2009-09-23 tralac Newsletter
2009-09-23 tralac
Hotseat Comment
Paul Kruger, a tralac Researcher, comments on Horizontal schedule issues
All GATS schedules have two main sections: 1) specific commitments where each country stipulates the restrictions it wishes to attach to the respective sectors and modes of supply; and 2) horizontal commitments, which are additional restrictions or obligations applicable across all listed (or committed) sectors. Consideration must also be given to these general horizontal commitments when determining the specific conditions in each sub-sector. Horizontal disciplines play a particularly important role in the liberalisation of Mode 4 and in most cases govern the coverage, definitions, categories, measures and criteria of natural persons when moving to a host country. Due to the sensitive nature of Mode 4, few countries actually undertake commitments in Mode 4. It is more typical for the entry to state ‘Unbound except as indicated in the horizontal section’. This general approach on Mode 4 scheduling, as illustrated by the Malawi schedule below, is typical of most GATS schedules:
| 9. Travel and Tourism services for Malawi | Limitations on Market Access | Limitations on National Treatment |
| A. Hotels and Restaurants (CPC 641 – 643) | 1) None 2) None 3) None 4) Unbound, except as indicated in the horizontal section | 1) None 2) None 3) None 4) Unbound, except as indicated in the horizontal section |
Now to determine the exact extent of Malawi’s commitments in Mode 4 the horizontal commitments in the beginning of the schedule must also be taken into consideration. According to the horizontal section only “natural persons employed in management and expert jobs for the implementation of foreign investment” are permitted to temporarily enter Malawi to take up employment. The terms of employment must however “be agreed upon by the contracting parties and approved by the Minister of Home Affairs”. These are horizontal obligations which must be observed when supplying services in Mode 4.
The general approach can be contrasted with the more liberal approach occasionally found in some schedules. The Namibian schedule made full commitments in all four modes without restricting the supply in Mode 4, as indicated below:
| 9. Travel and Tourism services for Namibia | Limitations on Market Access | Limitations on National Treatment |
| A. Hotels and Restaurants (CPC 641 – 643) | 1) None 2) None 3) None 4) None | 1) None 2) None 3) None 4) None |
Even when ‘None’ is indicated in a sectoral section, this must be read as meaning ‘none except the conditions set out in the horizontal section (WTO 2001. Guidelines for the scheduling of specific commitments under the GATS. S/L/92). So the horizontal section will be applicable regardless of the inscription in the schedule. This is of particular relevance in Mode 4 where most of the restrictions and conditions relating to the movement of natural persons are typically inscribed in the horizontal section. It can be argued that there is little difference between the general approach and the more liberal one, since the horizontal commitments will nevertheless be applicable to all the committed sectors and modes, even despite full liberalisation. The theoretical distinction between the two approaches is clear – a country stipulating ‘unbound’ (no liberalisation) in its schedule wishes to remain free to introduce or maintain market access or national treatment restrictions while an inscription of ‘none’ (full liberalisation) denotes no limitations or restrictions in the given sub-sector or mode of supply. Practical problems will arise when countries that made full commitments – like Namibia in the example above – modify or add market access or national treatment limitations to their horizontal section. Will these additional obligations as inscribed in the horizontal section be applicable to the committed sub-sectors and modes of supply, even if already fully liberalized? If so, can this not be a means to evade the fully liberalized sectoral inscriptions (‘none’) by introducing new and related restrictions in the horizontal section? As seen from the EPA negotiations, countries are moving towards detailed, and in some instances, more restrictive descriptions in their horizontal sections. How will this process of horizontal additions be managed? GATS schedules in some ACP countries (Angola, Mozambique, Swaziland, Rwanda, Tanzania, Uganda, Djibouti, and Madagascar) have no horizontal sections, making the effective management and understanding of these overall measures still more relevant.
Special Features
Second Report from Global Trade Alert reveals how G20 countries have broken their “no protectionism” pledge
The protectionist juggernaut shows no sign of slowing down” according to the latest Report from Global Trade Alert, published today by the Centre for Economic Policy Research. “Over 70 harmful measures have been enacted in each quarter of 2009, and almost every nation has been harmed by these measures. Another six months of protectionist measures are in the pipeline already.” The GTA Report, released on the eve of the G20 Summit in Pittsburgh reveals how the G20 countries have broken their “no protectionism” pledge, made at the November 2008 summit. “At least 121 measures have been implemented by G20 governments since last November. Every three days a G20 government has broken the pledge.” noted Professor Simon Evenett, coordinator of the GTA initiative. The Report urges the leaders at the Pittsburgh Summit to take two steps immediately in order to halt the protectionist dynamics. To read more and download the report, click here...
tralac Media Library
- View an interview by Dr Dickson Yeaboah, (Institute for Training and Technical Cooperation WTO). He comments on the competitiveness of African countries.
- View an interview by Mr Chiedu Osakwe, Accessions Division WTO. He comments on the special and differential treatment LDCs receive when acceding to the WTO.
- View all previous interviews here...
Weekly Customs, Excise, Tariff and Trade Remedy Summary Notification
- Download the notification here.
News
WTO sets up work plan to conclude Doha round in 2010
The World Trade Organisation (WTO) has established a work plan outlining the needs of the negotiating process between September and December 2009 in an effort to conclude the Doha Development Round in 2010.
SACU Council aims to sort EU deal issues
The Southern African Customs Union (SACU) Council agreed at a special meeting at the end of last week to redouble efforts to resolve outstanding issues in signing trade deals with the European Union (EU), hinting at the possibility of a change in SACU’s structure.
EC approves key concession for regional trading blocs
The European Commission (EC) has agreed to harmonise programmes under its European Development Fund (EDF) with those of countries in regional trading blocs in order to make them more effective.
SACU in agreement over monetary union
A meeting between the five member states of the Southern African Customs Union (SACU) in Swaziland at the weekend agreed to explore the possibility of forming an economic community monetary union.
SACU discussions ‘painful’, says Manuel
The Southern African Customs Union (SACU) held painful discussions at the end of last week in Swaziland on the union’s very future, South African Minister in the Presidency for National Planning Trevor Manuel said.
Nigeria to end import bans
The Nigerian government is to lift prohibitions on the importation of 40 items, initially put in place as a protectionist measure to assist the competitiveness of local manufacturers.
SA to give BLS nations ultimatum on EU trade pacts
South Africa is reported to have ‘changed tunes’ by deciding to let Botswana, Lesotho and Swaziland (BLS) ratify their interim Economic Partnership Agreements (EPAs) with the European Union (EU).
European Commission, ESA-IO to deepen regional integration
The European Commission (EC) and the Eastern and Southern Africa-Indian Ocean (ESA-IO) have signed a declaration as a commitment to deepen regional integration following a high-level meeting that took place in Lusaka, Zambia from 14 to 15 September 2009.
Events
tralac Annual Conference, 3-4 September 2009, Cape Town, South Africa
- Trade Policy Developments in Southern Africa
A succesfull conference was held in Cape Town recently. A post conference report will be published soon. Publications
Sino-African agricultural cooperation: Lessons for Africa’s agricultural development
New working paper: Sino-African agricultural cooperation: Lessons for Africa’s agricultural development by Ron Sandrey and Hannah Edinger. As part of the Forum on China-Africa Cooperation process, China has identified agricultural cooperation with Africa as a key priority sector of interaction. This cooperation with the continent has been ongoing and spans over the last five decades. Since the 1990s greater impetus has been placed on this relationship. Rich in agricultural resources, this support both financially and technically should be embraced and best harnessed by the continent to “feed itself”, given the issues of African food security and rural poverty, which came to the forefront once again during the big food price increases of 2008. Read more here...
Protectionism, trade remedies and safeguards: A quick guide for African countries
New working paper: Protectionism, trade remedies and safeguards: A quick guide for African countries by Willemien Denner, a tralac Researcher. Since 1945 the world economy has experienced high growth rates associated with the liberalisation of goods and services and the increase of capital flows. However, the global financial crisis which started in August 2007 has raised concerns for countries regarding the present and potential losses that can be experienced in employment and income. This rekindled the debate on protectionism and the restriction of foreign imports to protect domestic industries. Since the start of the financial crisis a dramatic increase of trade restrictive measures has taken place. After an initial slowdown in the utilisation of trade remedies, 2008 showed a marked increase in contingent protection measures. It seems certain that this trend will continue through the rest of 2009 and possibly into 2010. This can have a dramatic effect on the development, economic growth, employment and income of developing and least developed countries. Read more here...
AGOA.info
New data to July 2009
July 2009 AGOA data was released recently. Click here for aggregate totals, and here to view the latest AGOA release.
Updated bilateral US-Africa country trade profiles
Profiles of disaggregated bilateral US-Africa trade, by country, has been updated to reflect July 2009 data. This also includes various regional profiles - SACU, BLNS, COMESA, ECOWAS, and CEMAC. Follow this link.
Other updated AGOA data sections include disaggregated bilateral trade profiles for each AGOA country individually (as well as within various regional configurations), aggregate bilateral trade, preferential trade under AGOA / GSP and sectoral data from AGOA-eligible countries by value and as a proportion of US imports, as well as sectoral new AGOA and GSP AGOA data. Textile data, is available by value and by volume. Data to June 2009 shows exports of clothing are down 8% year-on-year (clothing exports made up of third country fabrics are 5% lower). Export data is available at this link.
The current quota period commenced in October 2008 and lasts up until September 2009. Current utilisation levels (to July 2009) are 14.7% overall, and 28.54% under the LDC sub-quota.
Follow these links to diagrams showing clothing exports under AGOA, and quota utilisation during the current quota period.
Trade acronyms and terminology
Visit AGOA.info's alphabetically-ordered database of trade-related acronyms and terminology
Latest AGOA news
- Growth opportunity is not well utilised in Nigeria
- Trade talk: Debunking myths about AGOA
- Africa: Reforming African economies continue to reap benefits
- East Africa: Exporters struggle to meet criteria for AGOA products
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- Read these and other AGOA-related news articles in AGOA.info's news area, which is continuously updated with articles sourced from a wide range of African and foreign publications.
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