July 29, 2021

The AfCFTA agreement features seven protocols, including trade in services, trade in goods, investment, intellectual property, competition, dispute settlement, e-commerce.

Here we delve into the Protocol on Services and offer suggestions for what trade unions can look out for, deliberate and demand.

The services industry comprises companies that earn revenue through mainly providing intangible products and services. Services can range from transport, banking, insurance and education to consultancy, accounting, health and tourist facilities.

Within the AfCFTA Protocol on Services, each country will make an offer to all other member countries. Importantly, all negotiations should be reciprocal. Reciprocal describes something that’s the same on both sides. Negotiations can be done bilaterally and the outcomes communicated to the AfCFTA Secretariat, which will inform all the members.

Each country will then submit its commitment schedule to remove trade controls in the five identified priority services. These are transport, communications, tourism, financial, and business services.

The liberalisation of trade in services is complex and involves regulatory measures such as licences, merging with local companies and the requirement of certain qualifications.

The trade union response

To start with, trade unions should demand that services must remain accessible to all.

The objective of liberalising services is to level the playground for operators through the easing of regulatory requirements. For instance, an indigenous IT company in Nigeria and a new entrant from Ghana will have an equal footing. The International Trade Union Confederation notes the trickle-down effect of easing regulations for companies that could lead to laws ensuring equal and affordable services to communities.

Unless stated, schedules of commitments within Free Trade Agreements (FTAs) don’t exempt public services. Martin Myant, a Researcher at the European Trade Union Institute highlights the limitation on the ability of a State to determine its welfare policies when outside companies have the right to compete with or take over services. Therefore, Trade unions must advocate for the exemption of public services and essential services from the AfCFTA. Myant says there are some advantages to granting outside companies rights. Companies can help to hold governments accountable and challenge problematic local legislation.

On the flip side, easing regulations can result in job loss or the protection of workers when local companies can’t compete with new entrants.

‘The movement of natural persons’ is considered a services sector, but it’s not part of the identified five priority sectors for liberalisation through the AfCFTA. Still, trade unions must ensure protections for migrant workers and look into the possible impact of the provisions on labour.

What do we need to look out for, deliberate and demand?

The negotiations on the liberalisation of services are complex and will take time to complete. Unions can use the opportunity to build advocacy and to ask the following questions:

  1. Which sub-sectors will be opened for outside companies and to which extent?
  2. Will access to quality public services be impacted? Are public services excluded from the list of the relevant schedules of commitments?
  3. Will domestic service providers remain protected?
  4. Within sectors put forward for liberalisation, will governments still play a leading role in, for example, the telecoms, energy, postal or distribution services?
  5. How will migrants and vulnerable workers be protected within the opening up of “movement of natural persons” as a service sector? How will local employment standards and jobs be impacted?

Ultimately, trade unions should ensure the following:

  • Access to affordable and quality services for communities;
  • Protection of governments’ regulatory power;
  • Exemption of the necessary public and essential services from the AfCFTA liberalisation process.

 

Also read:

Does the AfCFTA provide for mechanisms to advance socio-economic rights?