WTO must host a special debate on financial regulations, 112 CSOs demand
Published on Fri, 2012-09-28 10:55
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 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
Inter-regional and regional networks 9. Africa Development Interchange Network (ADIN)
National organizations and sub-national networks 18. Federación Argentina de Empleados de Comercio y Servicios (FAECYS) Source » |
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