Liberalisation of intra-regional trade in services
JB Cronjé, tralac Researcher, discusses the liberalisation of intra-regional trade in services
On 18 August 2012 the Summit of Southern African Development Community (SADC) Heads of State and Government approved and signed the Protocol on Trade in Services. Three Member States, Angola, Madagascar and Zimbabwe did not sign. A further three Member States, South Africa, Botswana and Namibia did not sign the Protocol apparently due to a lack of Presidential representation at the time of signature but all three have indicated that they will sign the Protocol. (Download the signed protocol here)
The Protocol paves the way for the liberalisation of intra-regional trade in services complemented by and consistent with other SADC Protocols in specific services sectors such as those on finance, tourism, transport, communications, health, energy and education. The Protocol, according to its Preamble, seeks to achieve “coherence in the Region’s intra-regional, inter-regional and multilateral commitments and negotiations on trade in services.” This does not prohibit the individual Member States from entering into new preferential agreements with third countries provided such agreements do not impede or frustrate the objectives of the Protocol. Member States are also not prohibited from maintaining any preferential agreement entered into with a third country prior to the adoption of the Protocol. However, Member States must afford other Member States the opportunity to negotiate the preferences granted in any such agreement on a reciprocal basis.
The Protocol will, once entered into force, apply to all measures such as laws, regulations, rules, procedures, decisions or administrative actions affecting trade in services taken by central, regional or local governments as well as by non-governmental bodies exercising delegated powers. It covers all natural or juridical persons of a State Member that supplies a service in the geographical territory of any of the countries that have ratified or acceded to the Protocol. These service suppliers will have the right to request the review of and where justified, appropriate remedies for, administrative decisions. Service suppliers will also have a right to be informed about the status of a license application, registration or similar procedure. Member States have an obligation to establish or maintain objective and impartial judicial, arbitral or administrative tribunals. They are also obliged to publish all laws, regulations, judicial decisions or administrative rulings and procedures relating to any matter in the Protocol. However, the specific market access opportunities Member States will grant and national treatment limitations they wish to maintain vis-à-vis foreign services and service suppliers must still be negotiated among the Member States.
The Member States will, initially, negotiate the liberalisation of six priority services sectors (communication, construction, energy-related, financial, tourism and transport services) in the first round of negotiations. It is unclear when these negotiations will start but it must according to the Protocol be completed within three years after the commencement of such negotiations. Subsequent rounds of negotiation shall cover all other services sectors. Importantly, during the negotiations, Member States are prohibited from introducing new and more discriminatory market access or national treatment measures on trade in services.
It is significant to note that the Protocol provides for its own dispute settlement mechanism in Annex 1 concerning the settlement of disputes between Member States relating to their rights and obligations under the Protocol.
Until now, the liberalisation of services trade has not received the necessary attention it deserves in the SADC economic integration process. It is still a long way before the negotiation of commitments on market access and national treatment are concluded. It is only after this process is concluded and the commitments implemented that businesses can take advantage of the negotiated market opportunities.