Kenya’s frosty trade relationship with Tanzania could yet again take a new twist over tariffs on milk and dairy products.
Tanzania, which is one of the key markets for local milk products, has imposed tariffs that make it hard for Kenyan milk to access the market.
The tariff is being blamed for the significant drop in Kenya’s dairy exports to Tanzania, which dropped from Kshs2.1 billion ($20.8 million) in 2015 to Kshs185 million ($1.8) million last year.
Kenya plans to petition Tanzania to remove the $0.9 per litre tariff on milk and milk products.
“The Tanzania tariff on milk and milk products is not in line with the EAC Common Market Protocol, and it is important for us to negotiate for harmonization of tariffs for our products to compete,” said Margaret Kibogy, the Kenya Dairy Board managing director.
She argues that the high tariff imposed by Tanzania is against the East African Community spirit of deepening trade.
Milk and milk products were some of the products in the trade war between the two countries that was threatening to disrupt bilateral trade.
In the first half of the year, dairy exports to Tanzania earned Sh141 million, exceeding what was recorded in the whole of 2016.
Kenya set off the dispute when it banned importation of cooking gas from Tanzania in June: Tanzania retaliated by banning exports of unprocessed foods, milk products and cigarettes.
Earlier last week, Tanzanian officials postponed a meeting intended to iron out issues fuelling trade dispute with Kenya from Aug 19 to Sep 2.
At the September meeting aimed at ironing out issues that caused the trade dispute, Kenya seeks to push for the harmonisation of dairy products tariff in the hope that it will grow its market share in Tanzania and Rwanda.