TRALAC - Trade Law Centre

Tanzania: US markets invite local produce

Friday, 05 March 2010

Source: Tanzania Daily News (Dar es Salaam)

The African Growth Opportunity Act (AGOA), that allows countries in the continent to fully access the US market, has not been fully utilized and Tanzania can do more in so many areas in the quest to capture the markets.

The US Ambassador to Tanzania, Mr Alfonso Lenhardt, said today that it was true that the export-import ratio between the two countries was still imbalanced, but this is the challenge that the country has to take in order to overcome the difference.

"The top leadership including the president, prime minister and vice- president believe that Tanzania can do more to move to a different level as the 2025 plans were positive," he said.

The African Growth and Opportunity Act (AGOA) is a United States Trade Act that significantly enhances US market access for (currently) 39 Sub-Saharan African states.

However, some exporters from Tanzania to the US complained of high freight charges on bulky and heavy items like honey and sisal products.

Lack of loans to facilitate efficient movement of goods is not readily available from financial institutions which demand collateral, said the exporters. Business analysts have said that Tanzania business people have to do more to meet the US standards.

"The US requires strict observation of sanitary regulations on goods exported into their country. Packaging requirement demands a high quality status, and needs information in line with the ones described on US catalogues," said the analysts.

The analysts further said that US needs product labelling which demands a description of the history of the product, conditions as described in international standards.

"Tanzania has products that the US does not have but the problem is a guaranteed market," said Shareef Mohamed who trades with US clients.

Cashew nuts, sisal, mangoes and other types of farm produce have a high demand in the US and the European Union, said Sholly John who was recently in the country as a tourist.

Some financial analysts are of the opinion that what is required is the Government to take deliberate moves of facilitating the exporters with the support they need: loans for the procurement of machines and raw materials.

"Our banks are busy buying treasury bills, instead of giving loans to the people," said a concerned businessman who asked for anonymity.

Tanzania was advised to share experiences from International Trade Forum where it can gain knowledge to plan businesses and influence the Government to give support to private businesses, said the business analysts.

The AGOA originally covered the eight-year period from October 2000 to September 2008, but amendments signed into law by former US President George Bush in July 2004 further extend AGOA to 2015.

AGOA builds on existing US trade programmes by expanding the (duty-free) benefits previously available only under the Generalized System of Preferences (GSP) programme.

Duty-free access to the US market under the combined AGOA/GSP programme stands at approximately 7,000 product tariff lines that include items such as apparel and footwear, wine, certain motor vehicle components, a variety of agricultural products, chemicals, steel and others.