15 February 1999
The WTO's financial services commitments will enter into force as scheduled
Governments which account for more than 90 per cent of the global financial services market agreed today that the landmark WTO financial services agreement will enter into force on 1 March 1999.
WTO Director-General Mr. Renato Ruggiero hailed today's decision as a vitally important element in providing stability to the financial sector, particularly in developing countries. Moreover, Mr. Ruggiero underscored that the ratification of this agreement by Parliaments is compelling evidence of the democratic and transparent nature of WTO agreements.
At a meeting today, representatives from the 52 governments1 decided that the 1 March 1999 date would not be changed and requested the WTO's Council for Trade in Services to extend the deadline for accepting the protocol in order to allow another 18 governments2 more time to complete their domestic ratification procedures. The decision to extend the deadline for accepting the protocol to 15 June 1999 was later adopted by the Council for Trade in Services.
The Council also agreed to renew the "standstill" commitment made in December 1997 for those 18 governments which have not yet accepted the protocol; a political commitment not to take measures which would be inconsistent with their schedules annexed to the protocol in the period before their formal entry into force.
The combined commitments of the 70 governments3 cover more than an estimated 95% of the world's financial services activity and eliminate or relax current restrictions on, inter alia, commercial presence of foreign financial services suppliers. The commitments, which cover all three of the major financial services sectors - banking, securities and insurance - also reduce current limitations on service suppliers.
"The ratification of this agreement by Parliaments shows once again that our system is transparent and democratic," Mr. Ruggiero said. "At a time of instability in global financial markets, this agreement provides a solid foundation for improvement of financial practices, for enlarging the pool of capital available to businesses and consumers and for increasing the transparency of financial operations around the world."
He urged those governments which had not yet ratified the protocol to do so as soon as possible. Mr. Ruggiero stressed that the agreement was not for the purpose of liberalizing capital flows, but was to create and expand opportunities for businesses to establish a presence in foreign markets. This presence, he said, would help provide the stability that is necessary to cultivate an environment for future economic growth, particularly in developing countries.
1Bahrain; Canada; Chile; Colombia; Cyprus; Czech Rep.; Ecuador; Egypt; EC and their Member States (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Portugal, The Kingdom of the Netherlands, Spain, Sweden, United Kingdom); Hong Kong, China; Hungary; Iceland; India; Indonesia; Israel; Japan; Korea, Rep. of; Kuwait; Macau; Malaysia; Malta; Mauritius; Mexico; New Zealand; Norway; Pakistan; Peru; Romania; Senegal; Singapore; Slovak Republic; South Africa; Sri Lanka; Switzerland; Thailand; Tunisia; Turkey; United States and Venezuela.