TRALAC - Trade Law Centre

Tanzania: Key US Congress members raise concerns about elections and treatment of US investors

Thursday, 01 October 2020

Source: The Street Journal

The ranking Democratic and Republican members of the U.S. House Subcommittee on Africa are packing a resolution urging the government of Tanzania to respect human and economic rights and to conduct free and fair elections on October 28.

House Resolution 1120 – sponsored by California Democrat Karen Bass, who chairs the subcommittee, and the ranking Republican, Chris Smith from New Jersey – reflects growing concern over political and economic developments in Tanzania by members of Congress who follow Africa.

Since the election in 2015 of President John Magufuli, the resolution states, “Tanzania has adopted and enforced multiple repressive laws that restrict freedom of the press, and of expression, assembly, and association.”  

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Citing reports of corruption and harassment of U.S. companies operating in Tanzania, the resolution criticizes the government’s “lack of respect for contracts and business operations that threaten future U.S. businesses investment and trade partnerships.”

Protection of U.S. investor rights is an issue that enjoys bipartisan support, and there are several U.S. commercial disputes in the country at this time. But the driver behind this Congressional expression of concern is the government’s nearly four-year dispute with Symbion Power, centered on the breach of a 15-year power purchasing agreement for the Ubungo power plant.

Symbion is a New York-based independent power producer that develops and operates projects in several African countries and has operated in the Middle East and Asia as well.

Former President Barack Obama launched his Power Africa Initiative at the Ubungo power plant in 2013. Power Africa has continued to enjoy the support of the Trump administration and has been further enhanced by the launch of Prosper Africa, and the establishment of the U.S. Development Finance Corporation.

In June, a letter submitted on behalf of Symbion under the annual eligibility review process of the African Growth and Opportunity Act (Agoa),  said the contract abrogation by the Tanzanian government “was taken without cause nor compensation and despite good-faith efforts by the company to seek a mutually agreed to solution.”

In the submission to the Office of the United States Trade Representative, Symbion requested that the agency “critically consider whether the Government of Tanzania is meeting the criteria to remain an Agoa beneficiary country, and what benchmarks need to be set to assure compliance with these unilateral trade preferences.”

According to the Symbion letter, commercial disputes with U.S. companies could jeopardize Tanzania’s continued eligibility to export duty-free apparel to the U.S. under Agoa. Recently, apparel exports to the U.S. totalled near $40 million, supporting thousands of Tanzanian jobs.


 

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