Trade War Looming Between Kenya and Tanzania?

Trade War Looming Between Kenya and Tanzania?

Business Daily (Nairobi)

June 24, 2008

News Article By Jim Onyango

Locally manufactured goods have been exempted from the East African Community-Standard Quality Mark.

Manufacturers said yesterday those compliant with the Diamond mark of quality need not apply the basic Standardisation Mark Scheme, adding: "All they need to do is to get the relevant permits for compliance with the respective standards."

But this move is likely to ignite a trade conflict between Kenya and Tanzania which has been leading the way in registering most of its products with the quality standardisation marks.

Manufacturers trading in the region were required to affix basic standardisation mark of quality stickers on their goods by next week's deadline for the implementation of the EAC-Standard Quality Mark Act or risk having their goods barred from the vast regional market boasting of a combined population of over 90 million people.

Analysts say Tanzania has the option of blocking Kenyan goods which do not display the standardisation marks. This means that more than 1,000 Kenyan brands may not enter Tanzania and Uganda- the country's key EAC trading partners.

The list of products in danger of being blocked out of the market includes food, leather, drinks, metal and steel.

The mark, acquired from the Kenya Bureau of Standards (Kebs), is a sign of quality and assures on product safety. The mark also protects manufacturers from competing with inferior products.

"A meeting between the Kenya Association of Manufacturers (KAM) and Kebs on June 18 concluded that companies with the more superior Diamond mark of quality and valid permits showing compliance with various standards do not need to apply the basic standardisation mark scheme. It was further agreed that this shall apply indefinitely as long as the Diamond mark exists" said KAM in a statement.

The lobby said the meeting with Kebs agreed that any new product manufactured or released into trade or supplied to retailers from October 1 will be required to bear the Standardisation mark.

Tanzania has been leading the way by inspecting and granting quality marks to its manufacturers. In May alone, Tanzania granted standard marks to 18 manufacturers.

So far more than 1,500 products manufactured in Tanzania bear the country's marks compared to Uganda's 900 brands and Kenya's 150 brands that bear the optional Diamond mark of quality. KAM has attributed the slow response to inadequate time given by Kebs.

KAM says members should fully sell the existing stock that do not bear the quality marks before they can have their next stocks registered with the standardisation feature.

"Members had indicated that the time frame given by Kebs to comply with the standardisation mark scheme effective July 1 was too short and were of the view that the deadline should be extended to allow for compliance and full utilisation of existing stocks of labels."

The manufacturers also said that its members that had acquired standardisation certificates but had not been issued with the labels will continue trading until September when the goods will be required to be fully compliant with the trade rules.

The only groups exempted from the standards scrutiny are horticultural produce traders, who operate under the Kenya Fresh Produce Exporters of Kenya (FPEAK) and the Kenya Flower Council (KFC). They have signed separate agreements with EAC's standardisation bodies.

It costs local manufacturers Sh20,000 to register each product with a standards authority. Manufacturers are required to apply to Kebs to issue them with a permit for the label.

For pharmaceuticals and pesticides, Kebs has informed manufacturers that it had mandated the Pharmacy and Poisons Board and the Pesticide Control Board to administer the standardisation mark on its behalf.

The quality mark shall make it more costly for pre-packaged products imported into the country, which must also comply with the standards in addition to the Certificate of Conformity (CoC) under the Pre-Export Verification of Conformity (PVoC) programme.

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