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Trade war between Kenya, Tanzania escalates


Kenya has imposed new tariffs on Tanzania in the aftermath of their inability to resolve a trade war.
 
The trade war was sparked by use of imported materials in goods made in the countries, setting the stage for a fresh round of the trade war.
 
Nairobi is believed to have hit back at Dar es Salaam by imposing new tariffs on Tanzania products like flour after the neighbouring country ignored a deal that granted Kenyan-made chocolate, ice cream, biscuits and sweets unrestricted entry into its market.
 
Tanzania maintains that it has retained 25 per cent import duty on Kenyan-made confectioneries such as chocolate, ice cream, biscuits and sweets, citing use of imported industrial sugar.
 
Tanzania will also continue to levy 25 per cent duty on Kenya’s edible oils as well as the Tembo cement brand produced by Bamburi Cement Factory which it says are made from imported palm and clinker respectively.
 
Kenya, on the other hand, is imposing 25 per cent duty on Tanzania’s products like flour which it says are produced from imported wheat. The row comes barely a month after the two countries announced an end to all trade disputes.
 
A team picked by the East African Community to audit Kenyan firms concluded in its report that: “Products manufactured using industrial sugar, when transferred to the EAC qualify for preferential tariff treatment provided they meet the criteria set under the EAC rules of origin 2015, and any other conditions set under the regional customs law.”
 
Acceptance of the certificate — a document showing where a good has originated and is used to determine duty on imported goods — guarantees the entry of Kenyan goods tax-free passage to Uganda and Tanzania.
 
The EAC common market allows for free movement of locally manufactured goods. Tanzania and Uganda revenue bodies have however accused Kenyan manufacturers of tilting competition in their favour by using imported industrial sugar under a 10 per cent duty remission scheme.
 
Source: BusinessDailyAfrica