Trade policy in Tanzania

1.      

INTRODUCTION

Trade policy is the complete framework of laws, regulations, international agreements and negotiating stances adopted by government to achieve legally binding market access for domestic firms[1]. Trade policies are usually designed to meet the country's commercial interest. They are normally a result of social context of the country; values, priorities and preferences of the country. Trade policy applies to the exportation and importation activities of the country, it provide a legal frame work of how they will be carried out.

2.      CASE STUDY IN TANZANIA TRADE POLICIES

In Tanzania, trade policy is a Union Government matter. International trade agreements responding to development at the regional level and in the Multilateral Trading System are, therefore, binding on the Union as well as the Zanzibar governments.

The matter of trade policy can be traced from the time of independence, during the socialism and self reliance policy to the current market oriented national policy of 2003. Both policies establishes a clear picture of the country's commercial interests and the social context that exist/ed. And, it's from there where one could see the discrimination of these policies out of the decision of what to allow and what not to allow.

3.      THE POLICY OF SOCIALISM AND SELF RELIANCE

Socialism and self reliance was a policy which came out, of what was called the Arusha declaration, which was established on 5th of February 1967[2]. This policy declared and established socialism ideology as the socioeconomic and political ideology of the ruling party, TANU, and to Tanzania as a country. Been so, it affected the economic policies in the country, the trade policy included.

4.      DISCRIMINATION IN THE SOCIALISM AND SELF RELIANCE POLICY

The socialism and self reliance policy together with other policies, e.g. the policy of confinement(placed the trade regime, comprising of foreign and internal trade for goods and services at levels from wholesale to retail, under public sector control and management) led to several noted discrimination.

4.1. DISCRIMINATION TO THE PRIVATE SECTOR

The policy declared that the ruling party, TANU, believed in what it called economic justice, through which it can be attained through the state intervening actively in the economic life of the nation as well as of the citizens[3]. This led to nationalisation of the principal means of production as it was also claimed in the declaration. Through this the private sector almost collapsed for the government exercised effectively the national economy, by controlling the industries, transportation and communication and trade activities.

4.2. DISCRIMINATION TO GOODS

The policy put emphasis on agriculture as the main way for development, and the other hand discriminating industrial goods and favouring agricultural good. This can be evidentially noted in one of the subheading in the declaration written "we have put too much emphasis on industries". Under this policy several industrial good not pertaining to either agriculture goods, or where not in the daily consumable use for restricted to be produced or traded. This was insured through confiscation of all industries privately own, by the government.

4.3. DISCRIMINATION ON FOREIGN INVESTMENT

 As the policy states "...self reliance", had basically discriminated foreign investments linking it as a way of welcoming exploitation. From the declaration, it argues from it's subtitle 'let's not depend money for development' for it had viewed foreign investment as a way capitalist countries provide external aids, through private rich individuals. In this sense private/foreign investment was very limited to the especially which came from the capitalist countries.

5.      THE CURRENT NATIONAL TRADE POLICY

The current national trade policy of 2003 followed the structural adjustment programme adopted in the early 1980's which came as the result of inn-efficient resource allocation due to government intervention and controls in monetary policy also as an impact of decline of private sector activity and Foreign Direct Investment due to the nationalization of foreign and domestic investments.

6.      DISCRIMINATION IN THE NATIONAL TRADE POLICY

6.1 DISCRIMINATION TO DOMESTIC INVESTMENT AND FIRMS.

Following establishment of the new trade policy, the country has been undergoing aggressive privatisation. However this privatisation of the have been largely prioritised to the foreign investors while little effect have been made to include the domestic firms, and hence discriminating domestic investment.

6.2. DISCRIMINATION IN THE SECTORS OF INVESTMENT

Currently, Tanzania has made priorities in sectors which active investment have to be established. These sectors are; agriculture and livestock, natural resources, tourism, manufacturing, oil and gas exploration, mining, real estate, transport and communication and energy. while leaving behind; education, health, insurance, water and sanitation, securities services, construction industries,  and integrated waste management sectors[4]. This has then evident discrimination in the national policy. Obviously is due to the pressure from the investors, whose main objectives are to obtain a huge profit.

7.      CONCLUSION

However Tanzania is a member of World Trade organisation (WTO) and under WTO agreements, countries cannot normally discriminate between their trading partners. This principle is known as most-favoured-nation. It is so important that it is the first article of the General Agreement on Tariffs and Trade (GATT), which governs trade in goods.

But some exceptions are allowed like setting up a free trade that discriminates goods from outside, or give developing countries special access to their markets and raise barriers against products that are considered to be traded unfairly from specific countries.

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[1] Dictionary of Trade Policy Terms 4th Edition

[3] Part one, The Arusha Declaration and TANU’s Policy on Socialism and Self-Reliance

[4] The Tanzania Investment Guide 2014-2015