RESTRICTED
WORLD TRADE S/FIN/M/11
19March 1996
ORGANIZATION
(96-0988)
Committee onTrade inFinancial Services
REPORT OFTHE MEETING HELD ON1MARCH 1996
Note bytheSecretariat
1. Theeleventh meeting oftheCommittee onTrade inFinancial Services waschaired by
Mr.Frank Swedlove ofCanada. Thiswasthefirstmeeting oftheCommittee aftertheconclusion
ofthefinancial services negotiations inJulylastyear. Theagenda forthemeeting was: tomonitor
theacceptance andimplementation oftheresults ofthefinancial services negotiations, toexchange
information onrecent developments infinancial services trade, toconsider some technical issues
regarding theschedules ofspecific commitments andArticle IIexemption lists,todiscuss theavailability
offinancial services data, andtoorganize future work.
2. Themeeting started withanassessment ofthestatus ofacceptance oftheSecond Protocol to
theGATS. Only twoofthe29countries concerned, Chile andJapan, hadaccepted theProtocol1,
butinthemeeting, representatives offourteen countries2expressed theirintentions tocomplete the
procedure ofratification andacceptance assoonaspossible. Noparticular obstacle wasnoted with
regard totheacceptance oftheProtocol bythecountries concerned, buttheprocedure would stilltake
some timetocomplete insome countries.3TheChairman urged allMember countries concerned to
expedite theiracceptance oftheProtocol, bearing inmind the30Junedeadline. Several delegations
stated thattheirnewcommitments were being implemented ahead oftheirformal entry intoforce,
including India which gavedetails ofitsrecent approval oflicenses for7newforeign banks and8
additional branches offoreign banks, andPhilippines which explained itsapproval lastyear of10
foreign banks withfullbanking authority andrecent approval of5foreign insurance companies.
3. Anumber ofcountries reported onrecent developments relating tofinancial services trade.
Australia reported onthecompletion ofamajor legislative reform inlifeinsurance; Canada wasin
theprocess ofreviewing itslegislation regarding financial institutions which would leadtochanges
tobemade effective inMarch 1997; theEuropean Community explained theentry intoforce from
January thisyearoftheInvestment Services Directive; India reported onrecent liberalisation oflong-
termdeposit interest ratesandcertain foreign exchange transactions; Japan reported onitsrelaxation
inApril thisyear(andelimination inApril 1999) oftheceiling ondiscretionary investment management
ofEmployees 'Pension Funds andNational Pension Funds aspartofitsderegulation program; the
Slovak Republic expressed itsintention toremove ameasure enabling reciprocal treatment offoreign
1Morocco accepted theProtocol formally on6March 1996.
2Australia, Canada, theEuropean Community, Hong Kong, India, Korea, Mexico, Morocco, Norway,
Philippines, Poland, Singapore, theSlovak Republic andSwitzerland.
3The26remaining countries which needtoaccept theProtocol arethe13countries excluding Morocco listed
infootnote 2,andBrazil, theCzech Republic, theDominican Republic, Egypt, Hungary, Indonesia, Kuwait,
Malaysia, Pakistan, South Africa, Thailand, Turkey andVenezuela.
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Page2
financial service suppliers from itslistofArticle IIexemptions withtheadoption ofanewActon
Banks, aswaspreviously indicated inthatlist;andtheUnited States reported onrecently implemented
legislation which liberalized inter-State banking byacquisition, bymerger andbydenovobranching
inphases.
4. Ontheconsideration oftechnical issues regarding theschedules ofspecific commitments in
financialservices,delegatesweregenerallyinterestedindiscussingissuessuchasclarifyingthedistinction
between cross-border supply (Mode 1)andconsumption abroad (Mode 2),andimproving the
comparability ofsectoral classifications usedinfinancial services schedules across countries. Caution
wasexpressed, however, thatsuchconsideration should notleadtoanalteration ofthesubstance of
theMembers'commitmentsintheirschedulesortotheimposingofuniforminterpretationswhencountry
practices differ. TheCommittee asked theSecretariat toproduce apaper which would identify the
technical issues involved, andwould serve asabasisfordiscussion inthenextmeeting oftheCommittee.
5. Ontheavailability offinancial services data, theCommittee asked theSecretariat toreport
atitsnextmeeting onthestatus ofon-going work inimproving theavailability ofstatistics related
toservices trade, taking intoaccount theissues andefforts described intheSecretariat document "GATS
andStatistics onTrade inServices" (S/C/W/5). Itwasnoted thatanywork inthisareashould not
duplicate work inother international organizations orplace onerous burdens ondeveloping countries,
buttheCommittee should playanactive roleinthedevelopment ofstatistics astheypertain tofinancial
services. Itwasalsoproposed thattheCommittee should discuss howtoimprove theclarity andlegal
consistency oftheschedules.
6. TheChairman informed delegates thattheCommittee wasrequested topresent areport on
itswork since theconclusion oftheUruguay Round totheCouncil forTrade inServices byOctober
ofthisyear, withthepurpose ofreporting totheMinisterial Conference inSingapore. Inorder to
preparethisreport,andtofurtherdiscusssometechnicalissuesregardingtheschedulingofcommitments,
thenextmeeting oftheCommittee would beheldinearlyautumn, unless aneedarose tocallanearlier
meeting inorder todiscuss theacceptance oftheSecond Protocol bytheMembers concerned. The
Secretariat wasasked toclosely monitor thesituation ofcountries withrespect totheir acceptance
oftheProtocol. TheChairman added thathistermasChairman oftheCommittee hadcome toan
end,andthathehadbeeninformed thattheChairperson oftheCouncil forTrade inServices would
conduct consultations withdelegations onthequestion ofappointing aChairman intimeforthenext
meeting oftheCommittee.