Liberalization of Trade in Services
Trade in Services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer. Trade in services that takes place between a producer and consumer that are, in legal terms, based in different countries is called International Trade in Services.
EAC Partner States have committed to scale up trade and investment in services sectors through guaranteeing free movement of services. Originally under the EAC Common Market Protocol, Partner States made commitments to liberalize a total of 144 sub-sectors in 7 priority sectors namely:
- Business;
- Communications;
- Distribution;
- Education;
- Financial;
- Tourism and Travel; and
- Transport.
The EAC Partner States further agreed to make additional commitments, at a future date, to liberalize the following additional service sectors that were not covered by the initial commitments:
- energy services;
- environmental services;
- health and social services;
- construction and related services; and
- recreation, cultural and sporting services.
The Revised Schedules of Commitments on the Progressive Liberalization of Services were adopted by the Sectoral Council for Trade, Industry, Finance and Investment (SCTIFI) in May 2019. In revising the Schedules of Commitments, Partner States also agreed to deepen their commitment, to a minimum of 78 sub-sectors per country.
Fast-tracking Liberalization of Trade in Services
In order to fast-track the liberalization of trade in services in the EAC region, Partner States adopted a Mechanism for the Removal of restrictions on Trade in Services within the EAC Partner States.
The mechanism serves two purposes – to monitor the removal of non-conforming measures (for committed sectors), and secondly, support Partner States in determining the level of restrictiveness of sectors and sub-sectors where commitments could potentially be undertaken in future rounds of negotiations.
Regulatory audits identifying restrictions were undertaken in the following services sectors: Professional, Communication, Tourism, Distribution, and Insurance services.
An excel template for operationalization of the mechanism for removal of trade in services restrictions in the EAC region was adopted and populated with data from the sector studies. The excel template is a source of reference to expedite implementation of commitments on trade in services under the EAC Common Market Protocol.
Implementation of Commitments in Trade in Services
To oversee and facilitate the implementation of the Mechanism, National Focal Points (NFPs) for Trade in Services have been appointed and National Trade in Services Committees (NTSC) established in each Partner State.
The NTSC facilitates the removal of restrictions and non-conforming measures; collaborate with NTSCs and NFPs of the other Partner States and disseminate information to the business community.
The NTSC feeds into to the Regional Trade in Services Committee (RCTS), whose role includes considering the reports of the NTSCs, as well as submitting periodic reports and recommendations to SCTIFI on the removal of restrictions on trade in services and non-conforming measures in the Community.