Overview of Lesotho’s and its Trading Partners’ Services Liberalization Commitments

1. Overview of Lesotho’s and its Trading Partners’ Services Liberalization Commitments National Seminar on Trade in Services Negotiations under SADC and SADC EPA Maseru Sun, 2-4 July 2012 mjelitto@sadc.int

2. SADC Member States

3. Distribution of by services sectors *Red bars denote SADC priority sectors

4. Lesotho’s commitments by sector* *Denotes incidence of commitments, by sub-sector, without assessment of depth/quality

5. An even closer look (1) 1. Communication Services • Full commitment on courier services • M1 & 3 commitments on value-added telecom services • No commitment on basic telecom services • M1 commitments on audiovisual services 2. Construction Services • M 2& 3 commitments on all categories, except • Pre-erection work at construction sites (511) • Special trade construction work • Renting services of equipment with operator

6. An even closer look (2) 3. Financial Services • M2 &3 commitments on all insurance services except auxiliary services (broking and agency services) • M3 commitments in banking services except • Financial Leasing • Participation in issues of securities • Settlement and clearing services for financial assets • Advisory and auxiliary services • Provision and transfer of financial information 4. Tourism and travel-related services • M 2&3 commitments on Tour Guide Services • No commitments on Hotels and Restaurants (exc. M2), and Travel Agencies and Tour Operator Services

7. An even closer look (3) 5. Transport Services • M3 commitments in Road freight and passenger, and maintenance and repair of equipment • No commitments on • Maritime, Internal Waterways, Air, Space, Pipeline, auxiliary services 6. Energy-related services • No distinct classification category in WTO • Commitments in the following “energy-related services: • Engineering and integrated engineering • Management consulting and related services • Technical Testing • Construction for civil engineering • Wholesale trade services of solid, liquid and gaseous fuels • Retailing services of fuel oil, bottled gas, coal, and woods • No commitments in: • Services incidental to mining (883 & 5115) • Engineering-related scientific and technical consulting services

8. Overall assessment • Few priority sectors in which new commitments can be made • Basic Telecom • Some Financial Services • Tourism (Hotels, tour operators) • Auxiliary transport services • Services Incidental to Mining • …but some potential for improving existing commitments • M3 audiovisual services • M1 road transport services • M1 Insurance • M1/2 Banking Services M4: Commitment to allow “4 expat senior executives and specialized skill personnel” Room for improvement?

9. Economic partnership with the EU in services and investment • EU likely to bring commitments in some 90% of services sectors to the table (based on Cariforum outcome) • Commitments comprise 27 EU Member States • Usability of commitments needs to be evaluated closely against Lesotho’s trade potential

10. Economic partnership with the EU in services • EU proposes chapters on best practice regulation in certain sectors (telecom, financial services, computer services, postal and courier, maritime transport) • Commitments comprise 27 EU Member States • Usability of commitments needs to be evaluated closely against Lesotho’s trade potential

11. Negotiations under SADC –main principles • Conducted through request - offer method • Requests exchanged before offers • Requests to one or more trading partner • To be circulated through the SADC Secretariat • Full transparency: requests to any trading partner shared with all trading partners

12. Making requests to trading partners 1. Evaluate trading opportunities in the relevant sectors • Where are you trading already now? • what sectors? what markets? What modes? • Potential to expand services trade ? • what sectors? what markets? What modes?

13. Making requests to trading partners 2. Examine current market situation • Are the sectors of interest listed in commitments of trading partners? • What is the level of commitments? • Have relevant Modes been bound? • Are they subject to quotas or equity restrictions? Etc. • Are your suppliers facing discrimination? • Are certain regulatory measures of concern? • Are there MFN exemptions that affect your interests?

14. Making requests to trading partners 3. Strategic Considerations • Evaluate the requests in accordance with their economic, and strategic importance • Requests also to non-key markets? • Horizontal requests? ->covering all sectors, MS, equally • Compare the value of your requests with the value of your offers – are they roughly commensurate? • …take into account current level of openness, LDC status etc.

15. Formulating offers 1 Assess the REQUESTS received 2 Evaluate trade & development interests • Promotion of FDI? • Improvements in business and/or social infrastructures? • Promotion of knowledge transfer? • Reduction/elimination of domestic supply gaps? • Other social/economic/regional policy objectives?

16. 3 Draft proposed offer Consult with relevant ministries & stakeholders • Use existing schedule/or list of MFN exemptions as a basis, then clearly mark changes (use agreed editorial conventions) • Consider technical corrections and clarifications • Consult SADC Secretariat for advice if needed

17. Summary: What do you want? Underpin national development objectives Strategic drivers Trade offs

18. Thankyouverymuch for your attention Question? Comments?