The trade in services between countries has become at least, if not more important than merchandise trade in the digital age. ‘Traditional’ services such as transport, travel and financial services have been supplemented in the global total by ‘new’ services: business services, ITC services and digitally-delivered services, the growth rates of which far surpass global economic growth rates – implying structural change. These structural changes reflect the rising technology content of almost all manufactured goods, as well as, and possibly more importantly, the input of services into other services. Digital businesses that sell digitally-delivered services are an example of an industry that has end-to-end services content: the value chain is exclusively services content and usually reflects high value-added content.

The question that needs to be asked, is whether countries can be successful in increasing their inputs and outputs of services, particularly in cross-border markets, which enable middle-income countries to access high value-add services to beneficiate their existing merchandise and services value chains; and high-income countries to extend their services markets.

One method of increasing services trade integration is within existing regional economic communities (RECs), which first started out as preferential trade areas (PTAs) for merchandise trade. RECs such as the European Union, the most highly integrated REC globally, have actively promoted increased services trade integration through trade facilitation methods and the reduction of services trade restrictions.

The lessons learned from the EU – as well as those learned from the USMCA and ASEAN – could benefit other RECs, not least the nascent African Continental Free Trade Area (AfCFTA), which itself has recently published a trade in services (TIS) protocol.

Services trade liberalisation

Firstly, services trade liberalisation is part of the process of increasing services trade integration. World Bank/WTO data on services trade restrictions (STR), the STR index (STRI)^[i], shows that the EU started with a relatively low restrictiveness level and achieved the largest reduction by 2016. This reflects the impact of the EU’s liberalisation efforts in the 2000s – for example, the implementation of the Services Directive by 2010 and continued enforcement through that decade. The EU’s STRI improvement is consistent with its high intra-REC trade growth; essentially, the EU dramatically opened its services markets internally, making it the least restrictive region.

ASEAN had high initial STRI (meaning ASEAN countries maintained significant barriers in 2008), but the region showed substantial net gains by 2016. Reforms under the AEC, including the AFAS packages and national deregulation, contributed to bringing down ASEAN’s restrictiveness. By 2016, ASEAN’s index, while still higher than the EU’s, had improved more than Africa’s or North America’s. This indicates ASEAN’s concerted, negotiated approach did result in measurable liberalisation – a positive sign that continued efforts post-2016 (with the ASEAN Trade in Services Agreement in 2020 succeeding AFAS) would further reduce barriers.

It’s worth noting, however, that ASEAN’s STRI, even after improvement, remained above the EU’s – there is still work to do to reach EU levels of openness, especially in sectors such as professional services and air transport where some members maintain protective rules^[ii].

The USMCA STRI trend over 2008-2016 was uneven, showing relatively smaller net improvement and some fluctuation. The U.S. and Canada already had quite open service economies in many respects, but areas such as professional licensing, government procurement in services, or visa restrictions kept the index from falling much. In fact, certain U.S.-Mexico service trade barriers persisted, as evidenced by the STRI not improving consistently – for example, Mexico had restrictions in sectors like energy services and telecommunications, and the U.S. had/has strict regimes for foreign professionals in some fields^[iii].

The ‘uneven’ description suggests that while some barriers were eased (perhaps through NAFTA’s implementation), others came and went, or remained. Overall, by 2016 North America’s STRI was lower than Africa’s or ASEAN’s, but higher than the EU’s. The lack of a bold regional push to liberalise services (beyond NAFTA’s initial effect) meant no dramatic STRI reduction for USMCA during that period.

Africa’s STRI was the highest of all regions and showed only modest reduction by 2016. This is unsurprising, as prior to AfCFTA, Africa’s services trade was governed by disparate policies of RECs and nations, often characterised by protective regulations. Many African countries historically impose strong controls on services (e.g., limits on foreign banks, tight telecom regulations, restrictive work permit regimes, state monopolies in utilities, etc.). The minimal improvement in the STRI by 2016 indicates that while some regional blocs (such as EAC or ECOWAS) made incremental progress, Africa as a whole had yet to liberalise significantly.

However, with the advent of the AfCFTA, improvements are anticipated beyond 2016. In fact, the AfCFTA’s success will in part be measured by a substantial drop in this STRI over the coming years. If African countries follow through on removing restrictive measures as committed, one would expect Africa’s STRI to fall closer in line with ASEAN’s, facilitating far greater intra-continental services trade^[iv].

The lesson then, from the experience of the EU, USMCA and ASEAN is that reducing regulatory restrictions is a prerequisite for integration. The EU’s large STRI decline corresponds with its strong intra-REC trade growth, whereas Africa’s high STRI coincides with low intra-regional trade. Policymakers can draw from this that efforts to streamline regulations, ensure openness to competition, and cooperate on regulatory frameworks directly pay off in increased trade.

Common continental frameworks

The experiences of the EU, USMCA, and ASEAN can provide additional valuable lessons for the AfCFTA. A key insight is that policy-driven integration is crucial to boost intra-regional trade in services. The EU demonstrates that deep harmonisation of regulations and strong institutions can yield a highly integrated services market – AfCFTA may not replicate the EU’s supranational structure, but it can strive for high standards in aligning regulations. For instance, adopting common continental frameworks for licensing, quality standards, and mutual recognition of qualifications (modelled on the EU’s directives or ASEAN’s MRAs) will help African service providers operate across borders^[v].

The importance of mutual recognition cannot be overstated: if a Nigerian architect’s qualifications are accepted in Côte d’Ivoire, or a Kenyan law firm can easily partner in Rwanda, it removes major barriers to regional services trade. The EU and ASEAN experiences show this requires political will and trust among members but yields substantial benefits.

Digital trade

The role of digital trade is another critical area. With ITC services being the fastest-growing globally, African integration must include a strong digital component. ASEAN’s success in expanding ITC trade regionally was supported by initiatives on e-commerce and data connectivity. Similarly, the AfCFTA has drafted a Digital Trade Protocol (DTP) (2023)^[vi] to facilitate e-commerce, data flows, and digital services across Africa^[vii]. Implementing such provisions (for example, prohibiting data-localisation mandates that fragment markets, or enabling mobile payment interoperability across countries) can significantly lower barriers for African tech companies and startups to scale regionally. This is an area where AfCFTA can leapfrog by embracing modern rules from the start, in line with USMCA’s digital chapter but tailored to the African context.

Institutional mechanisms for enforcement and dispute resolution

Crucially, institutional mechanisms for enforcement and dispute resolution will determine the performance of intra-Africa TIS facilitation. Africa can learn from the EU’s strong enforcement via the European Court of Justice (ECJ) and from ASEAN’s softer peer-review approach. The AfCFTA Agreement includes a Dispute Settlement Body that can help enforce commitments.

To avoid the ‘implementation gap’ seen in some ASEAN commitments, the AfCFTA Secretariat could actively monitor members’ compliance with services liberalisation schedules and publish progress reports (as ASEAN does this with its scorecard). Transparency and peer pressure can encourage countries to honour their commitments. Moreover, establishing African forums for regulators to regularly meet (akin to the EU’s coordination committees or APEC’s regulatory cooperation fora) can build trust and iron out technical issues that impede services trade.

AfCFTA’s trade in services facilitation can draw on the EU’s depth, ASEAN’s gradualism, and even USMCA’s modernisations. Key policy insights include: harmonise regulations and reduce restrictive policies (following the EU), invest in digital and physical infrastructure (echoing ASEAN’s development-driven integration), implement mutual recognition and ease movement of service providers (learning from both EU and ASEAN), and ensure robust monitoring and enforcement – to realise the agreed liberalisation.

If these lessons are applied, Africa’s currently modest intra-regional services trade (only ~3% weighted gain over 19 years^[viii]) could expand dramatically, unlocking efficiencies and growth akin to what ASEAN achieved in recent decades. The new AfCFTA Protocol on Services indeed aspires to an ‘open, transparent and integrated single services market’ across Africa, and the comparative experience underscores that this is an attainable goal with sustained commitment.

^[i] This data is analysed in a tralac Trade Report by John Stuart the author: ‘Intra-African Services Trade Integration: Data-Driven Insights for the AfCFTA’.

^[ii] ASEAN Secretariat, 2015. ASEAN Economic Community Blueprint 2025. Jakarta: ASEAN Secretariat.

^[iii] Villarreal, M. A., 2021. USMCA: Economic Integration and Services Trade Challenges. Washington, DC: Congressional Research Service.

^[iv] Refer, for example, to the related tralac Trade Report by the same author cited in footnote 1.

^[v] ASEAN Secretariat, 2015b. ASEAN Services Integration Report. Jakarta: ASEAN Secretariat.

^[vi] The  Digital Trade Protocol of the AfCFTA was finalised in February 2025, at the time of writing.

^[vii] UNCTAD, 2021. Digital Economy Report 2021: Cross-Border Data Flows and Development. Geneva: United Nations Conference on Trade and Development.

^[viii] This quoted data is presented in the related tralac Trade Report cited above.