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AfCFTA Guide
Trade in Services
The AfCFTA aims to create a single liberalised market for trade in services through the Protocol on Trade in Services which was adopted in 2019. Article 1(p) of the Protocol defines Trade in Services as the supply of service in the four different modes of supply as follows:
Article V of the General Agreement on Trade in Services (GATS) on Economic Integration establishes the rules that WTO members must abide by when entering into an agreement liberalising trade in services. These include the requirement for the agreement to cover substantially all services sectors, to eliminate existing discriminatory measures in all sectors covered and to prohibit the entry into force of new or more discriminatory measures.
The Protocol also details the objectives of the Agreement with regard to trade in services. These include among others:
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Enhancing the competitiveness of services through economies of scale, reduced business costs, enhanced continental market access, and an improved allocation of resources including the development of trade-related infrastructure;
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Progressively liberalising trade in services across the African continent on the basis of equity, balance and mutual benefit, by eliminating barriers to trade in services;
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Pursuing services trade liberalisation in line with Article V of the General Agreement on Trade in Services by expanding the depth and scope of liberalisation and increasing, improving and developing the export of services, while fully preserving the right to regulate and introduce new regulations.
Liberalisation of Trade
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The provisions relating to the liberalisation of trade, contained in the Protocol on Trade in Services, play a crucial role in ensuring the smooth flow of services among Member States. The Protocol specifies that Member States will negotiate sector-specific obligations by developing regulatory frameworks for each sector, as necessary, taking into account best practices and acquis from the Regional Economic Communities (RECs) and the negotiated agreement on sectors for regulatory cooperation.
It also stipulates that the liberalisation process will focus on the progressive elimination of the adverse effects of measures on trade in services to provide effective market access to boost intra-African trade in services. The Protocol also includes a provision for a List of Priority Sectors to be annexed to the Protocol.
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The AfCFTA has prioritised five service sectors to be liberalised under the Agreement, namely business services; communications; financial services; transport; and tourism. Other service sectors will be progressively liberalised over time.
Business Services
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All Professional Services
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Computer and Related Services
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Research and Development Services
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Real Estate Services
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Rental/Leasing without operators
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Other Business Services
Communication Services
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Postal Services
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Courier Services
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Telecommunications Services
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Audiovisual Services
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Others
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Financial Services
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Insurance and Insurance Related Services
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Banking and Financial Services
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Other Financial Services
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Transport Services
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Maritime Transport Services
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Internal Waterways Transport
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Air Transport Services
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Space Transport
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Rail Transport Services
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Road Transport Services
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Pipeline Transport
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Services auxiliary to all modes of transport
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Other transport services
Tourism Services
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Hotels and Restaurants (inc. catering)
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Travel agencies and tour operators
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Tourist guide services
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Other
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Non-Discrimination
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Non-discrimination is a key principle in the AfCFTA’s Protocol on Trade in Services. The aim is to foster equitable trade relations among Member States while promoting economic growth and cooperation.
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Most Favoured Nation: According to the Protocol, Member States are required to accord Most-Favoured-Nation (MFN) treatment to each other. MFN treatment means that Member States must provide the same benefits and advantages to all other Member States and must accord to services and service suppliers of other Member States treatment no less favourable than that which they accord to services and service suppliers of any third country.
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Suppose Morocco allows Egypt's construction companies to establish and operate construction projects within its territory, following the MFN principle, Morocco must extend the same permission to all other members of the AfCFTA for their construction companies as well.
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However, the Protocol also provides for exemptions from the MFN treatment obligation, provided that any measures inconsistent with the latter are listed in an agreed MFN exemption list. The MFN exemption list will undergo regular reviews to determine which exemptions can be eliminated.
National Treatment: The provision on National Treatment, contained in the Protocol, establishes the obligation for Member States to provide services and service suppliers of other Member States treatment no less favourable than it offers local services and service suppliers. National treatment can be subject to conditions and qualifications, which must be agreed between Member States concerned, and specified in the Member State’s Schedule of Commitments.
Special and Differential Treatment: One of the core objectives of the AfCFTA is to ensure mutually beneficial trade. In order to achieve this objective, Member States are expected to provide flexibility to other Member States based on their different levels of economic development or individual specificities. These include:
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the provision of special consideration to the progressive liberalisation of service sectors' commitments and modes of supply;
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consideration of the challenges that may be encountered by State Parties and the adoption of measures to accommodate the special economic situations and development, trade and financial needs of countries in implementing this Protocol; and
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provision of technical assistance and capacity-building through continental support programmes.
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Mutual Recognition
Article 10 of the Protocol on Trade in Services of the AfCFTA talks about how countries within the AfCFTA can recognise each other's qualifications and certifications for service providers. This helps make it easier for professionals from one country to offer their services in another country without having to go through a lengthy process of requalification.
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Recognition of Qualifications: A country within AfCFTA can agree to accept the education, experience, licenses, or certifications that service providers have obtained in another AfCFTA country. This recognition can be based on an agreement between the countries or can be given independently.
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Equal Opportunity: If a country has an agreement with one country for recognising qualifications, it should give other AfCFTA countries a fair chance to join that agreement or negotiate a similar one. If recognition is done independently, other countries should have a chance to show that their qualifications should also be recognised.
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No Discrimination or Trade Restrictions: Countries cannot recognise qualifications in a way that discriminates against other AfCFTA countries or secretly limits trade in services.
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Information Sharing: Each country should let the AfCFTA Secretariat know about its existing recognition measures within a year of the agreement taking effect. They should also inform other countries in advance if they plan to negotiate agreements for recognition, and they should share updates when they make changes to their recognition measures.
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AfCFTA Standards: Whenever possible, recognition of qualifications should follow standards that AfCFTA countries have agreed upon. Countries should also work together with organizations to establish common standards and criteria for recognition and for the practice of various professional services.