Ensuring Coherence Between Services, Digital, Competition, and IP Protocols in the AfCFTA

Services are among the sectors most affected by the digital revolution. Once digitized, services can be stored and transmitted over digital networks both within countries and across borders, easing the proximity burden of services. Although proximity is still essential for many services, advances in artificial intelligence (AI) keep expanding the set of tasks that can be codified and traded electronically. Hence, digital services are the most dynamic trading sector globally.

As new opportunities for shipping services abroad opens, trade rules and regulations developed in a different era become ripe for revisions. The stabilized text of the Joint Statement Initiative (JSI) on e-commerce released July 26 2024 marks the first set of multilateral rules for digital trade. Against the backdrop of rising barriers to cross-border dataflows the JSI can be a timely backstop for further digital fragmentation. However, so far, the JSI focuses on trade facilitation measures, while leaving rules on cross-border data flows, data localization and source code for future negotiations.

Meanwhile more than 100 regional trade agreements, including the African Continent Free Trade Agreement (AfCFTA), have chapters on electronic commerce. These typically go deeper than the JSI and have provisions for cross-border data flows while protecting personal data as well as disciplines on data localization requirement and protection of source code.

AfCFTA aims at creating a single services market through progressive liberalization as scheduled in specific commitments by sector and mode of supply.  Five priority services (business services, communication services, financial services, tourism services and transport services) are negotiated under phase I, all of them substantially affected by the digital revolution.

The AfCFTA also includes a draft digital protocol, complimentary to the AU Digital Transformation strategy for Africa 2020 -30, a draft competition protocol and a protocol on intellectual property rights. The digital protocol aims at “establishing harmonized rules and common principles and standards that enable and support digital trade for sustainable and inclusive socio-economic development and the digital transformation of the continent”.

The draft competition protocol has provisions on abuse of dominant positions by digital platforms designated as gatekeepers, while the intellectual property protocol explicitly aims at supporting intra-African trade, including services trade and digital trade.