WTO must host a special debate on financial regulations, 112 CSOs demand

WTO headquarters in Geneva.
(Photo: WTO)

A statement signed by 112 major civil society organizations, which represent hundreds of millions of people in more than 160 countries, supports an Ecuador’s proposal for a special World Trade Organization (WTO) session to review the current scholarship and opinion at the international level on the compatibility of its rules with robust financial regulations. The initiative will be discussed at the WTO’s Committee on Trade in Financial Services on Oct. 1.

Governments must ensure that global “trade” rules do not undermine countries’ ability to strengthen their financial regulations to avoid future crises, according to the statement, signed by global networks such as Social Watch, Consumers International, the International Trade Union Confederation (ITUC), and LDC Watch.

“Trade and finance experts have raised concerns that the rules of the WTO’s General Agreement on Trade in Services (GATS) and related WTO financial services rules could pose obstacles to post-crisis efforts to enhance regulation underway on the domestic and international levels,” reads the document. “We cannot afford to wait until the next financial crisis to ensure that countries’ WTO commitment do not interfere with or chill financial regulation.”

A proposal presented by Ecuador in late 2011 for a formal review of these WTO rules was supported by a powerful bloc of countries, among them Argentina, Brazil, China, India, South Africa and Turkey. But other WTO members, including the United States, the European Union and Canada, blocked it. Now, the same countries have indicated their intent to quash the proposal to even discuss these problems, much less consider possible updates to the old rules.

“In June 2012, WTO member state Ecuador tabled a modest but important proposal the goal of which is to provide all governments with greater certainty that the WTO rules governing financial services provide sufficient policy space for needed financial reregulation and do not deter improved coherence between the WTO and other international bodies promoting financial reregulation,” adds the civil society organizations’ statement. “Ecuador specifically proposed that WTO members undertake a discussion at the WTO’s Committee on Trade in Financial Services (CTFS) about the current scholarship and opinion at the international level with respect to macro-prudential regulation and its relationship to the GATS rules.”

The 112 civil society organizations’ joint statement reads as follows:

 

Statement in Support of Ecuador’s Proposal at the October Committee on Trade in Financial Services Meeting
September 24, 2012

The global financial crisis highlighted the need for robust regulation of the financial services sector to ensure financial stability and to avoid future crises. However, trade and finance experts have raised concerns that the rules of the World Trade Organization’s (WTO) General Agreement on Trade in Services (GATS) and related WTO financial services rules could pose obstacles to post-crisis efforts to enhance regulation underway both on the domestic and international levels.

In June 2012, WTO member state Ecuador tabled a modest but important proposal the goal of which is to provide all governments with greater certainty that the WTO rules governing financial services provide sufficient policy space for needed financial reregulation and do not deter improved coherence between the WTO and other international bodies promoting financial reregulation. Ecuador specifically proposed that WTO members undertake a discussion at the WTO’s Committee on Trade in Financial Services (CTFS) about the current scholarship and opinion at the international level with respect to macro-prudential regulation and its relationship to the GATS rules.

This latest initiative comes as a follow up to an effort led by Ecuador in advance of the 2011 WTO Ministerial Conference. Then Ecuador proposed to insert language into the Ministerial Declaration to launch a review of the regulatory implications of the GATS rules relating to financial services. Argentina, Brazil, China, India, South Africa, Turkey and scores of other countries supported this proposal. But it was blocked by the United States, the European Union and Canada. The countries opposed to the review said that it was not necessary because the current WTO rules provide sufficient policy space for countries to maintain or establish robust financial regulation.

Ecuador’s new proposal is simply aimed at giving other WTO member countries the same confidence about their regulatory policy space. Ecuador’s proposal will be discussed at the next quarterly meeting of the CTFS, which will take place the first week of October 2012. And, now we understand that the countries who blocked the formal review of the rules are threatening to block even holding Ecuador’s proposed special educational session on this issue that would facilitate WTO member countries developing a common understanding of the rules and their relation to financial regulation.

More than 100 countries, including dozens of developing countries, have GATS financial services commitments. Countries that did not schedule exceptions - and now post-crisis seek to re-regulate in committed sectors using mechanisms that may be prohibited by GATS rules - could (1) face a WTO challenge, (2) choose not to institute a needed regulatory tool to avoid a threatened challenge, or (3) be required to negotiate compensation terms with affected member states to alter their commitments, which may be infeasible, especially for developing countries.

We cannot afford to wait until the next financial crisis to ensure that countries’ WTO commitments do not interfere with or chill financial regulation.

We, the undersigned organizations, urge all WTO member states to support at the upcoming October 2012 meeting the modest proposal for discussion of the WTO financial services rules and financial regulation within the WTO’s Committee on Trade in Financial Services. It is critical for all member states to have full confidence that the policy space exists in these agreements for financial regulation. Given various threats by industry interests that countries efforts to strengthen their financial regulation conflict with “trade” commitments, such clarity is critical so that countries’ financial reforms are not chilled for fear that they would be subject to a WTO Dispute Panel deciding the meaning of GATS rules in the context of a challenge to their domestic laws.

 

Signatories

Global networks

1. Consumers International
Represents 240 member organizations in 120 countries
2. Economic Governance for Health
Global grassroots coalition group
3. IndustriALL Global Union
Represents 50 million members in 140 countries
4. International Trade Union Confederation (ITUC)
Represents 175 million members in 153 countries and territories
5. LDC Watch
Global alliance of national, regional and international civil society organizations
6. Public Services International (PSI)
Represents 20 million members in 150 countries
7. Social Watch
Network of national coalitions of civil society organizations
8. The International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF)
Represents 12 million members in 120 countries

 

Inter-regional and regional networks

9. Africa Development Interchange Network (ADIN)
Africa
10. Africa-Europe Faith and Justice Network (AEFJN)
Belgium
11. Agency for Cooperation and Research in Development (ACORD)
Africa
12. East African Trade Union Confederation (EATUC)
Africa
13. European ATTAC Network
EU
14. The European Consumers' Organisation (BEUC)
EU
15. Latin America and the Caribbean Council of AIDS Service Organizations (LACCASO)
Latin America
16. Latin American Network on Debt, Development and Rights (LATINDADD)
Latin America
17. Pacific Network on Globalisation
Pacific Islands

 

National organizations and sub-national networks

18. Federación Argentina de Empleados de Comercio y Servicios (FAECYS)
Argentina
19. Foro Ciudadano de Participación para la Justicia y los Derechos Humanos (FOCO)
Argentina
20. AID/Watch
Australia
21. Australian Council of Trade Unions (ACTU)
Australia
22. Australian Fair Trade and Investment Network (AFTINET)
Australia
23. Association pour la Taxation des Transactions financière et l'Aide aux Citoyens (ATTAC) Austria
Austria
24. Center for Encounter and Active Non-Violence
Austria
25. Informationsgruppe Lateinamerika (IGLA)
Austria
26. Sushasoner Jonny Procharavizan (SUPRO)
Bangladesh
27. Voices for Interactive Choice and Empowerment (VOICE)
Bangladesh
28. CNCD-11.11.11, Centre national de coopération au développement
Belgium
29. CSC Belgium
Belgium
30. Kairos Europe - Belgium
Belgium
31. Dynamique des Organisations de la Société Civile d’Afrique Francophone (OSCAF)
Benin
32. Brazilian Network for Peoples' Integration (REBRIP)
Brazil
33. Colegiado de Gestão do INESC
Brazil
34. Equit Institute
Brazil
35. Gestos-HIV, Comunicação e Gênero
Brazil
36. Proteste Brasil
Brazil
37. Confédération Syndicale du Burundi (COSYBU)
Burundi
38. Council of Canadians
Canada
39. La Confédération des syndicats nationaux (CSN)
Canada
40. Finnwatch
Finland
41. Association pour la Taxation des Transactions financière et l'Aide aux Citoyens (ATTAC) Finland
Finland
42. PowerShift- Germany
Germany
43. Verbraucherzentrale Bundesverband (vzbv)
Germany
44. Association pour la Taxation des Transactions financière et l'Aide aux Citoyens (ATTAC) Hungary
Hungary
45. Madhyam, New Delhi
India
46. Comhlámh
Ireland
47. NGO Action from Ireland (Afri)
Ireland
48. Presentation Justice Network Ireland
Ireland
49. Confederazione Generale Italiana del Lavoro (CGIL)
Italy
50. Campaign for Social & Economic Justice (CSEJ)
Jamaica
51. Marcus Garvey Peoples Political Party (MGPPP)
Jamaica
52. Pacific Asia Resource Center(PARC)
Japan
53. People's Action Against TPP
Japan
54. Zenroren, National Confederation of Trade Unions
Japan
55. Aids Orphans Care And Support Programme (AOCASP)
Kenya
56. Central Organization of Trade Unions - Kenya (COTU-K)
Kenya
57. Kenya Debt Relief Network (KENDREN)
Kenya
58. Federation of Korean Trade Unions (FKTU)
Korea
59. Korean Confederation of Trade Unions (KCTU)
Korea
60. Consumers Protection Association
Lesotho
61. Friends of the Earth Mauritius
Mauritius
62. Alconsumidor AC
Mexico
63. Bia´lii, Asesoría e Investigación, A.C.
Mexico
64. Justice and Peace Commission
Mexico
65. Red Mexicana de Acción Frente al Libre Comercio (RMALC)
Mexico
66. FIRST Union
New Zealand
67. New Zealand Council of Trade Unions Te Kauae Kaimahi
New Zealand
68. New Zealand Democrats for Social Credit
New Zealand
69. National Association of Nigerian Traders (NANTS)
Nigeria
70. Trade and Gender Network Initiative
Nigeria
71. Both ENDS
The Netherlands
72. Association pour la Taxation des Transactions financière et l'Aide aux Citoyens (ATTAC) Norway
Norway
73. Norwegian Forum for Environment and Development
Norway
74. Red Peruana por una Globalizacion con Equidad RedGE
Peru
75. Board of Church and Society-Philippines Central Conference
Philippines
76. Board of Church and Society-Southwest Philippines Annual Conference
Philippines
77. IBON Foundation
Philippines
78. Migrant Ministry of the United Methodist Church in the Philippines
Philippines
79. Centrale des Syndicats des Travailleurs du Rwanda (CESTRAR)
Rwanda
80. Alternative Information and Development Centre (AIDC)
South Africa
81. Congress of South African Trade Unions (COSATU)
South Africa
82. National Labour and Economic Development Institute (NALEDI)
South Africa
83. South Durban Community Environmental Alliance
South Africa
84. Ecologistas en Acción
Spain
85. Trade Union Congress of Tanzania (TUCTA)
Tanzania
86. Zanzibar Trade Union Congress (ZATUC)
Tanzania
87. The Caribbean Association for Feminist Research and Action (CAFRA) - Trinidad and Tobago
Trinidad and Tobago
88. The National Organisation of Trade Unions (NOTU)
Uganda
89. Jubilee Debt Campaign, UK
UK
90. Trade Justice Movement
UK
91. Trades Union Congress (TUC)
UK
92. World Development Movement
UK
93. War on Want
UK
94. American Federation of Labor-Congress of Industrial Organizations (AFL-CIO)
USA
95. Americans for Financial Reform
USA
96. Center for Digital Democracy
USA
97. Center of Concern (COC)
USA
98. Chicago Political Economy Group
USA
99. Citizens Trade Campaign
USA
100. Daughters of Charity
USA
101. Food & Water Watch
USA
102. Friends of the Earth - USA
USA
103. Gender Action
USA
104. Global Exchange
USA
105. Institute for Agriculture and Trade Policy
USA
106. Institute for Policy Studies, Global Economy Project
USA
107. Just Foreign Policy
USA
108. National Association of Consumer Advocates (NACA)
USA
109. New Rules for Global Finance Coalition
USA
110. Public Citizen
USA
111. United Church of Christ, Justice and Witness Ministries
USA
112. US Public Interest Research Group (PIRG)
USA

Source
Public Citizen: http://bit.ly/Qv3bvZ