy for economic and investment
growth.
(2)(iii)(d) Tariff and tax exemptions
As the report notes, duty exemptions are abundant and the VAT is relatively high.  We note
that Tanzania plans to remove discretionary tax authority from the ministries and to centralize such
authority within the Tanzania Revenue Authority (TRA).  How does the Government of Tanzania
intend to address this problem, so that exemptions are minimized and extended in a transparent
manner, with the minimum disruption to ongoing business?
How has Tanzania reconciled the VAT and exemption issue in conjunction with its tariff
structure and broader economic objectives?
(2)(iv) Rules of origin
The Secretariat’s Report notes that in March 1996, Tanzania, Kenya and Uganda established
the Tripartite Commission for East African Cooperation (EAC).  How far along is EAC toward the
establishment of a harmonized tariff and customs regime?WT/TPR/M/66
Page 25
(2)(vii) Standards and ecological requirements, para. 46
What is Tanzania’s position with respect to the importation of genetically modified
organisms?
(3)(vi) Export promotion, financing, and assistance
Please explain the export financing facilities available through the National Bank of
Commerce.  Please provide full details including amount of funds, and eligible recipients.  Please
explain why the programme was not notified to the WTO.
Regarding the export promotion efforts carried out by the Confederation of Tanzania
Industries (CTI), the Tanzania Chamber of Comm erce, Industries and Agriculture (TTCIA), please
explain if the Government provides financial support to these programmes, and if so, describe the
purpose, duration, amount of funds and/or other financial incentives, and eligible recipients.
(4)(i) State Trading, State Enterprises and Privatization
It is clear that further progress on reform hinges upon the continued privatization of
state-owned enterprises.  Paragraph 76 notes that, to date, only about 30% of Tanzania’s GDP has
been privatized; although, half of Tanzania’s parastatal enterprises have been sold.  What percentage
of the economy will have been privatized at the close of the new four year charge granted the
Parastatal Sector Reform Commission (PSRC)?  What is the future for the Loan and AdvancesRealization Trust (LART), slated to expire in 2002?
(4)(ii) Subsidies and other forms of production assistance
Please explain the provisions of the Tanzania  Investment Act and the Zanzibar Investment
Act relating to export assistance and financial incentives.  Please provide details of recent efforts,
including titles, purpose, duration, amount of funds  and/or other financial incentives, and eligible
recipients.
(4)(iii) Price regulation and competition policy
What is the status of competition regulations, in conjunction the Fair Trade Practices Act of
1994?
(4)(iv) Measures for the protection  of intellectual property rights
When is the creation of a commercial court expected? What other jurisdiction will it have?
Does Tanzania subscribe to any international arbitration conventions (e.g., ICSID)?
IV. Trade Policies By Sector
(2)(i) Agriculture and Related Activities, para. 10
Does the Agricultural Input Trust Fund (AITF) cover its costs?  If not, what replenishment
rate is necessary, or predicted to be necessary, to keep this institution afloat?  What is the spread
between AITF’s concessionary lending rates and commercial lending rates?
It would appear that Tanzania is well along the way to having a diversified agricultural sector.
Greater investment in commercial agriculture could strengthen this diversity and stimulate the wholeWT/TPR/M/66
Page 26
sector, including small holder agriculture.  Wh at are Tanzania’s plans to promote commercial
agriculture investment?
(2)(i)(d) Cotton
The Cotton Board, one of the industry crop boards, charges a 2% levy on exports.  This fee
seems quite high.  Is it compulsory?  If so, is the sector exceeding 2% average annual export growthas a result?
(2)(i)(k) Dairy
The report suggests that a significant disincentive for further reform in the dairy sector is that
the industry is being undermined by imports of subsidized production from other countries.  What is
the estimated damage to local industry of subsidized imports?  From where do these subsidized dairy
imports originate?
(2)(i)(l) Chart IV.2 Fishery Exports
There has been a dramatic rise in fish exports since 1994.  Are current production and export
levels sustainable?  Is this rate of growth sustainable, and if so, to what export levels?
(2)(i)(l) para. 42
The EU has banned the import of Nile Perch because it has alleged that the pesticide level in
Lake Victoria is unsafe.  Have countries bordering Lake Victoria conferred on the pesticide issue?What are the prospects for the continued export of Nile Perch and the consumption of fish from Lake
Victoria?
(2)(i)(l) para. 43
Is Tanzania working or planning to incorporat e in its regulations the use of turtle excluder
devices for wild harvested shrimp by industrial trawlers?
(2)(i)(m) Forestry
Is the current level of production and export of forest products sustainable over the long run,
especially for hardwoods?  Are there plans to increase the total acreage under plantation forestry?
(3)(i) Mining
Comment:  We would like to congratulate Tanzania on the success of its new mining policy
and Mining Act of 1998, which seems to already be bringing about the desired results (see Table IV.4
and Chart IV.3).
Please clarify whether a 2% export tax is still in effect for minerals (see also Section III(3)(ii)
Export Duties and Taxes).  If so, could not this revenue more fairly be collected through royalty
assessment?
(3)(ii) Energy
What steps are being taken to improve the collection of electricity tariffs (currently at 50% of
production)?  Has consideration been given to the possibility that private sector participation might be
able to raise the level of tariff collections and justify the lowering of current unit charges?WT/TPR/M/66
Page 27
(5) Services
Comment:  Tanzania should be commended for its ongoing effort to restructure the country’s
financial sector.  Today, the financial sector is stronger and more vibrant than ever.  Positive results
speak for themselves.
What is the timetable for the privatization of the remaining state-owned banks (the National
Bank of Commerce, the National MicroFinance Bank, and the Cooperative and Rural Development
Bank)?
(5)(i) Telecommunication
Comment:  The Government of Tanzania also seems to be moving in the right direction with
regard to the restructuring of the telecommunications sector.  Telecommunications is, of course,
important to the development of the whole economy, but particularly for the services sector and to
connect rural areas, both of which are important to the Tanzanian economy.
Please elaborate as to the timetable for the privatization of the Tanzanian
Telecommunications Corporation and the period of exclusivity post privatization.
(5)(iv) Transportation
Comment:  The United States was pleased to have signed the first open skies agreement for
any African country with Tanzania last year.  We would expect that, over time, this agreement willpositively impact Tanzania’s tourism, transportation, and trading sectors.  Studies have also shown
that convenient air travel also leads to greater investment.
What is the timetable for the privatization of other transportation services:  rail, air, airport,
and portions of the Tanzania Harbours Authority?
INDIA
Registration of companies for pharmaceutical exports
It has been reported that the Tanzanian Pharmacy Board has introduced stringent procedures
for registration of companies wishing to export to Tanzania.  The registration formalities are
reportedly slow and cumbersome.  Several Indian companies have complained about the delay in
registration of their products in turn affecting their exports to Tanzania.
We would urge the Government of Tanzania to look into the matter and see how these
registration procedures could be streamlines and simplified so that the process becomes faster.
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