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Cablegate: Tanzania: Trade Agreement Compliance And

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

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