By Lydia Shekighenda

Several scholars and economists have backed the government’s move to drop the Economic Agreement Partnership (EPA), saying it is in line with its priority of creating an industrialised economy.

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.

Source: All Africa

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