Transcript Slide 1

Services and SACU
Paul Kruger
[email protected]
Introduction
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Difference between trade in goods and trade in services
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Services are regulated by domestic laws and regulations
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Domestic legislation is used to protect services industries for example
Section 64(1) of the Electronic Communications Act:
“(1) A foreigner may not, whether directly or indirectly(a) exercise control over a commercial broadcasting licensee; or
(b) have a financial interest or an interest either in voting shares or paid-up capital
in a commercial broadcasting licensee, exceeding twenty (20) percent.
(2) Not more than twenty (20) percent of the directors of a commercial broadcasting licensee may
be foreigners.”
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Two restrictions on foreigners:
i) market access restriction limiting the participation of foreigners to
20%; and
ii) national treatment restriction favouring local directors
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Creating a transparent and predictable framework
Scheduling
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A services agreement generally consists of two main elements: a)
general obligations; and b) specific commitments
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Specific commitments reflect the liberalisation undertakings made by
countries – it is a flexible framework
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Section 64(1) of the Electronic Communications Act in a schedule:
2.COMMUNICATION SERVICES
Limitations on Market Access
Limitations on National Treatment
D. Audio Visual Services
1) Unbound
1) Unbound
c. Radio and Television services (CPC
9613)
2) None
2) None
3) Foreign ownership limited to 20
percent for commercial broadcasting
companies
3) Foreign directors of commercial
broadcasting companies limited to 20
percent
4) Unbound, except as indicated in the
horizontal section
4) Unbound, except as indicated in the
horizontal section
Liberalisation
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The schedules not only create a predictable and transparent
framework but also establish a framework for liberalisation
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The eventual goal is to abolish ALL restrictions: Tripartite agreement “possibility of no restrictions in the priority sectors”.
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The ‘standstill clause’ and its effect
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It can remove the flexibility – prevent countries to schedule ‘future’
restrictive measures
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Each sub-sector will have to be committed as seen from MERCOSUR
and ASEAN
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Difference between African scheduling and other regions
That is where the difference comes
2.COMMUNICATION SERVICES
Limitations on Market Access
Limitations on National Treatment
D. Audio Visual Services
1) The regulator can prescribe local content
requirements
1) None
c. Radio and Television services (CPC 9613)
2) None
3) Foreign ownership limited to 20 percent
for commercial broadcasting companies
4) Unbound, except as indicated in the
horizontal section
2) None
3) Foreign directors of commercial
broadcasting companies limited to 20 percent
4) Unbound, except as indicated in the
horizontal section
2.COMMUNICATION SERVICES
Limitations on Market Access
Limitations on National Treatment
D. Audio Visual Services
1) Unbound
1) None
c. Radio and Television services (CPC 9613)
2) None
2) None
3) Unbound
3) Unbound
4) Unbound, except as indicated in the
horizontal section
4) Unbound, except as indicated in the
horizontal section
Regulatory inventory
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Regulatory audits can provide countries to provide countries with a
clear understanding of what is happening behind the borders of each
country.
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All measures whether in the form of a law, regulation, rule, procedure,
decision, administrative action or any other forms taken by central,
regional or local governments and authorities, and non-governmental
bodies in the exercise of delegated powers must be reviewed.
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Perhaps a review all domestic regulation - qualification requirements
and procedures, technical standards and licensing requirements and
procedures – can be useful (particularly when harmonising)
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Can also facilitate foreign investment, highlight regulatory weakness
and identify areas for reform
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Information must be stored to be easily accessible – because the
ability to accurately store and administrate large amounts of
regulatory information will become more important
GATS commitments of SACU member states
Sectors scheduled
Sub-sectors
scheduled Percentage of sub-sectors
(out of 12)
(out of 160)
liberalised
Botswana
3
20
12.5%
Lesotho
10
78
48.75%
Namibia
2
3
1.88%
South Africa
9
91
56.88%
Swaziland
3
9
5.63%
Committed sectors of SACU
Botswana
Lesotho
Namibia
South Africa
Business
X
X
X
X
Communication
X
X
X
Construction
X
X
Distribution
X
X
Education
X
Environment
X
X
Financial
X
X
Health & Social
Tourism
Swaziland
X
X
X
X
X
X
Culture & Sports
Transport
X
X
Other
X
X
X
South Africa’s schedule in the distribution sector
Commitments of Malaysia in the distribution sector
South Africa and the region
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What services strategy for SA?
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Manufacturing sector is the focus of IPAP2 - this “productive” sector
of the economy creates the “conditions for the services sector to
grow”
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Bilateral, regional or none?
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SA has powerful services industries but bold action is needed
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SA strategy however different from its trading partners – SA industries
considerably more developed
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Objectives of SACU member states are not aligned – in goods trade
this is addressed through the revenue sharing mechanism
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What are our options / preferences?