Tanzania, Kenya move to avert trade disputes

Dar es Salaam/Arusha. Tanzania and Kenya plan to form a joint committee and set up a channel of communication to deal with future trade disputes.

The decision was reached during a meeting between the Minister of Foreign Affairs and East African Cooperation, Dr Augustine Mahiga, and his Kenyan counterpart, Ms Amina Mohamed, last Sunday in Nairobi.

The two ministers met to discuss a trade dispute triggered by Kenya’s ban on cooking gas imports from Tanzania.

Dr Mahiga told reporters on Monday in Dar es Salaam that in addition to the joint trade committee, the two countries would also set up a communication channel to facilitate real time consultations in case of a trade dispute.

The proposed committee will supplement the Joint Cooperation Commission (JCC) that was revived last November after President John Magufuli visited Kenya.

“The committee will look into all business-related issues on which the two countries diverge,” Dr Mahiga said.

“It’s a committee that will be formed to deal specifically with trade disputes. It will work closely with sectorial ministries from both countries.”

Kenya and Tanzania have in recent years been engaged in on-and-off trade and investment disputes, some of which have taken a long time to resolve.

Kenya recently banned imports of liquefied petroleum gas from Tanzania, citing safety and quality concerns.

Tanzania retaliated by banning imports of cigarettes, margarine and tyres from Kenya and blocked vehicles transporting maize from Zambia to Kenya from passing through Tanzania. Kenya hit back by banning wheat imports from Tanzania.

A senior East African Community (EAC) official yesterday welcomed the decision by the two member states to resolve the dispute, adding that the regional body had also put in place a mechanism to resolve such disputes. The recently established East African Competition Authority (Eaca), a semi-autonomous institution of the EAC with its temporary headquarters in Arusha, is charged with resolving regional trade, business and investment disputes. “We encourage partner states to settle trade-related disputes on a bilateral basis before they take a regional outlook,” the official told The Citizen on Monday. The institution will relocate to Nairobi when fully operational.

Eaca was established through the EAC Competition Act, 2006 to manage competition regulation in the community. The Act came into force on December 1, 2014. The Act seeks, among other things, to promote and protect fair trade within the bloc and ensure consumer welfare.

Eaca is also meant to provide its services in all economic activities and sectors having cross-border effect.

In undertaking its duties, the institution will address the primary areas that modern competition laws engage with, including cartels, abuse of dominance, merger control and consumer protection.

According to the EAC official, the authority is in the process of becoming fully operational.

The recent Kenya-Tanzania trade tiff had a negative impact on some businesses in the two countries, several of which incurred significant losses.

According to the chairman of the Tanzania Business Association, Mr Johnson Minja, the ban put a strain on cash flows.

“I welcome the initiative to set up a mechanism for permanent consultations for the sake of business continuity. The disruption of sales is very costly for businesses,” he said.

Mr Minja’s views were echoed by an assistant lecturer at the Tanzania Centre for Foreign Affairs, Mr Innocent Shoo, who called for immediate consultations in case of a trade dispute.

He said trade disputes needed joint efforts to prevent escalation, adding that it was things such as protracted trade disputes that could lead to the collapse of regional blocs.

“I commend the two governments for acting without waiting for the EAC to intervene,” Mr Shoo said. The recent trade dispute was contrary to EAC protocols on the Common Market and Customs Union.

For his part, the EAC official said the specific objectives of Eaca included protecting all market participants’ freedom to compete by prohibiting anti-competitive practices and protecting markets against barriers to interstate trade and economic transactions.

This is meant to guarantee equal opportunities for market participants in the community, especially small and medium-sized enterprises, and ensuring a level playing field for all market participants by eliminating any discrimination on the basis of nationality or residence.

Others include providing consumers access of products and services at competitive prices and better quality, providing incentives to producers for the improvement of production and products through technical and organisational innovation.

Another objective is promoting economic integration and development in the community by creating a conducive environment for investment.