Pros and Cons of Trade in Services
New Vision, October 03, 2008

By Simon Ng’ona

What is Trade? Trade is considered as the commercial exchange (buying and selling on domestic or international markets) of goods and services. On the other hand services can be defined as performance of duties or provision of space and equipment helpful to others and other scholars define a service as a product of human activity aimed at satisfying a human need, which does not constitute a tangible commodity. In this context therefore, trade in services has been a hot issue debate between developed and developing countries.

In recent months, the debate over foreign workers in the UK has become more heated between countries. While the governments argue that more foreign workers will raise growth, protectionists insist that foreign workers are robbing British citizens of jobs. A different question is also asked: how can Africa develop if the brightest and best are leaving?

Therefore in evaluating both sides of the coin in understanding the pros and cons of trade in services, many issues have been raised. Like counties such as Zambia the main services that are being exported are Health, Education and Tourism. Mobility in these sectors has over the years been so very frequent. Like in the health sector, it is on record that medical personnel such as doctors and nurses have over the years have gone to countries like UK with the sole purpose of good returns or earnings and it’s from those returns that a country like Zambia is supposed to benefit or already benefiting from.

These medical personnel in these countries send money to their families, friends and invest in businesses back home. This means that their families and friends are able to provide better education, food and health, creating better livelihood bringing development to the country. However it is difficult to know or there are no mechanisms of determining how much has been sent and spent in the development of Zambia or has gone towards the aforementioned benefits as earnings from trade in services.

Meanwhile, the repercussions of this development have had a greater damage to the health sector fraternity. Many of the qualified medical personnel have left the country living medial institutions with less or unqualified working force to attend to patients. This has lead to people dieing or not receiving the best and quality medical service.

To this effect this is why organisations like Civil Society Organisations (CSOs) are urging the government not to further sign an agreement on trade in service in the on going Economic Partnership Agreements (EPAs).

Reacting to calls by the European Union to further liberalise trade in services Consumer Unity and Trust Society-Africa Resource Centre said liberalizing services sector of developing countries in the current state of Economic Partnership Agreements (EPAs) will only give European countries preferential access to Africa’s market.

CUTS-ARC said this development will also grant European service enterprise equal or national treatment as that given to domestic African producers in their own home markets.

“Therefore if these agreements where to be entered into and signed they must be set in the context of Africa’s past experiences of service liberalisation and also bearing in mind the evidence surrounding effects of such liberalisation as has been occasioned by the EU’s FTAs with other developing countries,” said CUTS-ARC.

“Though we acknowledge liberalisation can harness development, we further would like to see the cutting off of all discriminatory measures because there is clearly none of the flexibility and choice available to developing countries in neither the positive list approach of General Agreements on Trade and Services GATS, nor any of its possible limitations in national treatment and most favored national regulations, “added CUTS-ARC.

CUTS ARC further said the Zambian government invested so much resources in training medical personnel but yet ended up in loosing don’t have their services which hampered good health services causing an overload to those working within and also increasing deaths due to lack of adequate manpower. The disease burden keeps on growing and can not be addressed by the shortage of the medical staff.

“The repercussions of unhealthy nation means production is negatively affected and underdevelopment looming. It is important to build strong and surplus medical personnel in order to realize any benefits from trade in services, “said CUTS-ARC.

The author is Programmes Officer,  CUTS Africa Resource Centre, Lusaka and can be reached at Lusaka@cuts.org.