Working Papers

An update on the African Continental Free Trade Area and Southern African Development Community Protocols on Trade in Services

An update on the African Continental Free Trade Area and Southern African Development Community Protocols on Trade in Services

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15 Jan 2020

Author(s): Viola Sawere

The services sector is key to economic development because it contributes a significant share of Gross Domestic Product (GDP), employment and trade in a country’s economy, regardless of the level of development. The United Nations Conference on Trade and Development (UNCTAD) (2017) shows that the share of services to GDP increased from 61% to 76% in developed economies and from 42% to 55% in developing countries, in the 1980-2016 period. During this period in developing countries, and particularly in least developed countries (LDCs), the productive resources mainly moved out of the agricultural sector to services.

Recognising the importance of trade in services in the development of the continent and the challenges that hold back the sector, the Action Plan for Boosting Intra-Africa Trade (BIAT), adopted in the 18th Ordinary Session of the African Union (AU) Assembly, in Addis Ababa, Ethiopia, January 2012, member states were called upon to undertake commitments to liberalise trade-related service sectors. The recommended service sectors include transport, professional services, financial and information, communication and technology (ICT) sectors. Also, the Assembly decided to fast-tract the establishment of the African Continental Free Trade Area (AfCFTA) by 2017 in implementation of the BIAT Action Plan and towards the establishment of the African Economic Community (AEC) envisaged in Article 6 of the Abuja Treaty (1991).

Since the Assembly’s decision to fast-track the establishment of the AfCFTA, it would be interesting to know what has been achieved at the AU and REC levels. Therefore, this paper takes stock of the progress towards commitments to liberalise trade in services on the continental level and the REC level – in the case of the Southern African Development Community (SADC). It provides some background, outlines the progress in negotiating liberalisation commitments, and highlights the achievements so far, in the context of the AfCFTA and SADC Protocols on Trade in Services.

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