Transcript The Draft SADC Annex on Trade in Services

The Draft SADC Annex
on Trade in Services
UNCTAD Secretariat
Sub-regional Conference on Improving Industrial Performance and
Promoting Employment in SADC
Gallagher Estate
6-8 December 2006
The Growing Importance of Services
• Services are becoming the largest sector in most
economies
• They are important contributors to GDP
In 2002 services contributed on average:
- 72% of GDP in industrialized economies
- 49% of GDP in developing countries (DCs)
• They also contribute largely to employment
(including of women)
The Growing Importance of Services
(2)
• Services play a key role in infrastructure
building, competitiveness and trade
facilitation
• They are also vital inputs into other goods
and services
• The potential gains from more open
services trade are greater than those from
liberalizing goods
Infrastructure Services
• Transport, logistics and distribution services are crucial for
moving goods and services from one country to another
• Business, telecom and financial services reduce transaction
costs and support trade
• The challenge is to determine how best to ensure the
provision of these services to the economy (options range
from subsidizing these sectors to opening them to
participation by domestic and foreign firms)
• Situation is similar in the case of public interest/essential
services (ensuring access to such services is a means for
achieving the MDGs)
Services Trade in Africa
• DCs, including Africa, remain net importers
of commercial services
• Africa’s share of world trade in services
dropped from more than 5 % in 1980 to
around 2% in 2003
Potential Benefits from Services Trade
Liberalization in SADC Region
Trade in services can contribute to:
• enhancing economic growth and increasing living
standards in the SADC region,
• the development of domestic services capacities,
• achieving the MDGs by contributing contribute to
social development (education and health) and
poverty reduction,
• making merchandise exports more competitive,
and
• promoting structural change of regional economies
The Mandate for Services Liberalization
in the SADC Region
The mandate for negotiating trade in services in SADC
stems from Article 23 of the SADC Trade Protocol:
1. Member States recognise the importance of trade in
services for the development of the economies of
SADC Countries.
2. Member States shall adopt policies and implement
measures in accordance with their obligations in
terms of the GATS, with a view to liberalising their
services sector within the Community.
The Mandate for Services Liberalization
(2)
Main GATS obligations include:
• Most-favoured nation treatment (Article II GATS)
- Article V (Economic Integration) allows
countries to derogate from the MFN principle
under certain conditions
• Countries’ specific commitments for liberalization
in different services sectors and modes of supply
The SADC Approach for Services
Liberalization
• The 1st SADC TNF meeting on Trade in Services
was held in Lesotho, in June 2000, the 7th TNF
was held in Mauritius in July 2006
• A Draft Annex (to the Trade Protocol) on Trade in
Services was prepared in 2002
• Once the Draft Annex is adopted negotiations on
progressive liberalization should be conducted in
the Trade Negotiating Forum (TNF)
The SADC Approach for Services
Liberalization (2)
Three track implementation plan:
• GATS Plus approach (commitments in the six
priority areas should be the starting point)
• SADC Plus approach (building on work already
undertaken by the relevant sector coordinating
units dealing with services sectors)
• Consolidation of the two approaches to develop a
regional negotiating strategy
The Draft SADC Annex on Trade in
Services
• The Draft Annex largely uses the GATS as a
model
• It defines trade in services according to the 4
modes of supply as defined by the GATS
• The issue of coverage (whether the annex applies
to all sectors) is still not final
• It refers to measures taken by central, regional or
local governments and authorities
The Draft SADC Annex (2)
• The provision on market access is drafted on the
GATS model (positive list approach and no
‘reservations’ allowed unless clearly indicated in
Members’ lists of commitments)
• Services liberalization is to be progressive
(according to a liberalization calendar)
• No limitations are envisaged for national treatment
• The negotiations will take into account the special
needs and circumstances of least developed
countries
The Draft SADC Annex (3)
• In principle 3 years following the adoption of the
Annex the TNF shall establish the necessary steps
for the negotiation of mutual recognition
agreements relating to requirements,
qualifications, licences, and other regulations
• The draft Annex seeks to promote investments in
services (by providing for the development of a
legal framework/model laws, regulation for
investments as well as mechanisms for joint
investments (in particular with SMEs))
The Draft SADC Annex (4)
• The SADC Draft Annex is now being
reviewed by Member States for formal
adoption
• The question was raised whether an Annex
to the Trade Protocol is the adequate legal
form
• The impact of other SADC protocols
affecting trade in services should be kept in
mind
Other Relevant Work on Trade in
Services in the SADC Region
• National workshops to raise awareness on
services trade and services negotiations
• Assessment of Trade in Services (in 6 sectors)
- SADC-wide exercise
- SADC Members States that are also members of COMESA
will also benefit from assessment work undertaken in
COMESA
• Review of the implementation of the
protocols affecting trade in services
Other Relevant Work on Trade in Services (2)
Assessment undertaken will consist of:
• Collection of law and regulations affecting trade in
services
• Questionnaires covering policy issues, market
structure and market performance in the different
services sectors
• National studies
• Regional study
Conclusions
• Ensuring the positive impact of liberalization at
regional and multilateral levels will require a clear
understanding of the specificities of the services
sectors and of the relationship between sectors
• The importance of services is double: economic
activities in their own right but also inputs to other
sectors
• The private sector has a key role to play in the
elaboration of policies for the sector (including in the
assessment exercise)
Thank you for your attention