GATS negotiations must focus on services liberalization: the case of SADC

This paper argues that for trade liberalization in the Southern Africa Development Community (SADC) region to have any meaning it is important that services liberalization keep pace with trade liberalization. It identifies key issues of interest to SADC countries in the GATS negotiations and how the countries can ensure a favourable outcome.

It finds that the key challenge for SADC countries is to establish their specific needs in the framework of GATS Article IV, leading to transfer of technology and capacity building. The areas of particular interest to SADC countries include:

• movement of persons, in particular further liberalization of movement of persons (mode 4) on a sectoral basis, and addressing issues that impede market access (issuance of visas, administrative procedures, lack of transparency and economic needs tests)
• tourism is a key economic sector many SADC countries (in particular Malawi, Mozambique, Tanzania and Zambia). Most SADC countries have already liberalized the tourism sector, but to ensure that trade is taking place fairly and competitively, other multilateral measures may be necessary. The lack of multilateral disciplines and mechanisms within the GATS framework will affect the ability of SADC countries to deal with or prevent anti-competitive practices (particularly by foreign companies) in their tourism sectors
• energy services: SADC countries will be under pressure to liberalize in many sub-sectors of energy services. To ensure that the link between market access and development is clearly established, access to the region’s energy markets should be made conditional on: a) transfer of technology and managerial know-how; b) acceptance by foreign suppliers of public services obligations; and c) setting up of alliances between foreign and domestic firms, including SMEs
• construction: SADC countries view the construction services sector not only as a key infrastructure service but also as a tool for upgrading welfare. The strengthening of domestic and export supply capacity relies upon the ability of SADC countries to upgrade continuously their technological capacity. SADC countries may seek to attach the requirements of associations and joint ventures, so as to include local companies in the design and implementation of construction projects. This has proved to be the most effective way of obtaining access to transfer of technology. Construction is one sector that SADC countries can request for sector liberalization of movement of natural persons in exchange for market access