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EMBARGO: NOT FOR PUBLICATION UNTIL
1300 GMT 3 MARCH 2000
PRESS/TPRB/128
21 February 2000
 IMPACT OF ACCELERATED REFORMS IN TANZANIA CONSTRAINED BY
ITS LIMITED EXPORT CAPACITY
Accelerated reforms undertaken since 1995 in Tanzania have resulted in a significantly
liberalized trade regime essentially based on tariffs. A new WTO report on the trade policies of
Tanzania says that Tanzania has eliminated its export restrictions and foreign exchange controls and
has, overall, made a concerted effort to create an environment conducive both to domestic and foreign
investment. However, the report also notes that Tanzania's severely limited export capacity has
hindered any significant export-led growth. A least-developed country, Tanzania is one of the mostindebted nations in the world. The report says that a large debt burden may be an obstacle to its trade
and economic development.
The new WTO Secretariat report, along with a statement by the Tanzanian Government, will
serve as a basis for the trade policy review of Tanzania which will take place in the WTO TradePolicy Review Body on 1 and 3 March.
The report says that Tanzania's main trading partners are the European Union, Japan, India
and Kenya. Its exports are primarily agricultural commodities with coffee, cashew nuts, tobacco and
cotton constituting the largest sectors. Tanzania imports mainly machinery, transportation equipment,industrial raw materials, and consumer goods. The report notes that because of the decrease in
agricultural production during the past few years, attributable to adverse climatic conditions, food and
foodstuffs imports have increased sharply.
Tanzania has participated in the Integrated Framework for Trade-Related Technical
Assistance to Least Developed Countries (IF). However, the report notes that despite its involvement
in the IF, and the technical assistance it has already received from its development partners such as
the WTO and other members of the IF, Tanzania is in need of substantial ongoing technical assistance
in a wide range of trade-related areas.PRESS/TPRB/128
Page 2/3
MORETanzania is actively pursuing a regional integration strategy, the report says. It is a signatory
of the Common Market for Eastern and Southern Africa (COMESA) - although it has announced its
intention to withdraw - and it is a member of the Southern African Development Community
(SADC). Tanzania also aims to strengthen th e East African Cooperation (EAC) agreement with
neighbouring Kenya and Uganda.
Under the Lomé Convention, Tanzania receives the full range of aide made available to ACP
countries by the European Union, the report notes. As a  result, many Tanzanian exports to the EU are
exempt from import duties. Likewise, Tanzania's goods enjoy non-reciprocal preferential access to the
markets of other developed countries through the Generalized System of Preferences. However, the
report states that due to Tanzania's limited export capacity, the benefits that Tanzania reaps from these
preferential arrangements are minimal.
The report notes that the recent reform of Tanzania's customs duties has resulted in a
simplified five-tier structure with a simple average of applied import duties of 16.2%. This tariff
structure is somewhat escalatory with many processed products facing a higher effective rate of
protection along the processing chain. The report states  that such a tariff structure provides substantial
import protection to higher-level processing activities, causing resource misallocation and inflicting
higher costs to Tanzanian consumers.
The report notes also that the Government of Tanzania relies heavily on revenues from tariffs
and VAT and that consequently there is pressure to maintain revenues through high tariff levels. Thereport says that this pressure could be reduced - as could tariff rates - if the extent of exemptions
granted were reduced or eliminated.
Tanzania is neither an observer to, nor a signatory of, the plurilateral Agreement on
Government Procurement. The report notes that Tanzania's own procurement procedures are aconfusing agglomeration of memoranda and other understandings that vary from ministry to ministry.
The report says that Tanzania has been pursuing an aggressive policy of privatization in conjunction
with support it receives from international financia l institutions. Tanzania has also been amending its
intellectual property rights legislation to conform with WTO requirements and is currently addressing
its lack of enforcement mechanisms.
Tanzania's agricultural sector constitutes over 50% of its national GDP and provides a
majority of the country's export earnings, the report says. The sector has been substantially liberalized
since the mid 1980s and market forces have been allowed to prevail, the report notes. The
Government has withdrawn from direct involvem ent in production, processing, and marketing
activities and has retained only its role in setting policies. The report notes that Tanzania has in the
past few years experienced severe food shortages and varying levels of export earnings due to bothdroughts and floods.
The report says that Tanzania's mineral sector, focused primarily on gold production, offers
one of the best opportunities for growth. With ov er US$600 million of new investment in this sector
likely to be realized in the next 2-3 years, the mineral sector promises to be an increasingly importantcontributor to GDP and export earnings. However, the report notes that the viability of Tanzanian
gold production is closely tied to international gold prices, which have shown continued volatility.
The report notes that Tanzania's manufacturing sector is underdeveloped. The sector is
dominated by food processing, beverages, agri- business, and light manufacturing, along with some
textile and footwear producers. The report says that it has been hampered by high input costs. In
particular, the tariff, which provides for high levels of protection for value-added goods, makes it
difficult for Tanzanian manufacturers who must source inputs from outside the country.PRESS/TPRB/128
Page 4
MOREThe services sector, like the rest of the economy, has undergone significant liberalization in a
number of areas, including telecommunications, insurance and financial services. The report notes
that tourism constitutes the largest component of  services GDP and holds promise for continued
growth. Tanzania is a net importer of services and intends to underline its commitment to
telecommunications liberalization by making specific bindings under the General Agreement on
Trade in Services (GATS).
Notes to Editors
Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member
countries’ trade and related policies are examined and evaluated at regular intervals. Significant
developments which may have an impact on the global trading system are also monitored. For eachreview, two documents are prepared: a policy stat ement by the government of the member under
review, and a detailed report written independently by the WTO Secretariat. These two documents are
then discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB). These
documents and the proceedings of the TPRB’s meet ings are published shortly afterwards. Since 1995,
when the WTO came into force, services and trade- related aspects of intellectual property rights have
also been covered.
For this review, the WTO’s Secretariat report, together with the policy statement prepared by
Tanzania, will be discussed by the Trade Policy Review Body on 1 and 3 March 2000. The Secretariat
report covers the development of all aspects of Tanzania’s trade policies, including domestic laws andregulations, the institutional framework, trade policies by measure and by sector.
Attached to this press release is a summary of the observations in the Secretariat report and
parts of the government's policy statement. The Secretariat report and the government’s policy
statement are available for the press in the newsroom of the WTO internet site (www.wto.org). Thesetwo documents and the minutes of the TPRB’s disc ussion and the Chairman’s summing up, will be
published in hardback in due course and will be available from the Secretariat, Centre William
Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed: Argentina (1992 and
1999), Australia (1989, 1994 and 1998), Austria (19 92), Bangladesh (1992), Benin (1997), Bolivia
(1993 and 1999), Botswana (1998), Brazil (1992 an d 1996), Burkina Faso (1998), Cameroon (1995),
Canada (1990, 1992, 1994, 1996 and 1998), Chile (1991  and 1997), Colombia (1990 and 1996), Costa
Rica (1995), Côte d’Ivoire (1995), Cyprus (1 997), the Czech Republic (1996), the Dominican
Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991,
1993, 1995 and 1997), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990,
1994 and 1998), Hungary (1991 and 1998), Icelan d (1994 and 2000), India (1993 and 1998),
Indonesia (1991, 1994 and 1998), Israel (1994 a nd 1999), Jamaica (1998), Japan (1990, 1992, 1995
and 1998), Kenya (1993 and 2000), Korea, Rep. of (1992 and 1996), Lesotho (1998), Macau (1994),
Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989
and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and
1998), Norway (1991 and 1996), Pakistan (1995), Pa pua New Guinea (1999), Paraguay (1997), Peru
(1994), the Philippines (1993), Poland (1993), Ro mania (1992 and 1999), Senegal (1994), Singapore
(1992 and 1996), Slovak Republic (1995), the Solom on Islands (1998), South Africa (1993 and 1998),
Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991 and 1996), Thailand
(1991, 1995 and 1999), Togo (1999), Trinidad and T obago (1998), Tunisia (1994), Turkey (1994 and
1998), the United States (1989, 1992, 1994, 1996 a nd 1999), Uganda (1995), Uruguay (1992 and
1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).PRESS/TPRB/128
Page 5
MORETRADE POLICY REVIEW BODY
TANZANIA
Report by the Secretariat - Summary Observations
The Economic Environment
Situated on the east coast of Africa, the United Republic of Tanzania is one of the world's
least developed countries.  Tanzania, which includes the islands of Zanzibar and Pemba, became
independent in 1961.  With  a per capita GNP of US$210, the economy is essentially dependent on
agriculture.
From independence in 1961, Tanzania followed a socialist model of economic development.
This essentially non-market approach resulted in the nationalization of businesses and industries and
the collectivization of agriculture.  Over time, the failures of this strategy became apparent as the
economy stagnated and suffered significant setbacks.  Since 1985, Tanzania has implemented a series
of economic reforms, but progress has been inconsistent.  However, since 1995, the pace of reform
has accelerated and Tanzania has focused on macroeconomic stabilization and fiscal reform supportedby international financial institutions.
Tanzania's GDP has grown over 3% over the past few years and is forecast to grow at even
higher rates through 2001.  Tanzania is one of the most heavily indebted nations in the world.  This
large debt burden may be an obstacle to economic development as costs associated with debtservicing prevent the allocation of resources to  activities that could serve to improve economic
capacity, competitiveness, and increased investment.  Because of Tanzania's programme of structural
reform and fiscal restraint, it is in line to receive debt relief under the IMF and World Bank's Heavily
Indebted Poor Countries (HIPC) programme.
Tanzania's main trading partners are the European Union, Japan, India, and Kenya.
Tanzania's exports are primarily agricultural commodities with coffee, cashew nuts, tobacco and
cotton constituting the largest sectors.  Machinery, transportation equipment, industrial raw materials,
and consumer goods constitute the major portion of imported products.  Because of the decrease in
agricultural production during the past few years, attributable to climatic conditions, food andfoodstuffs imports have increased sharply.  Tanzania is a net importer of services.
Institutional Framework
The Constitution of the United Republic of Tanzania was adopted in 1977 with amendments
passed in 1984 and 1992.  The Constitution calls for a parliamentary form of government with a
separation of powers among the executive, legislative, and judicial branches of government.
Tanzania's President, Vice-president, and National Assembly members are elected by direct
popular vote for five-year terms.  The President serves as Head of State and selects his Cabinet from
among National Assembly members.  The Cabinet is responsible for government policy planning, and
formulation.  The National Assembly, a unicameral body, exercises legislative power over all Union
matters.  Zanzibar has its own President and a House of Representatives, which exercises legislativepower over non-Union matters.  The semiautonomous relationship between Zanzibar and the
mainland is manifested in a number of policy areas, although harmonization in most areas related to
trade matters has been moving forward.  Foreign investment is considered a non-Union matter and
therefore falls separately under the oversight of the Zanzibar Government.
Tanzania has a body of statutes that govern imports, customs duties, foreign investment,
business licensing, intellectual property, export control, competition policy, and other related matters.
The Investment Act of 1997 was enacted to help create an attractive commercial environment, and toPRESS/TPRB/128
Page 6
MOREprovide incentives for inward investment.  With a few exceptions, 100% foreign ownership is
permitted in most economic activities.  A separate statute focuses on investment opportunities in themineral sector.  The Mining Act of 1998 similarly liberalizes opportunities for foreign investment and
provides special incentives to investors.
The Government of Zanzibar oversees its own foreign investment procedures.  Zanzibar
permits 100% foreign ownership except in some small retail areas and small tourist services.Zanzibar has also enacted legislation for the creation of economic processing zones and provides
support services and other incentives for businesses that export 80% or more of their output.
Tanzania is a founding Member of the  WTO, having signed the Final Act of the Uruguay
Round and the Marrakesh Agreement on 15 April 1994.  Tanzania grants at least MFN treatment to
all its trading partners.  As with other WTO Members, Tanzania has adopted in their entirety the
results of the Uruguay Round.  As a least developed country, Tanzania benefits from the special anddifferential treatment afforded developing countries in the form of exemptions or delayed
implementation of certain provisions.  Tanzania is not currently involved in any dispute settlement
proceeding under the WTO.
Tanzania faces many challenges and obstacles to its trade and economic development.
Tanzania has participated in the Integrated Fr amework for Trade-Related Technical Assistance to
Least Developed Countries (IF) by preparing an assessment of its needs for trade-related assistance
and by engaging in a Roundtable Meeting with its development partners.  Despite its involvement in
the IF, and the technical assistance it has already re ceived from its development partners such as the
WTO and other members of the IF, Tanzania is in need of substantial ongoing technical assistance ina wide range of trade-related areas.
Tanzania is also actively pursuing a regional integration strategy.  It is a signatory of the
Common Market for Eastern and Southern Africa (C OMESA), although it has announced its intention
to withdraw from COMESA.  Tanzania is also a member of the Southern African DevelopmentCommunity (SADC), which it has indicated is more  compatible with its national interests.  More
recently, it has been moving forward with the stre ngthening of the East African Co-operation (EAC)
agreement with neighbouring Kenya and Uganda.  All of these regional efforts are intended to
harmonize economic policy and facilitate trade although long-term plans call for the EAC to become a
political federation with authority to represent the common interests of member States.
Under the Lomé Convention, Tanzania receives the full range of aid made available to ACP
countries by the European Union.  Under Lomé IV, many Tanzanian exports to the EU enjoy
non-reciprocal preferential treatment in the form of exemption from import duties.  Likewise,
Tanzania's goods enjoy non-reciprocal preferential access to the markets of other developed countries
through the Generalized System of Preferences.  Due to Tanzania's limited export capacity, the
benefits that Tanzania reaps from theses preferential arrangements has been minimal.
Trade Policy Features
Trade policy instruments and their impact
The reforms that Tanzania has undertaken since 1985 – and at a more accelerated pace in the
past few years – have resulted in a trade policy framework that has been significantly liberalized and
that is essentially based on tariffs.  Export restrict ions have been eliminated as have foreign exchange
controls.  Tanzania has been making a concerted effort to create an environment that is conducive
both to domestic and foreign investment.  In keep ing with the Government's desire to promote
Tanzanian exports, particularly agricultural products, it has placed emphasis on open markets abroad.Nevertheless, its severely limited export capacity has hindered any significant export-led growth.PRESS/TPRB/128
Page 7
MOREThe recent reform of Tanzania's customs duties has resulted in a simplified five-tier structure
with tariff rates of 0%, 5%, 10%, 20%, and 25%.  This tariff structure is somewhat escalatory with
many processed products facing a higher effective rate of protection (ERP) along the processing
chain.  Such a tariff structure provides substantial import protection to higher-level processing
activities, causing resource misallocation and inflicting higher costs to Tanzanian consumers.  The
simple average of applied import duties is 16.2%.
In addition to import duties, Tanzania introduced a 20% VAT in 1997.  Excise taxes are also
levied on petroleum, alcoholic and non-alcoholic beverages, and tobacco products.  The Government
of Tanzania relies heavily on revenues from tariffs and VAT;  consequently, there is pressure to
maintain revenues through high tariff levels.  However, this pressure could be reduced – as could
tariff rates – if the extent of exemptions granted were reduced or eliminated.  In 1999, 42% of duties
were not collected on the mainland, while in Zanzibar, the corresponding rate was 33%.  VAT
exemptions constituted 31% of collections.
The Tanzanian Revenue Authority (TRA) has a preshipment inspection contract with
COTENCA Inspection S.A., which took effect on 1 March 1999.  COTECNA is responsible for
inspecting all imports whose f.o.b. value exceeds US$5,000.  Tanzania still uses the Brussels
definition of value (BDV).  Although Tanzania has notified the WTO of deferred application ofArticle VII, TRA officials do not believe that they will be able to make the changeover to transaction
value until 2001, and will be seeking an additional extension along with technical assistance to
implement Article VII.  Tanzania has no national legislation regarding anti-dumping, countervailing,
or safeguard measures, although the authorities suggest that such measures may be introduced in the
future.
The Tanzania Bureau of Standards (TBS) is charged with the administration of standards
issues, which include 572 published standards.  TBS is a member of the International Organization for
Standards (ISO) and has been notified to the WTO as the contact point for issues related to the
Agreement on Technical Barriers.  Most Tanzanian standards are voluntary in nature and TBS adoptsinternational standards whenever they exist.  Sanitary and phytosanitary standards are the
responsibility of the Ministry of Agriculture and Cooperatives, which conducts an inspection and
certification programme for all imports of plant and animal products.
Tanzania is neither an observer to, nor signatory of, the Uruguay Round Plurilateral
Agreement on Government Procurement.  Except for procurement regulations imposed as part of aid
and loans provided by international financial institutions, Tanzania's own procurement procedures are
a confusing agglomeration of memoranda and other understandings that vary from ministry to
ministry;  procurement issues are under review and new legislation may be forthcoming.
Tanzania has been pursuing an aggressive policy of privatization in conjunction with support
it receives from international financial institutio ns.  The intention of the Government is for all
parastatal entities to be either privatized or liquidated, although no target date for the completion of
this process has been announced.  Major privatizations are currently under way in the
telecommunications and utility sectors as well as in financial services.  Although there is legislation
on competition policy in Tanzania, enforcement has been informal, because regulations and
procedures have not yet been formalized.
Tanzania's Registrar of Companies oversees intellectual property matters, which are governed
by legislation on patents, trade and service marks, and copyrights.  Tanzania has been amending its
legislation to conform with WTO requirements;  the most recent is the Copyright Act of 1999.  It
intends to meet its obligations in other areas by 2006.  Tanzania is a member of the African RegionalIndustrial Property Organization (ARIPO) as well as the World Intellectual Property Organization
(WIPO).  It is a signatory to the Paris Convention and the Berne Convention and other international
protocols.  Tanzania's lack of enforcement mech anisms for intellectual property infringement isPRESS/TPRB/128
Page 8
MOREcurrently being addressed and the Government has indicated that enforcement procedures will be
strengthened.
Policies by sector
Tanzania's agriculture sector  constitutes over 50% of national GDP and provides a majority
of the country's export earnings.  The sector has been substantially liberalized since the mid 1980s andmarket forces have been allowed to prevail.  Th e Government has withdrawn from direct involvement
in production, processing, and marketing activities and has retained only its role in setting policies.
Traditional export crops include coffee, cashew nuts, tobacco, and cotton, although efforts are being
undertaken to promote non-traditional crops such as spices, horticultural items, and oilseeds.  Climatic
conditions in Tanzania in the past few years, fluctuating between drought and flood conditions, have
led to unpredictable agricultural production.  This has resulted in severe food shortages and varying
levels of export earnings.
Tanzania's mineral sector, focused primarily on gold production, offers one of the best
opportunities for growth.
With over US$600 million of new investment in this sector likely to be realized in the next
2-3 years, the mineral sector promises to be an increasingly important contributor to GDP and export
earnings.  However, the viability of Tanzanian gold production is closely tied to international gold
prices, which have shown continued volatility.  Any further downward pressure on gold prices will
put prospects in this area at risk.
Tanzania's manufacturing sector is underdeveloped.  The sector is characterized by food
processing, beverages, agri-business, and light manufacturing, along with some textile and footwear
producers. Despite efforts to take advantage of opportunities arising from regional integration, the
manufacturing sector has been hampered by high input costs.  In particular, the tariff, which provides
for high levels of protection for value-added goods, makes it difficult for Tanzanian manufacturerswho must source inputs from outside the country.  These costs, along with high energy prices, have
resulted in a generally uncompetitive manufacturing sector with low  capacity utilization.
The services sector, like the rest of the economy, has undergone significant liberalization.
Privatization efforts are under way in a number of subsectors including telecommunications,insurance, and financial services.  Tourism consti tutes the largest component  of services GDP and
holds promise for continued growth as the Government is focusing its efforts both on the supply side
(infrastructure) and the demand side.  Privatization of the telecommunications sector is moving
forward with the recognition that telecommunicati ons infrastructure is an essential component of
overall economic development.  Tanzania intends to underline its commitment to telecommunications
liberalization by making specific bindings under the General Agreement on Trade in Services
(GATS).PRESS/TPRB/128
Page 9
MORETRADE POLICY REVIEW BODY
TANZANIA
Report by the Government - Parts III and IV
I. TRADE ENVIRONMENT
A. THE EXTERNAL SECTOR
1. Tanzania has been implementing a number of policy measures to create a stable liberalized
external sector.  The policy measures were geared towards creating favourable conditions for quick
economic recovery and eventual achievement of sust ained higher rates of growth under conditions of
internal and external financial stability.  From mid 1980s there has been gradual liberalization of the
external sector by relaxing the foreign exchange  controls, which culminated into the replacement of
the Exchange Control Ordinance (Cap. 294) by the Foreign Exchange Act of 1992.  The new Actopened up the external sector to market forces of demand and supply, and government eased/removed
external trade restrictions (except for very few items on which control is necessary for health, security
and preservation purposes) by simplifying export and import documentation procedures.  All
exchange control documents i.e. import and export licences were abolished in 1992/93 period.
2. This went hand in hand with liberalization of foreign exchange system shifting from fixed
exchange rate system to a market-determined exchange rate in April 1993.  In 1996, Tanzania has
gone further with liberalization measures by adopting Article VIII of the International Monetary Fund
(IMF) that requires liberalization of all current account transactions.  This was followed by a partial
liberalization of the capital/financial account that allowed foreigners to participate in direct
investment activities in the country.
3. Simplification of export procedures, relaxation of exchange controls, privatization of state-owned
companies and new investments particularly in the mining sector has led into improvement in
performance of Tanzania's exports.  As a result, merchandise exports has increased on average by
8.5% from US$397 million in 1992 to US$588 million by end 1998.  The highest earnings of
US$763.8 million were recorded in 1996.  On the other hand, non-tangible exports i.e. servicesrecorded a significant performance during the period.  Throughout the period under review receipts
from non-tangible exports increased on average by 26% from US$167.5 million in 1992 to
US$555.2 million in 1998.
4. Imports of goods have remained almost unchanged over the period under review.  Measured in
current dollars, total imports (f.o.b) increased marginally from US$1,317 million recorded in 1992 to
US$1,366 million in 1998.
5. On the domestic trade, restrictions on the previo usly controlled commodities have been removed.
Notably progress was achieved in reducing non-barriers including elimination of import quotas and
bans, as well as import licensing requirements.  Moreover, the monopoly power previously exercised
by state marketing boards or state controlled enterp rises in regard to exporting, importing, and price
controls was significantly reduced during the review period.  Private institutions and individuals were
encouraged to participate in the procurement and marketing of both food and cash crops.
6. Trends in merchandise trade have great influence to the performance of the country's current
account.  Improvement in the export sector together with inflows under current account transfers has
resulted in reduction of current account deficit from US$708 million in 1992 to US$559 million in
1997.PRESS/TPRB/128
Page 10
MORE7. Over the period under review gross international reserves of the Bank of Tanzania increased to
cover up to about 13 week of imports.  The reserves increased from US$358.5 million (aboutten week of imports) in 1993 to about US$599 million by end of 1998.
B. F
OREIGN TRADE DEVELOPMENT
8. Apart from various economic reforms, Tanzania's external sector has been under pressure from
1992 to 1998.  In 1992, the deficit in the overall balance of payments was US$407.5 million growing
a bit to US$736.6 million in 1993 and declined since then to US$231.2 million in 1996 before risingagain to US$636.7 million in 1998.  Foreign trade (imports plus exports) has grown by an average of
14.1% since 1992, from US$1,714 million to US$1,955 million in 1998.  Exports grew steadily from
US$397 million to US$763.8 million in 1996 before falling slightly to US$752.6 million and further
to US$588.5 million in 1998.  On the other hand, imports (f.o.b) increased slightly by 3.7% from
US$1,316.6 million in 1992 to US$1,366 million in 1998.  On average, trade balance improved with a
reduction in deficit by 15.5% from US$919.6 million recorded in 1992 to US$777.5 million in 1998.
9. Major trading partners of Tanzania include EEC and Asia that accounted for 29.4% and 23.7%
respectively of the total imports.  The same continents account for 38.4% and 32.3% of the Tanzanian
exports.  Moreover, SADC member countries account for 11.7% and 10.9% of the country's imports
and exports respectively.  On the other hand, the EAC member countries accounted for 5.5% of total
exports from Tanzania while imports from these countries accounted for 6.9% by end 1998.
10. Apparently, the structure of the export sector largely remained unchanged with traditional exports
dominating over non-traditional exports.  Traditional exports on average accounted for about 58.8%
of the export receipts for the entire review period of 1992-1998.  On the other hand, the share of
import categories to total imports was dominated by capital goods during the same period of review.
On average, share of capital goods accounted for about 44% followed by intermediate goods which,
accounted for about 30% of the total import during 1992-1998 period.  The remaining 28% was forimports of consumer goods.
C. D
EVELOPMENT OF THE TRADE POLICY
11. This is the first trade policy review for Tanzania by WTO Secretariat.  The review is therefore
based on the actual situation compiled from the facts obtained on the ground.  Around the mid 1980s
Tanzania moved away from the reliance on control mechanism and government ownership of themeans of production.  She has since then moved steadily towards a market based and a private sector
led economy.  The Government now sees the private sector as the engine of growth for the economy
and aims to encourage the emergency of a strong private sector capable of creating jobs and wealth as
well as the major source of increased government revenue through the payment of taxes.
12. It should be noted that Tanzania does not have a comprehensive trade policy document.
However, concerted efforts to consolidate sectoral trade related policies into a national policy
document are under way.  The development of trade policy in Tanzania can be traced back from the
days of price controls and price fixing, trade restrictions, single marketing channels, and confinement
policies.  In the mid 1980s trade reforms measures were initiated.  The measures initiated led to the
trade liberalization which implied the removal of barriers and restrictions, rationalization and
reduction of import duties through unilateral, bilateral, regional and multilateral measures.
13. The systematic and gradual reduction and elimination of different barriers and obstacles to trade,
such as bureaucratic formalities, advance authorization, administrative controls, supervision, has
made a significant contribution to facilitating foreign trade by improving the country's allocation of
resources.  Tanzania has simplified and facilitated export and import procedures through the use of a
Single Entry Bill document for customs purposes.PRESS/TPRB/128
Page 11
MORED. REGIONAL INTEGRATION
14. Tanzania is a member of several regional integration groupings.  These include, the Common
Market for Eastern and Southern Africa (COM ESA), Southern Africa Development Community
(SADC), East African Cooperation (EAC) and Indian Ocean Rims-Association for Regional
Cooperation (IOR-ARC).
15. Under COMESA, all tariff s on trade among its Member States are scheduled to come to zero by
October 2000.  Tanzania has formally notified the COMESA Secretariat of her intention to withdraw
from COMESA membership effectively by Septembe r 2000;  in the meantime Tanzania continues to
discharge her obligation in the COMESA Treaty.  Under SADC, a Free Trade Area has almost been
concluded which will bring the import duty to zero eight years from the date of its conclusion.
Similarly, moves are in the process under the recently signed East African Treaty to negotiate a trade
protocol with a view of eliminating  almost all tariffs, non-tariff barriers and non-tariff measures.
This exercise has been given a time span of four years.  Tanzania is also a member of the charter
bringing together 14 countries forming the Indian Ocean Rim-Association for Regional Cooperation(IOR-ARC).  The grouping has the objective to facilitate and promote economic cooperation bringing
together representatives of government, business and academic.
II. TANZANIA AND THE WTO
A. T
ANZANIA AND THE MULTILATERAL TRADING SYSTEM
16. Tanzania is a contracting party to the outcome of the Multilateral Trade Negotiations (MTN)
which were launched in Punta Del Este in Uruguay at the end of 1986.
17. Tanzania participated in the negotiations which took eight years but, her effective participation in
every inch of the way, clause by clause, word by word, like any other least developed country was
severely constrained by her limited capacity technically and financially.  This is very well reflected at
our Permanent Mission in Geneva where the resources, including the personnel resources, are overstretched because of very heavy demands by a series of formal and informal meetings and discussions
going on in the WTO simultaneously.
18. Tanzania's weakness in the concluded Multilateral Trade Negotiations are further reflected by the
difficulties we are facing in complying with the obligations in the WTO Agreements in terms of
notifications and other requirements.  This has in tu rn also affected Tanzania's smooth integration into
the Multilateral Trading System.
19. Tanzania is currently a beneficiary among selected least developed and African countries in a
Joint Integrated ITC/UNCTAD/WTO Technical Assistance Programme (JITAP), which is based on
the Singapore WTO Ministerial Declaration of 1996.  Under this technical assistance, understanding
the implication of the Uruguay Round Agreements for Tanzania's economy is considered as a priorityneed by the public sector officials and private sector executives.  Activities aimed at enhancing the
understanding of the Agreements are targeted to policy makers in public, academicians and private
sector executives.
20. The understanding and awareness of the Agreements  in the long run are expected among other
things to facilitate the integration of Tanzania into the Multilateral Trading System.
B. A
PPLICATION OF THE WTO A GREEMENTS
21. In Tanzania awareness and understanding of the WTO Agreements are very weak within both the
public and private sectors, and this explains why no action has yet been taken with regard to the
implementation of the Uruguay Round Agreements (notifications and legislation).  This is partlyPRESS/TPRB/128
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MOREattributed to lack of or limited capacity in understanding what is to be done.  Having signed the
Final Act of Uruguay Round and the Marrakesh Agreement establishing the World TradeOrganization, all the WTO Agreements became binding on Tanzania.
22. The effective implementation of WTO commitments by Tanzania continue to be hampered by
lack of adequate financial, institutional, technolog ical, and technical capacities, a situation that will
exacerbate our participation in new and future negotiations.  Tanzania therefore calls for renewed
commitment to technical cooperation through adequate provision of resources in the regular budget ofthe WTO and other core agencies according to th eir mandates.  We further emphasize the need for
improved coordination in the delivery of this assistance as a necessary requirement to facilitate
effective participation on our part.  Tanzania has, however, in spite of those shortcomings made
efforts to comply with certain requirements such as establishing a National Enquiry Point and
Acceptance of Code of Good Practice on Voluntary Standards.
23. The primary purpose of the ITC/UNCTAD/WTO Joint Integrated Technical Assistance
Programme to Tanzania is to help the country in building national capacity for the understanding and
thus servicing her obligation arising from being a Member of WTO.  The Integrated Framework (IF)
for Trade Related Technical Assistance to Tanzania which was endorsed by the High Level Meeting
on Integrated Initiatives for LDC's Trade Development is progressing well and will eventually
increase the benefits that Tanzania derive from the trade-related assistance provided by the core
agencies and other development partners.  An Inter-Institutional Technical Committee on WTO hasbeen established but needs to be strengthened.
C. T
ANZANIA 'S POSITION REGARDING FUTURE NEGOTIATIONS
24. Tanzania reaffirms its commitment to respect the timetable for reviews, negotiations and other
tasks already agreed upon and established in the Marrakesh mandate and the second Ministerial
Conference held in Geneva in May 1998.  In our view the central challenge of future negotiation is toensure that issues of development are addressed decisively.  Meeting this challenge will serve to
strengthen the multilateral trading system, enhance its legitimacy and create a sustainable basis for a
new round of global economic growth from whic h all WTO Members can benefit.  The next WTO
Conference should represent an opportunity to place the development objective at the centre for future
negotiations.  Similarly, the inadequate capacity of developing countries and especially the LDCs toeffectively participate in broad-based negotiations should be taken into account.
25. Regarding development of future negotiations Tanzania is of the view that they should achieve
the objectives spelt out in the preamble to the Marrakesh Agreement and should enable the world
community to share fully and equitably the achievements of the Multilateral Trading System.
26. This will bring in our view, a sustained rise in the income of developing countries and would offer
real prospects for economic growth and poverty eradication.  Sufficient attention should be devoted to
ensuring degrees of flexibility to accommodate constraints faced by the developing countries.
The justification for special and differential treatm ent to Tanzania remains valid in so far as it is
designed to assist developing countries and other least developed countries and small economics to
overcome inherent handicaps, which prevent them from deriving meaningful benefits from their
participation in the Multilateral Trading System.  In this regard, special and differential treatment
should be firmly established in future negotiations, implemented and made contractual.PRESS/TPRB/128
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END27. The Government of Tanzania believes that agreements, rules and disciplines that emerge from
future negotiations should be designed to level the playing field by enhancing predictability,consistency and transparency in the system.  They should among other things include:
(i) support efforts for building our productive capacities and strengthening our supply
capabilities;
(ii) provide flexibility in the use of appropriate policy instruments to enhance the process
of growth and structural transformation of our economies;
(iii) improve market access for products of export interest to Tanzania;
(iv) advance our regional integration objectives;  and
(v) define more clearly the terms and conditions of special and preferential treatment.
28. As regards the mandated negotiations, Tanzania acknowledge the vital role of the agricultural and
service sectors to its economic growth and development.  The development of the agricultural sector
in Tanzania is crucial to our trade growth, em ployment creation, social cohesion and environmental
protection.  In this light, the ongoing reform and liberalization of international agriculture trade mustlead to improve access to world markets for all our agricultural exports (primary and processed).  This
should be achieved through:
(i) the elimination of tariff escalation/and tariff peaks;
(ii) reduction in domestic support in the developed countries;
(iii) the elimination of export subsidies which displace agricultural exports of developing
countries or impact negatively on their domestic production;  and
(iv) the obligation to formulate disciplines on export credits.
29. Tanzania recognizes the importance of addressing the vital issues of, food security and the
development of rural economies among other things, taking into account inherent constraints of
diversification for developing countries.  Specifications of small economies like Tanzania should begiven due attention and accommodated in future negotiations on agriculture.
30. Tanzania remains deeply concerned at the marginalization of LDCs in the world economy.  To
reverse this trend Tanzania supports the view that the next conference should adopt a decision
whereby developed countries would extend bound, duty free and quota free treatment to all products
of export interest originating from LDCs.  Developed countries should also make the necessaryfinancial commitment to enable the effective implem entation of the integrated initiative in favour of
LDCs.
31. Progressive liberalization of trade in services should respect both existing architecture of GATS
and the flexibility provided to developing countries under Article XIX of GATS including the
principle for granting credit for an autonomous liberalization since previous negotiations as providedfor in this Article.  Article IV of GATS, should be strengthened and made fully operational.
32. Tanzania fully endorses the proposals put forward by the Africa Group in Geneva with regard to
future work in the area of Intellectual Property.  In particular we would support a decision to extend
the moratorium on the application of the non-violation provision under Article 64.3 of the TRIPS
Agreement, which expired in January 2000, until Members agree by consensus that sufficient
experience has been gained with the application of the Agreement.