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SADC operationalises protocol on trade in services

Chronicle | 31 January 2022

SADC operationalises protocol on trade in services

Oliver Kazunga, Senior Business Reporter

THE Southern African Development Community (Sadc) has operationalised the Protocol on Trade in Services after 11 countries of the 16-member bloc including Zimbabwe ratified the pact.

The Sadc Protocol on Trade in Services provides a framework for a preferential trade agreement covering all commercial and tradable services in any services sector.

The protocol aims to encourage increased intra-regional trade in services through the gradual removal of unnecessary or over-burdensome regulation affecting the cross- border supply of services within the region, a process known as progressive liberalisation.

In a statement last Thursday, Sadc said the protocol has entered into force.
This was announced by the Sadc executive secretary, Mr Elias Magosi, in his notification to the 16-member States of Sadc, in which he wrote:
“I have the honour and pleasure to inform member States that the Protocol on Trade in Services entered into force on 13th January, 2022.

“Eleven out of the 16 Sadc member States have deposited instruments of ratification while five member States – Angola, Democratic Republic of Congo, Madagascar and United Republic of Tanzania plus the Union of Comoros, are yet to ratify the protocol,” said the regional bloc.

Article 30 of the Sadc Protocol on Trade in Services provides that the protocol shall enter into force 30 days after the deposit of instruments of ratification by two thirds of the member states.

Barriers to trade in services are found in the way that nations regulate services, for example, through a country’s banking or transport laws, where measures may be found that limit the ability of foreign services suppliers to trade freely across borders.

The protocol offsets the general and specific obligations binding the ratifying or acceding member States to grant each other preferential market access and non- discriminatory (“national”) treatment for regional service suppliers.

The member states guarantee to extend to each other the best conditions for trade that they grant to one Sadc state party or a non-state party, including non-Sadc countries.

"In addiction, state parties guarantee that the same market access conditions for particular services and service suppliers, as set out in their accompanying sectoral commitments, will not be made more restrictive or discriminatory compared to their own ‘like’ (comparable) domestic services and service suppliers,” said Mr Magosi.

“The sectoral commitments, and any limitations thereto, are set out in national lists of commitments (similar to tariff schedules) for sectors that have been subject to negotiations.

“The lists of commitments differ between individual State parties, reflecting different levels of national development of the services sector and regulatory capability and/or experience,” he said.

The first round of such sectoral negotiations was concluded in 2019 covering communication, financial, tourism, transport, construction and energy-related services.

A second round of negotiations was approved by Sadc Trade Ministers in 2021, covering regional trade in the remaining sectors, namely: business services; distribution; educational, health and social services; environmental services; and recreational, cultural and sporting services.

The adopted first round lists of commitments/schedules comprise of commitments in the six priority sectors by all member States except for outstanding schedules by Mozambique (in relation to energy-related services), Madagascar (construction and energy-related services) and Angola and Comoros – yet to become party to the protocol (all six sectors).

Member States have agreed to negotiate the outstanding offers in the six sectors during the second round of negotiations.

“The adopted commitments have also been supported by Protocol Annexes containing some common trade-related regulatory principles in some sectors aimed at underpinning conditions for market access and national treatment.
“The annexes, which are equally binding on each state party, build on experience in the World Trade Organisation (WTO) as well as other preferential or regional trade agreements covering trade in services," said Sadc.

 source: Chronicle