Challenges facing the movement of workers and services suppliers in the EAC
JB Cronjé, tralac Researcher, discusses challenges facing the achievement of free movement of business persons in the East African Community
The Protocol on the Establishment of the East African Community Common Market (Protocol) entered into force in 2010. The Protocol provides for the free movement of persons, services, workers, goods, capital and the right of establishment and residence in any other Partner State. The Protocol makes a distinction between the movement of workers, self-employed persons and persons supplying a service (mode 4) in another Partner State. The movement of workers and persons supplying a service is not unrestricted but subject to negotiated market access commitments. These market access commitments are contained in different Annexes to the Protocol but are linked to each other. The schedules of commitments on the liberalisation of trade in services of each Partner State contained in Annex V provide that market access and national treatment commitments on mode 4 are “in accordance with the Schedule on the Free Movement of Workers” (Annex II), thus equating the commitments. It is this last-mentioned Annex II that regulates the entry and stay of workers in another Partner State, the procedures for obtaining work permits, rules regarding the cancellation of work permits, expulsion of workers, their working conditions and the legal position of their spouses and children.
The Protocol defines a worker as “a person who performs services for and under the direction of another person in return for remuneration” (Article 1). This definition excludes self-employed persons who are defined to include “a person engaged in an economic activity not under any contract of employment or supervision and who earns a living through this activity” (Article 1). The movement of self-employed persons in the EAC are regulated under Annex III on the right of establishment which allows a national “to take up and pursue economic activities as a self-employed person and to set up and manage economic undertakings in another Partner State” (Article 13).
Market access commitments were undertaken in different categories of workers including managers and administrators; professionals; technicians and associate professionals; and, craft and related trades workers. Annex II regulating the movement of workers apply only to the occupational categories in which market access commitments where undertaken. Consequently, if a particular occupation is covered by a market access commitment such a worker has the right to enter the territory of another Partner State in order to apply for a work permit. Work permits are issued upon presentation of a valid common standard travel document or national identity card and contract of employment. Work permits are valid for a period of two years and can be renewed subject to the duration of the contract of employment or validity of the common standard travel document. Substantially the same procedures and requirements also apply to self-employed persons seeking to obtain a work permit in another Partner State provided they obtain the necessary registration and certification with the relevant competent or professional bodies before they engage in economic activities.
In September 2014, following the identification of implementation challenges arising from the liberalisation commitments made on the movement of workers, services and service suppliers the EAC Council of Ministers considered draft proposals on specific amendments to the Protocol provisions on trade in services and revised Partner States’ schedules of specific commitments on mode 4 under Annex V to the Protocol. The agreed scope of the work to be undertaken in reviewing Partner States’ schedules includes the rectification of technical scheduling and classification errors; rectification of legal discrepancies in cases where some Partner States have made more commitments under the General Agreement on Trade in Services (GATS) of the World Trade Organisation than under the EAC Protocol; adoption of certain GATS definitions; and, the negotiation and scheduling of horizontal commitments in the Partner States’ schedules of commitments on the liberalisation of trade in services. Partner States will also be requested to offer additional liberalisation commitments in the seven services sectors already negotiated under the Protocol. The review of negotiated liberalisation commitments will also include the negotiation and scheduling of specific commitments on mode 4. In order words, the newly negotiated commitments on the temporary movement of persons supplying a service in another Partner State will be separate from the provisions regulating the movement of workers and self-employed persons in the EAC. This could lead to the formulation of new definitions of persons that are in conflict with the definitions on workers and self-employed persons; categories of persons under mode 4 that overlap with existing categories of workers; and, permitted periods of stay and other conditions of employment that are different to similar provisions defined elsewhere in the Protocol. It will also require the adoption of additional provisions to regulate the movement of persons regarded as service suppliers. In what has started off as an exercise in simplifying legal matters to facilitate the free movement of factors of production and the implementation of the Protocol may end up achieving the opposite.