AfCFTA Trade in Services – A general guide and issues for negotiations on Mutual Recognition Agreements
Business services sector, which include professional services, has been prioritised under the ongoing negotiations on schedules of specific commitments in the context of the African Continental Free Trade (AfCFTA) Protocol on Trade in Services (PTIS). The final schedules of Member States’ commitments will spell out the market access and national treatment limitations applicable for each of the four modes of supply, namely: Mode 1 (cross-border supply), Mode 2 (consumption abroad), Mode 3 (commercial presence) and Mode 4 (presence of natural persons).
However, effective supply of professional services between two countries is not only determined by the guaranteed terms of market access and national treatment contained in the schedules but largely determined by the whether the regulatory authorities of the receiving country would recognise or accept the qualifications and experiences of that foreign service supplier (firm or natural person). For example, for regulated professional services, most countries normally require companies and individuals seeking entry in its jurisdiction to register with the local professional body.
The requirement for registration enables the recipient professional body to ensure suppliers’ competency, protection of the professional title (e.g. nurse, dentist, chartered or certified accountant), adherence to local industrial standards. It may also suggest a degree of protectionism that may restrict new market entrants. In ensuring effective market access for foreign professionals, the AfCFTA Protocol on Trade in Services provides for mutual recognition of professional qualifications, experiences or requirements met, licences or certificates, obtained or issued by a party to the agreement in fulfilling the criteria in authorizing or certifying the supply of a professional service in another member state.
The AfCFTA negotiators need to understand the provisions of the Protocol in order to ensure they come up with an implementation instrument that responds to market needs. In so doing, they need to know what is existing both at the African Union (AU) level and in Regional Economic Communities (REC) in order to build on the experiences and draw some lessons from these experiences. Therefore, this Blog provides some guidelines and notes some issues for the negotiations by answering some key questions: Why are mutual recognition agreements necessary? What does the Protocol say and what is expected? Are there any initiatives or arrangements at AU and REC levels in the area of mutual recognition agreements (MRAs)? What lessons are there for development of MRAs in the AfCFTA?
The concept of MRAs is not new; is common in many trade agreements including in the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO). In simple terms, a MRA is contractual arrangement or understanding between or among regulatory bodies to recognize each other’s technical standards and regulations, quality verification procedures and results thereof, for either goods or services.
Examples of MRAs include; for trade in goods, the conformity assessment or standards’ bodies of two or more jurisdictions agreeing to mutually recognise the procedures and results of assessment done by one party as sufficient and no need to undergo assessment in the receiving jurisdiction. For trade in services – the engineers’ association or regulatory bodies of two countries agree to mutually recognise the qualifications of a member registered or licenced by the other party for the purpose of accepting/admitting/authorizing or certifying their professional practice in the jurisdiction of the receiving body.
MRAs for professional services are often negotiated as trade facilitative instruments in support of market access commitments to ensure professional services suppliers takes the professional test or assessment in one country only. The acceptance of foreign professional qualifications would imply recognition of how it was obtained and related standards, criteria, procedures and the system of its verification. The development of an MRA especially, where international standards do not exist or there are significant differences in regulatory systems, may involve joint assessment of the systems in order to build confidence and trust in their respective systems.
Normally, an MRA establishes the conditions or criteria and verification procedures for the parties to recognise the results of each other’s compliance tests and thus assures the host body that the certified or licenced professional meets the required minimum standards, experience and qualification is thus able to offer quality services with professional integrity. It may aim at harmonisation of standards and systems which would imply automatic recognition or recognition of equivalences with or without conditions. In some cases, an automatic recognition could mean that licenses and certificates granted by the sending jurisdiction could automatically be considered valid in the receiving jurisdiction. Conditional recognition may require additional training or supervised practice before authorization is granted.
There are two types MRAs relevant for professional services among AU State parties: namely (a) Qualification Framework Agreements consisting of broad-based criteria for assessing qualifications obtained at various formal education or training levels. This aims at portability academic credits for students’ mobility and recognition of the awards i.e. certificates, diplomas or degrees thus facilitating skills mobility between parties, and (b) MRAs among professional regulatory bodies – which set criteria for recognition in the specific professional field that comprises academic, professional experience and/or tests that a person must pass in order to obtain a certificate or licence for professional practice.
Article 10 of the AfCFTA PTIS calls for mutual recognition of education, experience, licenses, or certifications obtained or requirements met. It urges State Parties to ensure non-discrimination in such systems and the need to afford other State Parties the opportunity to become party to MRAs or demonstrate that the education, experience, licenses, or certifications obtained or requirements met in that that territory should be recognised by the receiving country. Also, it states that wherever appropriate, recognition should be based on AfCFTA-agreed criteria. Lastly, PTIS requires State Parties, within 12 months of entry into force of the PTIS, to inform the Secretariat of their existing recognition arrangements.
In this regard, it would seem that negotiators are expected to agree on the mechanism for notification but also set out the criteria to be used by State Parties’ regulatory authorities in granting recognition, which may take the form of a framework agreement on MRAs. Negotiators do not need to reinvent the wheel since the process to deliver the requirements could build on international and regional experiences. For instance, notifications of existing MRAs could follow the procedure and form adopted in the GATS and for development of recognition criteria – there is great experience among regional economic communities.
Most of the AU Member States have bilateral arrangements for recognition of foreign qualifications; most tend to be in the regulated fields such as engineering, legal, medical and health professions. Also there are good efforts in developing an AU qualifications framework (QF) and some AU RECs have made good progress in developing regional or sub-regional QFs and MRAs.
The initiative to establish the African Continental Qualifications Framework (ACQF) is based on the Revised Convention on the Recognition of Studies, Certificates, Diplomas, Degrees and Other Academic Qualifications in Higher Education in African States 2014. The ACQF will support the objectives of the AU Agenda 2063 by facilitating mobility of skills and transparency of qualifications, through ongoing initiatives to harmonise education, development of common standards and quality frameworks. Similar, both the East Africa Community (EAC) and the Southern Africa Development Community (SADC) have adopted regional QFs. The EAC QF is operational and includes the launch of the EAC Common Area for Higher Education in 2015. The SADC QF is not yet fully operation as parties are undertaking some implementation activities including quality assurance assessments, and development of guidelines for recognition of prior learning, articulation and credit accumulation and transfers as well as review of national QF to ensure alignment to the SADC QF.
Development of MRAs for professional services in the RECs has progressed both, in terms of ongoing negotiations and implementation of signed agreements. For example, a number of MRAs are in force – EAC countries have concluded and signed four MRAs covering accountancy services (2011), architectural services (2011), engineering services (2012) and veterinary services (2016). Also, at sub-regional levels, member states of Economic and Monetary Union of West Africa (UEMOA) under the Economic Community of West African States (ECOWAS) and CEMAC/ECCAS are implementing MRAs relating to accounting, engineering, legal, medical services, amongst others.
There are also Ongoing negotiations. Some Member States of the Common Market for Eastern and Southern Africa (COMESA) namely; Malawi, Mauritius, Seychelles and Zambia together with Mozambique are negotiating MRAs for accountancy services in the context of the Accelerated Programme on Economic Integration (APEI) region; EAC countries are negotiating MRAs for legal services and health professionals i.e. pharmacists. SADC Member States have been undertaking some preparation for the development of MRAs in the context of their Protocol on Trade in Services. Regulators of veterinary services in SADC member states are undertaking consultations toward development of their MRA.
As noted, for the development of AU-wide criteria for professional services MRAs, Member States can also look at international experience which shows that recognition may follow different approaches, such as:
Vertical approach – limited to the specific profession or sector e.g. the Washington accord on engineering services, the Caribbean Community Skills Certificate Scheme; as well as EAC which are similar to MRAs in the Association of South and east Asian Countries (ASEAN);
Horizontal approach – which cover wide range of occupations but is based on a harmonised minimum training conditions. Examples include, the European Union Professional Qualifications Directive (automatic recognition of professional in the health sectors such as nurse midwifes, doctors (general practitioners and specialists), dental practitioners, pharmacists, architects and veterinary surgeons) and the Trans-Tasmania MRA between New Zealand and Australia.
Umbrella approach – provides detailed guidelines for development of MRAs in future. For example, the France-Quebec Accord sets out a common framework and procedure for the conclusion of occupation-specific MRAs among regulatory bodies in each profession in which they will negotiate the specific eligibility requirements for about 70 MRAs between in 2009 and 2019. Another example is the Asia-Pacific Economic Cooperation Architect Project Framework – which allows two or more of the state parties to enter MRAs as per the eligibility requirements identified in the framework.
There are many lessons that could be drawn from the experiences in negotiating and implementing MRAs whether for professional services or academic qualifications. The need to secure political support from the regulatory and policy institutions in the respective fields but also those responsible for immigration and labour permits is important, to ensure effective mobility of the professionals over and above the recognition of their qualifications. Political support is key especially where the MRA would results in surrendering some regulatory sovereignty or in an upgrade or change to regulation, or the development new laws and institutions. This could be achieved through comprehensive stakeholder consultations involving both policy and services providers in education, professional regulators and employers.
The implementation of MRAs can be a lengthy and costly process especially if recognition is to be achieved through harmonisation or where industrial standards and regulatory systems do not exist or differ significantly between parties to the MRA. This would require confidence and trust building. This can take considerable time and sometimes joint verification between parties’ systems or facilities may require the development of new, or an upgrade, of standards and systems.
Experience shows that regulatory bodies may decide to unilaterally apply licensing requirements that are in direct violation of the MRA. This is sometimes informed by some protectionist motives; and even where regulators are willing to implement, some support institution such as labour and immigration could also implement measures that frustrate the implementation of the MRA. It should thus be understood that recognition of qualifications does not always result in effective mobility of professionals.
Effective implementation requires supportive institutional structures i.e. legal and institutional framework to monitor and support MRA implementation, not only at national level but also could also at the REC level, depending on the approach followed. It should be remembered that MRAs are living arrangements, and after signature they require implementation and ongoing revision, and improvement, including possible re-negotiations. Otherwise they may become obsolete. Taking all of these issues into account, the umbrella approach may well provide the best fit for developing AU-wide criteria as required in Article 10 of the AfCFTA PITS.
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