Tanzania sorts out sugar tariff issues with SADC partners

TANZANIA – Tanzania has agreed to allow sugar imports from the SADC block under preferential rates, the Guardian has reliably learnt.

The preferential treatment to Sadc sugar exporters follows a special meeting of the SADC Committee of Ministers of Trade (CMT), which took place last week in Swaziland as part of the SADC Summit.

As part of the deal, it was also agreed that sugar imports from countries outside the region, like Brazil and Europe, which are heavily subsidized will be imported into Tanzania at 100 per cent duty, which is the Common External Tariff on the product for the EAC bloc.

The deal follows Tanzania’s application for derogation to impose 100 percent duty on sugar outside SADC and 25 percent for sugar originating in the region.

The country has an estimated annual sugar deficit of 100,000 metric tonnes for the local market that it fills with imports from the Sadc region and beyond. Malawi, South Africa, Zambia, Mauritius and Swaziland are the major sugar producers and exporters in the Sadc region.

The CMT special meeting sought to resolve outstanding issues as regards Tanzania’s application for derogation to impose 25 per cent and 10 per cent duty on raw and refined sugar respectively originating from the region and 100 per cent duty on sugar from third party countries.

Tanzania had indicated that this was to enable its domestic industry adjust as it is undergoing restructuring. Ordinarily, the country was expected to commit itself to zero duty on sugar originating from Sadc under the Sadc Sugar Cooperation Agreement (Annex VII to Sadc Trade Protocol).

The CMT agreed that Tanzania be given a dispensation of 12 months to adjust while allowing Sadc surplus producers to export to Tanzania at 10 per cent duty for refined sugar and 25 per cent for raw sugar.

The CMT urged Tanzania to adjust the duty of 10 per cent upwards for refined sugar originating from third parties. During the meeting, Tanzania also acknowledged the inconsistent tariff rate of 50 per cent that Malawi was, in the past, subjected to.

And it was reported that Zambia was subjected to an even higher import tariff rate of 100 percent for sugar exports into Tanzania.

On the inconsistencies of overcharging Malawi and Zambia with 50 per cent and 100 per cent respectively on imports, Tanzania requested evidence relating to the overcharging.

The Malawi delegation produced and submitted the necessary customs notes as evidence and it is now expected that Tanzania will either refund the money that was paid in excess of the preferential duty or will provide credits on future exports from Malawi and Zambia.

Tanzania had submitted applications in 2011 and 2015 for consideration by the SADC CMT for derogation or waiver from its trade liberalization commitment for sugar in terms of the provisions of the Sadc Trade Protocol in view of the problems its industry is facing.

In 2016, at this Special Meeting of the CMT, Tanzania presented an application to extend the timeframe for the derogation for three years.

However, the Committee approved the extension for only one year and on condition that preferences be given to Sadc supplies and that world supplies be subjected to 100 per cent as normally expected.

Ideally, Malawi and other major exporters in the region, especially Zambia and Swaziland, would have preferred a Tariff Rate Quota (TRQ) arrangement for access into Tanzania market.

The TRQ arrangement was thought to be the best way, on one hand, to effectively manage the imports into Tanzania and therefore to help that country’s domestic industry and, on the other, to promote intra-Sadc trade.

September 2, 16; http://www.ippmedia.com/en/business/tanzania-sorts-out-sugar-tariff-issues-sadc-partners

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