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Viewing cable 06DARESSALAAM1633, TANZANIA: TRADE AGREEMENT COMPLIANCE AND

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Reference ID Created Released Classification Origin
06DARESSALAAM1633 2006-10-03 14:19 2011-08-25 00:00 UNCLASSIFIED Embassy Dar Es Salaam
VZCZCXYZ0017
PP RUEHWEB

DE RUEHDR #1633/01 2761419
ZNR UUUUU ZZH
P 031419Z OCT 06
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC PRIORITY 4853
INFO RUEHIN/AIT TAIPEI PRIORITY 0073
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC PRIORITY
UNCLAS DAR ES SALAAM 001633 
 
SIPDIS 
 
SIPDIS 
 
DEPT EB/PP/MTA FOR EKOCH, AF/EPS THASTINGS, AF/E FOR BYODER 
PASS TO USTR FOR HIRSH 
COMMERCE TCC/4110 FOR BVAUGHAN AND MROLLIN 
USDA ITP/FAS FOR BERTSH 
 
E.O. 12958: N/A 
TAGS: ECON ETRD TZ
SUBJECT: TANZANIA: TRADE AGREEMENT COMPLIANCE AND 
MONITORING REPORT 
 
REF: A. STATE 152063 
 
     B. STATE 027693 
     C. STATE 024938 
 
1.  The monitoring of trade agreements and responses to 
foreign trade barrier complaints are handled by the Embassy's 
Economic and Commercial section, whether the questions or 
complaints are lodged by U.S. companies, USAID implementing 
partners, potential U.S. investor companies or individuals. 
There are no other trade agencies at post.  The regional 
office of the Foreign Commercial Service (FCS) and the 
Foreign Agricultural Service FAS) are located in Nairobi, 
Kenya; post consults with both FAS and FCS by telephone and 
e-mail regularly concerning both trade compliance issues and 
trade barrier complaints. 
 
Point of Contact 
---------------- 
2.  The coordinator and point of contact (POC) for post's 
periodic compliance reporting who has responsibility to 
ensure that trade complaints are reported promptly to 
relevant Washington agencies is: Pol/Econ Officer, Maureen B. 
Latour, Ph. 255-22-266-8001 x4253, e-mail: 
LatourMB@state.gov. 
 
Trade Agreements 
---------------- 
3.  Tanzania is a member of the World Trade Organization 
(WTO) and the World Intellectual Property Rights Organization 
(WIPO) and is treaty compliant within those multilateral 
organizations.  Tanzania is eligible under the African Growth 
and Opportunity Act (AGOA) for duty-free consideration of 
Tanzanian exports entering the United States.  In 2005, USD 
33 million worth of Tanzanian AGOA eligible products were 
imported into the U.S.  The Government of Tanzania (GOT) has 
not signed any bilateral trade agreements with the United 
States. 
 
4.  In recent months, however, the United States Trade 
Representative office (USTR) has approached the trade 
ministers of the three East African Community (EAC) 
countries--Tanzania, Kenya and Uganda--to discuss the 
possibility of agreeing to a Trade and Investment Framework 
Agreement (TIFA) with the EAC.  The Minister of Trade and 
Industry of Tanzania, Nazir Karamagi, expressed his interest 
in a TIFA at a June 5 meeting with Deputy USTR Karan Bhatia, 
although Minister Karamagi observed that the EAC itself might 
not be empowered to sign international agreements on behalf 
of its member states.  Tanzania is currently in consultations 
with the other EAC member countries on possible ways to 
implement a regional TIFA. 
 
IPR Success Story 
----------------- 
5.  A recent success story was the conclusion of a four-year 
long intellectual property rights violation (trademark) case 
lodged in May 2001 by Kiwi European Holdings. B.V. on behalf 
of its subsidiary, the U.S. firm, Sara Lee Household Company, 
against a Tanzanian importer who was marketing shoe polish 
manufactured in Shanghai, China labeled as "Kiwi," a 
registered U.S. trade mark.  The counterfeit shoe polish was 
sold throughout Tanzania at one-third of the actual price; 
the Sara Lee Household Company estimated losses of nearly USD 
2 million until a court injunction halted the sales. 
Throughout the time period (2001 to 2005), post worked 
closely with the company to monitor the progress of the 
litigation through the Tanzanian court system.  Finally in 
June 2005, the High Court of Tanzania, Commercial Division, 
ruled in favor of the Sara Lee Household's parent 
company--Kiwi European Holdings. B.V.  The importer and 
wholesale vendor of the counterfeit "Kiwi" products was 
ordered by the court to pay all court costs, damages and 
losses to the company. 
 
Other Trade Issues 
------------------ 
6.  A non-tariff barrier issue is currently under discussion 
between the Tanzanian Bureau of Standards (TBS) and a 
U.S.-based retail food importer ("American Garden") 
concerning the quality of TBS tests to measure the minimum 
iodine level in packaged salt as required by Tanzanian food 
regulations.  The U.S. company complained to post's 
Commercial section that the present TBS testing system does 
not accurately measure the iodine levels in its product, and 
shipments of the firm's packaged salt were refused entry into 
 
Tanzania.  Since the company brought this problem to post's 
attention in early 2006, EconOff and staff have met with 
relevant GOT and TBS officials to explore how to either 
improve the test procedures or to accept an alternate iodine 
detection test that would prove the U.S. company's salt 
products meet standards required by Tanzania's regulations. 
Post will pursue these discussions until an acceptable 
agreement is reached. 
 
Ongoing Trade Monitoring Efforts 
-------------------------------- 
7.  The Embassy's proactive efforts to monitor trade 
compliance on the part of the Tanzanian government include 
regular reviews of the Government Gazette and relevant press 
sources for information concerning any proposed changes in 
laws or implementing regulations that could create either 
tariff or non-tariff trade barriers for U.S. companies.  In 
addition, in preparation for updating the annual Country 
Commercial Guide and the Investment Climate Statement 
reports, post thoroughly reviews progress in and/or problems 
with trade compliance.  Based on the previous year's report, 
trade compliance and trade barrier concerns are investigated, 
verified, and, if needed, noted in the Investment Climate 
Statement. 
 
8.  Embassy officers meet regularly with GOT trade officials 
as well as East African Community (EAC) Customs Union 
officials to discuss relevant bilateral and multilateral 
trade issues.  In particular, the Embassy takes every 
opportunity to press the GOT Ministry of Industry and Trade 
and EAC officials to lower the EAC Customs Union tariff on 
imported used clothing.  In 2005, Tanzania, Kenya and Uganda 
agreed within the EAC Customs Union on a steep tariff 
increase on used clothing from 25 to 45 percent.  Post 
continues to request that the Tanzanian government take a 
proactive stance within EAC Customs Union discussions and 
urge the other members states to reduce the used clothing 
tariff to the former rate of 25 percent or lower. 
 
9.  The Embassy holds periodic seminars for U.S. businesses 
and other stakeholders on topics such as corporate law or IPR 
law in Tanzania or on eligibility criteria under AGOA.  In 
2005, post invited over 100 U.S. businesses, affiliates and 
other stakeholders to a one day seminar entitled: 
"Understanding and Enforcing Corporate Law in Tanzania."  In 
May 2005, in cooperation with the USAID East and Central 
African Trade Hub in Nairobi, post organized a two-day AGOA 
regional workshop in Dar es Salaam ("Changing Tanzania's AGOA 
Story") that attracted nearly 120 government leaders, 
business persons and bankers and generated practical methods 
to increase Tanzanian exports to the United States. 
 
Comment 
------- 
10.  With the just concluded trip of Tanzania's President 
Jakaya Kikwete to the United States (September 17 to 29) that 
included a delegation of 55 Tanzanian business persons and 
GOT trade officials, the prospects of serious U.S. 
investments in Tanzania is on the rise.  In line with our 
Mission Program Performance (MPP) goals, post has outlined 
plans for FY 2007 to better inform U.S. businesses working in 
Tanzania as well as potential U.S. investors, concerning 
Tanzania's commercial laws and regulations, the trade 
agreements the GOT is already party to, as well as the 
prospect of a regional Trade and Investment Framework 
Agreement with the EAC countries. 
DELLY