Trade Briefs
Empowerment policies in SADC and their effect on agreement design
Empowerment policies may give rise to discrimination when local suppliers are treated more favourably than foreign ones, and can even limit market access opportunities for foreign suppliers, when, for example, the equity share of the foreign partner is limited. However, the flexible rules incorporated in services agreements provide countries with the ability to schedule empowerment policies in order to legally maintain restrictions against foreign services providers and investors.
SADC member states are in the early stages of negotiations on trade in services and certain member states are currently applying empowerment policies that are in danger of contravening the rules of the anticipated services agreement. It is necessary that these measures are clearly identified and accurately recorded in the schedules of the respective countries.
This brief considers the effect of earlier GATS commitments on scheduling empowerment restrictions in the regional context and the challenges posed by the SADC standstill clause and the requirements of GATS Article V. The brief also proposes some alternatives to safeguard local industries and concludes by evaluating the possible exceptions provided by the services agreements.
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