Working Papers

Suitable Mechanisms for Negotiating Trade in Services and Movement of Business Persons in the Continental Free Trade Area

Suitable Mechanisms for Negotiating Trade in Services and Movement of Business Persons in the Continental Free Trade Area

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01 Apr 2015

Author(s): J.B. Cronjé

The purpose of trade agreements is to promote international trade. Preferential trade agreements on services or Economic Integration Agreements (EIAs) as they are defined in Article V of the General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO) can promote international trade in services by reducing barriers on foreign participation, improving transparency of policies and regulations affecting trade; and increasing the credibility of the trade regime (reducing the risk of (re-)introduction of trade restrictive policies).

Various negotiating and scheduling approaches can have an influence on the outcome of these three trade objectives and the subsequent agreement. However, the level of negotiating outcomes depends not so much on the choice of negotiating and scheduling approach, but on the political will to generate particular results.

The negotiating modalities contain the agreed objectives, the level of ambition the parties wish to achieve and the process to achieve the envisaged outcomes. In addition, the negotiating modalities usually includes the development of disciplines (regulation, competition, government procurement of services, and subsidies) that would establish a transparent, reliable and predictable business environment to facilitate the creation of regional value chains and deeper economic integration.

What approach should be adopted for the drafting and negotiation for trade in services and the movement of business persons in the Continental Free Trade Agreement? This paper provides an analysis and discussion of various models of services negotiations (i.e. positive, negative and hybrid and implications for the CFTA); various multilateral, plurilateral and regional experiences on trade in services and movement of business persons; the treatment of trade in services within African RECs and the Tripartite negotiations; the pros and cons of negotiating movement of business persons, within the framework of trade in services negotiations or separately; and possible negotiating modalities for trade in services and movement of business persons based on international best practices.

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