The Life Cycle of Trade in Services Negotiations

Despite the experience gained from more than two decades of services negotiations at the multilateral, plurilateral, and bilateral levels, trade in services continues to rank among the most complex subject matters in modern trade diplomacy. Such complexity arises from a number of factors, including:

1. the intangible nature of service-sector activity, and the corresponding difficulty of measuring and assessing a sector’s contribution to production and exchange and the economic consequences of alternative policy choices;

2. the considerable diversity of activities encompassed in a sector;

3. the challenge of factor mobility (capital and labor) involved in services transactions; and

4. the ubiquity (and diversity) of market failures affecting services transactions and related regulatory intensity.

For instance some African countries may be considering services market opening with the EC, as a part of the EPA Services and Investment negotiations. In this regard, the World Bank has developed a useful manual on trade in services negotiations, which addresses the 5 stages of the services negotiations life cycle. The stages include:

1. mapping a strategy for services in national development plans;
2. preparing for services negotiations (i.e., developing an informed negotiating strategy or identifying the capacity needs required to do so; setting up the proper channels of communication with key stakeholders; and conducting a trade-related regulatory audit);
3. conducting services negotiations (i.e., acquiring a voice in debates on outstanding rule-making  challenges in services trade by pursuing offensive interests; devising strategies to deal with defensive concerns; analysis of negotiating requests of trading partners; formulating own requests and offers; and participating in collective requests and offers);
4. implementing negotiated outcomes (i.e., addressing regulatory capacities and weaknesses; and identifying implementation bottlenecks); and
5. supplying newly-opened markets with competitive and international standard-compliant services (i.e., addressing supply-side constraints on the ability to take full advantage of the outcome of trade negotiations, including aid-for-trade in services).

The manual provides guidance on each of these platforms and can be accessed here.  


Meanwhile. the EPA-EC negotiations remain contentious and inclusive interim goods agreements in several regions have not even been completed (e.g. West Africa, East Africa, SADC EPA and Pacific regions).  On services and investment, it is not clear if African countries will get sufficient time and resources to negotiate with the the largest services economy in the world, the EU.  


Nonetheless, African countries should proceed with caution and with a clear strategy.  They should also bear in mind that Europe as a single market is the world‘s largest exporter of manufactured goods and services; the biggest export market for more than one hundred countries and has over 20 FTA and other trade negotiations under way (counted by country), which include services agreements.