EPZ employees in Athi River.  [Photo/Business Daily]Tanzania has announced a blockage of Kenyan textile goods manufactured outside the Export Processing Zone (EPZ).Through a communiqué issued on Friday, the Tanzanian government cited unfair competition for the local manufacturers“This is informed by the fact that Kenya has allowed textile and apparel manufactures operating in the EPZ to off load their final textile products in the Kenyan market duty free. This in effect may hinder similar products from Tanzania from being competitive when sold in the Kenyan market,” the communiqué stated as quoted by Monday's Nation.Kenya in May cleared firms operating in its EPZs to sell up to an expanded 40 per cent of their products in the local market as part of strategy to boost sales and help prop the struggling industry.The EPZ firms were initially only allowed to sell 20 per cent of their products in the Kenyan market with the rest sold under the African Growth and Opportunity Act (Agoa), a trade pact that allows US buyers to import goods from a number of sub-Saharan African countries without paying taxes.The gesture has, however, sparked a trade spat between the two countries amid concern that the Kenya’s expanded domestic market sales quota for EPZ firms could lead to dumping of products in the Tanzanian market.Tanzania has said it will no longer be according preferential treatment to Kenya because it is now enjoying a stay of application for textiles and footwear.The Tanzanian government further argued that 96 per cent of textile produced in Kenya is sold under AGOA market and thus the mechanism for monitoring such export is difficult.

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