Trade in Services in the SADC Region
The services sector in the SADC region is characterised by moderate investment, comparatively high cost and limited access to services by the general public. At the same time, it is acknowledged that services are the most important part of Southern African economies and are also important inputs to production in all sectors. Services are important elements for growth and competitiveness.
Most SADC Member States adopted services sector liberalization policies in the 1990s providing limited market access to foreign services suppliers, including through foreign direct investment. Except for the Union of Comoros which is negotiating its accession, all SADC Member States when they became WTO Members undertook binding liberalization commitments under the GATS; but also most Member States have bilateral agreements covering liberalization of some services sectors.
SADC Member States recognize that the deeper integration not only of trade in goods, but also of their services markets holds great economic potential. In the SADC Treaty Member States undertook to develop policies aimed at the progressive elimination of obstacles to the free movement of capital and labour, goods and services. The RISDP paragraph 220.127.116.11, recalls the objective of eliminating obstacles to the free movement of capital, labour and goods and services and the improvement of the region's economic management and performance through regional cooperation with the ultimate goal of eradicating poverty, and foresees the establishment of a Common Market through removal of barriers on factors of production. Whereas SADC has concentrated its efforts towards establishment of a Free Trade Area for goods, work on policies to eliminate obstacles to the movement of services has to date progressed slowly. Protocol on Trade in Services was a signed by Heads of State/ Governments in August 2012.
It is important to note that the Protocol on Trade in Services provides for a mandate to progressively negotiate the removal of barriers to the free movement of services, but does not bring about any integration of markets in and by itself.
SADC Ministers of Trade decided in November 2011 to commence with negotiations on the liberalization of six priority sectors (communication services, construction services, energy-related services, financial services, tourism services, and transport services). These negotiations are expected to result in market access commitments that will provide a predictable legal environment for trade and investment in the sector within the region.
On 23 July 2018, the Committee of Ministers of Trade approved Lists Commitments by 14 Member States, except for Angola and Comoros) covering the horizontal commitments and specific commitments in communication, financial, tourism and transports services. In addition, the Ministers also adopted three cross-cutting Annexes i.e. Annex on Substantial Business Operations, Annex on Interim Arrangement relating to Commitments on Subsidies and Annex on Movement of Natural Persons "Mode 4"; and three pro-trade regulatory, namely: Annexes on Financial Services, Annex on Telecommunication Services and Annex on Tourism Services. The first round negotiations on liberalization commitments were finalized on 14 June 2019, when the Committee of Minister of Trade adopted List of Commitments in construction and energy related services as well as the Annexes on Postal and Courier Services.
On 30 July 2021, the Committee of Ministers of Trade adopted the Negotiating and Scheduling Guidelines for the Second Round Negotiations, which was accompanied by a Roadmap. According to paragraph 5.3 of the Guidelines, the second round shall prioritize services that have relevance to the the SADC Industrialization Strategy and Roadmap (SISR) 2015-2063, particularly business and distribution services as well as all other sectors not prioritized in the first round namely educational; environmental; health; recreational, cultural and sporting services; and other services not included elsewhere. Also, it shall cover all unfinished elements of the six priority sectors for the first round that are relevant for the fulfillment of the SISRI 2015-2063. The Guidelines do not set any duration for the second round but according to the Roadmap, the negotiations are due to begin in September 2021 and expected to be concluded by June 2023, subject to any revisions.