RESTRICTED  
  
S/FIN/M/ 90 
 
31 January 2017  
(17-0600) Page: 1/3 
Committee on Trade in Financial Services    
 
REPORT OF THE MEETIN G HELD ON 24 NOVEMBER 2016 
NOTE BY THE SECRETAR IAT1 
The Committee on Trade in Financial Services held a meeting on 24 November  2016, under the 
chairmanship of Ms Junko Ueno (Japan) . The agenda is contained in Airgram  WTO/AIR/CTFS/ 7. An 
annotated agenda by the Chairperson was issued p rior to the meeting (JOB/SERV/245 ).  
1  ITEM A – ADOPTION OF THE ANNU AL REPORT TO THE COU NCIL FOR TRADE IN 
SERVICES (S/FIN/W/91 ) 
1.1.  The Committee adopted  the annual report as contained in document S/ FIN/W/ 91. 
2  ITEM B - REGULATORY ISSUES IN  FINANCIAL SERVICES   
2.1.  The Chairperson  recalled that  in the context of the Committee's review o n recent 
developments in global financial regulatory reform and their implications for trade in financial 
services, the Secretariat of the Global Forum on Transparency and Exchange of Information for 
Tax Purposes had made a presentation at the previous meeting, which was followed by an 
interesting discussion.  
2.2.  The Chairperson said that while only a few Members had commented on the suggestions  put 
forward at the last meeting for further work in this area, past discussions showed  that all Members 
stood to benefit from keeping abreast of latest regulatory developments, both at the national and 
international levels. In her view, w hile national dev elopments would be best addressed through 
individual Members' presentations, the Committee  should continue reviewing international 
developments through dialogue with international standard -setting bodies. In that regard, she 
reiterate d the suggestion made at the last meeting that the Committee invite standard -setting 
bodies  to make presentations at future meetings , including those that ha d not yet presented 
before the Committee, such as the Committee on Payments and Market Infrastructures (CPMI) and 
the Com mittee on the Global Financial Syste m (CGFS) . The Notes by the Secretariat on recent 
developments in international standard -setting (S/FIN/W/90 and Add.1) m ight provide useful 
background with respect to potential trade -related aspects deserving attention b y the Committee.  
2.3.  As there was no objection to the suggestion, the Chairperson indicated  that the Secretariat 
would contact international standard -setting organizations for an other round of presentations 
in 2017. The Committee so agreed  and decided  to reve rt to this agenda item at the next meeting.  
3  ITEM C – TRADE IN FINANCIAL S ERVICES AND DEVELOPM ENT  
3.1.  The Chairperson  addressed the issue of financial inclusion , which had been discussed by the 
Committee over the last few meetings. In that regard, she reminded  Members that following 
successive requests by the Committee, the Secretariat had prepared two Notes: one on Financial 
Inclusion and the GA TS (S/FIN/W/88) ; and another  on Barriers to Financial Inclusion and Trade i n 
Services (S/FIN/W/88/Add.1). The Notes showed that, while furthering financial inclusion was a 
major challenge for both developing and developed economies, it was in developing countries that 
                                                
1 This document has been prepared under the Secretariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO.  S/FIN/M/ 90 
 
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  innovative business models – high ICT intensive – had emerged as a potential solution to financial 
exclusion. Those business models ha d not been confined to national boundaries, but were 
increasingly being deployed in other markets through commercial presence. The potential for 
cross-border supply of financial services, such as payment and money transmission , was also very 
significant.  
3.2.  She further explained that the  challenge of financial exclusion ha d even led to a rethink of 
regulatory policies, with the focus shifting towards a functional approach to regulation, thus 
allowing bank and non -bank providers t o compete with each other and to establish different types 
of partnerships for the provision of financial services to the unserved. Moreover, governments ha d 
revamped their licensing regimes, instituting specific licenses  for specialized suppliers. Against  this 
background, as evidenced by the Secretariat Notes, trade opportunities ha d emerged, and 
developing country suppliers were major beneficiaries. Still, regulatory barriers continue d to slow 
down financial inclusion. As shown by a recent report by the GSM Association  (2015 State of the 
Industry Report - Mobile Money), of the 89 developing markets where mobile money was active 
only 47 ha d an enabling regulatory environment, while in the other 42 markets regulatory barriers 
still hamper ed the development o f mobile money services to its full potential. Since many of these 
regulatory barriers are indeed trade -related, there is a potentially significant role  for trade policy in 
services.  
3.3.  In her view, the issue of financial inclusion deserve d further attention , as it was closely 
related to some other important issues discussed in the WTO, namely SMEs and e -commerce, and 
to another item in this Committee's agenda, namely de -risking. A recent report by the Asian 
Development Bank, for example, explain ed that the e stimated g lobal trade finance gap 
of $1.6 trillion was partly the unintended consequence of regulatory compliance and de -risking by 
financial institutions, and partly the fact that most SMEs were still unfamiliar with digital finance . 
She found it difficul t to think of a more development -related issue before any Services body than 
this one. And, as shown by the Secretariat Notes, it has a close connection with trade in service s 
and trade policy in services.  
3.4.  After this introduction, she invited Members to ma ke suggestions on how to take this issue 
forward. She said that one option would be to build on section 4 of the Addendum  prepared by the 
Secretariat , and further consider how trade policy and trade negotiations m ight be used with a 
view to contributing to  financial inclusion.  
3.5.  The representative of  China  expressed appreciation for the Secretariat's support for the 
discussion on this issue. China’s financial regulatory agencies ha d been paying great attention to 
financial inclusion. China Banking Regulatory Commission (CBRC) issued a guidance document in 
February 2016, aiming at further promoting the development of financial inclusion, through such 
measures as c redit plan s for SMEs , agricultural credit, expanding access to financial services for 
SMEs, and imp roving the covera ge of basic financial services.  At the same time, in China's view, it 
was also very important to strengthen international cooperation as well as peer exchange and 
learning  in this area.  In September 2016, the G20 summit in Hangzhou publish ed the "2016 High -
Level Principles for Digital Financial Inclusion ", providing a basis for country action plans and as a 
way of leveraging the huge potential offered by digital technologies. These principles include d, 
inter alia , promoting a digital approa ch to financial inclusion, balancing innovation and risk to 
achieve digital financial inclusion, providing an enabling proportionate legal and regulatory 
framework for digital financial inclusion, expanding the digital financial services infrastructure 
ecosystem, and strengthening digital and financi al literacy and awareness.  She suggested that 
Members should take these principles into account during policy formulation, including for 
example, the establishment of a credit and payment system with full covera ge, set ting up an index 
system monitoring the progress of financial inclusion,  and improving the legal and financial 
environment for SMEs.  
3.6.  The representative of Chinese Taipei  said that the promotion of financial inclusion had always 
been one of the most  important policy objectives . Chinese Taipei had strived to bring its practices 
into line with global trends and had focused on three aspects in particular, namely expanding 
access to financial services, increasing usage of financial services, and improving the quality of 
financial services.  Several initiatives to expand access to financial services had been launched. For 
example, financial institutions were encouraged to actively help start -ups, and small and medium -
sized enterprises (SMEs) to obtain working  capital. The initiative had proven quite successful: as 
of June 2016, about 60% of all the loans made were to SMEs . Furthermore, incentives were S/FIN/M /90 
 
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  provided to encourage financial institutions to establish a greater presence in under -served areas. 
Micro -insurance was also being promoted by relaxing the insured's eligibility and expanding 
product coverage.  In order to increase usage of financial services, the government urged financial 
institutions to provide disabled people with appropriate and friendly servi ces tailored to their own 
individual demands. Measures were also taken to establish a digital financial environment and 
promot e the usage of electronic and mobile payment methods.  Finally, as part of Chinese Taipei's 
long term financial literacy campaign, the MoneyWise website was established in 2009 with a view 
to building awareness  of financial services . In addition, the Financial Ombudsman Institution was 
set up in 2012 to promote and enhance consumer protection in the financial services sector.  
3.7.  The Comm ittee took note  of the statements made and decided  to revert to this agenda item 
at the next meeting.  
4  ITEM D - RECENT DEVELOPMENTS IN FINANCIAL SERVICE S TRADE  
4.1.  The Chairperson  recalled that , as announced at the previous meeting, Jamaica (on behalf of 
CARICO M) submitted a draft proposal for a seminar on de -risking and correspondent banking. The 
proposal was circulated in document JOB/SERV/244.  
4.2.  Following a suggestion by the Chairperson, the discussion was held in informal mode . 
4.3.  Summing up the discussion, the Chairperson  said that the proposal needed further 
consideration. She added that, as suggested, she would consult with interested d elegations on this 
issue. The Committee so agreed  and decided  to revert to this agenda item at the next meeting.  
5  ITEM E  – FUTU RE WORK AND TIMING O F THE NEXT MEETING  
5.1.  The Chairperson  said that suggestions for further work had been discussed under the 
previous agenda items, and the Committee had decided accordingly. In her view, there was 
sufficient substance to justify another meeting at the time of the first cluster of Services meeting s 
in 2017 . She suggested therefore that the Committee meet again  in the first cluster of Services 
meeting in 2017 . The Committee so decided . 
6  ITEM F – OTHER  BUSINESS  
6.1.  There  were no issues raised under O ther Business . 
 
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