The Agricultural Trade Information Centre (ATIC) is part of the implementation programme of an FAO/MAFC project on Strengthening National Capacity in Agricultural Trade and Trade Negotiations Within the Framework of the Umbrella II Programme. The center will act as a central information and resource centre for all stakeholders in agricultural trade related issues. It will provide information and analysis on current issues related to agricultural trade and food security including relevant issues of interest among its regional and other trading partners for improved decision making and policy interventions.
As part of building awareness on issues of agricultural trade, the centre will prepare monthly trade briefs reflecting current issues on Agricultural Trade and Food Security in the Country. These briefs will be posted in the Centre's web page that will soon be developed. This the first of the series of the briefs which gives a general overview of agricultural trade in Tanzania .
Tanzania occupies an area of 945 027 km 2 and an estimated population of about 30 million. Agriculture is the mainstay of the Tanzanian economy accounting for over 50 pe rc ent of its GDP. The country's main agricultural exports include tobacco leaves, cashew nuts, coffee, cotton, tea, maize, sisal and pulses. In Zanzibar , the main agricultural exports are cloves, copra and chillies. The country's main agricultural imports are oil palm, cereals and refined sugar. Maize is the main staple food in Tanzania . Other food products include meat (livestock and poultry), rice, wheat, root crops, sorghum/millet, bananas and pulses. According to FAO, about 43 pe rc ent of the population is undernourished placing the country at a higher level of food insecurity than the average for Sub-Saharan Africa which is 33 perc ent.
Since the 1980s, the Government of Tanzania has introduced various policy reform measures intended to enhance economic growth and development. One of the major policy reform measures was the Economic Recovery Programme (ERP), introduced in early 1986. The programme involved trade liberalization, price de-controls and the removal of other restrictive trade regimes. In its June 2004 national budget document, the Government has signalled its drive to continue this reform process with sweeping changes in its customs and other trade measures mainly to enhance small-holder agricultural productivity and private enterprise development.
Tanzania 's major trading partners include the European Union and Asia which account for about 29 and 24 pe rc ent respectively of the total imports. The same trading blocks account for 38 and 32 pe rc ent of the Tanzanian exports respectively. Intra-African trade accounts for 12 and 11 pe rc ent of the country's imports and exports respectively. On the other hand, trade with Kenya and Uganda , which together with Tanzania constitute the East African Community accounts for 6 – 7 pe rc ent of trade flows with Tanzania .
The country is currently facing several inter-linked forces that would determine the nature of its agriculture and food security situation in the future. In Ma rc h 2004, the African, Caribbean and Pacific (ACP) countries concluded the all-ACP-EC phase of their negotiations on Economic Partnership Agreements (EPAs) with the European Union. The second phase, which is based in the regions has already commenced. At the same time, Tanzania is involved with negotiations going on at the World Trade Organization (WTO) on agricultural trade, among other issues, in the context of the Doha Development Round of multilateral trade negotiations. There are other important regional negotiations taking place, in which, again, the country is taking part.
Thus faced with these series of talks on trade liberalization and given the human and financial limitations of the country, the negotiating capacity of Tanzania is stretched to the limit. In order to support its participation, the Government of Tanzania requested the assistance of FAO, under the framework of the Umbrella II Programme. The objective of this project is to provide analytical and capacity building assistance to the Government of Tanzania and other relevant stake-holders to enhance their abilities in maximizing the benefits of international trade in agriculture within the framework of the FAO Umbrella II Programme.
Problem to be addressed
With regard to regional cooperation, Tanzania is a member of the Southern Africa Development Community (SADC), the East African Community (EAC) and the Indian Ocean Rim-Association for Regional Co-operation (IOR-ARC). Under SADC, negotiations on the implementation of a Trade Protocol (with aim of establishing a Free-Trade Area) are at a very advanced stage. Once the FTA is established the objective is to bring the import duty among member states to zero within eight years from the date of establishing the FTA. Similarly, moves are in the process under the recently signed (Ma rc h 2004) EAC customs union protocol to eliminate almost all tariffs and non-tariff measures and to establish a common external tariff (CET) for the three members ( Tanzania , Uganda and Kenya ). Under this agreement, three tariff bands on imports of goods originating outside the EAC will be established: zero pe rc ent (for mainly capital goods), 10 pe rc ent (mainly intermediate goods), and 20 pe rc ent (for “sensitive sector” products and consumer goods). Tanzania is also a member of the charter bringing together 14 countries forming the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC). The grouping has the objective to facilitate and promote economic cooperation bringing together representatives of government, business and academic.
Under SADC, Tanzania is currently involved in the on-going process of negotiating an EPA with the European Union. This agreement which is expected to come into fo rc e in January 2008 will be based on a WTO compatible reciprocal trade arrangement instead of the currently existing preferential trade arrangement under the Cotonou Agreement with the EU. However, this is further complicated if one takes into account the fact that Tanzania has established a custom union with Kenya and Uganda both of whom are negotiating for EPA with the EU under a separate regional group – the East and Southern Africa group (ESA). However, Tanzania like other developing countries, benefits from other preferential schemes – the African Growth and Opportunity Act (AGOA – USA ) and Generalised preferential schemes from Canada and Japan , which unlike the preferences under the Cotonou Agreement or the EPAs are purely autonomous and have no contractual obligations on either party.
As a Member of the WTO, Tanzania is currently facing severe problems in fully participating in the WTO process. Like other least developed countries, Tanzania is severely constrained by her limited technical and financial capacity. Awareness and understanding of the WTO and other related Agreements within both the public and private sectors is very limited. This problem is significant if we take into account the fact that having signed the Final Act of Uruguay Round and the Marrakech Agreement establishing the World Trade Organization, all the WTO Agreements became binding on Tanzania .
It should also be noted that Tanzania does not have a comprehensive agricultural trade policy. However, concerted efforts have being taken to consolidate sectoral trade-related policies into a national trade policy document. Key amongst the priorities set out in the implementation matrix of this document is the urgent need to enhance both the public and private sector analytical capacity building in trade and trade negotiations and the establishment of an effective trade support network to disseminate relevant information to the main economic sectors. Overall, the effective implementation of WTO commitments by Tanzania continues to be hampered by lack of adequate financial, institutional, technological, and technical capacities, a situation that will exacerbate the country's limited participation in on-going and future negotiations.
Added to the lack of capacity to effectively participate in the WTO process is the on-going negotiation of EPA with the EU. Tanzania , as a member of the ACP group of countries is thus facing several major sets of closely interlinked fo rc es that are likely to have significant impact on the development of its agriculture sectors and food security. Thus, the possible conclusion and outcome of both the negotiations for EPAs under the Cotonou Agreement and in the context of the WTO Doha Round, pose serious concerns on the future of its agricultural trade and development of the sector. Furthermore, the evolving sanitary and Phytosanitary Standards (SPS) including private standards by Tanzania's trading partners, the ongoing CAP reform which will determine the nature of EU agriculture over the next couple of years and the process of EU enlargement have also created concerns for ACP States like Tanzania as to how to address these multi-faceted fo rc es so as to reap the maximum benefits for their mostly agrarian economies.
In line with the country's long-term development and food security objectives, FAO and other development partners have been supporting this effort in various areas. An Agricultural Sector Development Programme/Strategy (ASDP) has been developed which is in the implementation phase. Other FAO related assistance currently on-going includes projects under the Special Programme for Food Security (SPFS) and a Medium–term Investment Programme and Formulation of Bankable Projects in Support to the Comprehensive African Agricultural Development Programme (CAADP) under the NEPAD initiative. Furthermore, FAO is assisting the GoT in SPS/TBT related aspects with a view to improving the quality, safety and nutritional value of food produced in Tanzania and to ensure the acceptability of food imports/exports into/from the country. This on-going project is highly complementary to the present one. Its main purpose is to improve the current food control administration in the country; review and update the various food laws, regulations and existing standards; upgrading of food inspection and food analysis through training programmes and supplying some essential analytical equipment and laboratory supplies; improving the capabilities of the Tanzania Codex Contact Point within Tanzania Bureau of Standards (TBS) in all issues related to Codex, nationally and internationally.
Under the ASDP, the Government of Tanzania recognised the fact that international agreements can open opportunities and create greater competition for Tanzania 's commodities and products. Thus access to regional and global markets is critical to the development of its agricultural sector. However, to fully exploit these opportunities and minimize the negative effects of global competition, the sector should aggressively pursue competitiveness, in terms of cost, quality and consistency of supply. But to ensure competitiveness, it will be necessary to improve information, knowledge and understanding of the needs and regulations of the market place. Although an on-going project (funded jointly by the African Development Bank and FAO) will provide some market linkage aspect between domestic markets and the farm/field, the links with international markets are not addressed.
Thus, while all these programmes have been well targeted, the nation's institutional and human capacities to ensure their sustainability in both the domestic and international market place are very weak. This problem is compounded by the fact that financial resou rc es are also limited at present. It is against this backdrop that this request for assistance from FAO is being sought.
The urgency of this project is driven by events that are already in motion: the first phase of the EPA negotiations ended September 2003, and is now been followed up by more subs tantive regional negotiations for reciprocal trade arrangements to be completed in 2008; the WTO Doha Round though stalled at the moment is gaining momentum, the EU has recently announced a subs tantive package of reforming the CAP with the first of phase of EU enlargement process already completed in May 2004. Thus, enhanced capacity in understanding all these agreements and the various linkages including how they relate to or can impact the country's long-term development objectives is of crucial importance to the government.
This project will be implemented within the framework of the FAO Umbrella II Trade-Related Capacity Building Programme (MTF/GLO/116/MUL). It will provide analytical as well as technical capacity building support to the Government of the Tanzania (including other relevant stake-holders) to enhance their capabilities in international trade negotiations related to agriculture.
The project has 4 specific objectives:
It will specifically focus on enhancing the technical capability of staff of the relevant Government Ministries and other stake-holders involved with agricultural trade and trade negotiations in order to be able to provide the analysis and information necessary to support Tanzania's negotiations in agricultural trade and to understand the legal implications of the commitments;
It will provide assistance to the Government and other stake-holders in analysing the implications of the Agreement on Agriculture (AoA) including the post Doha-Round issues, the on-going negotiations for Economic Partnership Agreement (with the European Union) and regional agreements relating to agricultural trade, food security and in defining policy options for the country to achieve its long-term objectives in agriculture within the various framework agreements under the Umbrella II Programme Strategy. This will be achieved through a series of reports and impact studies on specific commodity sectors;