International trade agents

1. The principal-agent relationship is central to international trade, where agents manage specific tasks for the principal.
2. Agents do not own the goods but help in the transfer of title and ownership.
3. Agents assist in facilitating business activities, making it easier for the principal to reach broader markets and handle logistics effectively.

i. Special or particular mercantile agents: These agents are appointed to handle specific tasks or duties for the principal. Their authority is limited to certain actions, and the agency relationship is usually temporary, meant for a particular assignment or task. For example, a special agent might be appointed to handle a one-time sale of goods or to negotiate a specific contract. Their powers are not general, and they cannot perform tasks beyond what was agreed upon.

ii. General agents: These agents have a broader scope of authority compared to special agents. A general agent is empowered to carry out all acts connected to a particular trade, business, or employment on behalf of the principal. This means they can make decisions and handle day-to-day operations for the principal in the normal course of business. Their role includes managing various aspects of the business, such as purchasing goods, negotiating contracts, and dealing with suppliers or customers, all while acting in the best interest of the principal.

iii. Universal agents: A universal agent holds the highest level of authority. They have unlimited power to act on behalf of the principal in any lawful transaction. This means they can handle a wide range of activities, even those outside the typical scope of business. Universal agents are often trusted individuals, such as family members or close associates, who have full discretion in making decisions for the principal. Their role is critical because they can act as a complete substitute for the principal in matters where the principal cannot personally participate.

i. Commission agents: Commission agents are individuals or firms that act on behalf of a principal (importers or exporters) to buy and/or sell goods in the market. They do not take possession of the goods but are responsible for negotiating the best possible terms for the transaction. Commission agents earn a commission based on the total sales value they generate, and their role includes selling goods for the principal either from their own inventory or by procuring them from the principal.

ii. Brokers: Brokers act as intermediaries between buyers and sellers in international trade. They do not take possession of goods or handle transactions directly but instead focus on negotiating contracts or arranging sales/purchases between parties. Brokers charge a brokerage fee for their services. They do not assume liability for the goods and do not enter into contracts in their own name. Brokers help connect the right parties but are not involved in the ownership or handling of the goods.

iii. Factors: Factors are mercantile agents with a more significant role compared to brokers. They take physical possession of goods from the principal and sell them in their own name. Factors are responsible for handling sales transactions, which could include credit sales. They deduct their commission from the sales proceeds and then send the remaining amount to the principal. Factors have considerable discretion in terms of negotiating sales conditions and assume greater responsibility for the sale process.

iv. Clearing and forwarding agents (CFAs): CFAs are responsible for the entire logistics process of importing and exporting goods. They handle all the formalities associated with clearing goods through customs and ensuring they are properly dispatched. Once goods are cleared through customs, CFAs organize the transportation and delivery of goods to the importer or the next destination. They act as a bridge between the importer/exporter and customs or shipping companies, ensuring that everything goes smoothly during the process.

v. Del-credere agents: Del-credere agents are a special type of agent who not only act on behalf of the principal but also guarantee payment for goods sold on credit. If a customer defaults on a credit sale, the del-credere agent takes on the risk and compensates the principal for the loss. In return for this additional risk, del-credere agents are paid an extra commission called the "del credere commission." These agents ensure that credit transactions are secure, and they assume liability for the performance of contracts related to those sales.

vi. Auctioneers: Auctioneers specialize in selling goods at auction. They are licensed professionals who conduct auctions where goods are sold to the highest bidder. Auctioneers aim to get the maximum price for goods during the auction process, and they do this by providing details about the items being sold, including the auction date, place, and description of the goods. Auctioneers do not take ownership of the goods; instead, they facilitate the sale process and ensure that the highest possible value is achieved.

vii. Warehouse keepers: Warehouse keepers are responsible for the storage of goods before export or after import. They offer services to store goods safely and issue receipts, such as warehouse keeper's receipts, acknowledging that the goods are stored in their facility. These receipts are not title documents, but they serve as proof that the goods are under care. In some cases, warehouse keepers issue a warehouse warrant, which can be transferred to someone else and represents the title to the goods in storage. They charge for their storage services and ensure that goods are stored under appropriate conditions.

International trade involves a complex network of organizations, government agencies, and private bodies that ensure the smooth flow of goods and services across borders. In Tanzania, several institutions and organizations play a crucial role in facilitating international trade. A significant example is the Export Processing Zones Authority (EPZA).

Export Processing Zones Authority (EPZA)

EPZA is a key government agency responsible for promoting investments in Tanzania's Special Economic Zones (SEZs). Established in 2006 following the amendment of the Export Processing Zones (EPZs) Act of 2002, EPZA operates autonomously under the Ministry of Industry, Trade, and Investment. The authority aims to boost international trade by attracting investors and facilitating the processing of export-oriented goods.

Objectives of EPZA

The main goals behind the establishment of EPZA include:

1. Promoting investments: Encouraging both local and foreign investments in the designated Export Processing Zones (EPZs) and Special Economic Zones (SEZs) across Tanzania.
2. Technology transfer: Attracting new technologies to enhance the quality and competitiveness of Tanzanian products in the global market.
3. Processing local raw materials: Promoting the processing of Tanzania's raw materials to add value before export, which can increase the country's export revenue.
4. Employment creation: Generating job opportunities within the SEZs and contributing to overall economic development.
5. Increasing foreign exchange earnings: Boosting Tanzania's foreign exchange reserves through increased exports.

Functions of EPZA

EPZA undertakes various activities to support its objectives and functions effectively in the trade sector. These include:

1. Land acquisition and infrastructure development: EPZA works with local governments to acquire land for SEZs and develops the necessary infrastructure (e.g., roads, buildings) for investors to set up their operations.
2. Provision of utilities and services: The agency ensures that SEZs have necessary utilities like water, electricity, drainage, and waste management to maintain a smooth working environment for businesses.
3. Promotion and marketing: EPZA prepares both national and international programs to promote Tanzania's SEZs, attracting investment and business opportunities from global players.
4. Security and maintenance: The authority ensures the security of assets and operations within EPZs and provides maintenance services for both physical infrastructure and machinery.
5. Commercial information: EPZA provides investors with valuable commercial information, including market trends, investment opportunities, and logistical details to make the investment process seamless.