International trade in services

International Trade in Services

A. Services Sector- An important Pillar of Mauritius' Economic Landscape

Trade in Services is the key driver of Mauritius' external trade.

In recent years, Mauritius has reinvented its economic landscape by diversifying its economy away from sugarcane monoculture to a robust manufacturing and service-based economy driven by export-oriented manufacturing (mainly textiles), tourism, financial and business services, information and communication technology, seafood processing, real estate, and education/training.

Services matter for continued development in Mauritius for a variety of reasons. Three key reasons are as follows: first, as an avenue for export diversification; second, as an input into the production of goods and services; and third, as a significant contributor to employment.

TREND IN MAURITIUS SERVICES EXPORT (2015 - 2021) (USD million)

Indicator 2015 2016 2017 2018 2019 2020 2021
Exports of services 2,733 2,827 3,048 3,216 3,036 1,277 1,247

According to the World Bank, the share of the country's trade in services as a percentage of GDP was at 36% for the year 2022. Export of Services for the same year was estimated to be around USD 2.62 billion.

The Financial Services and the ICT Sectors, along with tourism, remain the most important sectors for the Mauritian economy. The Financial sector remains one of the most vibrant economic sectors of Mauritius. As an internationally recognised jurisdiction of repute, the Mauritius International Financial Centre is home to a number of international banks, legal firms, corporate services, investment funds and private equity funds.

Mauritius has forged a strong reputation as a cross-border financial services hub, with a growth rate exceeding 4.5% over the last four years and employing over 9,900 professionals. The financial services sector is a core part of the Mauritian economy, with a GDP contribution of 13.1%, which includes 6.6% in financial intermediation, being essentially banking activities and capital markets, 2.1% in insurance activities and 0.6% in financial leasing and other credit granting activities. Further details are available on the following link: https://mauritiusifc.mu/

The ICT Sector is yet another sector of the the Mauritian economy with a GDP contribution of 6.9% in 2021. Over the years, the ICT Sector has exhibited rapid evolution in terms of geographical expansion, new client acquisition and adoption of innovative models to offer a considerably wider spectrum of services. Today, the sector comprises of some 900 companies and employs more than 32,000 people.

B. Snapshot of Mauritius' Commitments in the Services Sector

Mauritius has been active at the multilateral level as well as the regional level with the view to promote Trade in Services. Below is a snapshot of the various initiatives with respect to the Trade in Services under the various trade agreements Mauritius is currently a member of.

World Trade Organisation (WTO)

At the level of the WTO, Mauritius has filed commitments in Tourism, Telecommunications and Financial Services, three important services sectors for Mauritius. The commitments guarantee the access of foreign service suppliers and specify any existing limitations affecting both foreign and domestic service suppliers.

Mauritius Schedule of commitment is available here.

African Continental Free Trade Area (AfCFTA)

The Agreement establishing the AfCFTA, which entered into force on 30 May 2019, include a specific Protocol on Trade in Services. Negotiations for specific commitments in services are still ongoing. Five priority Services sectors, namely Financial, Transport, Communication, Tourism and Business services have been negotiated as starting point.

The Schedules of Specific Commitments for Djibouti, Democratic Republic of Congo, Eswatini, Lesotho, Namibia, Malawi, Mauritius, Seychelles, Zambia, Zimbabwe and the combined Schedule of Commitments of the East African Community Member States have been adopted by the 9th Council of Ministers.

With the view to liberalise and promote trade in Services on the African Continent, members have endeavoured to offer GATS plus commitments in the sectors negotiated.

SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)

The Southern African Development Community (SADC) Protocol on Trade in Services (PTIS) which was signed in 2012, provides for progressive liberalisation of trade in all the services sectors across the region and thus create a single market for trade in services. Conscious of the crucial part services play in the development of an economy and in the creation of employment opportunities, Mauritius ratified the Protocol in September 2015.

The SADC Protocol on Trade in Services entered into force on 13 January 2022, after ratification by two-thirds of the SADC Member States.

COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA (COMESA)

In 2014, COMESA Members States completed the 1st round of trade in services negotiations which opened the regional market for communications, financial, tourism and transport services. Schedules of Specific Commitments for 11 Member States namely; Burundi, Djibouti, Egypt, Eswatini, Kenya, Malawi, Mauritius, Seychelles, Sudan, Uganda and Zambia were adopted by Council of Ministers and gazetted in 2014.

MAURITIUS-CHINA FREE TRADE AGREEMENT

The Mauritius-China FTA, operational since 1 January 2021, contains a comprehensive chapter on Trade in Services, including an Annex on additional measures in relation to financial services, as well as an Annex on Movement of Natural Persons. A completely new component of the Services Chapter is an Annex on Traditional Chinese Medicine.

Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with India

The CECPA with India, operational as from 01 April 2021, contains a comprehensive chapter on Services as well as annexes on movement of natural persons, financial services, telecommunication services and specific schedules of commitment allowing market access in key sectors. It provides access to more than 100 service sub-sectors, in which Mauritian and Indian companies are allowed to establish businesses in each other's markets either as wholly owned entities, in partnership with local operators or under specific conditions provided under the Parties domestic laws.

More Information on the Trade in Services Component under each Trade Agreement are available under the section " Mauritius Trade Agreements".

Understanding Trade in Services:

  1. Modes of Supply
  2. Classification of Services WTO
  3. Classification of Services UNCPC
  4. Reading a Schedule of Commitments
  5. International Trade in service agreements