ESA’S PROPOSED FRAMEWORK IN THE CONTEXT OF EPA

NEGOTIATIONS IN TRADE IN SERVICES

Isabelle Ramdoo

Ministry of Foreign Affairs, International Trade

And Cooperation,

Mauritius

Outline of Presentation

Objectives of the Proposed Agreement

ESA Negotiating Mandate

Cotonou Mandate and WTO provisions

Approach to Negotiations

Principles of the Framework

Structure of the Framework:

(a)Scope and Coverage

(b)Specific sectors covered

(c) Approach to Liberalization

(d)Development Cooperation

Conclusion

Objectives of the Proposed Agreement

In the Interim Agreement initialed in December 2007, the Parties undertook to complete negotiations, including in trade in Services, with a view to concluding a comprehensive EPA, no later than 31 December 2008

The aim of the Agreement in TIS is to establish a framework and scope for potential negotiation in relation to trade in services

Objectives of the Proposed Agreement (2)

To enhance trade in services among ESA states in the context of regional integration

To eliminate restrictions to trade in Services on both sides for the smooth integration of our countries in the world economies

To strengthen and modernize our regulatory frameworks

Negotiating Mandate

Road Map agreed in February 2004, which is based in Cotonou Agreement

The Negotiating Mandate (Rendez-Vous) building on Article 41 of Cotonou Agreement, the parties agree to continue negotiations including in trade in services

Cotonou MandateCotonou Article 41:

41.1 Parties underline the growing importance of Trade in Services and the major contribution to economic and social development

41.2 They reaffirm their respective commitments under the GATS and underline the need for special and differential treatment to ACP suppliers of services

41.3 In the framework of Negotiations for progressive liberalization in TIS, as provided for in Article XIX of GATS, the Community undertakes to give sympathetic consideration to ACP States’ priorities for improvement in the EC Schedule, with a view to meeting their specific interests

Cotonou Mandate (2)41.4 The parties further agree on the objective of extending under

the EPAs, and after they have acquired some experience in applying the MFN treatment under GATS, their partnership to encompass the liberalization in Services in accordance with he provisions of the GATS and in particular those relating to the participation of developing countries in liberalization agreements

41.5 The Community shall support the ACP States’ efforts to strengthen their capacity in the supply of services. Particular attention shall be paid to services related to labour, business, distribution, finance, tourism, culture and construction and related engineering services with a view to enhancing their competitiveness and thereby increasing the value and the volume of their trade in services

WTO Provisions

Therefore, our framework is in line with Article IV of the GATS, where we are increasing our participation in trade in services

The ESA proposed framework is a WTO compatible framework consistent with Article V of GATS. We are in the process of identifying sectors of interest, will cover all modes of supply. However, with some degree of asymmetry to provide flexibilities to accommodate the concerns of ESA countries.

The Proposed framework also builds on Article XIX of GATS, that is progressive liberalization

Approach to the Negotiations

Based on the principles underlined in the CPA

Based on the GATS template because:(i) ESA has experience in using the GATS framework. Though

not a simple one, it has clear scope, definitions and coverage.

(ii)To ensure consistency with the regional frameworks. ESA countries (members of both SADC and COMESA) are currently establishing the regional framework, which is based on the GATS model

Principles of the Framework

The Framework is based on the following key principles:

(i) Proper coordination and coherence with the regional framework

(ii) Variable geometry to take into account the different levels of development of ESA countries

(iii) Asymmetry,

(iv) Regional Preferences

(v) Development Cooperation between ESA and EC in areas of mutual interest

Structure of the Framework

A framework of principles, in four main parts:

(i) General provisions – scope and definitions

(ii) Disciplines

(iii) Specific commitments

(iv) Development Cooperation

It outlines the general principles and obligations that will apply to signatory states on any measure affecting trade in services, including liberalization commitments

Scope and Coverage of the Agreement

As contained in the GATS, the Agreement includes supply of services on all four modes of supply, namely:

(i) cross-border trade: supply of a services from one territory to another (Mode 1)

(ii) Consumer Abroad: supply of a service in the territory of a party to a service consumer of the other party (Mode 2)

(iii) Commercial Presence: supply of a service by a service supplier of one party through commercial presence in the territory of the other party (Mode 3)

(iv) Temporary Movement of Natural Persons: Supply of a service through the presence of natural persons of a Party to the territory of the other party (Mode 4)

Scope and Coverage of Agreement (2)

Modes 1 and 2 – Unlock market access for services sectors of interest to ESA states. Particular emphasis on tourism, professional services, IT and related services

Mode 3 – Services-related sectors only.

Mode 4 – Agreement recognizes the necessity of concluding bilateral agreements with individual EC countries for the movement of people for temporary movement of people, including semi-skilled persons

Approach to Liberalization(i) All ESA countries reaffirm their commitments to

progressively liberalizing their trade in services in those sectors where they are ready to do so.

(ii) Consistency with WTO provisions, with some countries prepared to improve their levels of commitments

(iii) Principle of variable geometry, with longer transitional periods for some member states

(iii) Article 41.3 of CPA calls for the EC to improve their commitments. ESA is therefore in the process of identifying those areas of specific interest to them, where they would wish to have deeper market access in the EC. Requests are being prepared accordingly

Development Cooperation Development is at the core of the EPA Negotiations. The Services text contains a comprehensive chapter on development cooperation which aims at building capacity of ESA countries, overcoming the supply side constraints and providing technical assistance

Main sectors of interest to ESA member states include, among others:Tourism and travel related servicesFinancial servicesTelecommunication servicesInfrastructure related services (incl air, land and maritime transport)Legal servicesProfessional ServicesConstruction and related engineering servicesHealth ServicesMedical Services

Development Cooperation (2)

Cooperation would take the form of:capacity building

Technical, financial and logistical assistance to support the development, strengthening and modernization of the institutional and regulatory framework, which is essential to create the enabling environment for investment

cooperation to address the supply side constraints

support the development of services-related infrastructure network to improve the performance of the sectors and to reduce the cost of doing business

Development Cooperation (3)

partnership, in the form of joint ventures, transfer of technology and skills in scarcity areas

Credit for Autonomous liberalization: Some of our countries, though small and vulnerable, have undertaken ambitious autonomous liberalization initiatives in services. Consideration(credit) in the form of additional market access, technical assistance and development cooperation could be given for such initiatives

Conclusion

The aim of the proposed framework is to unlock trade in Services, to have a framework that genuinely provides for the right conducive environment for our services suppliers, to put our economies on a new growth path

To ensure predictability

to tap investment and commercial opportunities not only in the EC but in our own markets

to develop our support services in order to unbundled production and consumption

To encourage improvement in the quality of services, competitiveness and innovation in service delivery

Conclusion (2)

improve our cooperation with EC service suppliers, in the form of joint ventures, transfer of technology, transfer of skills etc

the spillover effects, in improving the efficiency of the services sector in the region, which is crucial to improve the competitiveness of the region as a whole . Gains expected –efficiency, productivity, employment creation, increase in capital to finance growth, increase in investment flows, technological transfer, building human capital among others

Development cooperation - support, in the form of technical and financial assistance, capacity building, partnership, trade facilitation, in developing our regulatory framework, our services-related infrastructure network and to help us overcome of supply side constraints

Thank You