Financial services

Uruguay Round and Post-Uruguay Round negotiations in financial services 

• Overview of the 1995 and 1997 negotiations on financial services
• Successful conclusion of the 1997 WTO’s financial services negotiations

Current commitments and exemptions 

Financial services is one of the sectors where the number of WTO members with specific commitments is the highest – second only to tourism services. As of end-2020, 111 WTO members (counting the EU-25 as one⁽¹⁾) had undertaken specific commitments in at least one type of financial service – 43 had made commitments on the whole range of insurance, banking and other financial services.

• Schedules of WTO Members with Specific Commitments on Financial Services

For consolidated information on members’ commitments and exemptions on financial services go to the services database. If you are seeking the commitments of a specific WTO member, go to “Jump to a specific sector for a given Member”, select financial services from the sector dropdown list, select the member of interest and click “go”. To see a table showing which members have made commitments in financial services choose “See which Members have made commitments in a specific sector”, select Financial services and click “go”.

Treatment of the sector in negotiations

Financial services were included in the services negotiations which began in January 2000.

• Developments in the negotiations

The negotiations on financial services, as on other services sectors, have gone through various stages since 2000. In line with the GATS mandate (Article XIX), services negotiations were launched in 2000. Several negotiating proposals were submitted in this early phase, highlighting negotiating objectives and the concerns of members.

The Doha Ministerial Declaration of 2001 set timelines for the submission of requests and offers, with clear dates for the submission of bilateral requests (end June 2002) and initial offers (end March 2003). Interested members started to meet in so-called ‘friends groups’, including the ‘Friends of Financial Services’.

In the lead-up to the Hong Kong Ministerial Conference (December 2005), a joint statement on the liberalization of financial services was circulated by Australia, Bahrain, Canada, the European Union, Japan, Norway, Oman, Panama, Singapore, Switzerland, Chinese Taipei and the United States (TN/S/W/43).

The joint statement underscored the importance of opening the sector to foreign competition. It called for further improvements in members' schedules of commitments, notably by ensuring the right to establish new and acquire existing companies, and in the form of wholly-owned subsidiaries, joint ventures or branches (mode 3). It also called for the adoption of appropriate commitments on both mode 1 (services supplied from one country to another) and mode 2 (consumers moving abroad to consume services), removing national treatment limitations, and eliminating other non-discriminatory limitations (such as monopolies, numerical quotas or economic needs tests and mandatory cessions). In addition, the statement called for consideration of additional commitments on transparency in development and application of laws and regulations, transparent and speedy licensing procedures, and on other regulatory issues. 

Members identified their key negotiating objectives for financial services in the run-up to the Hong Kong Ministerial Conference. As described in document TN/S/23, those objectives included the following:

Scope of commitments (sectoral or modal)

• commitments on “commercial presence” by a foreign company (mode 3) for all financial services
• commitments on mode 1 (services supplied from one country to another) and mode 2 (consumers or firms making use of a service in another country) in appropriate sub-sectors (e.g. financial services addressed to sophisticated customers, such as reinsurance, asset management, and securities; marine and energy insurance services; provision and transfer of financial information and financial data processing)

Limitations and discrimination

• limitations on the right to establish new companies and to acquire existing companies
• limitations on legal form
• limitations on foreign ownership (i.e. freedom to establish in the form of wholly-owned subsidiaries, joint ventures or branches)
• non-discriminatory limitations, such as monopolies, numerical quotas or economic needs tests (ENTs — a test using economic criteria to decide whether the entry into the market of a foreign firm is warranted) and mandatory cessions
• discrimination in the application of laws and regulations

Regulatory issues and additional commitments for negotiation

• transparency in the development and application of laws and regulations, transparent and speedy licensing procedures

Scheduling issues to be addressed

• use of the definitions in the GATS Annex on Financial Services

The Hong Kong Ministerial Conference in December 2005 provided new momentum to the services negotiations. Clear objectives for services negotiations were established in Annex C of the Ministerial Declaration, with the submission of plurilateral requests allowed by February 2006 and revised offers by mid-2006.

Similar to other services sectors, a number of WTO members prepared a plurilateral request on financial services and communicated this to a group of approximately 20 members.  The main objectives of the request included the following: mode 3 commitments to provide rights to establish new companies and acquire existing companies; commitments on modes 1 and 2 in a defined list of sub-sectors; the removal of key national treatment limitations; and the need for transparency in the development and application of laws and regulations relevant to the financial services sector (TN/S/M/19, paragraph 54).

Since negotiations were temporarily suspended in July 2006, no members have submitted a second revised offer as foreseen in the Hong Kong Ministerial Declaration. In total, 71 offers (initial and revised) were submitted, representing 95 members. Almost half of them contain improvements to financial services commitments. However, the proposed improvements offered less openness than that provided by regulatory frameworks already in place (see TN/S/20, paragraphs 46 to 48).

For an assessment of the plurilateral negotiations in various sectors and areas, consult the Report by the Chair of the Special Session of the Council for Trade in Services to the Trade Negotiations Committee in 2011 (TN/S/36).

back to top

Additional information and background studies  

Additional information