TZ doing well in regional trade

Sunday March 13 2016


Arusha. In a bid to improve trade with other members in the East African Community (EAC), Tanzania has issued 3,222 simplified certificates of origin (CoO) as of June last year compared to 2,355 certificates issued in 2014.

This was revealed in Dar es Salaam on Tuesday by Prime Minister Kassim Majaliwa in his address to the East African Legislative Assembly (Eala) currently holding a plenary session here.

A CoO is a document used in international trade in printed form or as an electronic document. It is completed by an exporter and certified by a recognised issuing body, attesting that a ship consignment has been produced, manufactured or processed in a particular country.

The origin of a product does not refer to the country, where the goods were shipped from, but to the country, where they were made.

If it happens that the products were manufactured in two or more countries, origin is obtained in the country, where the last substantial economically justified working or processing is carried out.

A common practice is that if more than 50 per cent of the cost of producing the goods originates from one country, the local content is more than 50 per cent, then that country is regarded as the country of origin. In case of trading blocs, such as the EAC, CoO may be allowed to state the trading bloc rather than a specific country.

Determining the origin of a product is extremely important because origin is key information for applying tariffs, embargo and other trade policies. However, not all exporters need a CoO for depends on the destination of goods, their nature and it can also depend on the financial institution involved in export process.

CoO became a contentious issue in early years of enforcement of the EAC Customs Union Protocol, specifically through the application of Common External Tariffs (CET), which were removed on goods produced outside the bloc. The problem came, when such goods were on transit from one member state to another in the bloc.

Mr Majaliwa told the Eala that issuance of CoO was one of the measures taken by partner states to consolidate economic integration and that it reflected the pace with which trade barriers were being eliminated in the region.

He cited Kenya, where a significant number of non-tariff barriers (NTBs) had been eliminated through an innovative SMS-based NTBs reporting system

Rwanda has done away with all trade restrictions and has gone further to harmonise demographic and social statistics for undertaking agricultural surveys and census.

“All initiatives are geared towards enhancing the Common Market Protocol,” he said in an address he delivered on behalf of President John Magufuli, adding, however, that issuance of electronic CoO had been delayed and, therefore, had yet to be adopted.

He said in Uganda, the value of goods from the EAC partner states that had been accorded zero-tariffs grew by nine per cent, while 360 EAC standards on traded goods had been adopted and applied.

No trade figures were given for the strife-torn Burundi, but the tiny country is reported to have started recognising academic qualifications, experiences obtained, licences and certifications obtained for workers from other EAC member countries.

“We all admit that we have done well in eliminating tariff-related barriers. We must resolve to do away with the remaining ones,” he said, remarking that the bloc had also seen the removal of many road blocks in recent years.

The PM disclosed in a speech, whose copy was availed to The Citizen on Sunday in Arusha, that out of the 15 one-stop border posts (OSBPs) being constructed in key borders areas across the region, seven had been completed, of which four were fully operational.

Those already working include the Holili/Taveta OSBP on the Tanzania/Kenya, which was opened a few weeks ago. TradeMark East Africa granted some $ 12 million for its construction.

Other posts completed within the borders of Tanzania are Rusumo (Tanzania/Rwanda), Sirari/Isebania (Tanzania/Kenya, Horohoro/Lunga Lunga (Tanzania/Kenya), Kagitumba/Mirama Hills (Rwanda/Uganda), Gasenyi/Nemba (Burundi/Rwanda) and Ruhwa Border Post on the border of Burundi and Tanzania.

OSBPs have been adopted for use in the region as a trade facilitation to minimise delays at borders and in major trade corridors in the region.

The Eala was also told about a phenomenal increase in intra-EAC trade, which, according to the EAC Secretariat, was now at 23 per cent over and above the intra-African trade figure of 12 per cent. Intra-regional trade within the bloc has been on a 300-per cent increase from $2 billion in 2005 to $6 billion in 2014.

However, Eala Speaker Daniel Kidega said the legislators were still concerned about the tenets of the EAC Common Market Protocol, which had not been fully met in the last five years since the arrangement was enforced after two years of negotiations.

“A sticking area concerns that of free movement of persons and the rights of residence,” he said, noting that the East African Trade Union Confederation (EATUC) and the East African Employers’ Organisation (EAEO) did petition the Eala on the matter, which was debated and passed.

He commended Tanzania, often blamed for being slow in the integration process, for its commitment to harmonising work and resident permits as well as necessary fees in line with providing preferential treatment to citizens of the EAC partner states.

According to him, Rwanda, Kenya and Uganda had already abolished work permit fees and have introduced inter-state passes. The move encourages workers to move freely in search for opportunities.

Mr Kidega added that the launch of the EAC International E-passport would further facilitate movement of the people in the region.

Speaker of Tanzania’s National Assembly Job Ndugai said the region looked forward to including new legislators from the Republic of South Sudan and that would widen the bloc. He thus urged the Eala to be bold in playing its role in the integration process.

The Eala was further informed about consolidated gains of the Single Customs Territory, which commenced in 2014 on a pilot basis along the Northern and Central corridors. This is implemented through the finalisation of key operational instruments entailing revision of business manuals, development of an M&E tool framework, staff deployment and revision of an enforcement framework.