Pretoria - South Africa has ratified the Southern African Development Community (SADC) Protocol on Trade in Services, which seeks to free the sector in the 14-member trade bloc.
Trade and Industry Minister Rob Davies has told Parliament that the ratification of this protocol represents a significant advance in Pretoria’s agenda for regional integration in Southern Africa and beyond.
In June, Cabinet approved the submission of the protocol to Parliament for ratification, in accordance with section 231 of the South Africa Constitution. The Protocol on Trade in Services was approved by the 32nd SADC Summit of Heads of State and Government in Maputo, Mozambique, in August 2012.
An approval by the National Assembly and the National Council of Provinces means the agreement will then be binding on South Africa.
Davies noted that the services sector accounted for around 50% of the GDP for developing countries and around 70% for developed countries.
“International trade in services is an important and growing component of global trade. In 2012, according to World Trade Organisation (WTO) statistics, global services exports were valued at US$4.3 trillion and accounted for 23.4 percent of the world's total exports.”
The protocol not only sets out a framework for the liberalisation of trade within SADC, but will also serve as a basis for negotiations.
Negotiations will initially focus on these key service sectors: construction, transport, energy, tourism and financial services. The envisaged liberalisation seeks to eventually cover all sectors and modes of supply.
In order to feed the nine billion people expected by 2050, global food production must increase by 70%. However, climate change is expected to reduce food crop yields by 16% worldwide and by 28% in Africa. Price and yield volatility will continue to rise as a result of extreme weather events, hurting livelihoods and putting food security at risk.
Davies said South Africa also had a well-developed services sector which accounted for around 67% of GDP, and the country’s trade in services accounted for 14.3% of total trade.
South Africa is very active in services trade in SADC and in Africa, particularly in the retail, banking, telecommunications and transport sectors. It is also involved in services related to oil production and in legal services throughout the region.
South Africa was also a significant exporter of services to African economies and the protocol will lay the basis for enhancing the access SA companies will enjoy in the region.
“In this way, South African firms can contribute to economic development in the region, particularly in countries where there is a shortage of quality and efficiently priced services that is required to underpin other economic activities,” said Davies.
The ratification and implementation of the SADC Protocol on Trade in Services also supports the National Development Plan (NDP).
The NDP identifies trade in services as an area that deserves more attention, and states that South Africa is not sufficiently exploiting existing demand for services. South Africa would need to position itself on the African continent to take advantage of its capabilities. – SAnews.gov.za
