Global Services Network Alert
February 10, 2005

Financial Leaders Group Calls Further Financial Services Liberalization Essential to Doha Round Success

At the conclusion of a two-day mission to the World Trade Organization in Geneva, the Financial Leaders Group (FLG) issued a statement calling on WTO members to seek commitments for substantial liberalization in the critical area of financial services. Negotiations in this area are not being pursued vigorously, the group said. Over the past two days, the FLG delegation has held a series of bilateral meetings with key developed and developing countries, and hosted a 1/2 day seminar at the WTO entitled "The Benefits for Developing Countries of Liberalizing Financial Services Markets."

A copy of the FLG statement follows below. For more on the Financial Leaders Group, visit http://www.flwg.org.

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FINANCIAL LEADERS GROUP CALLS FURTHER FINANCIAL SERVICES LIBERALIZATION ESSENTIAL TO DOHA ROUND SUCCESS

The Financial Leaders Group (FLG) believes that the financial services negotiations are critical to the success of the Doha Round, and that the outcome must be based on commitments to achieve substantial liberalization. Moreover, if the Doha Development Agenda is to achieve its goals, the financial services sector must be able to supply efficiently the services other sectors need. Consequently, the FLG urges WTO Members to submit financial services offers expeditiously.

The July 31, 2004 WTO agreement on a negotiations framework paved the way for liberalization of financial markets. This is an important opportunity, but it is not being pursued with the vigor and political will commensurate with the sector's contribution to advancing global economic growth. Many WTO Members have yet to submit initial offers, which were due in March 2003. Many offers that have been submitted provide for little new liberalization.

We urge all WTO Members that have not yet tabled offers to do so, and those that have tabled offers should present revised and improved offers by May 2005. These should not only provide guarantees for existing market access and existing investments, but they should also create new market opportunities. In the end, we will evaluate the final result on the basis of its commercial value.

Financial services, broadly comprising banking, insurance, insurance intermediation, asset management, pension and retirement services, payments systems including credit cards, brokerage and securities, are an absolute prerequisite of modern economies. Liberalizing trade in financial services improves capital market efficiency, bolsters financial sector stability, and supports economic growth and job creation. Enhanced competition stimulates modernization and provides consumers with the broadest range of products and services at the lowest cost.

Well-regulated financial systems are critical to fully realizing the benefits of financial services liberalization. The WTO negotiations should therefore encourage best practices in regulatory transparency and domestic regulation according to the needs of different sectors. Transparent and fair regulatory systems play an integral role in the development of deep, liquid capital markets, which are essential for sustained economic growth and development.

Geneva
February 10, 2005