Interviewed
by the ‘Sunday News’ separately in Dar es Salaam yesterday, they said
that the move will not only protect domestic industries but also the
revenue earned by the government through importation of goods from
European Union (EU) countries.
"If Tanzania will decide to sign the
protocol, it would mean allowing the importation of duty free and quota
free goods from the EU - thus imposing stiff competition with domestic
manufacturers," one of them, Mzumbe University’s Professor Honest Ngowi
said.
He noted that industries within the EU
were well protected; meaning that importation of goods from the
countries will make local manufacturers fail to compete in the market.
Prof Ngowi further explained that the
government has been getting revenue from goods imported from the EU,
which also means that it stands to lose the earnings if it will endorse
the protocol.
"This is a right move for the protection
of domestic industries and government revenue," Prof Ngowi stressed.
He, however, noted that Tanzania, as an East African Community (EAC)
member state, agreed to sign the protocol as a bloc.
Therefore, its decision to drop the
agreement may be received in a different way by other partner states,
which might consider it as a slow moving or unwilling partner.
He observed that in the long run, the
government should take initiatives to empower its industries so that
they can compete with other countries. "We are currently trading with
China and India ... the government will be required to create an
enabling environment for domestic industries to compete with other
countries in future.
The Confederation of Tanzania Industries
(CTI)'s Director of Policy and Advocacy, Mr Hussein Kamote, urged the
government to reconsider its decision of not signing the protocol
because it may have impacts in trading with EU under Everything But Arms
(EBA).
Mr Kamote said currently, Tanzania has
been allowed to export its goods to the EU market, which means it should
comply with the EU rules of origin. "Tanzania can decide to sign the
protocol or not because it will continue to export its goods to the
countries.
But the EU may decide to put
restrictions on goods standards and rules of origin, especially on her
imports,” Mr Kamote noted. He said that by signing the protocol Tanzania
will enjoy rules of origin agreed in the protocol, contrary to the
current situation where it is forced to comply with rules set by EU.
On the other side, he said, it is a
right move for the country to protect domestic industries which may face
difficulties if the goods from EU countries will be allowed to
Tanzanian market.
He, however, explained that under the
EPA protocol, not all goods, which will be imported into the country
will be duty free as agreed, to safeguard the nation’s economic
interests.
Mr Kamote elaborated that currently, 60
per cent of the raw materials and capital goods are imported from EU
while 24 per cent of agricultural goods have been restricted - thus only
16 per cent of commodities are being negotiated under the EPA Protocol.
For his part, Dr Oswald Mashindano, a
Principal Research Associate at the Economic and Social Research
Foundation (ESRF), said that the government’s decision is right, judging
from past experience.
He said Tanzania has been signing a
number of international treaties and agreements, but its benefits have
been minimal to the country. Dr Mashindano said, however, that it was
crucial for the government to consider UK’s withdrawal from the EU
before signing the protocol because it was too early to know its
repercussions. “The UK has just withdrawn from the EU.
Thus it is difficult to know its
economic repercussions within a short time,” Dr Mashindano noted. On
Friday, this week, the government said that it was not the right time to
endorse EPA protocol.
The government’s decision came as East
African Community (EAC) members have begun a countdown to the signing of
the Economic Partnership Agreement (EPA).
The Permanent Secretary (PS) in the
Ministry of Foreign Affairs, East Africa, Regional and International
Cooperation, Dr Aziz Mlima, told reporters that the decision was meant
to protect the economic interests of the country. “We think it is not
the right time for us to sign the agreement.
There are still contentious issues,
which need to be settled to ensure Tanzania is not turned into a source
of raw materials and markets for European goods,” Mr Mlima noted.
The PS further said that the protocol
scheduled for signing on July 18 will have a devastating effect on the
economy of low income countries turning their economies into market
peripheries for industrial nations, while destroying some of the
prospective industries.
The government’s priority is to create
an industrialised economy. The PS further clarified that by dropping
EPA, Tanzania has nothing to lose because it would continue trading with
other countries in the world.
Dr Mlima further said that safeguarding
the economy of the country was the core reason, adding that the way the
agreement was crafted did not meet the country’s objective in becoming
an industrialised nation.
