Where to from here for the Tripartite FTA negotiations on movement of business persons?
JB Cronjé, tralac Researcher, comments on negotiations towards an agreement on movement of business persons under the Tripartite Free Trade Area
At the launch of the negotiations for the establishment of the Tripartite Free Trade Area (TFTA) comprising the Members of the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC) in June 2011, the Members agreed to conduct the negotiations in two phases. Phase I of the negotiations included trade in goods and movement of business persons “on a separate track”. The trade in goods part of the negotiations were more-or-less concluded in June 2015 with the signing of the TFTA Agreement by sixteen of the twenty six negotiating Member States. The TFTA Agreement now awaits the submission of fourteen instruments of ratification before its entry into force. In the meantime, the TFTA Agreement remains open for signature by the other negotiating Members. Any Member of the African Union may accede to the TFTA Agreement after its entry into force.
At the same time, all negotiating Members signed the Sharm El Sheikh Declaration launching the TFTA to clarify their position on the way forward. The Declaration provides, amongst other things, for the finalisation of outstanding negotiating issues including annexes on trade remedies, elimination of customs duties and rules of origin. It also directed the commencement of Phase II negotiations covering trade in services and trade-related matters including cooperation in trade and development, competition policy, intellectual property rights and cross border investments. It further states that “all negotiations, including outstanding work be carried out in accordance with principles, processes and institutional structures as approved by Summit” in June 2011. The Declaration also states that “work on negotiations on movement of business persons should continue on a separate track”.
The sixteen contracting Members to the TFTA Agreement have made a firm commitment not to defeat the purpose and object of the TFTA Agreement prior to its entry into force, unless a Member makes it clear not to become a party to the TFTA Agreement. One way of defeating the object of the TFTA Agreement would be to depart from the principles governing the TFTA Agreement in the ongoing negotiations. For example, Article 6(f) states the TFTA Agreement shall be governed by the principle of “single undertaking with regard to the various phases of the Agreement”. However, the Negotiating Principles adopted by the Summit in June 2011 only provides for “a single undertaking covering Phase I on trade in goods”. The inclusion of negotiating principles into the text of the TFTA Agreement suggests that future negotiations must adhere and give effect to them. In fact, the TFTA Agreement expressly provides for the conclusion of related legal instruments namely protocols on trade in services and trade-related matters within a certain period of time after its entry into force. A single undertaking means that all the components of the negotiations are parts of a whole and indivisible package that cannot be agreed separately. The absence of such a principle permits fragmentation of the negotiating agenda and would allow for the conclusion of self-governing agreements on trade in goods, trade in services, and any trade-related matter. In other words, in the absence of a single undertaking principle Members can pick and choose which of the legal instruments developed under the TFTA negotiations they wish to sign and ratify. Time will tell how this plays out.
Nonetheless, in October 2014 at the third meeting of the Tripartite Sectoral Ministerial Committee responsible for Trade, Finance, Economic Matters, Home and Internal Affairs, it was agreed to negotiate a separate legal instrument to regulate the movement of business persons in the TFTA. Up to that point it was envisioned that the Members would develop an annex or protocol on movement of business persons to the TFTA Agreement. According to Article 36 of the TFTA Agreement, all annexes and protocols that are developed for the implementation of the TFTA Agreement form an integral part thereof. The movement of business persons is not mentioned in the TFTA Agreement as an outstanding negotiating issue under Phase I nor is it included in the list of trade-related matters to be negotiated under Phase II. In fact, movement of business persons does not form part of the scope, coverage and objectives of the TFTA Agreement. Consequently, a Member may decide to sign and ratify the Tripartite Agreement on Movement of Business Persons but remain outside the TFTA Agreement and vice versa. Such an outcome would defeat the purpose of the exercise.
The Tripartite Agreement on Movement of Business Persons is supposed to form part of the larger TFTA initiative in order to facilitate and increase trade amongst the participating Member States. The primary objective of the Tripartite Agreement on Movement of Business Persons is to set common administrative rules and procedures to facilitate the movement of business travellers within the region. It is extremely onerous to travel within the continent. Not only in terms of the cost of transport, weak and unreliable flight connections, and unsatisfactory airport facilities but also due to high visa application fees and lengthy processing times. It is these last-mentioned challenges this Agreement attempts to address.
The purpose of this Agreement is not to afford any person access to the labour market of another Member State. It is customary to include aspects of this feature in trade agreements and it is common practice to address these issues under a dedicated section in a trade agreement. However, the Tripartite Member States decided to exclude this matter from the Agreement altogether. Presumably, matters relating to access to the labour markets of others will be addressed as part of the trade in services negotiations in the second phase of the negotiations scheduled to commence this year. Each Member State can then agree to grant individuals with certain skills sets or certain groups of persons supplying a service conditional access to their labour market for a limited period of time. Additionally, Member States can also grant transnational firms the right to transfer persons occupying certain positions to foreign offices or to grant them the freedom to employ persons from any other nationality. These matters are typically addressed in those sections dealing with foreign investment in trade agreements.
The purpose of the Agreement is also not to facilitate the entry, stay and exit of tourists from other Member States. It does not attempt to relax or abolish visa requirements for tourists traveling inside or from outside the region. According to the Africa Visa Openness Report 2016 of the African Development Bank, only 13 African countries offer visa-free access or visa on arrival facilities to fellow African citizens. Only 9 African countries provide electronic visa application procedures. However, most regional economic communities have protocols in place that mutually exempt all or at least certain categories of intraregional travellers from visa requirements. Others are working on common tourist visa regimes that would grant tourists from outside the region access to all the Members States of a regional economic community.
At the most recent meeting of the COMESA-EAC-SADC Tripartite Technical Committee on Movement of Business Persons in August 2015, the meeting agreed to refer the draft Tripartite Agreement on Movement of Business Persons to the Tripartite Committee of Senior Officials for guidance on two provisions in the draft Agreement and two issues outstanding from the meeting. There is also a third group of concerns, not raised by the Members.
The first group of issues relates to the provisions on the “guiding principles” and “dispute settlement”. First, the purpose of negotiating principles is to guide and underpin the negotiation process and the development of an agreement. Obviously, the negotiating principles adopted by the Summit in June 2011 were developed to complement trade in goods negotiations and had to be rationalised to fit the peculiarities of any other negotiating issue under discussion. The mere fact that the Members could not agree to the inclusion of certain overarching and undefined principles in the draft text indicates a lack of consensus on a plan of action from the outset. It seems these guiding principles are now inserted as an afterthought. The draft Agreement does not contain a Most-Favoured-Nation (MFN) treatment principle obligating a Member State to provide the same treatment to all business travellers from the region. In the absence of an MFN obligation, countries will continue to apply national immigration regulations on a country-by-country basis. Second, possible disputes arising from the interpretation and application of the agreement will typically relate to the processing of applications and issuing of visas by national immigration authorities. In other words, disputes will arise from administrative actions taken by government officials. When temporary entry is refused an affected business person should first and foremost have access to an administrative remedy to take an administrative decision on review or appeal. In order to safeguard administrative justice, it is critical that strong provisions to enhance transparency and accountability of administrative actions are included in the agreement to ensure that all applicants are treated fairly, impartially and promptly.
The second group of issues relates to the consideration of the views of the private sector following a presentation by the Tripartite Business Councils to the committee and the lack of information submitted by Members on currently applied immigration practices. First, the concerns raised by the private sector show a lack of national consultation with the intended beneficiaries of the agreement; consideration of international best practices; and, varied voices at the negotiating table. Second, Members were requested to structure and share certain information on currently applied immigration practices in a comparable manner in order to inform the negotiations. Sadly, this has not happened. These are fundamental flaws in the negotiating process.
The third group of concerns relates to weaknesses in the draft Agreement. The aim of the draft Agreement is to reduce the cost of doing business through the adoption of objective criteria, establishment of greater legal certainty and minimisation of discretionary powers relating to measures affecting the temporary entry and exit of business persons. It will allow business travellers to enter and stay in a particular Member State for a period of up to 90 days with the opportunity to apply for an extension of the visa for a period of up to 90 days. Members also agreed to grant multiple entry visas to business persons that will be valid for a period of up to 3 years. Unfortunately, Members may maintain prior application and approval requirements and Members are under no obligation to grant visa-free or even visa -on-arrival access to fellow African business travellers. At the very least one would expect Members to provide electronic visa application facilities. This is a major weakness in the draft Agreement.
Another weakness is the lack of clear timeframes and guidelines to ensure compliance with requirements on improving access to information and on simplifying the visa application process. For example, fees and charges must reflect the approximate cost of services rendered; each Member will be required to publish visa application requirements and documentation on the internet; and, each Member must undertake a review of formalities and documentation requirements aimed at reducing the cost and time of compliance for business persons. However, the draft Agreement does not provide clear outcomes on the aims it wishes to achieve from the reviews and it does not offer mechanisms to measure compliance or progress in meeting its objectives.
It is commendable that Members will be obliged to process all applications within 7 working days but then conversely allows Members to extend the process for an undefined ‘reasonable period’ of time. Members will be required to provide timely notifications to applicants on the outcome of their applications but fails to grant applicants a right to resubmit an improved application. Understandably, Members should be allowed to suspend commitments under exceptional circumstances such as in the case of national security and health threats or public policy concerns, but not without prior consultation with affected Members. At the moment, Members would be allowed to merely notify others after a particular restriction has been imposed. It is inconsistencies like these that will dilute the value of commitments.
Probably the biggest concern of all relates to the identification of a business person. According to Article 1 of the draft Agreement, a business person is someone who is “engaged in trade in goods, services or the conduct of investment activities and shall be limited to business visitors, traders and investors”. The particular provision then goes on to provide vague descriptions of each category. The question is: what documentation or evidence must a person present in order to satisfy these requirements and qualify as a business person? Unfortunately, the draft Agreement does not provide any clues. In light of the aforementioned, proof of citizenship or residence in a Member State should probably be the first requirement that comes to mind. Seeing that persons will not be afforded access to the labour markets of others, business visitors and investors will need to demonstrate their source of remuneration remains outside the territory of the Member State granting them temporary entry and stay. A letter from the employer should suffice. However, additional difficulties might arise with the identification of traders. A trader is defined as “a business person whose business is buying and selling goods subject to the relevant national legislation of a Tripartite Member State”. This category of business persons will probably need to demonstrate that their principal place of business and dominant place of accrual of profits is outside the territory of a Member granting temporary access. The million dollar question from any bona fide informal trader meeting all these requirements is: will an oral declaration attesting to these matters be sufficient?