This working paper examines the African services trade to set a background for assessing the main issues for consideration in the current Continental Free Trade Area (CFTA) negotiations. This is done systematically by firstly looking at the actual trade data in order to see who the main traders are and assess the extent to which South Africa dominates the trade. We then look at some of the issues associated with barriers to services trade and how the CFTA may address these.

Services are a major part of modern economies; services trade is important for many African countries but the data is difficult to obtain, especially for bilateral trade data. The authors find that South Africa is not the dominant service trader on the continent but is dominant in many of the smaller services sectors. Transport and travel are the major traded sectors although these are generally outside a trade negotiation focus.

The current measurements of services trade restrictiveness show large variations between different countries and different sectors. Despite its current difficulties, the Trans-Pacific Partnership Agreement (TPP) represents the benchmark in what can be achieved with services trade liberalisation. Africa sorely needs reforms in services trade frameworks and policy environments; in the absence of specific targets for the usual negotiating reciprocal process with partners, the emphasis reverts back to regulatory reforms with its emphasis on unilateral policy and best-endeavours in trade agreements.

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