Greener Pastures Identified for Trading in Services Than in Goods

5 December 2019
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United Nations Economic Commission for Africa (Addis Ababa)

Douala — Trade officials from all of ECCAS' eleven-member countries as well as strategic service providers in Central Africa have been provided with the tools and techniques for consolidating specific lists of services on which their governments will commit to remove tariffs and other restrictions as stipulated in the Protocol on Trade in Services within the framework agreement on African Continental Free Trade Area (AfCFTA).

This follows a three-day workshop that has rounded off in Cameroon's economic capital - Douala, at the behest of the General Secretariat of the Economic Community of Central African Sates (ECCAS), with the technical and programmatic backing of the UN Economic Commission for Africa and the financial support of the European Union.

The lists are categorized under five major priority areas identified by the African Union for free trade, which are: financial services, professional services, tourism, transport and telecommunications/ICTS.

During the workshop, the representatives of ECCAS member States were advised to prod their various governments to give primacy to their specific lists of commitments for services in Africa's Common Market following evidence that the liberalization of trade in services will engender far more gains for African countries compared with the liberalization of trade in goods.

Citing a World Bank study, the Director of ECA's Sub-regional Office for Central Africa - Antonio Pedro - said "the liberalization of services in Africa will lead on average to an increase in merchandise trade of 11.8% and 4.1% GDP growth."

He said Africa's GDP has been projected, by ECA, to rise to 3.8 percent by 2020, driven by strong domestic demand, particularly in the service sectors.

"Indeed, the liberalization of trade in services has favorable effects on the trade of goods in the sense that it allows for greater mobility and better allocation of the factors of production, notably capital and labor," he said, while concluding that through free trade in services "development and technological innovations are more easily diffused making digital transformation more feasible."

The Deputy Secretary-General of ECCAS in charge of the Department of Physical, Economic and Monetary Integration (SGA-DIPEM), Ms. Chantal Marie-Therese Mfoula regretted that in spite of the evidence of that they can trigger more gains for African counties, little attention was paid to developing service sectors in Central Africa.

To realize the potential for growth driven by trade in services, therefore, "formal and informal, trade in services in Central Africa must be at the highest level of the regional and continental integration agenda," she argued.

Central African countries must therefore pay particular attention to "facilitating trade flows by eliminating the harassment of service providers at border posts or in service destination countries, simplifying visa requirements if not simply abolishing them, relaxing and clarifying residency requirements, and improving the process of applying for and obtaining work permits."

While thanking ECA for its continued support to ECCAS' program of work in Central Africa and particularly for embedding an expert in trade in services and investments within the ECCAS Secretariat; as well as the EU for its funding support, Ms. Mfoula said her organisation especially through its Regional Working Group on Services, would steadily provide technical assistance to member States on implementing the provisions of the AfCFTA Protocol on Trade in Services.

Meanwhile Filippo AMATO, Head of the Trade Section of the EU Delegation to Cameroon said the EU has an interest in supporting AfCFTA processes because "ideally, the AfCFTA should become the departure point of an EU-Africa free trade area, in the long term."

ECCAS member States are expected to finalize their specific list of commitments on trade in services for submission to the AU early in 2020 ahead of effective free trading across the continent by July 2020.

Media Contact

Abel Akara Ticha - Communication Officer

United Nations Economic Commission for Africa

637, rue 3.069, Quartier du Lac, Yaounde, Cameroon

Tel: +237 222504348

E-mail: akara@un.org

Read the original article on UNECA.

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