advancing free movement of business persons in southern and eastern africa doing business in africa...
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Advancing Free Movement of Business Persons in Southern and Eastern Africa
Doing Business in AfricaCape Chamber of Commerce and Industry
JB Cronjé23 July 2014
The movement of persons under Free Trade Agreements
• In general, trade agreements between developed and developing countries focus almost exclusively on professional services providers (skilled workers).
• Many, however, go well beyond the General Agreement on Trade in Services (GATS) of the World trade Organization (WTO) in providing access for a greater number of categories of professional services, through expanded numbers of covered categories or through unlimited access (no quotas).
The GATS legal framework for the movement of persons
The Movement of natural persons supplying services (mode 4) defined as:
“ a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member”
• It refers to two types of natural persons1. Those who are (themselves) service suppliers, and2. Those who are employed by a service supplier
3
The GATS legal framework for the movement of persons [2]
Included Excluded • Employees of foreign service suppliers in host country (ICT)
• Employees of foreign service suppliers abroad to fulfill a contract (CSS)
• Natural persons as independent service suppliers fulfilling a contract (IP)
• Business visitor (BV)
• Employees in the goods sector
• Employees of host country firms
• Persons with citizenship, permanent residence
•Job seekers
4
Different terms
Temporary entry is also referred to as:
• Presence of natural persons (legal term)• Movement of natural persons• Mode 4 in the GATS – refers to service suppliers• Migration • Labour mobility – broader concept – includes
relocation to work in foreign markets
Some fundamental issues
1. Immigration officials and Labour officials can only allow what is in national laws or regulations (but great discretion at border – importance of administrative law).
2. Traditional thinking assumes that every person who crosses a border is a potential immigrant!
3. Most governments want to collect revenue for permits issued. Some prices can be prohibitive or great disincentive to obtaining skills that are needed in local market.
4. What is needed to facilitate trade, investment and increase production?
Examples of domestic and cross-border growth in Africa
• Kenya's ICT companies are investing in Rwanda, Uganda and are now looking to enter Nigeria,
• United Bank for Africa and Ecobank operate in more than 20 countries.
• South African firms invested $1.6 billion in other African countries. For example, in telecoms, MTN, operates in 21 countries across Africa
• Regional value chains emerging • Future growth in Africa will to a large extent have to come
from intra-African initiatives and trade and investment
Some generic issues
1. What are the categories of persons eligible for temporary entry – criteria and/or definitions (separate from market opening in specific sectors).
2. How to differentiate between business persons and regular natural persons (tourist, asylum seeker, economic migrant, etc.)
3. Maximum time period of temporary stay in a calendar year.4. What documents are needed to submit to border officials –
visa, work permit, or totally free access – for entry.5. Do all categories of business persons need to submit same
set of documents?
Some generic issues
6. If Visa or Work Permit is needed for any of the categories of business person, should it be applied for in advance, or requested & delivered on entry (at the border)?
7. Should a common travel document or ID be developed for all bona fide business visitors and issued by Member States (such as APEC Business Travel Card)?
8. Problem is that most immigration and/or labour laws pre-date trade discussions and cannot cater to temporary entry as discussed today.
Main challenges on the movement of persons in FTAs
• How to ensure the following: - clarity - specificity - predictability- transparency
of the movement of (business) persons regime to prevent confusion at the border
N.B. Temporary entry is separate from immigration although governed by Immigration laws.
• What exactly is “Temporary”? Can temporary presence be extended? Limited to a fixed period normally tied to a contract.
Main challenges on the movement of persons in FTAs [2]
Visa & work permit-related requirements and procedures• Eligibility criteria tend to be strict and bias toward highly-skilled and –
educated categories• Quantitative restrictions and/or Economic Needs Tests• Application procedures often cumbersome, costly, administratively
complex and lengthy
Recognition of academic and professional qualifications – Mutual Recognition Agreements
• Mostly concluded for licensed professionals with established international standards and practices – not viable where skills and experience are judged mainly through a concrete demonstration of work.
• MRAs mostly involve neighbouring (developed) countries, partners of broader integration initiatives, countries with former colonial or linguistic ties
Mobility in East and Southern Africa
• Southern African Development Community (SADC)
• Common Market for Eastern and Southern Africa (COMESA)
• East African Community (EAC)• COMESA-EAC-SADC Tripartite Free Trade
Agreement
Progress on Movement of Persons in the different Regional Economic Communities
• COMESA and SADC are negotiating specific commitments on the temporary movement of services suppliers (mode 4) in terms of– SADC Protocol on Trade in Services
• No mention of harmonisation of immigration laws; • each country can apply own laws on entry and stay, work and
labour conditions, and establishment;• No measures relating to job seekers;• No right of access to employment market in other countries;• No prohibition on market access and national treatment
restrictions, quotas, and Economic needs tests• Negotiating guidelines provides for commitments in four
categories
Progress on Movement of Persons in RECs
• SADC Protocol on the Facilitation of Movement of Persons of 2005 aims to ensure visa-free entry, residence and establishment in the territories of its member states (not yet in force)
• objectives of the Protocol are to facilitate:– visa-free entry for visitors into the territory of another
member state for a period of up to 90 days;– permanent and temporary residence in the territory of
another member state;– establishment of oneself and working in the territory of
another member state.
Progress on Movement of Persons in RECs
• The Protocol also obliges the member states to – harmonise laws and administrative practices– standardise immigration forms– establish a separate SADC DESK at each major point of entry– establish enough border crossing points with identical
opening hours – issue uniform and simple border permit/border pass to
citizens residing in the border areas of member states– abolish visa requirements, but where visas are necessary,
issue them gratis at the point of entry.
Progress on Movement of Persons in RECs
• COMESA Regulations on Trade in Services• Same scope and exclusions as GATS• Members must negotiate specific commitments
on movement of persons (mode 4)• Provides for the reduction and elimination of
quotas and Economic Needs Tests• Provides for commitments in four categories of
persons with common definitions for each
Progress on Movement of Persons in RECs
COMESA Protocol on the Free Movement of Persons, Labour, Services, Right of Establishment and Residence (not yet in force)•Calls for for the establishment of mechanisms:
– within which citizens can move freely; are – free to take up offer of employment in any member State under similar
conditions as national workers; – pursue activities as self-employed persons in any member State; – reside in any member State.
•Abolish visas or to grant visas upon presentation of valid travel documents for up to 90 days;•Abolish discriminatory measures on employment, remuneration and other conditions of employment•provide mutual recognition of certain qualifications and coordinate provisions regulating certain specific establishments and the categorisation of companies or firms.
Progress on Movement of Persons in RECs
• EAC concluded a Protocol on the Establishment of the East African Community Common Market entered into force in 2010– free movement of goods, services, labour, capital and the right
of establishment and residence– different rules and procedures for entry, stay, work,
establishment and residence for three categories of persons, namely citizens (visitors, students, medical patients and persons in transit), workers and self-employed persons
– occupational categories of workers listed in each member’s negotiated schedule of specific commitments based on International Labour Organisation’s International Standard Classification of Occupations
Progress on Movement of Persons in RECs
Category of Workers Kenya Burundi Tanzania Rwanda Uganda
Directors and chief executives X X
Specialised departmental managers X X
Other departmental managers X X
Physical science professionals X X X
Mathematicians, statisticians and computing professionals X X X X
Engineering science professionals X X X X X
Health and life science professionals X X X X
Teaching professionals X X X X X
Legal professionals X X
Social science and related professionals X
Writers and creative or performing artists X
Business professionals X X
Land surveying X
Other professionals X X
EAC commitments on the movement of natural persons by category and country
Progress on Movement of Persons in RECs
EAC commitments on the movement of natural persons by category and country
Engineering technicians X X
Optical and electronic equipment operators X
Medical and health science X X
Associated professionals X
Physical and life science professionals X X
Ship and aircraft controllers X X X
Business and social services associate professionals X
Primary and pre-primary education and other teachers X
Other business social services, athletics, sports and related services X
Extraction and building trades workers X X
Metal, machinery and related trades workers X X
Progress on Movement of Persons in RECs
Progress on recognition of qualifications, work permits and social security
– SADC developed a Code on Social Security – EAC member states have not yet harmonised the portability of
social security and retirement benefits, as well as work permits, application forms, procedures and fees
– EAC Common Market Protocol also provides for the mutual recognition of academic and professional qualifications – e.g. accountants, architects
– SADC approved Regional Qualifications Framework to set minimum standards and to facilitate the recognition of qualifications
Progress on Movement of Persons in RECs
• Progress on travel documents– East Africa passport is being used for travel within
the EAC– Plans underway for an EAC tourist visa for tourists
from outside the EAC region– COMESA considering business visa to facilitate the
movement of business persons within the region– Plans to develop a single tourist visa for the SADC
region – SA to develop SADC work seeker permit?
COMESA-EAC-SADC Tripartite FTA
Second COMESA-EAC-SADC Tripartite Summit held in June 2011, the Tripartite Summit
Signed a Declaration Launching the Negotiations for the Establishment of the COMESA-EAC-SADC TFTA; Adopted a Roadmap for Establishing the Tripartite FTA and Tripartite Negotiating Principles, Processes and Institutional Framework
COMESA-EAC-SADC Tripartite FTA [2]
• Declaration Launching the Negotiations provides:– The movement of business persons in the TFTA
region will be negotiated under a separate track and parallel to the negotiations on trade in goods during the first phase of the TFTA negotiation process.
– The second phase of the negotiations will cover the built-in agenda in services and trade-related areas.
COMESA-EAC-SADC Tripartite FTA [3]
• September 2013, a Tripartite Technical Committee on Movement of Business Persons was established
• The draft TFTA Agreement and Annexes - starting point for the negotiations.
• Article 29 of the draft TFTA Agreement deals with movement on business persons and defines it as
• ‘a natural person residing in a Tripartite Member State who is engaged in trade in goods, the provision of services or the conduct of investment activities, and shall include business visitors, traders and investors, professionals and intra-corporate transferees’
COMESA-EAC-SADC Tripartite FTA [4]
• draft TFTA Annex on Movement of Business Persons (TFTA Annex) provides for – full market access for all four categories of business
persons (business visitors, traders and investors, intra-corporate transferees and professionals) by prohibiting the use of numerical quotas and economic needs tests.
– The definition of a business person includes persons supplying a service as contained and defined in GATS, but it also goes beyond the GATS framework to include persons involved in other productive activities
Matters for consideration
• Common standards for scheduling of commitments
• Common categories of eligible persons that are properly described and defined
• ENTs must be clearly defined• Visa and work permits procedures harmonised
and simplified• Mutual recognition of education and work
experience
Thank you