TRADE IN SERVICES

Under the EAC Common Market Protocol (CMP), EAC Partner States have committed to progressively liberalize trade in services in accordance with the negotiated commitments made under Annex V of the Protocol. In 2010 all Partner States made commitments to open their market in seven (7) service sectors, namely: business; education; finance; communication; tourism and travel related; and transport. Partner States agreed to progressively remove restrictions and undertake not to introduce any new restrictions on the provisions of services (Art. 16(5) of EAC CMP. The Partner States took a variegated approach to liberalization by commitments in different services activities and modes of supply.
Furthermore, Partner States agreed that additional commitments will be undertaken in successive rounds i.e. specific commitments and sectors where no commitments were undertaken will form the basis for further negotiations as well as the remaining 5 services sectors namely: Construction and related; Environmental; Health related and Social; Recreational; culture and sporting services and other services not included elsewhere. However, the linking of temporary movement of services supply and schedule on movement of workers has made it very difficult to fully exploit opportunities presented by Common Market. Also the deadlock on linking or delinking services suppliers and movement of workers has prevented EAC Partner States from further liberalization of 7 agreed services sectors as well as initiate negotiations for 5 services unliberalized sectors.
EAC Partner States have made commitments to consider proposals for amending the trade in services provisions of the EAC CMP with the aim of removing linkage between temporary movement of services supplier (mode 4) and schedule on movement of workers (Annex II). In the same exercise Partner States are expected to correct errors in their schedule of commitment on trade in services.
The World Bank Common Market Score card 2016 which focuses on legal compliance with commitments made under the Common Market protocol revealed that all EAC Partner States remained largely non-compliant in their services trade liberalization commitments.
EABC therefore recommends that:

1. EAC Partner States should expeditiously finalize the de-linking of the temporary of movement of service suppliers (Mode 4) from the schedule on movement of workers (Annex II of CMP);
2. Partner States should finalize formulation of the Regulations on Movement of Services in order to be able to regulate temporary movement of service suppliers and services in general;
3. Partner States should fully liberalize the 7-agreed services sectors: Business; Distribution; Education; Finance; Communication; Tourism & travel related; and Transport; Or commit at least 100 sub-sectors on W/120 list classification;
4. Partner States should initiate negotiations to liberalize the remaining 5 services sectors which are: Construction and related services; Environmental; Health and Social services; Recreational; culture and sporting services and other services not included elsewhere;
5. Partner States should conduct a services regulatory stock taking to identify existing discriminatory restrictions and set up a mechanism at regional level to repeal existing restrictions and monitor restrictions in trade in services as per Article 16(5) of Common Market Protocol