. /.WORLD TRADE
ORGANIZATIONS/CSS/W/143
22 March 2002
(02-1501)
Council for Trade in Services
Special SessionOriginal:  Spanish
COMMUNICATION FROM  CUBA
Negotiating Proposal for Financial Services
The following communication has been received from the delegation of Cuba with the request
that it be circulated to the Members of the Council for Trade in Services.
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I. INTRODUCTION
1. Cuba submits this negotiating proposal1 as an initial contribution to the discussion on the
financial services sector within the framework of the special session of the Services Council.
2. The financial sector has experienced an unprecedented boom in recent years, particularly in
developed countries, which have very complex and diversified systems in which capital markets havebecome fully developed, with numerous financial instruments that make them increasingly difficult to
regulate.
3. Financial services are of particular importance to national infrastructure, so that the
liberalization of this sector has a considerable impact on Members' economies. A well functioning
financial system provides an important vehicle for the efficient allocation of financial assets and
promotion of economic competitiveness.
4. Given the significance of the financial system, regulations should be drawn up to ensure that
it is in keeping with each country's level of development so that its operation and liberalisation do not
overexpose countries to foreign capital, which can trigger off instability and crisis.
5. In the light of the above, Members must strive to strengthen their financial systems and
ensure that the negotiations are conducted in accordance with their different levels of development.
II. NEGOTIATING PROPOSALS
6. The current negotiations must take Members' individual levels of development into account.
Many developing countries have fragile financial systems, and therefore need to implement regulatory
measures to protect themselves from speculative capital and asymmetrical competition from
transnational corporations.
                                                     
1  Cuba reserves the right to amend this proposal, which does not prejudge its final position on sub-
sectors or services which are not included in the analysis, at any time.S/CSS/W/143
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7. Bearing in mind the existing asymmetries and developing countries' fragility and need for
protection from speculative capital, market access negotiations must be conditional upon the existence
of a regulatory framework which allows progressive liberalization in accordance with national policy
objectives, as established in Article XIX.2 of the GATS.
8. The negotiations should facilitate the access of developing countries to the sectors of interest
to them in developed country markets and strengthen the competitiveness of their services, as
stipulated in Article IV of the GATS.
9. The nature of the sector should be taken into consideration when liberalizing financial
services.  The negotiations should not encourage excessive competition between domestic and foreign
services and service suppliers, given the inherent risk of destabilizing national economic systems.  In
this respect, economic needs tests for commer cial presence are legitimate limitations for many
developing countries.
III. EXPECTED OUTCOME OF THE NEGOTIATIONS
10. The aim is to achieve the increasing participation of developing countries in trade in financial
services, through effective access to markets of export interest which enable Article IV of the GATS
to be implemented.
11. Cuba hopes that these negotiations will result in the strengthening of its domestic financial
services capacity through the full implementation of Article XIX.2 of the GATS.
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