A Business view on the benefits of opening trade in financial services
The failure of the Cancùn Ministerial may delay the GATS negotiations in the WTO, although services liberalization was not among the more contentious WTO issues debated at Cancùn. However, in terms of economic importance, services in general and financial services in particular are definitely key sectors for growth and employment in both industrial and developing countries. Further liberalization of trade in financial services (i.e., banking, insurance, securities and related services) could, therefore, significantly promote economic development worldwide.
Import benefits are a strong case for liberalization of financial services. This applies to developing countries, where there often is a huge potential for liberalization of foreign financial firms’ commercial presence. It also applies to industrial countries regarding their remaining restrictions in GATS mode 3 and larger liberalization potential in GATS modes 1 and 4. As has been shown in this paper, the specific risks of such liberalization measures for deve loping and industrial countries can be managed.
The governments of the world should consider opening up their financial sectors further also in view of the import benefits for their businesses and consumers and even the governments themselves. This can be done not only by conducting multilateral and bilateral liberalization negotiations, but also by adopting unilateral measures, which should, however, be incorporated on a binding basis into any multilateral and bilateral agreement concluded.
The national committees of the ICC are requested to promote the awareness of these import benefits of further financial services liberalization in their countries.