RESTRICTED  
  
S/C/W/ 457 
 
31 October 2023  
(23-7355)  Page: 1/2 
Council for Trade in Services  Original: English  
 
  
COMMUNICATION FROM SOUTH AF RICA 
REVIEW OF ARTICLE II (MFN) EXEMPTIONS  
Written answers by South Africa  to the questions from Hong Kong, China ( S/C/W/431 ) 
The following communication from the delegation of South Africa , dated  31 October  2023, is being 
circulated  to the Members of the Council for Trade in Services.  
 
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During the Uruguay round of services negotiations, South Africa listed indefinite Most Favoured 
Nation (MFN) exemptions in terms of the General Agreement on Trade in Services (GATS) A rticle II:2 
in relation to the financial and road transport services.  
 
According to the compilation of questions prepared by the WTO Secretariat in the framework of the 
fifth review of MFN exemptions in document ( S/C/W/431 ), the delegation of South Africa has 
received four (4) questions from Hong Kong , China . Below are the answers provided by the 
delegation of South Africa to those questions.   
 
QUESTION FROM HONG KONG, CHINA  ON ALL MEMBER'S MFN EXEMPTIONS (QUESTION  1, 
S/C/W/431 , PAGE 2)  
1. Please indicate whether the exemption has been used for any actual measure since the 
previous review in 2016/17, and if so provide information on the use.  
 
Answer from South Africa  
South Africa continues to negotiate access to the regional road transport market, with the 
neighbouring  countries identified in the MFN exemptions, on a preferential and reciprocal basis to 
advance regional economic development.  The exemption reflects  meas ures that are still in use (e.g. 
regional agreements and bilateral  treaties) . These include the SADC Protocol on Transport, 
Communication, and Meteorology, the Trans -Kalahari Corridor, and the Maputo Development 
Corridors , among others .  
 
Regarding the MFN  exemption on financial services, it reflects a measure that remains in use: The 
Multilateral Monetary Agreement which governs the Common Monetary Area (CMA)  in terms of 
monetary arrangements , consisting of Lesotho, Namibia, South Africa , and Eswatini. The "Preamble " 
to the Multilateral Monetary Agreement clearly states the reasons and advantages of maintaining 
the CMA and the intentions behind the monetary arrangements.   
 
Both MFN exemptions (financial and road transport services) are in use and remain in place to date. 
This is because the regional development priorities and circumstances giving rise to the exemption 
still prevail.   
 
2. If the exemption has not been used . 
 
N/A 
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  3. Please explain why the conditions that created the need for the exemption  still prevail . 
Answer from South Africa  
The conditions that created the need  for the MFN exemption on road transport  still prevail . This is 
because integrated road transport networks  in the Southern African Development Community 
(SADC) region  remain key t o achieving efficiencies and economies of scale in the cross-border  
movement of people and goods.  At this stage, there is no need to eliminate the  MFN exemption as 
it is based on the principle of reciprocity. However, South Africa like the rest of the regi ons, continues 
to regulate cabotage and third-country  operations.   
 
With respect to the MFN exemption on financial services, t he Multilateral Monetary Agreement was 
reviewed, approved, and signed once again between the Governments of the CMA member countri es 
in July/August 2021.  The extension of the Agreement signals the continuing need for the MFN 
exemption: to provide for the sustained economic development of the CMA as a whole and afford 
equitable benefits arising from the maintenance and development of the CMA.  
 
4. Describe whether any action has been taken or is being contemplated to eliminate such 
exemption. Please explain why if not.  
 
Answer from South Africa  
South Africa has not taken any action nor does it contemplate eliminating the listed MFN exemptions 
on financial and road transport services due to the reasons stated above.  
 
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