Analysis of Tanzania - European Union (EU) Trade Relations and Lessons for Future Trade Arrangements

Abstract

This paper analyses trade relations between Tanzania and the European Union (EU) 28 Member States. The paper’s objectives were to analyse trade integration between Tanzania and the EU, make a comparative analysis of Tanzania’s regional exports concentration, and presents recommendations for future trade arrangements. The paper used descriptive research design. Export Intensity of Production Index (EIPI) and Regional Export Concentration Index (RECI) were trade indicators used for data analysis. The paper employed secondary data from the Tanzania Economic Surveys published by MOFEC, and the UNCTAD Handbook of Statistics. The findings revealed that Tanzania is a trade dependence country and in terms of regional diversification of exports it depends on the EU market. Also, Tanzania and EU are not integrated together but rather working together. The paper recommends that, the domestic supply side constraints should be well addressed to diversify its exports base. This will effectively utilize trade preferences provided to integrate the country in global economy.