ICC was deeply disappointed by the failure last month at the key Doha ministerial meeting to agree on modalities on agriculture and industrial products, but hopes the Round will continue, and that offers currently on the table will remain and new offers will be made on financial services.
The week after the setback, ICC’s Chair of the Commission on Financial Services and Insurance, Victor Chu, sent a letter to ICC’s national committees and members, outlining the importance of including financial services in the final agreement, and detailing what needs to be included in such a pact.
In the letter, ICC also called on WTO member states to open up their services sectors to a degree which generally matches the level of trade liberalization in agriculture and industrial goods in the Doha Round.
The benefits of further liberalization of financial services include: helping create international trade and investment flows, contributing to the prosperity of all countries, and assisting in the development of financial sectors and economies. By binding current levels of market access, the Doha Round would also significantly increase legal certainty of establishment and operation of foreign financial institutions in WTO countries, ICC said.
What is more, the recent global financial turmoil following the sub-prime housing crisis in the US should not stand in the way of financial market opening by the WTO, which would deprive countries of important benefits, ICC said.
For developing countries, ICC advised that liberalization be implemented using a phased approach, which would benefit foreign financial institutions seeking to increase their market presence over time and aid the gradual development of the financial sector. Phased liberalization could also be bound in the Doha Round, starting with establishment rights, which would include investment in domestic institutions and freedom to operate on an equal basis with domestic competitors.
In parallel, ICC advised, the Round should call for transitional periods for further market opening measures. Technical assistance from advanced WTO member countries would be desirable, to help build up the institutional and legal framework in developing countries.