COMESA T RANSPORT S ERVICES E XPERIENCE : P OLICY AND S TRATEGY Presentation by Emily Mburu Trade in Services and Trade Facilitation Coordinator COMESA Secretariat

C ONTEXT Introduction COMESA Trade in Services (TIS) Programme COMESA Negotiations on Trade in Services COMESA work on Transport Services Trade and Transit Facilitation Transport sub-sectors Air Transport Road Transport Rail Transport Maritime Inland Water Transport Conclusion

I NTRODUCTION At the initial stages the COMESA liberalization process concentrated on goods; Transport and financial services were the early sectors for regional cooperation to facilitate the movement of goods In the late 1990s COMESA included Trade in services as part of the integration programme and formed a working group on Trade in services

T RADE IN S ERVICES IN COMESA Trade in services in COMESA rose from $24.2 billion in 1997 to US$51.4 billion in 2007 Services contribute at least 40% of GDP in most COMESA Member States The objectives of the trade in services programme are: Eliminating barriers to trade in services to promote growth and development Enhance cooperation among Member States to improve the efficiency and competitiveness of the markets To increase, improve and develop the exports of services Liberalize trade in services

F ORUM FOR NEGOTIATING TRADE IN SERVICES The Framework for liberalizing trade in services in COMESA was developed and adopted by Council in June 2009 The Regulations on Trade in services Annex on the temporary movement of persons The Regulations on Trade in Services provided for the formation of the Committee on Trade in Services

C OMMITTEE ON T RADE IN S ERVICES The first meeting of the Committee was held in September 2009 Services negotiating guidelines developed They provide for seven (7) priority sectors, namely business, communication, construction, energy, financial, tourism and tourism At the second meeting in May 2010 Member States agreed to commence negotiations in four priority sectors, namely communication, financial, tourism and transport The other three sectors are to be included once schedules of commitments are done in the four priority sectors

C OMMITTEE ON T RADE IN S ERVICES Held in September 2009 Services negotiating guidelines developed Provides for seven (7) priority sectors, namely business, communication, construction, energy, financial, tourism and tourism Held in May 2010 MS agreed to commence negotiations in four priority sectors, namely communication, financial, tourism and transport The other three sectors are to be included at a later stage First MeetingSecond Meeting

C OMMITTEE ON T RADE IN S ERVICES ( CONT ) Held in May 2011 Member States initiated the process of exchange of information based on their draft schedules of commitments Member States agreed to finalize their schedules of commitments Held in July Member States have submitted their schedules of specific commitments in the four priority sectors MS with submissions discussed the schedules and made requests to each other Third MeetingFourth Meeting

W ORK UNDER THE TIS P ROGRAMME To deal with specificities of each sector/sub-sector, the TIS programme works in collaboration with other COMESA programmes that deal with specific services’ sectors, such as Insurance (Yellow card) ICT Transport etc The objectives are to: Bring together relevant stakeholders in a specific sector to identify the issues of interest to them in the sector Enhance cross border trade and investment by eliminating barriers to trade in the specific sector Work on harmonization of laws and regulations in the specific sector

COMESA WORK PROGRAMME ON T RANSPORT An efficient transport sector is an integral element for development and facilitation of trade COMESA has developed two documents A Regional Transport Policy A Regional Transport Strategy The documents were adopted by Ministers of Infrastructure in July 2011 These are to be used by MS in formulating national policies and strategies from a regional trade development and integration perspective The strategy mentions the need for regional transport operators forming alliances to obtain economies of scale

T RADE AND T RANSIT T RANSPORT F ACILITATION COMESA has developed a number of instruments to facilitate trade and transport and reduce the cost of doing business Among the issues addressed are lack of harmonization in policy, regulations, administrative and procedural regimes The sub-sectors taken into consideration are: Air transport Road transport Rail transport Maritime transport Inland water transport

A IR T RANSPORT The liberalization program is based on the Yamoussoukro Decision (YD) adopted by the AU in 1999 and ratified in 2000 Implementation is through Legal Notice No. 2 which are the Regulations for the Liberalization of Air Transport in the COMESA region 16 MS are implementing Phase 1 of Legal Notice No.2, the exceptions are: Libya, Madagascar and Swaziland 11 MS are granting the fifth freedom rights to COMESA air carriers, namely Burundi, Djibouti, Egypt, Ethiopia, Kenya, Malawi, Rwanda, Sudan, Uganda, Zambia and Zimbabwe.

A IR T RANSPORT ( CONT ) Yamoussoukro Decision COMESA Legal Notice No.2 – Based on Bilateral Air Service Agreements (BASAs) COMESA Multilateral Air Transport Agreement (MATA)

COMESA-EAC-SADC J OINT C OMPETITION A UTHORITY (JCA) Joint Competition Regulations and the Guidelines, Rules and Procedure for implementation of competition in air transport adopted by the 3 RECs Established to supervise the activities of the airlines and operators in a liberalized market The JCA comprises of seven members two from each REC and a rotating Chairperson for the RECs Presently the members are: Burundi and Uganda (EAC), South Africa and Zimbabwe (SADC), and Malawi and Sudan (COMESA). Kenya is Chairing on behalf of COMESA SADC Secretariat is providing secretariat services MandateMembership

R OAD T RANSPORT Road transport is the primary mode of transport for goods and passengers in the COMESA region Road Sector Management and Funding Reforms have been undertaken by MS to manage and maintain the road infrastructure assets Most MS have set up road funds and development agencies These agencies are responsible for construction and maintenance of road infrastructure nationally The main source of funds are fuel levy for maintenance Construction and rehabilitation is through government budget allocations, borrowing from development banks and cooperating partners

R AIL T RANSPORT The share of cargo by rail has declined drastically in the COMESA region in the past three decades Options adopted to improve performance of the sector include: concessions of railways restructuring of management closure of branch lines in some countries Concessions have been done in 4 countries namely, Ethiopia, Kenya, Malawi and Uganda Though no significant improvements in overall efficiency of the sub-sector New railway development projects are underway in the region

M ARITIME T RANSPORT Main challenge in the region is port congestion Measures adopted to reduce congestion in the port of Mombasa include Kenya Ports Authority and the Kenya Revenue Authority designated private local container terminals to accept cargo discharged directly from ships prior to payments of charges and customs dues Regulatory checks and payments are now done at the private container terminals Privatization of some services at the port is creating room for private sector participation and increasing investments at the ports

I NLAND W ATER T RANSPORT Not much so far has been done in this subsector in the COMESA region MS have agreed to prioritize the preparation of standards and regulations to enhance safety of navigation MS sharing common water bodies are to enter into multilateral agreements to develop harmonized management of the resources

C ONCLUSION Develop national and regional strategies for dealing effectively with transport services as they are vital for economic development Expand trade and investment opportunities and cooperative arrangements, especially under the Tripartite for economies of scale as well as to diversify markets and take advantage of trading opportunities For COMESA, most work now under the infrastructural development is being undertaken at the Tripartite level

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