text: A SURVEY OF NON-TARIFF BARRIERS THAT AFFECT TANZANIAN IMPORTS AND EXPORTS WITHIN EAC, SADC AND COMESA COUNTRIES Final report Research and report prepared by Ms Jeniffer Mmasi Iramba Management and Industrial Services Ltd P.O. Box 21856 Dar es Salaam, Tanzania Tel: 255-22-2124963/2122506 Email: firstname.lastname@example.com And Simon Ihiga Trade and Investment Consortium P.O. Box 6221-00200 Nairobi, Kenya Tel: 254-20-2010865 Email: email@example.com 07 August 2007 1 EXECUTIVE SUMMARY...................................................................................................................3 1.0 INTRODUCTION...........................................................................................................................5 1.1 Overview..........................................................................................................................................5 1.2 Background to the EAC and SADC NTB surveys..........................................................................5 1.3 Scope of Work and tasks for the survey..........................................................................................6 1.4 Methodology for undertaking the survey.........................................................................................7 This report has tried as much as possible to answer all the terms of reference as highlighted above under the scope of work and tasks for the survey......................................................................................7 2.0 OVERVIEW OF EXPORT AND IMPORT TRADE.........................................................................8 2.1 EXPORT TRADE................................................................................................................................8 2.2 IMPORT TRADE..............................................................................................................................11 3.0 NTB MEASURES DIRECTLY AFFECTING EXPORTS...............................................................14 3.1 INVENTORY OF NTBS APPLIED ON TANZANIAN EXPORTS TO EAC AND SADC COUNTRIES ......................................................................................................................................14 3.2 EXPORT NTB INVENTORIES UNDER THE WTO CATEGORIZATIONS............................16 4.0 NTB MEASURES DIRECTLY AFFECTING IMPORTS ..............................................................23 4.1 INVENTORY OF NTBS THAT APPLY TO TANZANIAN IMPORTS ...................................23 4.2 IMPORT NTB INVENTORIES UNDER THE WTO CATEGORIZATIONS............................23 5.0 KEY ISSUES FOM INTERVIEWS AND RESEARCH..................................................................29 5.1 FOCAL POINT FOR REPORTING NTBS..................................................................................29 5.2 MEMBERSHIP TO NATIONAL MONITORING COMMITTEE - THE NTBS FOCAL POINT 31 5.3 INSTITUTIONAL RESPONSIBILITIES FOR REPORTING NTBS AND MONITORING THEIR ELIMINATION .....................................................................................................................32 5.4 TEMPLATE FOR NTBs ELIMINATION ...................................................................................35 6.0 ASSESSMENT OF PROCEDURES FOR HARMONIZATION OF TRANSIT TRAFFIC BETWEEN COUNTRIES IN THE REGION.........................................................................................51 6.2COMESA Yellow Card. The COMESA Yellow Card is a motor vehicle insurance scheme which covers third-party liabilities and medical expenses. A yellow card issued in one COMESA country is valid in all other member countries and is mostly applicable along the Northern Corridor route......51 7.0 RECOMMENDED ACTION PLAN FOR MONITORING AND FACILITATING ELIMINATION OF NTBS......................................................................................................................52 2 EXECUTIVE SUMMARY Analysis of exports to EAC, SADC and COMESA regional blocs shows that that while Kenya was a major export destination, taking an average 27% of total exports to the region during the period 2001 to 2005, Uganda was an insignificant market, taking a mere 4% of Tanzania's total exports. The analysis also indicates that while the Common External Tariff (CET) of EAC Customs Union allows for zero% tariff rates to be applied on intra-EAC trade excluding few selected items imported from Kenya which attract 10%, this preferential tariff arrangement has not yet had an effect in making Uganda a significant market for Tanzania's exports. The EAC/COMESA/SADC region took an average of 27% over the period 2003-2006. The analysis also shows that South Africa and Kenya were the main regional markets, which took an average of 53% and 27% of total exports to the region respectively over the period 2003-2006. On the other hand, the region contributed 20% of Tanzania's imports during the period. Analysis of imports from EAC countries show that while Kenya was a major import source during the period, Uganda contributed a mere 1.1% of Tanzania's imports from the region, despite the preferential import tariffs that exist under the EAC Customs Union. During the 2005/06 EAC and 2004 SADC NTBs consultations, it was found out that a number of NTBs exist on Tanzania's exports to EAC and SADC countries. The EAC categorised the NTBs under Cumbersome inspection requirements; Varying trade regulations among the three EAC and SADC countries and Varying, cumbersome and costly transiting procedures in the three EAC countries. The survey had also identified a number of NTBs that directly affect imports, categorised Customs and administrative documentation procedures; Cumbersome inspection requirements; Police road blocks; and Congestion at Dar es Salaam Port. The 2004 SADC survey had identified NTBs related to exports and imports, which are categorised under Customs administrative and documentation procedures, obstacles in getting export and import permits, Export bans; and Cumbersome inspection requirements. These NTBs still exist although to a smaller extent since Customs has made a lot of improvements in imports clearance through application of ASYCUDA++ system at major entry points. Current consultations indicate that the public and private sector both prefer a structured approach to dealing with NTBs the reporting, monitoring and elimination process. The template NTBs monitoring mechanism that was proposed during the 2005/06 EAC NTBs survey is therefore validated as still relevant, and that it should be applied to report and facilitate elimination of NTBs experienced on intra- SADC trade. The template, which appears as Table 10 to this report identifies the NTBs reported, their content, responsible agencies, approach to eliminating the NTBs, performance benchmarks, possible constraints to elimination and the success factor which should be used to eliminate such constraints. At the time of endorsing the EAC mechanism in early 2006, it had been agreed that the EAC ministries responsible for EAC matters would coordinate its application. However, although the Tanzania NTBs Monitoring Committee has not convened an inaugural meeting to-date, this Ministry is still preferred as the coordinator of NTB issues. During consultations on the EAC NTBs Monitoring Mechanism, it had also been agreed that heads of key institutions involved in trade matters would constitute membership of the National Monitoring Committees. While this membership is still valid, Tanzania trade stakeholders propose that it should be expanded to include additional institutions that had not been included at the time. The proposed membership is shown under Table 10 of this report. Regarding harmonization of transit traffic procedures, it is understood that the private sector is lobbying the Tanzania Government to consider rejoining COMESA. If this development takes place, the private sector recommends that the country should implement all operational COMESA transit 3 traffic schemes so as to facilitate regional cross-border transit traffic within the three regional trading blocs. The analysis also shows that like her two EAC sister states, the recommended Action Plan for reporting, monitoring and eliminating NTBs in Tanzania should centre on four key issues, namely: l The need for Partner States within EAC and COMESA to consolidate and demonstrate their political and technical goodwill to implement aspirations of the EAC and COMESA Treaties, so that decisions passed at Council levels are respected and domesticated through timely amendments of national laws, regulations and practices; l The need for Partner States need to ensure that the legal and regulatory framework governing the integration process is properly enshrined in their national laws, clearly understood and complied with by all agencies responsible for enforcement of trade regulatory and administrative requirements. l The need to build capacity at the coordinating ministry and business associations so as to enable the NTBs Monitoring Committee to play its role of facilitating reporting, monitoring and elimination of NTBs. An effective secretariat capacity will also help to kick-start application of NTBs monitoring and elimination mechanism without further delay. l The need for harmonising the regional transit traffic schemes. This is especially because Tanzania belongs to both EAC and SADC trading blocs, while its EAC partner states also belong to COMESA, which means there may be some transit procedures that have contradictory elements and focus. Such conflicts can only be addressed effectively if the three regional trading blocs harmonised the applicable procedures. 4 1.0 INTRODUCTION 1.1 Overview This assignment was commissioned by the Regional Trade Facilitation Programme (RTFP) on behalf of the COMESA/EAC and SADC Secretariats with an objective of identifying and analysing the nature and scope of Non-tariff barriers (NTBs) that hamper intra-regional trade within the member countries. A total of twenty-five countries which are members of COMESA 1, SADC2 and/or EAC3 are being surveyed in this respect, Uganda included. All the three regional economic communities (RECs) are currently at various stages of developing formal/ structured mechanisms for identifying, monitoring and eliminating NTBs and are collaborating closely in this process, and the result is expected to be the adoption of a single NTB monitoring and elimination mechanism for the region. The survey is divided into two parts, one for SADC and/or EAC 4 countries that were surveyed in 2004 and 2005/06 respectively, and one for COMESA5 countries that have not been surveyed before. The survey for EAC and SADC countries is updating and validating the 2004 and 2005/06 NTB inventories while the survey for COMESA is compiling complete inventories for 11 COMESA countries that have not been surveyed before. This report should therefore be read as an update for the Tanzania EAC 2005/06 and SADC NTB surveys, and a review of Tanzania's willingness to implement harmonised transit traffic schemes such as the COMESA harmonised transit documentation and other related trade facilitation instruments. 1.2 Background to the EAC and SADC NTB surveys The 2005/06 survey for EAC countries (Tanzania, Kenya and Uganda) identified a number of NTBs which were categorised under the following clusters: (a) Customs documentation and administrative procedures, which include un-standardised systems for imports declaration and payment of applicable duty rates, limited customs working hours, different interpretation of the COMESA Rules of Origin 6, application of discriminatory taxes and other charges on imports originating from amongst the three countries, cumbersome procedures for verifying containerized imports, problems in blocking the marketing of counterfeit products, and diversion of transit goods into the region (b) Immigration procedures, which include un-standardised visa fees and procedures for application of work permits, cumbersome and duplicated immigration procedures. (c) Quality inspection procedures, which include delays in inspection of commercial vehicles, cumbersome and costly quality inspection procedures, unnecessary quality inspections (including of products certified by accredited laboratories and of imports originating from the EAC bearing certification marks issued by the three East African Standards Bureaus), un- standardised quality inspection and testing procedures and varying procedures for issuing certification marks. 1 Common Market for Eastern and Southern African countries 2 Southern African Development Community 3 Eastern African Community 4 Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe, Kenya and Uganda 5 Burundi, Comoros, DR Congo, Djibouti, Egypt, Eritrea, Ethiopia, Madagascar, Rwanda, Seychelles and Sudan 63 Where products are not wholly produced in the EAC and an EAC rule of origin has not yet been agreed, COMESA rules of origin are used in the interim. 5 (d) Transiting procedures, including cumbersome, un-standardised and costly transport and other procedures for transit traffic. Regarding SADC, the Protocol on Trade provides for the attainment of a Free Trade Area (FTA) in 2008 through the elimination of tariff barriers to trade. Whilst the process of eliminating tariff barriers within SADC is in progress and predictable, the success of the FTA hinges to a large extent on a systematic process of eliminating non-tariff barriers which hinder intra-SADC trade. The 2004 Inventory Report on NTBs in SADC countries defines NTBs as "any regulations to trade other than a tariff or other discretionary policies that restrict international trade", and groups NTBs into three broad categories, namely: (a) Health, safety and environment NTBs: these barriers include exports bans, restrictive SPS requirements, standards and conformance requirements; (b) Trade policy NTBs: these barriers include broader policy measures including public export assistance, export taxes, import licenses, import quotas, production subsidies, state trading and import monopolies, tax concessions, trade remedy practices (such as anti-dumping, safeguard and countervailing measures); (c) Administrative NTBs: these barriers include customs clearance delays, lack of transparency and consistency in customs procedures, overly bureaucratic and often arbitrary processing and documentation requirements for consignments, high freight and transport charges, and generally, services that are not user-friendly. 1.3 Scope of Work and tasks for the survey The objective of the study for Tanzania aims at updating the inventory of NTBs that hinder intra-EAC and intra-SADC trade identified in the 2005/06 survey. The specific tasks of the survey are to: 1. Prepare patterns of intra-SADC and intra-EAC trade using the most recent trade data, identify the country's exports and imports and the main traded commodities for the last 5 years for which data is available at HS7 2 digit level (2002-2006). 2. Identify the scope and nature of NTBs that affect intra-EAC and intra-SADC trade utilising a standardised inventory approach under the WTO categorisation of NTBs. 3. Undertake consultations on the template form for reporting NTBs as proposed during the 2005/06 EAC NTBs survey consultations. 4. Undertake consultations with the private sector representative organisations and the public sector on the proposal that they designate a National NTBs Committee as the focal point for reporting, monitoring and facilitating elimination of NTBs, which will also liaise closely with EAC and SADC Secretariats. 5. Highlight those NTBs in the inventory which have been introduced since the 2005 EAC and 2004 SADC NTB studies. 6. Assess the importance of each NTB in terms of its impact on intra- EAC and intra-SADC trade, and on traders, such as the cost of the additional time incurred to ensure compliance, lost market opportunities, and prevalence of specific NTBs at EAC and SADC country exit and entry points 7. Assess NTBs that are identified with particular transport and transit modes, including air freight, sea freight, road freight, and other cross-border traffic services. 7 Harmonised System data 6 8. Identify EAC and COMESA enforcement agencies and laws, regulations, practices, and requirements in each country of study and in the importing/ exporting countries with which traders must comply. Additionally, the survey also review Tanzania's willingness to implement harmonised transit traffic schemes such as COMESA's Harmonised Road Transit Charges, COMESA Carrier's License, Harmonised Axle Load and Maximum Vehicle Weight specifications, and the COMESA Yellow Card. 1.4 Methodology for undertaking the survey In Tanzania, the survey included a detailed analysis of export and import data between 2002 and 2006, including EAC/SADC/COMESA destination countries, trends and major products traded. It also reviewed available literature on existence and impact of NTBs, which include the 2005/06 NTBs survey report, the 2004 Business Climate Index survey report and earlier reports compiled under the Regional Trade Facilitation Forum regarding obstacles that hinder export and import trade. Consultations were also held with relevant representatives of the private and public sector, which included the Confederation of Tanzania Industries, Tanzania Chamber of Commerce, Industry and Agriculture, Tanzania Clearing and Forwarding Association, Ministry of Industry Trade and Marketing, Ministry of East African Community Customs and Excise Department. These consultations entered around validation and update of NTBs identified during the 2004 and 2005/06 surveys, template for reporting NTBs, Focal point for coordinating reporting, monitoring and facilitating NTBs elimination, membership to the National NTBs Monitoring Committee and its capacity to coordinate work on NTBs. The report also used the WTO NTB codes to categorise identified NTBs into a standardised inventory. This report has tried as much as possible to answer all the terms of reference as highlighted above under the scope of work and tasks for the survey. 7 2.0 OVERVIEW OF EXPORT AND IMPORT TRADE 2.1 EXPORT TRADE 2.1.1 Tanzania's exports to EAC/SADC/COMESA region Total exports to the EAC/COMESA/SADC region grew from USD 130 million in 2002 to 196 million in 2003, to 267 million in 2004, 463 million in 2005 and to 514 million in 2006. The region therefore took an average of 14% of share of Tanzania's total global exports in 2002, 17% 2003, 20% in 2004, 30% in 2005, 32% in 2006 and an average 267% over the period 2003-2006. The major export markets within the region were South Africa and Kenya, with an average of 527% and 27% export market share respectively over the period 2003-2006. Analysis of exports to EAC regional bloc shows that while Kenya was a major export destination during the period at an average 27%, Uganda took a mere 4% of Tanzania's total exports to COMESA/SADC region. The analysis indicates that while the Common External Tariff (CET) of EAC Customs Union allows for zero% tariff rates to be applied on intra-EAC trade excluding few selected items imported from Kenya to Tanzania and Uganda at 10%, this preferential tariff arrangement has not yet had an effect in making Uganda a significant market for Tanzania's exports. Details of the Tanzania's export trends and market shares within EAC/SADC/COMESA region are shown in Table 1 below. Table 1: Tanzania exports to EAC/SADC/COMESA countries between 2002 and 2006 (USD) DESTINATION 2,002 2,003 2,004 2,005 2,006 TOTAL EAC/SADC/ COUNTRY 2003-06 COMESA MARKET SHARE SOUTH AFRICA 16,711,855 37,757,498 114,989,177 292,270,522 299,578,865 744,596,062 52% KENYA 35,727,238 114,461,900 84,511,276 80,305,356 115,067,705 394,346,237 27% UGANDA 5,553,281 8,313,107 11,824,251 20,831,506 20,277,324 61,246,188 4% MALAWI 17,959,226 1,416,932 12,545,300 8,035,181 18,944,806 40,942,219 3% ZAMBIA 17,639,924 2,025,516 6,808,813 8,990,416 15,386,020 33,210,765 2% DRC 16,008,677 737,140 10,232,034 12,694,400 4,381,571 28,045,145 2% BURUNDI 7,089,045 326,320 7,606,614 7,718,966 6,631,172 22,283,072 2% EGYPT 1,683,110 11,607,919 1,070,189 8,502,755 638,012 21,818,875 2% MOZAMBIQUE 1,647,364 1,764,132 3,462,703 7,208,759 9,323,340 21,758,934 2% SWAZILAND 376,865 12,345,187 2,877,758 560,413 1,899,113 17,682,471 1% COMOROS 363,200 340 1,183,031 1,592,926 9,932,296 12,708,593 1% RWANDA 3,913,490 811,087 2,946,160 3,134,225 3,733,011 10,624,483 1% ZIMBABWE 1,419,051 1,190,001 1,249,242 1,566,262 1,198,431 5,203,936 0% BOTSWANA 39,004 131,918 51,623 4,242,640 761,184 5,187,365 0% ANGOLA 1,414,138 0 671,966 1,402,581 2,792,292 4,866,839 0% ETHIOPIA 375,840 125,383 1,781,792 1,767,749 635,848 4,310,772 0% MADAGASCAR 696,405 6,841 1,991,430 820,145 1,068,827 3,887,243 0% MAURITIUS 293,606 1,782,742 540,583 466,092 916,231 3,705,648 0% SUDAN 272,260 40,838 262,930 436,001 497,761 1,237,530 0% NAMIBIA 31,253 786,138 12,987 47,369 325,992 1,172,486 0% ERITREA 237,275 7,740 117,281 232,065 195,953 553,039 0% DJIBOUTI 51,015 404,741 61,508 8,181 3,983 478,413 0% SEYCHELLES 287,374 276,934 24,789 37,251 39,792 378,766 0% TOTAL TO 129,790,496 196,320,354 266,823,437 462,871,761 514,229,529 1,440,245,081 100% 8 DESTINATION 2,002 2,003 2,004 2,005 2,006 TOTAL EAC/SADC/ COUNTRY 2003-06 COMESA MARKET SHARE EAC/COMESA/S ADC TOTAL 905,771,690 1,132,043,399 1,329,820,571 1,544,517,953 1,589,613,469 5,595,995,392 EXPORTS TO ALL WORLD COUNTRIES COMESA/SADC 14% 17% 20% 30% 32% 26% SHARE 26% 8 Source: Computed from TRA data 2.1.2 Tanzania's major exports to EAC/SADC/COMESA region The major products exported to EAC/COMESA/SADC region during the period 2002 to 2006 were: a. Products of HS Chapter 71 - Natural and cultured pearls, precious and semi- precious metals, which took an average 28.9% of export market share b. Products of HS Chapter 72 – Iron and steel, which took an average of 16.6% export market share The 10 major exports to the region are presented in Table 2 below. 8 TRA - Tanzania Revenue Authority (TRA 9 Table 2: Major exports to COMESA/SADC countries between 2002 and 2006 (USD) HS Product Description 2,002 2,003 2,004 2,005 2,006 TOTAL PRODUCT Chapter 2003-06 EAC/SADC/ COMESA MARKET SHARE 71 NATURAL/CULTURED PEARLS, PREC 3,871,029 26,676,125 105,385,154 282,842,418 1,261,157 420,035,883 27% STONES & METALS, COIN ETC 72 IRON AND STEEL 1,238,457 5,150,483 10,302,005 11,347,031 212,054,217 240,092,193 15% 3 FISH & CRUSTACEAN, MOLLUSC & 3,823,782 567,591 41,054,613 24,599,578 25,742,986 95,788,550 6% OTHER AQUATIC INVERTEBRATE 9 COFFEE, TEA, MATE AND SPICES 805,516 346,238 18,849,314 16,109,711 39,439,081 75,549,860 5% 10 CEREALS 27,190,135 2,152,824 8,674,804 13,115,145 7,710,636 58,843,544 4% 52 COTTON 3,708,245 1,418,661 9,387,525 11,072,228 32,783,803 58,370,462 4% 28 INORGN CHEM; COMPDS OF PREC 82,612 412,053 256,044 455,221 54,945,842 56,151,772 4% MET, RADIOACT ELEMENTS ETC 27 MINERAL FUELS, OILS & PRODUCT 724,934 46,875,228 1,637,111 1,622,245 3,236,315 54,095,833 3% OF THEIR DISTILLATION; ETC 63 OTHER MADE UP TEXTILE 2,784,239 1,816,375 9,285,597 10,332,334 10,273,683 34,492,228 2% ARTICLES; SETS; WORN CLOTHING ETC 39 PLASTICS AND ARTICLES THEREOF 1,430,854 6,924,960 3,022,145 7,336,577 11,087,676 29,802,212 2% TOTAL 10 MAJOR EXPORTS 45,659,803 92,340,538 207,854,312 378,832,488 398,535,396 1,123,222,537 72% ALL OTHER PRODUCTS 84,130,693 103,979,816 58,969,125 84,039,273 115,694,133 446,813,040 28% TOTAL EAC/SADC/COMESA 129,790,496 196,320,354 266,823,437 462,871,761 514,229,529 1,570,035,577 100% Total exports to world markets 905,771,690 1,132,043,399 1,329,820,571 1,544,517,953 1,589,613,469 5,595,995,392 EAC/SADC/COMESA SHARE OF TOTAL EXPORTS 14% 17% 20% 30% 32% 28% Source: Computed from TRA9 data 9 TRA - Tanzania Revenue Authority (TRA 10 2.2 IMPORT TRADE 2.2.1 Tanzania's imports from EAC/SADC/COMESA region Total imports sourced from EAC/COMESA/SADC countries steadily grew from USD 322 million in 2002 to USD 437 million in 2003, 526 million in 2004, 648 million in 2005 and to 803 million in 2006. The region however performed poorly in terms of the market share it enjoyed in the Tanzanian market during the period, which decreased slightly from 21% in 2002 to 20% in 2004. Thereafter the share increased back to 21% in 2005 before falling gain to 20% in 2005 and further to 18 in 2006. On average, the region contributed 20% of Tanzania's imports during the period. The major import source countries were South Africa and Kenya, which contributed an average of 64.7% and 24.1% respectively during the period. Analysis of imports from EA countries show that while Kenya was a major import source during the period, Uganda contributed a mere 1.1% of Tanzania's imports from EAC/COMESA/SADC region. The analysis indicates that like the case for exports, the preferential tariff rates of zero per cent under the EAC CET has not yet had a positive effect in making Uganda an important source of Tanzanian imports. However, the trend could be due to similar products being produced by the two countries which mean there is minimal opportunity for trade between Tanzania and Uganda. Details of import trends between 2003 and 2006 are shown in Table 3 below. Table 3: Tanzania's imports from COMESA/SADC countries between 2002 and 2006 (USD) IMPORT 2002 2003 2004 2005 2006 TOTAL 2003- Market SOURCE 06 share COUNTRY SOUTH AFRICA 190,837,390 277,084,300 333,819,012 404,005,796 546,760,150 1,561,669,258 64.7% KENYA 96,247,694 117,112,184 131,467,576 174,727,363 157,430,894 580,738,017 24.1% EGYPT 5,292,021 11,607,919 15,888,202 15,775,485 35,559,268 78,830,874 3.3% SWAZILAND 15,788,163 12,347,729 17,396,533 23,843,781 16,762,690 70,350,733 2.9% UGANDA 2,686,715 8,313,107 7,724,111 6,497,906 3,851,186 26,386,310 1.1% ZAMBIA 4,368,125 2,025,516 6,209,570 4,539,926 11,582,977 24,357,989 1.0% MOZAMBIQUE 31,541 926,277 1,572,002 2,011,079 17,150,901 21,660,259 0.9% MAURITIUS 1,751,361 1,782,742 4,104,357 4,687,133 3,061,219 13,635,451 0.6% MALAWI 1,462,538 1,416,932 2,865,390 3,826,742 3,705,653 11,814,717 0.5% ZIMBABWE 1,998,327 1,190,001 1,484,200 1,978,280 1,301,651 5,954,132 0.2% SYCHELLES 1,012 276,934 39,805 1,088,863 3,750,875 5,156,477 0.2% BOTSWANA 264,115 603,400 585,607 732,837 1,084,893 3,006,737 0.1% ETHIOPIA 693,883 125,383 1,055,277 1,056,936 163,386 2,400,982 0.1% DEMOCRATIC 374,522 737,140 807,938 613,649 180,595 2,339,322 0.1% REPUBLIC OF CONGO NAMIBIA 632,525 786,138 207,923 595,938 594,739 2,184,738 0.1% DJIBUTI 2,450 404,741 275,456 1,233,680 0 1,913,877 0.1% BURUNDI 7,797 326,320 16,173 305,977 5,517 653,987 0.0% RWANDA 45,187 0 117,524 29,276 153,635 300,435 0.0% MADAGASCAR 672 6,841 169,416 32,290 25,438 233,985 0.0% ERITREA 6,728 7,740 112,199 6,225 21,139 147,303 0.0% SUDAN 116,716 40,838 11,149 3,476 87,678 143,141 0.0% 11 IMPORT 2002 2003 2004 2005 2006 TOTAL 2003- Market SOURCE 06 share COUNTRY LESOTHO 0 0 0 678 64,199 64,877 0.0% COMOROS 781 340 0 25,403 19,096 44,839 0.0% ANGOLA 23 0 526 297 207 1,030 0.0% TOTAL 322,610,286 437,122,522 525,929,946 647,619,016 803,317,986 2,736,599,756 100% IMPORTS FROM COMESA/SADC TOTAL 1,511,300,000 2,164,324,178 2,551,859,324 3,274,673,786 4,440,030,847 13,942,188,135 IMPORTS FROM WORLD COUNTRIES COMESA/SADC 21% 20% 21% 20% 18% 20% SHARE Source: Computed from TRA10 data 2.2.2 Major imports from EAC/SADC/COMESA countries Tanzania's the ten (10) leading imports from EAC/SADC/COMESA region between 2002 and 2006 were mineral fuels, iron and steel, machinery and appliances, electrical machinery, vehicles, plastics articles, paper and paperboard, sugar and confectionery and essential oils and perfumery products, which combined contributed an average of 786% of total imports during the period. The import trends and market shares of the 10 major items during the period 2003 and 2006 are shown in Table 4 below. 10 TRA - Tanzania Revenue Authority (TRA 12 Table 4: Ten major imports from COMESA/SADC by products 2002-2006 (USD) HS PRODUCT DESRIPTION 2002 2003 2004 2005 2006 TOTAL PRODUCT CHAPTER 2003-06 SHARE OF HEADING IMPORTS FROM EAC/ SADC/OMESA 27 MINERAL FUELS, OILS & PRODUCT 31,775,564 78,256,542 71,989,002 86,062,011 65,015,089 333,098,208 14% OF THEIR DISTILLATION; ETC 72 IRON AND STEEL 13,293,578 32,417,683 60,205,888 95,693,861 110,473,162 312,084,172 13% 84 NUCLEAR REACTORS, BOILERS, 39,235,364 38,545,355 53,226,859 65,676,326 62,553,403 259,237,307 11% MCHY & MECH APPLIANCE; PARTS 85 ELECTRICAL MCHY EQUIP PARTS 31,582,886 30,549,669 27,920,579 34,837,178 110,557,792 235,448,104 10% THEREOF; SOUND RECORDER ETC 87 VEHICLES O/T RAILW/TRANW 13,746,691 17,736,897 27,842,168 41,064,484 63,913,024 164,303,264 7% ROOL-STOCK, PTS & ACCESSORIES 39 PLASTICS AND ARTICLES 20,156,318 21,684,568 27,510,841 34,340,725 39,399,615 143,092,067 5% THEREOF 48 PAPER & PAPERBOARD; ART OF 17,782,063 21,867,798 23,734,141 29,427,492 23,171,364 115,982,858 5% PAPER PULP, PAPER/PAPERBOARD 73 ARTICLES OF IRON AND STEEL 13,780,388 18,397,594 22,117,207 27,357,553 30,035,637 111,688,379 5% 17 SUGARS AND SUGAR 10,365,792 11,929,984 17,933,881 20,342,605 23,299,007 83,871,269 4% CONFECTIONERY 33 ESSENTIAL OILS & RESINOIDS; 12,643,007 13,169,561 11,879,219 18,143,261 23,373,727 79,208,775 3% PERF, COSMETIC/TOILET PREP SUB-TOTAL 10 MAJOR IMPORTS 204,361,651 284,555,651 344,359,785 452,945,496 551,791,820 1,838,014,403 78% ALL OTHER PRODUCTS 118,682,178 154,262,493 78,256,542 71,989,002 86,062,011 509,252,226 22% TOTAL COMESA/SADC 323,043,829 438,818,144 422,616,327 524,934,498 637,853,831 2,347,266,629 100% Source: Computed from TRA data 13 3.0 NTB MEASURES DIRECTLY AFFECTING EXPORTS 3.1 INVENTORY OF NTBS APPLIED ON TANZANIAN EXPORTS TO EAC AND SADC COUNTRIES During the 2005/06 EAC and 2004 SADC NTBs consultations, it was found out that a number of NTBs exist on intra-EAC and intra-SADC trade. Current consultations indicate that most of these NTBs still exist. A summary of the NTBs that affect Tanzania's exports are clustered under: 3.1.1 Cumbersome inspection requirements Various NTBs experienced under this cluster include repeated and long inspection queues during inspection of Gross Vehicle Mass and axle loads, faulty weighing equipment at some stations, cumbersome and costly quality inspection procedures, lack of quality standards for plastics, quality inspection procedures in the other two EAC countries on some products that are already certified by TBS in Tanzania and varying quality inspection and testing procedures among EA and SADC countries. 3.1.2 Police road blocks While this is not cited as a very serious obstacle to cross-border EAC and SADC trade, police officers still stop commercial vehicles at various inter-country road blocks and at border crossings even where there is no proof that goods being transported are of suspicious nature (for example smuggled goods and drugs, etc). 3.1.3 Varying trade regulations among the three EAC and SADC countries Within EAC, Uganda and Kenya both use the harmonised COMESA axle load specifications at 16 tonnes for double axle, while Tanzania uses a higher legal limit of 18 tonnes under SADC. Also, the specified maximum Gross Vehicle Mass (GVM) for commercial vehicles differs among the three EAC countries, at 54 tones in Kenya, 46 tones in Uganda, and 56 tones in Tanzania, which limit the ability to undertake efficient transit traffic within the region. Also EAC countries have different parameters on weights, labelling, and quality, tolerance in measurements, and type and technology used in packaging, which limits ability of intra-EAC trade. Within SADC, the ability for maximising trade opportunities is limited by the lack of some members like Malawi and Zambia to deposit their trade instruments, which implies that the intra-SADC tariffs cannot be applied under the trade protocol. 3.1.4 Varying, cumbersome and costly transiting procedures in the three EAC countries Under this cluster, the most serious NTBs are varying requirements among the three countries on the type of commercial trucks that should be used in transit traffic and application of insurance bonds on goods destined to the region, especially Kenya. 14 15 3.1.5 Immigration procedures Some of the NTBs experienced under this cluster include requirements for work permits in the two other EAC states, visa for travelling to South Africa, and lack of an East African Passport by many citizens who cross borders in search of business opportunities. 3.2 EXPORT NTB INVENTORIES UNDER THE WTO CATEGORIZATIONS The NTBs applicable on Tanzanian exports to EAC and SADC markets can be categorized under the WTO NTB Categorisation given in Table 5 below. 16 Table 5: WTO categorization codes on NTBs applicable to Tanzanian exports to EAC and SADC markets INVENTORY DESCRIPTION CATEGORY WTO Problem Area Description of the most severe NTBs Impact of NTB to businesses and trade Responsibility/ Inventory Source of NTB Code PART II Customs and Administrative Entry Procedures C Customs In some instances, Kenya Customs demands that Exporters are denied access to Kenya market, and is mostly experienced Kenya F Classification Tanzanian exporters wishing to penetrate the Kenyan by small-scale exporters of batiks and other textile products through Customs at and Rules of market have to produce an EA certificate of origin, or Namanga and Lunga Lunga border points border points alternatively an international certificate of origin. An origin EA certificate of origin does not exist yet, since the EA countries are using the COMESA Certificate of Origin until they develop their own. G Customs The limited customs open hours for verifying 1. Time lost to clear goods at borders since offices are closed at night TRA - Customs formalities documents and clearing cargo is a hindrance to faster 2. Cost of corruption at border crossings, in efforts to clear goods Department movement of goods across borders before close of the day's business G Customs On a number of occasions, Kenyan Customs demands Cost of repackaging and time lost during unloading, physical verification Kenya Customs formalities that products originating from Tanzania have to be and reloading. Department unloaded for physical verification, which means destruction of the product packages. The importer has thereafter to repackage goods at own cost so as to fit original packages. Products most affected include tyres, textiles, konyagi spirit, and cigarettes. G Customs Kenyan customs often demand a customs insurance The insurance bond costs an average of US$ 200 for a 20 foot container Kenya Customs formalities bond for transit goods that pass through Kenyan and ends up tying business working capital. Department/ roads en-route to Uganda, Rwanda, Burundi and Kenya Revenue DRC. Authority G Customs Some SADC members like Malawi and Zambia have Non-ratification of the SADC trade protocol means Tanzanian Malawi and formalities not deposited their trade instruments, which in effect originating products are charged duty, making them more expensive than Zambian means they have not ratified the SADC trade would have been the case if SADC preferential tariffs were applied. Governments protocol. This means they cannot apply the SADC trade protocol tariffs on goods imported from Tanzanian. 17 INVENTORY DESCRIPTION CATEGORY WTO Problem Area Description of the most severe NTBs Impact of NTB to businesses and trade Responsibility/ Inventory Source of NTB Code Part III Technical Barriers to Trade B Technical 11 Cost of possible financial penalties if the transport truck exceeds the Weighbridge Differences in axle load and GVM amongst EAC regulations and countries mean that Tanzania trucks transiting specified axle load limits or GVM in Kenya or Uganda12. Also hiring Departments standards through Kenyan roads en-route to Uganda have to additional trucks to transport excess load is an extra cost to the the three EAC transporters and consequently to importers in Kenya and Uganda. 13 strip off excess cargo so as to avoid financial countries penalties on overloaded trucks. Sometimes, this may mean hiring of additional trucks to transport the stripped-excess weight B Technical EAC has not yet harmonised their quality standards A lot of plastics articles destined to the Kenyan market have been denied KEBS/ TBS regulations and for plastics articles, which restricts penetration of entry on allegations that they do meet applicable Kenyan standards even standards export markets. when they have a TBS mark. C Testing and Weighing equipment in some stations is sometimes Faulty weighing equipment means the transporters could be accused and Weighbridge certification faulty, meaning that even when a truck has a proper charged of exceeding allowed axle loads and GVM. Most result to bribing Departments arrangements seal, weight readings at different stations vary. Also, officials at weighing stations to avoid such consequences. there are numerous stations along the major highways, which do not respect seals even when it is clear that such seals have not been tampered with. The most notorious stations are along Moshi and Kibaha on Nairobi-Dar es Salaam road. highway C Testing and Too much time is lost during cross-border pre- Time lost during inspection of export cargo destined to Kenya, since KEBS certification shipment inspection and certification for Kenyan KEBS14 undertakes either sampled and in some cases 100% inspection arrangements bound cargo before goods are allowed into the Kenyan market, instead of recognising TBS certification mark on goods originating from Tanzania. The process of inspection means that some goods may have to be unloaded, while the inspection may involve laboratory analysis, a process that can only be undertaken in Nairobi since most border points do not have laboratory facilities. These procedures result to lost business time and cost. 11 GVM means Gross Vehicle Mass. 12 Uganda and Kenya both use the harmonised COMESA axle load specifications at 16 tonnes for double axle, while Tanzania uses a higher legal limit of 18 tonnes under SADC. Also the specified maximum Gross Vehicle Mass (GVM) for commercial vehicles differs among the three EAC countries, at 54 tones in Kenya, 46 tones in Uganda, and 56 tones in Tanzania 13 In Tanzania, Tanroads is the agency responsible for enforcement of weighbridge requirements, in Kenya it is the Weighbridges Department and in Uganda the Roads Department. 18 INVENTORY DESCRIPTION CATEGORY WTO Problem Area Description of the most severe NTBs Impact of NTB to businesses and trade Responsibility/ Inventory Source of NTB Code PART III C Testing and EAC and SADC countries have different parameters Differences in parameters translate into Technical Barriers to Trade EAC agencies certification on weights, labelling, quality, and tolerance in (TBT), which are impediments to penetration of Kenyan and Ugandan responsible for arrangements measurements, type and technology used in markets for Tanzanian products in some instances (for example cement). weights and packaging. These procedures make entry of The difficulty experienced in penetrating these markets becomes a source measures, and Tanzanian originating goods into the other two EAC of frustration, bribery, time loss, and theft of goods kept by traders at the Standards countries difficult. It is also an obstacle to exports to borders while awaiting clearance by relevant agencies. Bureaux SADC markets. PART IV Sanitary and Phytosanitary Measures B SPS measures Exports go through unnecessary, onerous and costly Exporters of food products incur a lot of costs, and are forced to spend a TBS, TFDA, C including testing and documentation procedures, since the TBS, lot of unnecessary business time during the certification process. For TAEA, 15 example, Tsh. 30,000 is payable for quality inspection certificate by Ministry of chemical TFDA , Ministry of Health and Tanzania Atomic 16 TBS, Tsh. 30,000 - 40,000 for radiation certificate, and Tsh. 30,000 for Health residue limits, Energy Authority each have to issue export health certificate. In total, a food products' exporter spends not less than disease certification on every export consignment, a function Tsh. 200,000 on every export consignment. In addition, exporters freedom, that could be carried out by one body in consultation experience a lot of frustration having to repeat the same documentation specified with the others. on each export consignment since any previous export is not recognised product as a reference for good quality practice. treatment; Testing, certification and other conformity assessment Part VII Other E Other Many Tanzanians do not yet have an East African Many people (especially small business people) cross borders through Tanzanian passport to facilitate business travel to Kenya and undesignated routes, which is illegal, and could attract substantial costs Immigration EAC passports Uganda. if one is arrested as an immigrant. The lack of the passport restricts Department 14 KEBS – Kenya Bureau of Standards 15 TFDA – Tanzania Food and Drugs Authority 16 TAEA – Tanzania Atomic Energy Authority 19 INVENTORY DESCRIPTION CATEGORY WTO Problem Area Description of the most severe NTBs Impact of NTB to businesses and trade Responsibility/ Inventory Source of NTB Code business travel in search of business opportunities, marketing and sales E Other EAC countries have not yet adopted proposals for Applications for work permits is a cumbersome process. The current EAC Immigration acceptance of cross-border movement of people, procedure allows for one month stay without a work permit using a Departments Work permits since the Common Market stage of EAC integration national or EAC passport, after which one has to acquire a work permit, process has not been agreed. This means that which is not a transparent process. Tanzanians crossing Kenyan and Ugandan borders in search of business opportunities have to apply for work permits D Business Currently, mainland Tanzania and Zanzibar have Businesses operating in mainland Tanzania in have to register as foreign Attorney practices or different legal requirements for registration of businesses in Zanzibar. This restricts the ability of businesses to penetrate General's restrictions in businesses the Zanzibar market freely. Chambers, the market Central Government E Other The three EA countries are categorised as either Under the TRIPS agreement, Kenya as a developing country can patent EA focal points developing or LDC countries. This categorisation is its products, while the other two EAC countries cannot do so. The for TRIPS a potential impediment to cross border trade when implication is that Kenyan patented products (for example agreement 17 pharmaceuticals) can access the markets of the other two countries viewed under the WTO TRIPS agreement. without facing TBT restrictions, while the other two cannot access the Kenyan market. This is a potential NTB to exports. E Other The three EAC countries have varying requirements While the Ugandan requirement on closed body trucks is a genuine Ministry of on the type of commercial trucks that should be requirement, it translates into costly transport for goods destined to DRC, Infrastructure used in transit traffic. Uganda for example requires Rwanda and Burundi. Development that transit trucks should have closed bodies to avoid diversion of un-customed goods into the domestic customs territory. 17 TRIPS – Trade Related Intellectual Property Rights Agreement of the WTO 20 Table 6: Specific Official Regulations Affecting Exports WTO Inventory Product Group Government Regulatory Procedure Category Controlling Agency Part II All products; Kenya Customs Requirement for an EAC certificate of C&F However specifically textile Department origin, which does not exist Customs batiks and other textile Classification and products Rules of origin Part II G All products EAC Customs Verification of export/import documents Customs formalities Departments and clearing cargo at borders is done only during day light hours Part II G Tyres, konyagi spirit, Kenya Customs Requirement for physical verification of Customs formalities cigarettes Department imports Part II G All transit products en-route Kenya Customs Requirement for a customs insurance Customs formalities to Uganda, DRC, Rwanda, Department bond on transit goods that pass through Burundi Kenyan roads en-route to Uganda, Rwanda, Burundi and DRC. Part II G All products Malawi and Zambia Import duties applied on 3rd country rates Customs formalities Governments without an preferential treatment to SADC members Part III B All products Uganda and Kenya Requirements to weigh transport trucks Technical regulations Weighbridge on axle load and GVM specifications and standards Departments Part III B Plastics items EAC Bureaus of Requirement by KEBS imports of plastics Technical regulations Standards, specifically articles have to meet Kenyan standards and standards KEBS Part III C All products EAC weighbridge All transport trucks must be weighed at Testing and departments each station even when the seal issued in certification an earlier station has not been tampered arrangements with Part III C all products, and especially Kenya and Uganda Weights and measures assessments Testing and cement Weights and Measures certification Departments arrangements Part VII E All products EAC Immigration Requirement for a valid passport for Other – Passports Departments travel and work permit to work to in any and work permits EAC country Part IV B & C Food items TBS, TFDA, Ministry Testing for chemical residues, diseases, SPS measures; of Health and Tanzania product treatment, conformity Testing, certification Atomic Energy assessments and export certification and other conformity Authority assessment Part VII E All products EAC Customs and Procedures for transit commercial traffic Other – transiting Police Departments procedures Part V G Maize Ministry of Agriculture Requirement for an export permit Export restraints and Food Security Part IV B Maize seed Ministry of Agriculture Phytosanitary certificate Part IV B & C and Food Security SPS measures; Testing, certification and other conformity assessment Part V G Rice Ministry of Agriculture Requirement for an export permit 21 WTO Inventory Product Group Government Regulatory Procedure Category Controlling Agency Export restraints and Food Security Part V G Beans Ministry of Agriculture Requirement for an export permit Export restraints and Food Security Part V G Sugar Ministry of Agriculture Export permit Export restraints and Food Security Part V G Logs and wood products Ministry of Natural Export ban Export restraints Resources and Tourism Part V G Scrap metal Ministry of Industry Export ban Export restraints Trade and Marketing Part V G Jute bags Ministry of Industry Export permit Export restraints Trade and Marketing Part V G Hides and skins Ministry of Industry Export permit Export restraints Trade and Marketing Part V G Mineral products Ministry of Energy and Export permit Export restraints Minerals Part V G Fish and Fishery products Ministry of Natural Export permit Export restraints Resources and Tourism Part V G Animal trophies Ministry of Natural Export permit Export restraints Resources and Tourism Part V G Rhinoceros horns Ministry of Natural Export ban Export restraints Resources and Tourism Part V J&L Cash crops: cotton, coffee, Ministry of Agriculture Permits Export taxes & Other sisal, tea, cashew nuts, and Food Security Agricultural cess tobacco Cooperative levies Part V G Arms and ammunition Ministry of Public Export ban Export restraints Safety and Security Part V G Obscene literature Ministry of Information Export ban Export restraints Culture and Sports Part IV B Livestock Ministry of Livestock SPS certification SPS measures Development Testing, certification and conformity assessment Live animals Ministry of Natural Export permit Resources and Tourism Part IV B Beeswax and honey Ministry of Natural Export permit SPS measures Resources and Tourism Testing, certification and conformity assessment Part V G Dangerous drugs Ministry of Health Export ban Export restraints 22 4.0 NTB MEASURES DIRECTLY AFFECTING IMPORTS 4.1 INVENTORY OF NTBS THAT APPLY TO TANZANIAN IMPORTS During the 2005/06 EAC and 2004 SADC NTBs consultations, it was found out that a number of NTBs exist which directly affect imports into Tanzania. Current consultations indicate that most of these NTBs still exist. The only area where progress has been made is on customs documentation through introduction of ASYCUDA++ at Dar es Salaam Port. However the problem still exists in other entry border points. NTBs on imports can are categorised under the following clusters: 4.1.1 Customs and administrative documentation procedures Examples of NTBs under this cluster include varying systems for imports declaration and payment of applicable duty rates at entry points, limited customs working hours, and cumbersome inspection procedures used by TRISCAN18. 4.1.2 Cumbersome inspection requirements Various NTBs experienced under this cluster include repeated and long inspection queues during inspection of Gross Vehicle Mass and axle loads, faulty weighing equipment at some stations, cumbersome and costly quality inspection procedures. 4.1.3 Police road blocks While this is not sited a very serious obstacle to cross-border EAC and SADC trade currently, police officers still stop commercial vehicles at various inter-country road blocks and at border crossings even where there is no proof that goods being transported are of suspicious nature (for example smuggled goods and drugs, etc). 4.1.4 Congestion at Dar es Salaam Port The use of old equipment like cranes used to offload cargo from delivery vessels has led to serious clogging at the port, lack of warehousing space, slow turn-around time of the vessels and consequently to exorbitant charges for deliveries to Dar es Salaam port and demurrage charges on cargo. 4.2 IMPORT NTB INVENTORIES UNDER THE WTO CATEGORIZATIONS NTBs on imports are categorised under the WTO categorisations tabulated in Table 7 below. 18 TRISCAN has been sub-contracted by Cotecna, which itself is contracted by TRA to undertake pre-shipment inspection on quantity and dutiable value on imports. 23 Table 7: WTO categorization codes on NTBs applicable to Tanzanian imports INVENTORY DESCRIPTION CATEGORY WTO Problem Area Description of the most severe NTBs Impact of NTB to businesses and trade Responsibility/ Inventory Source of NTB Code Part II Customs and Administrative Entry Procedures B Customs TISCAN has been sub-contracted by TRA, to Unnecessary time wasted before an importer can pay applicable TRA – I valuation and undertake inspection on dutiable quantity and duty so as to get the goods cleared and released from customs area Customs Destination value so as to facilitate charging of correct Department Inspection import duties. However, TISCAN sends its preliminary report to Cotecna South Africa for approval before the report can be given to TRA Customs. While the procedure is too cumbersome and time-consuming, it contradicts the overall objective of ASYCUDA++, which is to facilitate clearance of imports based on their degree of risk. D Customs 19 Unnecessary time wasted to clear imports at border stations due to TRA - Customs The ASYCUDA ++ system is operational at Dar formalities and es Salaam International Airport, Dar es Salaam manual processes. Average days to declare imports, classify them, pay Department documentation Customs Service Centre, Dar es Salaam Port, import duty, carry physical verification under Red Channel, clear them Zanzibar, Tanga, Tunduru, Kasulu, Holili. KIA and from customs area, and release them to importer is minimum of 7 days Mwanza. The rest of the stations will be completed at Dar es Salaam International Airport. by July 2007 except five stations i.e. Namanga, Tarakea, Hororo, Sirari and Mtukula, which are scheduled for upgrade in the 2007/2008 financial year 19 ASYCUDA – Automated System of Customs Data. The system has more modules than ASYCUDA 2.7 system, for example has modules for automatic classification of goods into green (for automatic release), yellow (for scanning and thereafter proceed for release or physical verification), or red (for physical verification). The classification depends on the degree of risk of imports. The degree of risk depends on country of origin and whether the importer is known to have engaged in any trade malpractices. Further, the system has a transit module, which means information can be transmitted electronically by customs in exporting to destination country and vice versa. This enables insurance bonds on exports to be cancelled much faster than if the documents regarding an export were to be posted, which is what happens under ASYCUDA 2.7. 24 INVENTORY DESCRIPTION CATEGORY WTO Problem Area Description of the most severe NTBs Impact of NTB to businesses and trade Responsibility/ Inventory Source of NTB Code PART II G Customs The limited customs open hours for verifying 3. Time lost to clear goods at borders since offices are closed at night. TRA - Customs formalities documents and clearing cargo is a hindrance to This has a negative effect on importation of raw materials, and Department efficient importation makes manufacturing in Tanzania uncompetitive. 4. Cost of corruption at border crossings, in efforts to clear goods before close of the day's business B Customs The EA Customs officials sometimes have different Tanzanian importers of raw materials from Kenya sometimes pay higher The EAC Valuation interpretation of tariff lines especially on raw than would be applicable duty rates, which results to higher prices of the Customs materials, which have an implication on duty payable finished product. This makes it impossible for Tanzanian manufactured Departments on imports. This is especially applicable on imports products to compete on an equal footing in the Tanzanian market with from Kenya. equivalent products originating from Kenya and Uganda, on which raw materials have duty exemption. Part III Technical Barriers to Trade PART III A General Many institutions operate at entry points, and may Business time lost at borders during unloading and reloading of cargo – Various bodies demand that cargo be unloaded for physical 24% of all cargo cleared at Tanzanian borders takes more than 1 week to – Customs, verification before clearance to enter the Tanzanian unload for inspection and reload onto delivery trucks Police, market. Inspection bodies e.g. 20 TBS PART III C Testing and EAC and SADC countries have different parameters Differences in parameters translate into Technical Barriers to Trade EAC agencies certification on weights, labelling, quality, and tolerance in (TBT), which are impediments to penetration of Tanzanian. Food items responsible for arrangements measurements, type and technology used in are affected by these requirements The difficulties experience in weights and packaging. These procedures make it difficult for penetrating these markets become a source of frustration, bribery, time measures, and EAC and SADC originating goods to enter into the loss, and theft of goods kept at the borders while awaiting clearance by Standards Tanzanian market. relevant agencies. Bureaux Part IV B&C SPS measures Testing of chemical residue limits, prevalence of The procedures involved in testing and certification lead to time loss TFDA Testing, diseases on plants and food imports, and subsequent Tanzania Atomic certification, certification by TFDA and Tanzania Atomic Energy Energy Authority Authority is a requirement on foods, plants and conformity chemical products prior to importation assessments Part VII Other 20 TBS – Tanzania Bureau of Standards. 25 INVENTORY DESCRIPTION CATEGORY WTO Problem Area Description of the most severe NTBs Impact of NTB to businesses and trade Responsibility/ Inventory Source of NTB Code E Other Many Ugandans and Kenyans do not yet have an Many people (especially small business people) cross borders through Uganda and EAC passports East African passport to facilitate business travel to undesignated routes, which are illegal, and could attract substantial costs Kenya Tanzania. if one is arrested as an immigrant. The lack of the passport restricts Immigration business travel to Tanzania to market and sell their products Departments D Business While the search and registration for a business 1. Time and cost of travelling to Dar es Salaam to pay and obtain a BRELA practices or name can be done online, payment for a business business license. Registration of new businesses takes an average of restrictions in certificate is still done manually, and a new applicant 5 days, but more than 2 weeks for 17% of all new locally based Ministry of the market has to travel to Dar es Salaam to pay and obtain a applications. The procedure could therefore be very time consuming Industry, Trade business certificate from the Attorney General's and expensive to foreign businesses .to open new entities or and Marketing Business Office. Under the new Business Activities Tanzania branches. For example, business registration across the registration Registration Act of January 2007 which repealed the EAC borders takes between 6 days to over 2 weeks Attorney and licensing Business Licensing Act of 1972, all business General's procedures activities in the regions and districts are registered at 2. The requirement by Courts that electronically generated documents Chambers those levels and records of such registrations are cannot be used to register limited companies means one has to then sent to the BRELA registry for records and engage a lawyer for registration of limited companies, which is an control purposes. The new Act has however removed expensive undertaking. the licensing function from the Ministry of Industry, Trade and Marketing and placed on BRELA. 2. Electronically generated documents cannot be used to register limited companies C Distribution There are a multiplicity of fees and charges The previous multiplicity of fees and charges by Local Authorities Local constraints levied by different Local Authorities on the has been a source of frustration to efficient importation since a authorities same business entity, if such a business delivery truck had to pay charges to every local authority distributes its products in different localities. whenever through which it passed en-route to its destination. It is While this practice affects local businesses hoped that the new requirement not to charge business licenses more seriously, it also affects importation will be implemented without delay. from other EAC and SADC countries. A new Business Activities Registration Act was enacted by Parliament in January 2007, which has repealed the Business Licensing Act of 1972. Under the new Act Local Authorities 26 INVENTORY DESCRIPTION CATEGORY WTO Problem Area Description of the most severe NTBs Impact of NTB to businesses and trade Responsibility/ Inventory Source of NTB Code will not charge any fee for business licences. 27 Table 8: Specific official regulations affecting imports WTO Inventory Product Group Government Regulatory Procedure Category Controlling Agency Part II B All products TRA – Customs Destination inspection on dutiable Customs valuation Department quantity before levying of applicable import duties. Part II I Destination Inspection Part II D All products TRA – Customs Assessment of degree of risk and Customs formalities Department consequent classification either under and documentation green, yellow and red channels under ASYCUDA system Part II D All products TRA – Customs Customs office hours are only open during day Customs formalities Department time Part II B Customs All products TRA – Customs Interpretation of tariff descriptions and Valuation Department codes Part III All products TRA Unloading of cargo for physical General TBS verification Police TFDA Part IV B & C Plants, fresh foods, TFDA, TBS Testing for prevalence of diseases, chemical and Tanzania Atomic chemical residue levels pharmaceutical products Energy, Ministry of Agriculture and Food Security Part III C All products Weights and Measures Assessment of weights and measures Testing and Agency parameters such as weights, labelling, quality, certification tolerance in measurements, type and technology used in packaging. arrangements Part VII All products Immigration Requirement for passports, work permits Other - EAC Department and visas21 passports Part D All products BRELA Business registration Business practices or restrictions in the Ministry of Industry, Licensing market Trade and Marketing Attorney General Chambers Part VII C All products Local Authorities Payment of local authorities fees and Distribution charges constraints Part II G All products TRA - Customs Customs documentation and procedures Customs formalities Department Part II H Agricultural products like TRA - Customs Import licenses/ permits Import licensing tea, coffee, tobacco and Department tobacco products 21 Visas apply for Mozambique and South African citizens 28 5.0 KEY ISSUES FOM INTERVIEWS AND RESEARCH 5.1 FOCAL POINT FOR REPORTING NTBS To ensure that NTB complaints are reported, monitored and actions taken without delay, businesses through their membership organizations (CTI22 and TCCIA23) have re-affirmed that the institutional mechanism agreed during the 2005/06 EAC NTBs consultations should be applied without further delay. This mechanism should also be applied to report and facilitate elimination of NTBs experienced on intra-SADC trade. At the time of endorsing the EAC mechanism in early 2006, it had been agreed that the EAC ministries responsible for EAC matters would coordinate its application. However, the Tanzania NTBs Monitoring Committee has not convened an inaugural meeting to-date. In the course of current consultations, it emerged that the said meetings have been delayed by lack of secretariat capacity to coordinate issues related to NTBs. The same sentiments have been expressed in Kenya and Uganda, where the business community propose for a "super mechanism" to track existence of NTBs and facilitate their elimination. It would therefore seem that for the Monitoring Committees to be effective, their secretariat capacities need to be built up, probably through technical support by development partners. The NTBs Monitoring Committee Structure that should be used to report on existence of NTBs and facilitate their elimination for EAC and SADC countries is given under chart 1 below. 22 CTI – Confederation of Tanzania Industries 23 TCCIA – Tanzania Chamber of Commerce, Industry and Agriculture 29 Chart 1 Institutional framework for reporting, facilitating elimination and feedback on NTBs Businesses Confederation of Tanzania Industries Tanzania Chamber of Commerce, Industry and Agriculture Tanzania National Monitoring Committee Line ministry or agency responsible for taking action on an NTB EABC EAC and SADC Secretariats Equivalent regional SADC business association EAC and SADC Sectoral Committee on Trade, Industry and Investment The EAC and SADC Co-ordination Committees (Permanent Secretaries of EA & SADC Affairs EAC Council of Ministers EAC & SADC Trade SADC Council of Ministers Remedies Committee Reporting Feedback Liaison 30 5.2 MEMBERSHIP TO NATIONAL MONITORING COMMITTEE - THE NTBS FOCAL POINT During consultations on the EAC NTBs Monitoring Mechanism, it had been agreed that heads of key institutions involved in trade matters would constitute membership of the National Monitoring Committees. In the course of current consultations, stakeholder proposed that membership of the Tanzania Monitoring Committee should be constituted of persons listed under Table 10 below. This membership should also be adopted to facilitate NTBs reporting and elimination for intra-SADC trade. Table 10: Membership of Tanzania NTBs Monitoring Committee No Member and institution No Member and institution 1 Permanent Secretary 15 Chief Executive Ministry Industry, Trade and Marketing Tanzania Food and Drugs Authority 2 Permanent Secretary 16 Chief Executive Officer Ministry of East African Community Weights and Measures Agency 3 Commissioner General 17 Chief Executive Tanzania Revenue Authority Confederation of Tanzania Industries 4 Commissioner of Customs and Excise 18 Chief Executive Tanzania Freight Forwarders Association 5 Commissioner of VAT 19 Chief Executive Tanzania Chamber of Commerce, Industry and Agriculture 6 Chief Executive 20 Director General Tanzania National Roads Agency Board of External Trade (Tanroads) 7 Executive Director 21 Managing Director of a manufacturing company with Tanzania Bureau of Standards substantial exports to the other 2 EAC countries 8 Chief Executive Tanzania Ports 22 Town Clerk of relevant local authority Authority 9 Chief Executive 23 Permanent Secretary Ministry of Finance Tanzania Railways 10 Commissioner of Police 24 Permanent Secretary Ministry of Foreign Affairs 11 Executive Director Private Sector 25 Permanent Secretary Ministry of Agriculture and Food Foundation Security 12 Faculty of Commerce and Management, 26 College of Business Education University of Dar es Salaam 13 Tanzania Farmers Association 27 Permanent Secretary, Ministry of Natural Resources and Tourism 14 Surface, Marine Transport Regulatory Authority (SUMATRA) 31 5.3 INSTITUTIONAL RESPONSIBILITIES FOR REPORTING NTBS AND MONITORING THEIR ELIMINATION 5.3.1 Businesses Responsibilities of businesses will be to identify existence of NTBs and report to their membership business associations, chambers of commerce, transporters associations, or clearing and forwarding associations. They will also monitor whether actions planned by line ministries and agencies responsible for enforcement are being implemented. 5.3.2 Business Associations/ Chambers of Commerce, Clearing and Forwarding Associations The responsibilities of business associations, chambers of commerce, transporters associations, and clearing and forwarding associations will be to: a. Receive NTB complaints. b. Where possible verify with relevant ministries about the genuineness of cases reported (e.g. by drivers), and whether applied regulations, procedures and practices are backed by law. c. Prepare reports on reported cases and forward them to the NMC members, line ministry in charge of EAC and SADC matters and the EAC and SADC secretariats for action and elimination. d. Built a database on reported NTBs. e. Act as watchdogs on the progress of eliminating NTBs. f. Follow-up on progress achieved in eliminating or minimizing NTBs at NMC meetings. g. Inform their members on the progress made to resolve NTBs at national and regional level. 5.3.3 Line ministry or agency responsible for enforcing an NTB The responsibilities of the line ministry or agency responsible for enforcing an NTB will be to: a. Receive NTBs complaints from individual businesses, business associations and chambers of commerce. b. Verify the genuineness of reported cases, review the justification for the enforcing the applicable law, regulation or procedure, and whether such laws, regulation or procedure contravenes any EAC, SADC or international requirements (for example WTO agreements). c. Prepare quarterly reports on reported NTBs, actions taken, and table them to NMC meetings. 32 5.3.4 National Monitoring Committees on NTBs (NMCs) The NMC will be the national Focal Point of the EAC/SADC Trade Industry and Investment Committees (TICC). It will only focus on NTBs that hinder the free flow of trade in goods and services, and persons that accompany such goods within the EAC and SADC Partner States. It will act as the watchdog in monitoring the progress of eliminating NTBs experienced at the national, EAC and SADC levels. It will hold quarterly meetings to receive such reports and make necessary decisions, and will be hosted by the line ministry in charge of EAC and/or SADC matters. Its functions will be coordinated b a secretariat, including quarterly meetings, verification of NTB cases, monitoring progress of rectifying NTBs and reporting to EAC/SADC secretariats. The specific Terms of Reference for the NMC will be to: a. Receive copies of NTB cases that have been sent by business associations, chambers of commerce, transporters associations, clearing and forwarding associations and individual business people to the line ministry or agency responsible for enforcing a Non-Tariff-Measure (NTM) that ends up as an NTB. b. Receive a plan for rectifying such an NTM including the proposed timeframe. c. Monitor progress of implementing proposed NTB actions. d. Discuss whether actions taken by the line ministry or agency responsible for enforcement are sufficient. e. Initiate bilateral discussions with counterpart NMCs in the other two EA and SADC Partner States regarding NTB cases that are of a cross-border nature, and initiate an elimination process. Where necessary, equivalent agencies (such as Bureaux of Standards, Customs, etc) responsible for enforcing trade regulations will be brought together to negotiate a harmonization process, if the NTB in question is in form of varying trade requirements between EAC and SADC states. Bilateral dispute resolution will always be used before any NTB cases are referred to the EAC and SADC Secretariats for policy action. f. Forward reports to the EAC and SADC Secretariats on national actions taken by line ministry or agency responsible for taking an NTB action for information and onward dissemination to other relevant NMCs. g. Disseminate information to the business associations, chambers of commerce, transporters associations, and clearing and forwarding associations for feedback to the business community on actions taken on reported NTBs. h. Refer cases to EAC and SADC Secretariats, where no satisfactory solution in form of a planned review, amendment or withdrawal has been proposed by the agency responsible for enforcing an NTB within one calendar month from the date of reporting. The Secretariats will thereafter initiate a dispute resolution process through the respective Trade, Industry and Investment Committee (TIIC). NTB cases that cannot be resolved by the TIIC will be forwarded to the Trade Remedies Committee for dispute resolution. i. Hold an annual regional forum where members can share experiences on the NTBs elimination process, review achievements made, challenges faced and necessary initiatives for improving the efficiency of the Monitoring Mechanism. 33 5.3.5 EAC and SADC Secretariats The EAC and SADC Secretariats will: a. Receive quarterly progress reports from NMCs on resolved and unresolved cases. b. Prepare progress reports for the respective TIIC and Co-ordination Committee for information on resolved cases. c. Monitor actual practices at major exit/ entry points. d. Initiate dispute resolution by the TIIC and Trade Remedies Committee on cases that have not been resolved at the national level or through bilateral discussions at the regional level. e. Facilitate an annual verification of actual practices by TIIC. 5.3.6 The Trade, Industry and Investment Committee This is a key Committee in the cross-border NTBs elimination process. Its responsibilities will be to: a. Prepare a comprehensive implementation program and priorities relevant to cross-border NTBs elimination. b. Monitor and constantly review implementation of planned NTBs elimination process. c. Submit reports and recommendations to the Co-ordination Committee on implementation of NTBs. d. Undertake annual verification of actual practices at border points where NTBs are practiced. 5.3.7 The Co-ordination Committee The Co-ordination Committee (Permanent Secretaries level) will be involved in monitoring progress of NTBs elimination as part of its mandate on trade promotion under the EAC and SADC Treaties. Its specific responsibilities will include: a. Submitting reports and recommendations to the Council of Ministers regarding implementation NTBs elimination. b. Coordinating implementation of NTB decisions made by the Council. c. Directing investigations on specific NTB cases that remain unresolved. d. Referring any cases that cannot be resolved by the TIIC to the Council of Ministers for policy guidance. If resolutions cannot be agreed at the council's level, the cases will be forwarded to the EAC and/or SADC Trade Remedies Committee (EACTR), whose decisions on trade disputes will be final. 34 5.3.8 East African Business Council and equivalent SADC business association The responsibilities of EABC and its equivalent SADC association will be to: a. Disseminate information on NTBs elimination progress to business people through their websites. b. Undertake an annual Business Climate Index (BCI) Survey for the region. The results will indicate whether the business climate is improving and whether new initiatives are required to deal with NTBs. c. Convene an annual regional NMC forum so as to share experiences on NTBs elimination process. 5.4 TEMPLATE FOR NTBs ELIMINATION Consultations with the business community through their umbrella organisations (Confederation of Tanzania Industries, and Tanzania Chamber of Commerce, Industry and Agriculture) and the Ministries of Industry Trade and Marketing, and East African Community show that a structured approach to reporting, monitoring, and facilitating elimination of NTBs is still preferred. For NTBs that cannot be resolved at the national level, they should be referred to the regional organs to initiate the elimination process. Also, a feedback mechanism should be applied to inform the business community of NTBs that have been resolved so that they are regularly updated on importation and exportation regulations and requirements. The EAC NTBs reporting, monitoring and elimination mechanism that was endorsed in early 2006 was therefore endorsed and should be applied without delay. The same format should also be used to report NTBs applicable on Tanzania exports and imports within SADC region. The tabulation of the Tanzania NTBs reporting, monitoring and elimination mechanism is given in Table 9 below. 35 Table 9: Tanzania NTBs reporting and elimination mechanism 36 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code Part II D Customs The newly introduced On average, declaration of Customs Introduce ASYCUDA++ ASYCUDA++ Annual Insufficient Sufficient documentat ASYCUDA ++ system is imports, assessment of Department at all major import entry operational at all reports by financial government ion and only operational in Dar es classification of goods and points, by end of 200724as import entry Customs on resources to roll resource administrati Salaam International import duty payable, physical planned so as to reduce points, so as to average out allocations to ve Airport, which means that verification of goods where time taken from imports reduce time taken clearance ASYCUDA++ at enable rolling out procedures at other import entry applicable, payment of dutiable declaration to release of on imports to 6 time at entry all import entry of ASYCUDA points, delays are value, and release of goods goods. hours. points. points. ++ at all import experienced in declaring from the customs area takes an entry points and clearing imports average of 7 days at Dar es Continue with current Substantial EAC BCI Lack of efficient using ASYCUDA 2.7 Salaam International Airport, initiatives of recruiting reduction in 2006/07 to railway system. Timely system. two weeks at Dar es Salaam new staff so as to transport time and report on orientation and port, and 1 day at other major increase efficiency in cost, using the time and cost sensitization of Tanzania Freight import entry points. customs clearance. most efficient and comparisons customs officials Forwarders Association is Consequently, it costs US$ cost effective between and clearing also of the opinion that 6,500 to transport a 14 foot Continue with ongoing transport system; 2004 & 2006 agents on Tanzania Customs needs container load of cargo from initiative of compulsory Target reduction for operations of to move to the higher Dar es Salaam to Kampala, customer services of transport time transporting new system27. ASYCUDA WORLD which is double the cost for training in customs from 7 day to 3 cargo which has more transporting similar cargo from training programs days, and between Dar Simplified modules than ASYCUDA New Jersey to Dar es Salaam, a transport cost and Kampala customs ++ journey that takes an average Using the comparison of from US$ 6,500 procedures by of 18 days. time taken and cost Dar-Kampala to upgrade imports incurred to transport a 14- not more than 3 clearance to foot container from Dar to days, and from ASYCUDA ++ Kampala (7 days at US$ US$ 6,500 to a 6,500), with transport much smaller Timely from New Jersey to Dar amount for a 14- communication (18 days at about US$ 25 with border foot container . 3,200), target a reduction officials whenever of time from Dar to Target imports areas of customs Kampala to 3 days and clearance from harmonisation are cost to about US$ 1,600, current average of agreed by the by using the most efficient 17.5 days to Council of and cost effective Latvia's 1.2 days, Ministers. transport system. the best world case 26 Modernisation of Ensure efficient country . railway system, to 24 TRA has already started the process of upgrading to ASYCUDA ++. So far, stations upgraded include Dar es Salaam Customs Service Centre, Dar es Salaam Port, Zanzibar, Tanga, Tunduma, Kasulu, Holili, KIA and Mwanza. The remaining stations are scheduled to be completely upgraded by July 2007. Namanga, Tarakea, Hororo, Sirari and Mtukula stations will be upgraded in the next financial year. 25 If a 14-foot container takes 18 days from New Jersey to Dar at about US$ 3,200, then one day should cost about US$ 180, which means 3 days target to transport a similar container from Dar to Kampala could cost much less than the current US$ 6,500, if transported by rail instead of by road – which is the current transport mode used. 26 Comparisons on average number of days to clear customs for various countries of the world are given in the World Development 2005 report of the World Bank. 27 At the moment TRA is planning to add a web based module to ASYCUDA ++ and to include it in the training modules for courses run at its College for all clearing and forwarding agents 37 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code communication with enable change officials at import entry from road to rail points whenever areas of transport customs harmonisation are agreed by the Council (e.g. customs procedures/ taxes) 38 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code Part II While Tanzania and Customs Tanzania has a The three The initiative by Uganda to Importers fully Publication Customs Tanzania Sensitise Customs C&G Uganda have both contention that ASYCUDA EAC test an interface for sensitised on on how the could regard fears officials on introduced the and Simba systems are not Customs intercommunicating operations of Simba and by businessmen as usefulness of the ASYCUDA++ system, compatible although both are Departments between the two systems is ASYCUDA ++ ASYCUDA unfounded and publication in Kenya has decided to web based This could affect commendable and needs to and Simba systems therefore does not facilitating implement the Simba sharing of information between be finalized soonest in systems work and warrant spending compliance by system. the EA Customs, and has order for the EAC share on a publication importers, and possibility of disrupting the countries to agree on the information on how the faster importation efficient implementation of the way forward regarding online systems operate of raw materials EA Customs Union, since if sharing of web-based for manufacturing online sharing of customs customs information information is not possible, imports/ exports cannot be cleared online. Consequently this would delay duty payment and clearance of imports, since importers have to wait for import documents28 to arrive before lodging them for declaration and import clearance. Also, in case of imports from Kenya, relevant insurance bonds cannot be cancelled until the exports leave the Kenya customs territory, which ties up the exporter's working capital, and may end up delaying an intended import. There is a lot of shuttling Time lost travelling to Dar es TRA TBS should open a Business time in between the Port of Dar Salaam and in chasing Dar Port sub-office at Dar es documentation es Salaam and clearance documents between Salaam port and introduce and impost TBS to certify acceptance TBS and Dar Port a similar service in urban clearance reduced of specified products. centres such as Mwanza, substantially Kigoma, Mbeya, Mtwara, Tanga and Arusha) The lodgement module of Time lost to clear goods at Tanzania Respect and immediate Border crossings Report by Lack of "service 1. Orientation ASYCUDA ++ is borders Customs implementation of open 24 hours per Customs on attitude" by of customs available 24 hours and Department Council decision to day operating customs officers to installed with clearing Cost of corruption at border operate customs on 24- hours officers, which view and forwarding agents crossings, in efforts to clear hour basis at borders by may not view a customs as a who have the facilities to goods before close of the day's 1st quarter 200629. 24 hours business accommodate its business operation as service application. However, the Finalise the ongoing necessary institution limited customs open joint effort at the 2. Increase hours for verifying Namanga and Sirari Insufficient number of documents and clearing stations to use only one number of customs 39 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code Part II In some instances, Kenya The problem is mostly Kenyan Customs Authorities in Immediate Regular Resistance to EA Customs C&F Customs demands that experienced by small-scale Customs each partner state need domestication of verification implement Departments Tanzanian exporters exporters of batiks and other Officials at to communicate to harmonised laws on actual harmonised need to introduce wishing to penetrate the textile products, who are denied border border officials on once decisions are practices at laws since rent- penalty measures Kenyan market have to access to the Kenyan market points, decisions of the Council, made by EAC borders by seeking on errant officials produce an EA certificate through Namanga and Lunga mostly so that harmonised laws Council of EAC opportunities who do not of origin, or alternatively Lunga border points. Namanga are implemented without Ministers Secretariat. will be lost. implement an international certificate and Lunga delay. Council of origin. An EA certificate Lunga Decisions of origin does not exist yet, since the EA countries are using the COMESA Certificate of Origin until they develop their own. Part II The EA Customs officials Tanzanian importers of raw The EAC Customs Officials at Customs officials Quarterly Lack of resources, Sufficient B&C sometimes have different materials from Kenya Customs borders need to be from any two EA reports to since the joint allocation of interpretation of tariff lines sometimes pay higher than Department sensitised properly on countries that share the Council sharing of offices resources under especially on raw applicable duty rates, which s tariff coding so that they a border entry/ exit on border proposal may an itemised materials, which have an results to higher prices of the can classify products in point to be housed stations with entail building "joint EAC implication on duty finished product. This makes it the correct tariff lines. in the same joint sharing new customs projects budget". payable by importers if impossible for the finished building, so that of customs office blocks at such materials originate products to compete on an Publish an EA Gazette interpretations of offices. borders points. from Kenya. equal footing in the Tanzanian on the Intra EAC tariffs tariff lines can be market, with equivalent and CET to enable agreed face to face. products originating from similar interpretations of Kenya and Uganda, on which tariff codes and rates. The pilot customs raw materials have duty office at Malaba exemption. which jointly houses officials from Kenya and Uganda should be replicated at all EAC border stations. Part II G On a number of occasions, Cost of repackaging and time Kenya A joint investment in Consensus on a A joint Lack of The project could Kenyan Customs demands lost during unloading, physical Customs scanners by Kenya and joint scanner report by sufficient be budgeted under that products originating verification and reloading. Department Tanzania customs project between Kenyan and resources to the EAC budget, from Tanzania have to be departments in the major Kenya and Tanzania invest in the to enable timely unloaded for physical border points. Prior Tanzania customs Revenue proposed joint .sourcing for verification, which means assessment of type of departments, and Authorities project between funds from the destruction of the product scanner required before assessment report to the Kenya and development 28 Import documents include exporter's invoice and bill of lading, which are either posted or delivered by the transporters. 29 TRA is actually considering undertaking a feasibility study to facilitate opening up the borders station on 24 hour. The study will take into the cost involved, facilities to accommodate the required number of staff to run 24 hr services, and the amount of traffic involved. This will enable a decision to be made on which border stations merit a 24 hr service. 40 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code packages. The exporter has procurement is prior to any Council of Tanzania partners. thereafter to repackage at necessary to avoid investment. Ministers customs own cost, since the investment in "white departments. importer may have ordered elephants". goods in specified packages. Products most affected include tyres, textiles, konyagi spirit, and cigarettes. Part II G SADC Trade protocol Some SADC members have not Malawi and Deposit trade SADC secretariat SAD report Malawi and Fear of customs ratified the SADC trade Zambia instruments with SADC report on on Zambia revenue loss by protocol, which means SADC Governments secretariat and ratify ratification of trade ratification central Governments preferential tariffs cannot be trade protocol protocol of trade governments ofshould carry an applied on goods originating protocol Zambia and impact assessment from member countries, Malawi of ratifying the Tanzania included trade protocol Part VIIG Police Police officers stop Police checks are a source of Police Introduce scanners at Future police Daily records Lack of Central checks at commercial vehicles at rent-seeking opportunities Department major border points, checks to use on vehicles resources to Government boarder various border crossings, while precious time is wasted using the example of Dar scanners or sniffer inspected at introduce or allocation of crossings while officially, they are on pretence that verification of Port, where scanners dogs on suspected border purchase sniffer sufficient and road only supposed to stop goods is being done. On have increased clearance commercial points, 31 resources for dogs or blocks vehicles based on proof average, 12% of all police from previous 60 to 20 vehicles, while methods scanners at sniffer dogs or that goods being checks at border crossings take containers per day. Also, tracking system to used and border points, scanners as a transported are suspicious over 1 hour introduce sniffer dogs for be used for transit reasons for and tracking major long term (e.g. that vehicle exceeds vehicles suspected to be trucks inspection system for investment at allowed axle load, goods involved in trade transit traffic. major border are smuggled, vehicle is malpractices, and points and carrying drugs or other tracking system for Resistance by tracking gadgets dangerous products like transit vehicles. police to for transit trucks arms, documentation implement does not conform to Introduce heavy financial scanners due to Keep up war on goods being transported, and other penalties for fear of loss or insecurity, etc) transporters involved in rent-seeking especially at trade malpractices (e.g. opportunities. borders withdrawal of driving license). Police checks Keep up war on are often anti-corruption Introduce clearly laid justified for down procedures on security reasons. which police checks are undertaken at border points for commercial vehicles and inform businesspeople accordingly. 41 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code 30 Introduce EAPCCO motor vehicle clearance certificate for vehicles crossing borders in each EAC country, and enforce the carrying of the certificate by all drivers so as to facilitate faster movement of goods across EAC borders. Part VIIE Kenyan police stop Police checks are a source of Police Apply same measures as Use same Same Same Apply same Tanzanian originating rent-seeking opportunities 2.1 above for road benchmark as 2.1 records as bottlenecks as solutions as 2.1 commercial vehicles at while precious time is wasted blocks in the three EAC above and report 2.1 above 2.1 above above on pretence that verification of countries. This requires on progress of and a joint various road blocks, goods is being done. harmonisation of police harmonisation to report by instead of stops based checks within EAC. the EAC Council EAC on proof that goods of Ministers Police being transported are Chiefs to suspicious – ref above. Council of Consequently, police Ministers checks in Kenya hinder access to the Kenyan market by Tanzanian originating goods. 30 EAPCCO – EA Police Chiefs Cooperative Organisation, in which comprises of 9 states of Eastern Africa are members, including the 3 EA countries. Major transporters are also part of the organization. 31 One sniffer dog costs an average of US$ 50,000, same cost as a scanner. 42 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code Part IIB Transiting Differences in axle load Cost of possible financial Kenya Harmonise EAC axle Harmonised axle A joint Ideological Council should procedures 32 penalties if the vehicles exceeds Weighbridge load and GVM load limits and quarterly differences give direction on and GVM amongst EAC on exports countries mean that the specified axle load limits or Department, specifications, either GVM report by among EAC whether to Tanzania trucks transiting GVM. Also, cost of hiring Roads under COMESA or specifications EAC countries on harmonise under additional trucks if excess load is Department 33 Departments whether to COMESA or through Kenyan roads en- SADC specifications . route to Uganda have to stripped to required weight. in Uganda , responsible harmonise axle SADC strip off excess cargo so as and for load limits and to avoid financial penalties Tanroads in weighbridges GVM either for overloading. Tanzania to EAC under COMESA Sometimes, this may mean Council on or SADC hiring of additional trucks progress of specifications to transport the stripped- harmonising may delay the excess weight axle load and harmonisation GVM process. specifications and cargo weighing procedures Part II G Unnecessary time lost to Business time lost at borders – Various Establish common Unloading and Daily records Cost of Sufficient unload and reload cargo 24% of all cargo cleared at bodies – clearance business reloading time on cargo establishing budgetary during physical borders takes more than 1 Customs, centres at major border reduced to unloaded/ joint business allocation by verification; and too week to unload for inspection Police, stations, since the minimum 1 day reloaded; & a centres at border EAC many agencies involved Inspection Council has already for all cargo, from quarterly stations. Governments in verification of imports. bodies (e.g. reached a decision on the current average of report by for joint 34 matter. more than 1 week inspection Cost of business centres TBS ) for 24% of goods agencies mechanised Introduce mechanised where physical regarding unloading & unloading/ reloading of verification takes progress in reloading cargo place, since joint o Resistance verification by verification to establish In future, undertake exit/ entry of export/ joint inspection on samples inspection import cargo. operations but not 100% inspection agencies will be by various carried out jointly. officers who benefit from manual unloading through rent- seeking practices 32 GVM means Gross Vehicle Mass. 33 The harmonisation should be guided by the targeted size of the potential market within COMESA or SADC, i.e. which trade bloc has the biggest potential market for EAC countries, is it COMESA or SADC? 34 TBS – Tanzania Bureau of Standards. 43 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code Party II G Kenyan customs often The insurance bond ties up Kenya The EA Revenue A consensus to A joint Kenya Revenue The VAT demand for a customs business working capital. Customs Authorities need to waive the report by Authority may element that insurance bond on transit Department/ dialogue and find a insurance bond on EAC resist waiving would be goods destined to Uganda, Kenya practical way of waiving transit goods Revenue the bond, due to affected needs a Rwanda, Burundi, or DRC, Revenue the insurance bond if the between EAC Authorities potential danger practical way to which costs about US$ 200 Authority goods are on transit to Revenue to the that goods on deal with, while for a 20 foot container. neighbouring countries, Authorities Council transit may be still pursuing the since there are no diverted into the objective of implications on customs Kenyan market, waiving the duty revenue. However, which would insurance bond. such a mechanism should have ensure the goods are not implications on diverted into the Kenyan VAT revenue. market or other transiting country since there are implications on VAT revenue. Businessmen allege that This denies Tanzania It is not The Kenyan EAC desk A report to the Report by Kenyan The Council Part VIIE goods originating from transporters the opportunity to clear which needs to verify the Council on reasons Kenyan transporters should resist any Tanzania and destined to undertake long distance transit is the genuineness of this why the EAC desk may resist pressure to delay Uganda or vice versa and transport, and also denies responsible allegation and require a requirement is to Council requirement that the EAC which use Kenyan roads Tanzanian exporters and agency in satisfactory answer on practiced. any EAC integration must be transported using importers the chance to choose Kenya that reasons for insisting on transporters can process. Kenyan trucks during their own transporters, based on requires this the requirement. EAC undertake transit through Kenya. cost of freight and efficiency in practice. should be viewed as one transit transport delivery. territory after coming through Kenyan into force of the roads for fear of Customs Union. potential business loss. 44 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code Part II Quality Exports go through Exporters of food products TBS, Quality inspection bodies Harmonised A joint Disagreements The Central B&C inspection unnecessary, onerous and incur a lot of costs, and are TFDA, should collaborate in inspection EAC may arise as to Government procedures costly documentation forced to spend a lot of TAEA, issuance of the various procedures among publication which body to needs to offer procedures, since the TBS, unnecessary business time Ministry of inspection certificates by the inspection on designate the guidance on the 35 during the certification process Health designating one of them agencies and a inspection responsibility harmonisation of TFDA , Ministry of Health and Tanzania (for example, Tsh. 30,000 is to issue one certificate designated agency procedures of issuing the inspection Atomic Energy Authority payable for quality inspection covering all inspection to issue the available to inspection requirements and each have to issue export certificate TBS, Tsh. 30,000 to requirements. inspection exporters certificate. designate of one certification on every 40,000 for radiation certificate covering of food agency to issue export consignment, a certificate, Tsh. 30,000 for Exporters who have a all requirements on products the export function that could be health certificate. In total, a credible export history behalf of others and the certificate. carried out by one body in food products' exporter spends should not be required to responsible consultation with the not less than Tsh. 200,000 on undergo through the agency others. every export consignment. In inspection procedures on addition, exporters experience every export consignment a lot of frustration having to before issuance of the repeat the same documentation necessary certificates, but on each export consignment their products should be since any previous export is stamped as certified not recognised as a reference automatically. However, of good quality practice. occasionally, they could be inspected by the relevant agencies just to confirm that good manufacturing practices are used. Government inspection/ The transhipment levy is too TBS, TFDA Inspection companies Payment for Report by Resistance by Future import Part IIIC regulatory Agencies e.g. high, and companies should charge a nominal import inspection TBS and TBS and TFDA inspection TBS & TFDA levy sometimes end up paying as specific amount per based on a TFDA on to amend the charged on the Charges on transhipment high as Tsh. consignment and not on shipment and not amendment inspection shipment as companies based on 400,000 or more. This means value of cargo on import value of charge opposed to percentage value of the higher the value of the inspection procedures due current charge on imported items. import items the higher the fee, charges to fear of import value which has to be passed on to revenue loss consumers, making Tanzanian goods uncompetitive. Too much time lost Time lost during pre-inspection TBS/ KEBS EAC Standards Bureaux Immediate Monthly 1. The EA The Council of during cross-border pre- of export cargo destined to should mutually recognition by EA reports of Standards Ministers should shipment inspection and Kenya, while KEBS also recognise each other's Standards EA Bureaux monitor through certification for Kenyan undertakes either sampled and in certification marks for Bureaux of each Standards may insist the Secretariat, bound cargo some cases 100% inspection products where standards other's that are on that any EA before goods are allowed into have been harmonised, certification mutually undertaking harmonised the Kenyan market, instead of without undertaking marks for recognised, continued procedures are recognising TBS certification 100% inspection, as this products where those inspection respected, mark on goods originating from was the main objective standards have where of imports implemented and Tanzania. The process of 36 been harmonised sampled or as the consistently of the SQMT Protocol 45 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code Part III C In July 2005, after the Although the quality inspection KEBS Any future trade A decision by Council Resistance by EAC phase out of Pre-shipment by KEBS has now been waived requirements should go EAC Council that guidelines enforcement Governments Programme in Kenya, the for imports originating from through a process of any new trade on process agencies, which goodwill to the Kenya Bureau of EAC states, it had been tripartite discussions and requirements of may regard integration Standards introduced a introduced without tripartite consensus since EAC is should go through introducing requirement as process by new import inspection consultations with the other now one customs territory. tripartite trade taking away directing procedure that was found EAC Standards Bureaux, while discussions, requirement their authority enforcement to be difficult and in the Customs Union any trade consensus and s by any as enshrined in agencies to expensive to implement, requirements should involve approval by EAC partner national laws. respect Council requiring that imports will tripartite discussions and Council state guidelines. only be allowed into the consensus. The requirement had country if accompanied led to confusion among by a quality inspection Tanzanian exporters and certificate from an suspicion the Kenya is not a internationally accredited serious trade partner. laboratory37. Some regional buyers do Lost business opportunities to Ministry of Tanzanian products Reports by Changing Proper not accept quality Tanzania businesses Industry, Trade and accepted by manufacture biased opinions sensitisation of assurance certificates Marketing to coordinate regional buyers rs on sales of regional regional buyers to issued by regional bodies efforts sensitise relevant turnover to buyers that accept products like TBS. They instead authorities in Uganda, various locally made certified by TBS. insist on certification of Kenya, SADC and markets products are of Sufficient products by regional buyers accept inferior quality budgetary internationally accredited TBS certified products allocation needs organisations to be made by Central government for this activity Part IIIC EAC countries in some Differences in parameters EAC Finalise the EAC SQMT SQMT Bill Quarterly Domestication The Council to instances have different translate into Technical Barriers agencies Bill, and thereafter finalised and reports to of the SQMT give priority to parameters on weights, to Trade (TBT), which are responsible domesticate it in each domesticated into Council on into national finalisation of the labelling, quality, tolerance impediments to penetration of for weights EAC country without the laws of each progress of laws may be SQMT Bill in measurements, type and Kenyan and Ugandan markets and delay, so that issues partner state finalising delayed by technology used in for Tanzanian products in some measures, related to TBT can be and differences in A plan by EAC packaging, which makes instances (for example cement). and harmonised. domesticatin calendars of Secretariat to entry of Tanzanian The difficulties experienced in Standards g the SQMT national domesticate the originating goods difficult penetrating these markets Bureaux Bill parliaments, Bill once in the other two EA become a source of frustration, while finalised countries and vice versa. bribery, time loss, and theft of enforcement of goods kept by traders at the harmonised borders while awaiting clearance practices may 35 TFDA – Tanzania Food and Drugs Authority 36 SQMT – Standardization, Quality Assurance, Metrology and Testing 37 While an agreement has been reached regarding the application of PVOC for EAC originating goods, its application needs to be monitored to ensure it does not disrupt imports from the other 2 EAC countries. 46 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code by relevant agencies. not get entrenched as fast as planned in the SQMT Bill, due to entrenchment of practices that cut across many government organisations/ bodies Part VIIE Immigrat Clearance of travel The requirement to fill exit/ Immigration Optimise immigration Average time for Annual Resistance by Sensitize ion documents through entry forms even at entry/ exit Department procedures by removing crossing EA Business Immigration immigration procedur immigration involves stations where scanning of requirement to fill borders for East Climate Department to officials on es at cumbersome procedures, passports is used seems a entry/exit forms in exit/ Africans reduced to Index Survey phase out exit & essence of time to border with a requirement to fill duplicated function, since the entry points where not more than 15 report by entry forms business people crossings exit/ entry forms even scanning should give computerised scanning of minutes at all entry/ EABC on and on efficiency where scanning of automatically record passports is already exit points time taken of using only passports is undertaken. information on the travellers. operational and computerised The current duplicated function procedures scanning of travel means unnecessary time spent Make the immigration for crossing documents to at border crossings. Currently, counters for East Africans borders record travellers' on average, 12% of border more efficient by data. crossings by Tanzanians take increasing the number of more than 1 hour. officials manning them, Government and enhance their training budget allocations on use of the scanners, so for introduction of as to increase efficiency. passport scanners at all entry/ exit points. Part IIE Many East Africans do Many people (especially small Immigration Immigration Departments Illegal immigrants Monthly Time to design Sufficient not yet have an East business people) cross borders Departments should speed up issuance reduced to bare reports by new application resource African passport, while through undesignated routes, in the three of the EA passport by minimum Immigration forms for an allocation by EAC even for those who have which is illegal, and could East African simplifying the Departments East African governments for it, the Immigration attract substantial costs if one countries application procedures, on number of passport issuance of EA Departments still insist on is arrested as an immigrant minimising application EA passports passport stamping it at every exit fees, decentralising the issued. or entry issuance process to major urban areas, and sensitising the citizens on the passport's existence. Further, the requirement to stamp the passport at every entry/ exit should be removed, by 47 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code respecting the Council's decision to issue an automatic 6 months multiple entry visas and pass without delay. In the long run, EAC partner states should accept the national identity card as a valid document for crossing borders, once issuance of identity cards in Uganda and Tanzania is completed. 48 1 2 3 4 5 6 7 8 9 10 NTB Problem Description of the most Impact of NTB to businesses Responsible Possible approach to Performance Means of Constraints Success factor Inventory Area severe NTBs Ministry/ eliminate NTB Benchmarks Verification under Department WTO code Part IVD Business While the search and Time and cost of travelling to BRELA, Streamline business name Business name Half year Resistance by Sufficient Central registration registration for a business Dar es Salaam to pay and Ministry of search and registration, search, reports by officials at Government & name can be done online, obtain a business license Commerce payment and issuance of registration, BRELA on various agencies allocation of licensing payment for a business Registration of new businesses and Industry, business certificate, payment of harmonised currently financial procedures certificate is still manual, takes an average of 5 days, but Attorney licensing and related local business procedures responsible for resources for and a new applicant has to more than 2 weeks for 17% of General's authorities' charges under certificate, for business business comprehensive travel to Dar es Salaam to all new applications. Chambers, BRELA licensing and registration, licensing, reforms of pay and obtain a business Local business charges licensing, registration, business laws and certificate from the The requirement to have authorities. Review the Evidence under one agency and issuance payment and computerised Attorney General's separate agencies responsible Act to allow (BRELA) certificates, issuance of registration. Chambers. for business name search and electronically generated Electronically charges, and business registration, payment and documents to be generated electronicall licenses, due to The central Business licensing it of is issuance of business certificate, admissible in court as documents used to y generated fear of jobs loss. government needs Part IV D separated from business and business licensing, is evidence register limited documents to give guidance registration, and is carried cumbersome and unattractive to companies Insufficiency of on a long-term out by the Ministry of new investors. Introduce online resources for and Commerce and Industry, payment of new A new Evidence computerisation comprehensive while the two functions The previous multiplicity of businesses certificates so Act allowing to enable online policy that would should be undertaken fees and charges by Local as to remove current electronically payment for form the under one agency. In Authorities has been a requirement that involves generated business framework for addition, various Local travel to Dar es Salaam documents to be certificates and business reforms. source of frustration to Authorities in the past used for physical payment and admissible in registration of This could for to charge separate fees efficient importation since a courts of law. limited example be in the delivery truck had to pay issuance of certificate. from the same business Reform legal requirement An EAC companies. form of a private entity, if such an entitycharges to every local by courts on registration harmonised sector authority whenever through distributes its products in of limited companies, so business law on Resistance by development which it passed en-route to different localities. This as to allow for registration administrative local authorities strategy. requirement has now been its destination. It is hoped using electronically requirements on one business changed through the new that the new requirement not generated documents. law due to fear Business Activities to charge business licenses of revenue loss. Registration Act of will be implemented without January 2007, which has delay. Part IVD repealed the Business Licensing Act of 1972. The current requirement by Under the new Act Courts that electronically business licensing has generated documents cannot be been removed from the used to register limited Ministry of Industry, companies means one has to engage a lawyer for Trade and Marketing registration of limited and Local Authorities companies, which is an will not charge any fee expensive undertaking. Part IVE for business licenses Currently, mainland Businesses operating in Attorney Central Government to A harmonised One Resistance Sensitize the Tanzania and Zanzibar Zanzibar have to register as General's harmonise business business business between people of 49 Source: Consultations with Tanzania trade in 2005/ 2006 and Feb 2007 38 TRIPS – Trade Related Intellectual Property Rights Agreement of the WTO 50 6.0 ASSESSMENT OF PROCEDURES FOR HARMONIZATION OF TRANSIT TRAFFIC BETWEEN COUNTRIES IN THE REGION During the course of current consultations, it emerged that representatives of the business community (CTI and TCCIA) are lobbying the Tanzania Government to consider rejoining COMESA. It is however notable that Tanzania has implemented the COMESA Carrier's License, which is allows commercial goods vehicles to transport goods throughout all COMESA member states under one license. If Tanzania rejoins COMESA, the business community recommends that the country should implement all other operational COMESA schemes in order to facilitate regional cross-border transit traffic. Tanzania should also convince other SADC members to harmonize their transit traffic schemes with COMESA schemes so that commercial trucks transiting within the region do so speedily and at minimal costs. The COMESA schemes that are already operational are: 6.1 Harmonized Axle Loading and Maximum Vehicle Weight. This scheme aims at preserving road infrastructure by limiting the load on freight vehicles. COMESA has harmonised the axle load at 16 tonnes for double axle and Gross vehicle Mass (GVM) specifications at a maximum of 54 tonnes. 6.2 COMESA Yellow Card. The COMESA Yellow Card is a motor vehicle insurance scheme which covers third-party liabilities and medical expenses. A yellow card issued in one COMESA country is valid in all other member countries and is mostly applicable along the Northern Corridor route. 6.3 Harmonized road transit charges system. The system requires that heavy goods trucks with more than three axles pay a charge of US$10 per 100km while trucks with up to three axles pay US$6 per 100km. Buses with a capacity of more than 25 passengers pay US$5 per 100km. 6.5 Other planned COMESA programs include: 6.5.1 COMESA Bond Guarantee scheme The COMESA bond will be a unique bond accepted by all the member countries for transit traffic. The objective is to reduce the cost associated with nationally executed customs bond guarantees for transit traffic. Sine current bonds are country specific; implementation of this scheme will mean that transport operators do not have to get a new bond whenever their trucks cross borders. 6.5.2 COMESA Customs Declaration Document (CD-COM) This is a system of declaration which is used for imports, exports and in transit of goods processes. The aim is to avoid creation of new documentation at every border point for goods in transit. It can reduce the cost and delays for economic operators and facilitate information sharing between customs. The CD-COM is compliant with the widely 51 accepted standards (UN keys and ASYCUDA). It is being partially used on the northern corridor. 7.0 RECOMMENDED ACTION PLAN FOR MONITORING AND FACILITATING ELIMINATION OF NTBS The following recommendations emerge from the analysis on NTB monitoring and elimination process. 7.1 Need for goodwill and commitment by member states Partner States within EAC and SADC need to consolidate and demonstrate their political and technical goodwill to implement aspirations of the respective EAC and SADC Treaties, so that decisions passed are respected and domesticated through timely amendments of national laws, regulations and practices. Any intended introduction of laws, regulations and practices that may have an impact on trade need to be discussed by all member states, and consensus reached before they are enforced. For EAC countries, they need to recognize that with the coming into force of the Customs Union, they have lost their sovereignty on trade issues. For SADC members, they should recognize and implement aspirations of the Trade Protocol. This recognition is important so that policy makers do no delay implementation of actions that hinder rather than promote inter-regional trade. Goodwill and commitment will also minimize the time often lost during protracted discussions on trade issues and subsequent delays in implementation of agreed actions. 7.2 Legal and Regulatory Framework Partner States need to ensure that the legal and regulatory framework governing the integration process is properly enshrined in their national laws, and clearly understood and complied with by all agencies responsible for enforcement of trade regulatory and administrative requirements. This is important so that such agencies do not introduce laws, regulations, practices and procedures that may contradict aspirations of the EAC and SADC Treaties. 7.3 Capacity for monitoring and facilitating NTBs elimination While the EAC endorsed its NTBs monitoring and elimination mechanism early in 2006, its application has been hampered by lack of capacity by the coordinating ministries. This is because while the responsible ministries may have the goodwill to apply the mechanism, their staffing capacity is only sufficient to deal with daily operational issues, which leaves little room to handle cross-border and behind-border obstacles in a structured manner as proposed under the NTBs monitoring and elimination mechanism. It is therefore imperative that the partner states source for technical assistance from development partners to enable them to kick-start application of the mechanism. This initiative could be facilitated by EA and SADC Secretariats. 52 7.4 Harmonisation of regional transit traffic schemes Tanzania belongs to both EAC and SADC trading blocs. Its EAC partner states also belong to COMESA. In order to trade effectively in the three regional blocs, Tanzania should be in the forefront of lobbying for harmonized transit traffic schemes. This is necessary so that the country does not end up implementing different schemes that may have contradictory elements and focus. Also, Tanzania stands to benefit is if the regional blocs harmonized their transit traffic schemes, since she would minimize duplication of effort and maximize use of scarce personnel and financial resources. 53