Successful conclusion of the WTO's financial services negotiations

The World Trade Organization's negotiations on financial services concluded successfully on 12 December after 70 WTO Members reached a multilateral agreement to open their financial services sectors. The landmark agreement brings trade in this sector - worth trillions of dollars - under the WTO's multilateral rules on a permanent and full most-favoured-nation basis. The agreement covers more than 95 per cent of trade in banking, insurance, securities and financial information.

WTO Director-General Mr. Renato Ruggiero said the agreement came at a critical time. "With so much of the world facing economic turbulence, negotiators from all WTO Member states have shown once again the courage and commitment to pursue the policies of liberalization which are essential to economic stability, growth and development. I congratulate them all." He added that it is through the WTO's international rules, agreed by all WTO Members, "that businesses can best gain the certainty needed to plan their future international activities."

World banking assets amounted to some US$40 trillion in 1994 and foreign assets of deposit banks amounted to US$8.6 trillion in 1995. Whereas foreign exchange turnover in the world's major foreign markets amounted to US$1.2 trillion in 1995, outstanding futures and options in interest rates, currencies and stock market indices amounted to US$10 trillion.See footnote 1 According to the OECD, gross insurance premiums in OECD countries exceeded US$ 2 trillion in 1995.

In all, 56 governments, counting the European Communities as one, made commitments during the negotiations to either maintain or expand the market access they currently offer foreign financial service suppliers.See footnote 2 The negotiations resumed in April 1997 and were chaired by Mr. Yoshio Okubo (Japan). The results of the negotiations build on previous multilateral negotiations held at the end of the Uruguay Round (1986-1993) and in July 1995 to open financial services markets. In all, 102 WTO Members now have multilateral commitments in this sector.

The results of the latest round of talks are part of a protocol which will be open for governments to accept until 29 January 1999. The agreement will enter into force on 1 March 1999 at the latest.

Footnote: 1Estimates based on data from the International Monetary Fund and the Bank of International Settlements.

Footnote: 2Australia; Bahrain; Bolivia; Brazil; Bulgaria; Canada; Chile; Colombia; Costa Rica; Cyprus; Czech Republic; the Dominican Republic; Ecuador; Egypt; El Salvador; the European Communities (15 members); Ghana; Honduras; Hong Kong, China; Hungary; Iceland; India; Indonesia; Israel; Jamaica; Japan; Kenya; Korea; Kuwait; Macau; Malaysia; Malta; Mauritius; Mexico; New Zealand; Nicaragua; Nigeria; Norway; Pakistan; Peru; Philippines; Poland; Romania; Senegal; Singapore; Slovak Republic; Slovenia; South Africa; Sri Lanka; Switzerland; Thailand; Tunisia; Turkey; the United States; Uruguay and Venezuela.