RESTRICTED  WORLD TRADE  
ORGANIZATION  S/FIN/M/60 
23 December 2009 
 
 (09-6699) 
Committee on Trade in Financial Services  
  
 
REPORT OF THE MEETING HELD ON 8 OCTOBER 2009 
 
Note by the Secretariat
1 
  
1. The Committee on Trade in Financial Services held a meeting on 8 October 2009, under the 
chairmanship of Mr. Sudhir Sooklal (South Africa).  The agenda is contained in Airgram WTO/AIR/3430.  
A. A
CCEPTANCE OF THE FIFTH PROTOCOL TO THE GENERAL AGREEMENT ON TRADE IN SERVICES 
EMBODYING THE RESULTS OF THE FINANCIAL SERVICES NEGOTIATIONS  
2. The Chairperson  recalled that three WTO Members had yet to accept the Fifth Protocol:  
Brazil, Jamaica, and the Philippines.  At the prev ious meeting, the delegations of Brazil and the 
Philippines informed the Committee that they had not been able to make progress on this issue.  He 
invited these three Members to provide further info rmation on the status of their domestic processes, 
and give some indication as to when they might be able to accept the Protocol.  
3. The representative of Brazil  said that the domestic procedures had not been concluded yet, 
and added that his delegation would keep the Co mmittee informed of any further development. 
4. The representative of Jamaica  said he had not received any update from his authorities as to 
when the  ratification would be finalized.  He rea ffirmed his country's commitment to the ratification 
of the Protocol.  
5. The Chairperson  thanked these delegations for their updates, and encouraged the three 
Members concerned to accelerate their internal procedures for the acceptance of the Protocol.   
6. The Committee took note  of the statements made and decided  to revert to this agenda item at 
the next meeting. 
B. TECHNICAL ISSUES  
7. The Chairperson  reminded Members that at the last meeting the United States had made a 
proposal for an information exchange on trade in  non-life insurance services.  The proposal was 
contained in a room document dated 12 June.  As he  had indicated at that time, there seemed to be a 
general agreement in principle to discuss these issu es, but further consultations were needed on the 
format and content of such work.  With a view to  discussing the organization and content of such an 
information exchange, the Chairperson had c onvened an open-ended informal meeting on 
23 September.  At that meeting, the United States announced that a revised proposal taking on board 
the comments made by other Members would be circ ulated shortly.  The revised room document was 
finally circulated on 29 September.  
                                                      
1  This document has been prepared  under the Secretariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO.  S/FIN/M/60 
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  8. The representative of the United States
 said that a number of changes had been made to the 
proposal in light of the comments received at the previous meeting.  The revised proposal clarified 
that the format would be an informational wo rkshop outside the Committee, on the margins of a 
future meeting.  In order to ensure a more bala nced approach, as suggested by some Members at the 
previous meeting, the revised proposal foresaw  inviting scholars and ot her organizations with 
expertise in this sector as well as insurance associat ions.  In addition, she said that the proposal called 
upon other Members to make presentations on their own markets for property and casualty insurance, or any matter related to property and casualty insura nce services.  Finally, the information exchange 
would also address regulatory matters and i ssues related to consumer protection.   
9. The representative of Switzerland
 said that the revised proposal constituted a good basis for 
the organization of a workshop on the margins of a future meeting.  Such an event would provide 
Members with the possibility of exchanging info rmation and increasing there  understanding of the 
non-life insurance sector.  He suggested that the In ternational Association of Insurance Supervisors 
(IAIS) should be invited to participate in the wo rkshop, with a view to understanding how the sector 
was regulated and supervised at the international level.  
10. The representative of Malaysia  said that she looked forward to further discussing this revised 
proposal.  
11. The representatives of Australia  and Japan  supported the proposal.  
12. The representative of South Africa  said that he could support the proposal, provided a 
balanced approach was ensured. 
13. The representative of th e European Communities2 supported the proposal and suggested that 
the issue of micro-insurance be included in the programme. 
14. The representative of Canada  supported the proposal, and encouraged Members to present 
their experiences with liberalization of this sector.  
15. The representative of Brazil  said that he had not yet received comments from the competent 
authority in his country.  On a preliminary note, he said that the information exchange proposed by 
the United States should focus only on technical issues and should have a broader and balanced 
perspective.  
16. The representative of India  agreed in principle with the id ea of exchanging information.  
However, he said that he would be able to offer definitive comments only once the consultations with 
the competent authorities in his country had been completed.  
17. The representative of Thailand  said that the programme should address issues such as market 
restrictions faced by insurance companies from deve loping countries in developed markets; regulatory 
and supervision aspects; and ways to ensure the protection of policy holders, especially in 
increasingly liberalized market environments. 
18. The representative of China  said that  his authorities were still reviewing the proposal, and 
concrete comments would be made at a later stag e.  However, he stressed the importance of 
developing a balanced programme.  
                                                      
2 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty 
establishing the European Commun ity (done at Lisbon, 13 December 20 07) entered into force.  On 29 
November 2009, the WTO received a Verbal Note (WT/L/7 79) from the Council of th e European Union and the 
Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 
1 December 2009, the European Union replaces and succeeds the European Community.   S/FIN/M/60 
 Page 3 
 
 
  19. The representative of Pakistan  said that the revised proposal was fairly balanced.  He 
considered that this information exchange was a useful first step, and that, depending on its outcome, 
it could be extended to other sectors, such as life insurance, wealth management, investment banking 
and others.  The aim would be to increase th e information available to the Committee.  
20. The representative of Korea  also supported the proposal.  
21. The representative of Mexico  said that her delegation supported in principle the proposal.  
The information exchange should include the concer ns of developing countries with regard to the 
regulation of non-life insurance, in particular me dical insurance in some developed countries.  
22. The representative of Indonesia  supported the proposal and looked forward to the detailed 
programme.  
23. The representative of Norway  supported the proposal, and added that the information 
exchange would provide the Committee with useful information regarding a sector of high importance 
to Norway.  The proposed programme seemed to cove r many important issues.  He found the idea of 
Members presenting their experiences regarding the regulation and liberalization of their own non-life 
insurance markets particularly useful.  He also s upported Switzerland's suggestion to invite the IAIS.  
24. The Chairperson  said that the debate showed that Memb ers agreed in principle to organize 
this event.  It was now a question of getting a ba lanced programme reflecting the views of the whole 
membership.  With that in mind, he would hold  consultations with Members on the substance and 
content of such a programme.  He indicated that he  would convene an informal meeting prior to the 
next formal meeting of the Committee to  discuss these issues.  It was so agreed .   
25. The Chairperson  then turned to a proposal submitte d by Pakistan, entitled "Impact of 
technological developments on regulatory and comp liance aspects of banking and other financial 
services under GATS" (document Job(09)/107). 
26. The representative of Pakistan  said that the paper was aimed at starting a discussion on the 
impact of technological developments on the regul ation of banking and othe r financial services under 
the GATS.  There had been tremendous changes in the ways to deliver services since the GATS had 
entered into force.  Members had taken commitments in financial services in light of their situation at 
that time, and could not have anticipated the t echnological changes that had altered the ways and 
modes of financial services delivery.  His country was therefore proposing the following:  (a) to hold detailed discussions on this topic in regular or dedi cated sessions in order to comprehensively attend 
to this issue and get Members' views and comments;   (b) to request the Secretariat to develop a 
background paper giving factual account of all these aspects, including the impact of ever evolving 
ICT on e-banking and other financial services – th is may incorporate country experiences of 
interested Members; and (c) to have a discussion on the need for modification of the classification of financial services, in order to ensure an accurate  and unambiguous description of e-financial services 
and the electronic modes of delivery in Members' schedules of specific commitments.  
27. The representative of India
 supported the proposal, which raised issues of interest to 
Members.  
28. The representative of South Africa  also supported the proposal and commented on some 
elements.  Firstly, paragraph 5 said that e-banking helped providers reduce the costs of supply, and 
also helped consumers reduce their costs of access to  finance.  However, he noted that since access to 
infrastructure was not always possible in some countri es, that might negate this cost-reduction factor.  
Secondly, it was not clear to him what was meant by e-banking transactions being "non-territorial in 
nature" as stated in paragraph 6.  In his view , although e-banking was virtual, it would still be of 
territorial nature in the sense that it would be the South African jurisdiction that would apply to S/FIN/M/60 
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  transactions involving South Africans.  Thirdl y, he wondered whether there were already BIS 
regulations on supervisory responsibility, an issue raised in paragr aph 10(a) of the proposal.  Fourthly, 
paragraph 10(c) of the paper made  reference to the risks of non-compliance raised by electronic 
transactions.  He wondered who woul d be held responsible for that non-compliance.  Finally, he said 
that paragraph 10(e) on jurisdictional ambiguiti es seemed to be similar to paragraph 10(a).  
29. The representative of Switzerland
 supported the proposal of looking into the issue of e-
banking as the Committee had done in the past.  He  reminded Members that in 2003 his country had 
submitted a communication on e-bankin g (S/FIN/W/26, and Add.1).  That communication focussed in 
particular on the regulation and s upervision of e-banking in Switzerla nd.  In his view, it would be 
useful if other Members also provided inform ation on the regulation of e-banking in their 
jurisdictions.  
30. The representative of China  said that his authorities were still reviewing the paper.  
Technological developments brou ght not only business opportunities, but regulatory challenges as 
well.  Exchanging information on these issues would he lp Members, particularly developing ones, to 
enhance their regulatory capacity to face those cha llenges.  He supported the specific suggestion made 
in the paper to request the Secretariat to contribute a background note on these issues.  
31. The representative of th e European Communities  said that due to the late submission of the 
paper, there had not been enough time to consult th e 27 EC Members States.  She welcomed the paper 
nonetheless, and looked forward to discu ssing these issues at future meetings.  
32. The representative of Australia  said that the paper raised a number of interesting issues 
related to e-banking, and supported a discussion on these issues at a future meeting of the Committee.  
33. The representative of Mexico  favoured the proposal, and said that she might provide detailed 
comments in upcoming meetings.  
34. The representative of Brazil  said the paper raised very releva nt issues, and his delegation was 
interested in participating in that discussion.  He drew Members' attention to the communication 
submitted by Brazil in 2005 on electronic commer ce and financial services (Job(05)/103), which 
addressed some of the issues referred to in Pakist an's communication.  Brazil's specialists were 
analysing Pakistan's proposal in detail, and he therefore reserved his right to further comment on it in the future.  Nevertheless, he suggested that the Committee invite the International Organization of 
Securities Commissions (IOSCO), the Financial Stab ility Board, and other international standard 
setting organizations to further discussions on these i ssues, and in order to take advantage of these 
institutions' expertise.  Finally, he considered that  it would be necessary to a void any overlap with the 
work carried our by those institutions, focusing in stead on the specific implications for trade in 
financial services.   
35. The representative of the United States
 said that it was a very timely topic, and looked 
forward to future discussions on this.  Much mo re work could be done on these issues in the 
Committee.  She showed particular interest in discussing what Pakistan described as jurisdictional 
ambiguities arising out of cross-border electronic transactions.   
36. The representative of Canada  said that the paper raised some important questions about how 
regulation might be affected by technological cha nge, particularly in a cross-border context.  She 
noted that Canada did not allow cross-border trad e in banking services, with the exception of certain 
information and data processing activities regardless of the means of delivery of such activities.  In 
her view, the means of service delivery, whether electronic or otherwise, did not obviate the need to 
comply with "know-your-customer" requirements.  In terms of further work on this issue, she 
suggested that Members engage in such a discussion.  She also sought further elaboration from 
Pakistan as to whether the modification of the classification of financial services was really necessary,  S/FIN/M/60 
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  given that the main issue appeared to be the means of delivery of a pa rticular activity, and not whether 
that particular activity in itself was different or new.  In this regard, having examples of specific 
service activities would be helpful.   
37. The representative of Japan  requested some clarifications from Pakistan.  Firstly, paragraph 3 
of the proposal said that banking services are now  "offered through Automated Teller Machines 
(ATM), Point of Sale (POS), Internet banking, Call Centers, Interactive Voice Recognition (IVR), 
Mobile telephone and Real Time online banking".  Japan would like to know what Pakistan is 
focusing on in this context.  Secondly, in paragr aph 11(c) the proposal called for a discussion on the 
possibility and need for modification of the classifica tion of financial services.  Japan would like to 
know what outcome was envisaged out of this discussion.  
38. The representative of Korea  sought some clarifications on Pakistan's proposal.  Firstly, he 
asked whether the Secretariat background paper referred to in the proposal was going to be incorporated in the general background paper that the Secretariat was alread y preparing for discussion 
at the Council for Trade in Services, or whether it would be a separate, stand-alone, paper that would 
concentrate more on technological developments .  Secondly, he asked whether and how the 
development of e-banking technology related to the modification of the services sectoral classification 
list.  
39. The representative of Pakistan
 replied to some of the questions raised by Members, and 
promised to give more detailed replies at the next  meeting.  Firstly, on supervisory responsibility and 
jurisdictional issues raised by South Africa and othe r Members, he said that there might be instances 
where one could not actually be sure what jurisdicti on would apply to a particular transaction.  He 
would give detailed examples at the next meeting.  Secondly, he agreed with the representative of 
South Africa that paragraph 10(e) of the proposal was very similar to paragraph 10(a).  Thirdly, 
replying to a question raised by South Africa, he  said that e-banking transactions were mostly non-
territorial in nature, because of their virtual nature .  In many cases, the transaction would originate in 
the provider's or consumer's jurisdiction, but it w ould still be difficult to define where the transaction 
took place.  Fourthly, in reply to a question by Japan , he said that the reference in paragraph 3 of the 
proposal to various delivery channels was not intended to focus on any specific mode of supply.  It would be important, however, to take into account all the different technologies available for the 
delivery of financial services, e.g. Internet or mobile banking.   
40. The Chairperson
 said that there had been a positive reaction to Pakistan's proposal of 
initiating a discussion on the issues raised.  It was also true that the proposal had been recently 
received and several delegations were still awaiting responses from their capitals.  In his view then, 
Members might want to continue discussing this pro posal at the next meeting.  He reminded Members 
of the papers submitted by Hong Kong, China in  2002 (S/FIN/W/25), and by Switzerland in 2003 
(S/FIN/W/26 and Add.1), and suggested that others  might want to emulate those proposals and submit 
their own communications reflecting the regulatory stat us quo in their countries.  He indicated that he 
would hold consultations on how to ta ke this proposal forward, if possible prior to the next formal 
meeting.  Finally, he encouraged other Members to put forward new ideas for further work at the 
Committee with a view to maintaining the current momentum.  
41. Before closing the agenda item, the Chairperson  updated Members on the organization of the 
dedicated discussions on Islamic finance and Microfin ance.  Contacts had been initiated with potential 
speakers in the area of Islamic fina nce, where the issues to be discu ssed seemed to be clearer, namely 
the differences between Islamic finance and "tradi tional" finance, both in terms of business and 
regulation; market access barriers; classification is sues; and scheduling issues.  The format of the 
dedicated discussion would be simple.  The idea w ould be to have a few speakers acting as lead 
discussants, making short presentations from the podium, which would be followed by a debate.  As a 
result of the debate, Members could decide how to proceed with regard to this issue.   S/FIN/M/60 
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  42. In terms of the speakers' profiles, in his view  it would be preferable to have representatives 
from  international organizations with expertise in  this area (for example, the Islamic Development 
Bank and even the International Monetary Fund) ;  from national regulatory agencies; and from 
industry.  Some Members had already volunteered to bring national regulators to act as lead 
discussants.  The tentative date foreseen for the de dicated discussion was 9 November 2009.  In terms 
of procedure, once he had a clearer idea of the speakers' availability, he would communicate their 
names, affiliations, and the topics that would be addressed in their presentations.  
43. It was not clear to him, however, what s hould be discussed regarding the issue of 
microfinance. In fact, the informal discussions held by Members on this issue had not led to 
satisfactory replies to the questions raised in th e informal background note prepared under the Chair's 
responsibility.  More precision was necessary in order to figure out a suitable program and find the 
appropriate speakers.  In his view, further guida nce from Members was needed.  He would continue 
his contacts with interested delegations to further cl arify these issues.  He stressed that this did in no 
way indicate a lack of interest either on the Chairper son's or the Secretariat's part to proceed with a 
dedicated discussion on microfinance, but it seemed that more work was necessary in order to 
concretize the main issues to be discussed.  
44. The Committee took note
 of the statements made, and decided to revert  to this agenda item at 
the following meeting.  
C. RECENT DEVELOPMENTS IN FINANCIAL SERVICES TRADE  
45. The Chairperson  said that Members had a very rich exchange of views under this agenda item 
at the last meeting, on the basis of an initiative la unched by South Africa to consider the trade-related 
aspects of the current financial crisis and of the polic ies adopted to counter its deleterious effects.  In 
his view, the debate had shown that Members agreed  in principle to discuss these issues, but the exact 
content and organization of such work needed to be  further refined.  He had concluded at the last 
meeting that he would conduct informal consulta tions once the South African ideas had been put 
forward in writing.  The written proposal, in the fo rm of a room document, was finally submitted by 
Argentina, India, and South Africa, and circulat ed to Members on 17 September.  An informal 
meeting had then been held on 23 September, wh ere Members commented on the proposal and sought 
some clarifications with regard to the work envisaged therein.  
46. The representative of Argentina  took the floor, also on behalf of India and South Africa, to 
provide some responses to the comments made and qu estions raised at the informal meeting of 23 
September.  Several questions were  raised with regard to the scope  of the analysis required, in 
particular with regard to the definition of the measures at issue (i.e. "financial support programmes 
and similar measures").  Some Members had asked in particular how the measures to be examined 
would differ from the measures already included in th e three reports of the Director General to the 
Trade Policy Review Body (TPRB).  One Member  had asked how the word "similar" would be 
defined.  According to the representative of Argentin a, the objective of this exercise was not to find a 
consensus definition of "financial support programm es."  Rather, it consisted of assessing the extent 
to which trade in financial services, including conditi ons of competition, was being affected by certain 
measures adopted during the current crisis.  Theref ore, the proponents had decided to confine the 
universe of measures that would serve as a basis for the analysis to the measures already included in 
the three reports of the Director General to the TPRB.  The measures to be analyzed would be the 
ones contained in the relevant sections of the fo llowing documents:  JOB(09)/2  (Overview of national 
bailout measures/plans and guarantee schemes for financial institutions); JOB(09)/30 (Annex 3 - 
Overview of National Bailout Measures/Plans and Guarantee Schemes for Financial Institutions - 
September 2008 - March 2009); JOB(09)/62 (Annex 3 - Measures For Financial Institutions, 
March 2009 - June 2009).    S/FIN/M/60 
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  47. He further explained that by setting a pre- defined universe of measures, Members would 
avoid giving the Secretariat the responsibility of having to decide which measures should or should 
not be included in the study.  Furthermore, a discussion on definitions would be avoided, since the scope of the proposed programme of work would be clearly defined.  Finally, no further notification 
processes would be faced either by Members or the Secretariat, thus avoiding a considerable amount 
of additional work.  
48. Some Members had expressed concern that this proposal might overlap with the work already 
being undertaken by the TPRB.  Those Members al so requested clarifications on how the proposed 
exercise would differ from the analysis developed unde r the umbrella of that Body.  In replying to 
those concerns, the representativ e of Argentina quoted paragraph 77 of JOB(09)/62 regarding the 
impact of financial support measures, which read as follows: " ... these measures, which in most cases 
constitute some form of State aid or subsidy, may eventually bri ng about negative spill over effects on 
other markets or introduce distortions to competition between financial institutions." In his view, the 
DG reports to the TPRB did not actually analyze in depth the negative spill over effects, neither did 
they verify whether distortions had in fact taken pl ace.  The reports did not discuss the extent to which 
trade in financial services, including conditions of competition, was being or had been affected by 
financial support programmes;  and they did not cont ain an economic analysis of the impact of these 
measures.  
49. Some Members had also expressed concerns with regard to an examination that would focus 
on the consistency of these measures with commitments under the GATS.  The representative of Argentina agreed with those concerns;  the proposal  would be redrafted to make that clear.  The idea 
was not to undertake a legal consistency analysis  (or, as some delegations suggested, a "finger 
pointing" exercise), but, rather, to carry out an economic analysis of the extent to which trade in financial services was being affected by financial support programmes.  
50. One Member had asked how and whether the me asures proposed to be analyzed might be 
framed into the prudential carve-out provision of the A nnex on Financial Services.  In replying to that 
question, the representative of Argentina said that th e proponents did not object to a discussion on the 
relationship between the prudential carve-out a nd the financial support programmes and similar 
measures.  In his view, this was an important issue of systemic concern.  However, the proponents did 
not see a consensus within the Co mmittee to pursue this type of discussion at this stage.  
51. With regard to point 7.d) of the proposal, a suggestion had been made not to limit the research 
on the impact of the financial support programmes to  the availability of international credit lines to 
"emerging markets."  The representative of Argen tina agreed and said that this expression will be 
replaced by "developing countries' markets."  Anot her question had been raised as to whether the 
Secretariat could conduct the type of examina tion requested.  The proponents believed that the 
Secretariat had the necessary experience and expertise to carry out such a task.  
52. After clarifying these aspects of the proposal, th e representative of Argentina turned to the 
next steps.  He said that the proponents had identif ied some immediate steps that the Committee could 
pursue, with the assistance of the Secretariat, in  order to advance with the proposed programme of 
work:  a) firstly, to request the Secretariat to draft a Note setting out the provisions of the GATS of 
specific relevance to financial services (this corres ponded to item 7.a) of the proposal); b) to request 
the Secretariat to organize a half- (or one-) day ev ent during the next services cluster during which 
experts in financial services who had already undert aken work in the subject matter could brief the 
Committee on the results achieved;  and c) to request the Secretariat to carry ou t a literature review in 
order to assess what other organizations, institutions and/or academics had already done with regard 
to the extent to which trade in services, including  conditions of competition, was being affected by 
financial support programmes directed to financial institutions (this would correspond to a first phase 
of the examination required in item 7.b) of the proposal).  S/FIN/M/60 
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  53. The representative of Malaysia
 found the proposal useful.  She reiterated nonetheless that any 
study by the Secretariat of the conformity of specific measures with the agreement should neither 
have legal implications nor prejudice Members' positions in the negotiations. 
54. The representative of Switzerland  said that the Committee was well placed to further examine 
the issue initiated by the Directo r-General in the framework of the TPRB.  What remained to be 
discussed at the Committee was how to conduct such an  analysis.  His delegation was looking forward 
to a revised document that would include the clarifi cations envisaged.  In general, in his view, any 
analysis or study conducted by the Secretariat s hould remain generic and should not single out any 
individual Member or measure.  In other words, th e Secretariat could deepen the work already done 
and extend it to the issues that had already been enumerated.  However, any analysis should remain 
within the limits of the GATS, and should be linke d to the definition of trade in financial services 
contained in the Agreement.  Turning to the imme diate steps suggested by Argentina, he said that 
initially he could accept requesting the Secretar iat to prepare a Note on the GATS provisions 
specifically relevant to trade in financial services. 
55. The representative of Brazil  said that the proposal was relevant and that the Committee could 
not avoid analysing the impact of the current financ ial crisis on trade in financial services.  In his 
view, the proposal had already taken into consid eration the work carried out by other WTO bodies, 
namely the Committee on Trade, Debt and Finance,  and the TPRB.  Additionally, the proposal aimed 
at adding value by focusing on trade in financia l services.  Notwithstanding the importance of some 
recent governmental measures to diminish the impact  of the financial crisis, he considered that 
Members should assess to which extent trade in financ ial was affected by those measures.  He drew 
Members' attention in that regard to the recent G20 declaration, particularly paragraph 48, which 
stated that governments should fight against prot ectionism and refrain fro m implementing measures 
that might distort trade in goods and services. 
56. The representative of Ecuador  said that it was very important to analyse the impact of the 
enormous amounts paid by some Members to fina ncial institutions and insurance companies in 
difficulty.  This Committee should have a more act ive role in that regard .  His delegation supported 
the proposal, which sought answers to a real problem  through constructive deba te.  The intention was 
not to identify any culprits but simply to verify , through the tools available to this Committee, the 
consistency of this assistance with GATS rules.  In his view, the Secretariat was more than capable of 
starting work on the issues identified in the proposal.  
57. The representative of Norway  supported the proposal in genera l, and said that it was very 
relevant for the Committee to discuss how these vari ous measures had affected trade in financial 
services.  His delegation was looking forward to a revised proposal, as announced by the representative of Argentina.  He supported the three st eps envisaged by the authors of this proposal as 
the initial phase of this work.  
58. The representative of Australia
 said that her delegation was looking forward to the revised 
proposal, before getting into a deeper discussion a bout how the Committee took forward the proposed 
work programme.  He could, nonetheless, support the first step suggested by Argentina, that is, to 
request the Secretariat to prepare a Note on the GATS provisions of specific relevance for trade in 
financial services.  
59. The representative of Mexico  said that the Committee should bear in mind the work carried 
out by the TPRB, which would issue a compilation of measures adopted between October 2008 and 
October 2009, so as to avoid any overlap.  She added that her delegation would continue analysing the 
proposal.  
60. The representative of China  said that the work programme should not overlap with the work 
carried out by other WTO bodies or other interna tional organizations.  A dditionally, it should be  S/FIN/M/60 
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  within the mandate of the Committee.  From th at perspective, he supported the suggestion by 
Switzerland that the elements enunciated by Argent ina be included in a revised proposal, so as to 
gather more support for the proposed work programme from national regulators.  His delegation supported the next steps suggested by Argentina.  
61. The representative of El Salvador
 said that the proposal arrived at the right time.  The 
Committee should focus its attention on the effects of the crisis on trade in financial services, and look 
at the GATS in that light.  His delegation supported the next steps suggested by Argentina.  
62. The representative of Pakistan  said that there was merit in discussing these issues at the 
Committee.  In his view, there was no overlap with  the work carried out by the TPRB.  While the 
TPRB and other fora might have identified the measur es in question, they had not actually looked into 
the effects of those measures on trade in financial services.  Secondly, sin ce the Members concerned 
were known, it would not serve any purpose to pinpoint or name individual Members.  Thirdly, in his 
view, the exercise would have no impact on the decision of the governments concerned to continue those measures or not.  The analysis was for the benef it of all Members.  It might be useful for future 
decisions regarding further liberalization measures or  the implementation of specific commitments on 
financial services.  In his view, the first steps pr oposed by Argentina were reasonable.  He urged 
therefore Members to consider this proposal fro m a dispassionately point of view, as a neutral 
technical exercise to understand the impact of the crisis on the financial sector.  
63. The representative of Kenya
 supported in principle the proposal .  The main reason he took the 
floor though was to remind Members that his de legation was still preparing a Note to initiate a 
discussion on the impact of the financial crisis on the financial sector, particularly that of developing 
countries.  He promised to circulate the Note as soon as it was ready.  
64. The representative of the United States  thanked the co-sponsors of this proposal for taking 
care of the concerns raised by Members.  Howe ver, his delegation remained concerned about the 
breath of the proposal's scope.  She took note of  the three immediate st eps suggested by the 
proponents as part of the proposed work programme.  At this stage, however, her delegation would 
like to see those three steps, and the purpose of each one, set out on paper.  For example, the 
suggestion had been made for the Secretariat to pr epare a Note on the provisions of the GATS relating 
to financial services.  She was under the impression that  the Secretariat had recently prepared a paper 
on the occasion of the workshop held in March to commemorate the tenth anniversary of the Fifth 
Protocol.  Perhaps instead of entrusting the Secret ariat to prepare a new paper, Members might wish 
to see what had already been done in this area.  She expressed her satisfaction though that Members 
did not consider this exercise as a finger pointing exer cise.  That said, she rese rved the right to make 
further comments once the revised pa per had been circulated.  Her de legation was not able to join a 
consensus to move forward with th is proposal until a revised version had been put forward in writing.  
65. The representative of Uruguay  supported the proposal.  In his view, the Committee could not 
turn a blind eye to an analysis of the greatest cr isis since the 1930's.  The proposal was very well 
structured and had the appropriate focus.   
66. The representative of the European Communities  looked forward to receiving a revised 
proposal in writing before being able to confir m the Communities' position.  As a preliminary 
comment, however, she voiced concern regarding the potential overlap with the work done or to be 
done by the TPRB.  As the representative of Me xico had said, the TPRB was about to produce a 
compendium of all the measures taken by Members in  this area.  That would already cover part of 
what the Committee might do within its mandate.  She then referred to the suggestions made for 
further work by the Secretariat, and expressed doub ts as to whether it was within the Secretariat's 
mandate to examine the impact of the measures enum erated by Argentina.  Besides, she wondered  
whether the data to assess the effects of such measur es were available or, even if available, whether S/FIN/M/60 
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  the data would be available in a timely fashion so as to make the Secretariat's paper meaningful.  She 
added that if a Member had concerns about the eff ect of a specific measure taken by another Member 
on trade in financial services, then it was up to  the Member concerned to produce the necessary 
evidence.  It was not sufficient that there was a pr oblem in a Member's financial sector.  There must 
also be a causal link between the measure and its eff ect.  That was a bilateral issue and it was not the 
job of the Secretariat to discover such a link.  She reiterated that the Communities reserved its 
position until it received a revised proposal in writing. 
67. The representative of New Zealand
 said her delegation had no objection in principle to the 
preliminary steps outlined by Argentina.  However,  she expressed concerns about the broad scope of 
the proposal, which aimed at analysing whether the policy response had had negative impact or 
exacerbated the crisis in certain financial system s.  She wondered whether there would be an 
assessment of the counterfactual.  For example, what would have happened if certain measures had 
not been introduced?  Would a more severe situat ion have resulted in increased contagion?  Her 
delegation supported, nevertheless, the alignment of any Secretariat work with organizations having 
expertise in the financial sector, including but not limited to, the IMF, the OECD, and IOSCO.  She 
also noted that, since some countries were already unwinding or reconsidering their support 
structures, it might be that any offending measures are no longer enforced by the time the study was 
completed.  She finally wondered how long the pr oposed study would take to be completed.  
68. The representative of Canada  welcomed the proposal since it underlined the overall 
importance of advancing trade in financial services at this particular point in time.  In her view, it 
would be interesting to have the responses provide d by Argentina in writing.  In particular, her 
delegation would appreciate some further clarifica tion of the linkages between the specific issues in 
question and the conditions of competition.   
69. She then made some general comments regarding the overall context of these discussions.  
The global financial turmoil had been responsible for enormous changes in the financial services 
sector.  In certain countries, restoring stability of th e financial sector had been of central importance, 
and the primary focus of the G20.  In response to the financial turmoil, the G20 developed a number 
of recommendations and encouraged countries to ta ke action to strengthen th eir financial sectors to 
mitigate the risk of further crises.  Many Members had had to take significant measures in response to 
the financial crisis to safeguard the safety and soun dness of their financial systems.  Canada had been 
fully committed to implementing all the action items outlined by the G20.  Indeed, Canada co-chaired 
the G20 working group on regulatory reform, and ch aired the Financial Stability Board Committee on 
Standards Implementation.  Canada had also been  working with its international partners to 
implement the April 2008 recommendations of  the Financial Stability Forum. These 
recommendations were aimed at strengthening prud ential oversight of capital, liquidity, and risk 
management; enhancing transparency  and valuation; changing the role and uses of credit ratings; 
strengthening governments' responsiveness to risks;  and putting in place more robust arrangements for 
dealing with stress in the financial system.  Some Members like Canada had financial systems that 
had been resilient to global turbulence.  Cana da had not had to bail out a single institution and 
Canada's financial institutions had been successful in raising additional capit al through the crisis 
period.  Indeed, as indicated in DG Lamy's report of last winter, Canada's response to the global 
financial turmoil had focused on ensuring adequate liqui dity in its financial market.  In terms of next 
steps, she reserved her comments for the moment, and would continue reflecting on whether further 
work from the Secretariat was required.  
70. The representative of Japan  said that it would be useful to have a revised version of the 
proposal in light of the clarifications made by  Argentina.  His delegation had no objection in 
discussing the financial crisis in the framework of the Committee, but was aware that there might be 
some overlap with the work carried by the TPRB and international organizations such as the IMF.  He 
expressed doubts, however, regarding an eventual S ecretariat's paper that might look into the  S/FIN/M/60 
 Page 11 
 
 
  compatibility of certain measures with GATS provisi ons, which, in his delegation's view, would not 
be useful.  
71. The representative of Singapore  made some preliminary comments.  She reminded Members 
that the information provided in the DG's reports to the TPRB was collected on the understanding that 
those reports would have no legal effect on the ri ghts and obligations of Members, nor any legal 
implication with respect to the conformity of me asures with any WTO agreement.  In her view, the 
same understanding should be applied to the work that could be carried out in the Committee. 
72. The Chairperson  said it was clear that further consultations on some aspects of the proposal 
were necessary, since some Members still had con cerns, in particular with regard to the legal 
implications of this exercise.  He urged the proponents to submit a revised proposal as soon as 
possible.  Regarding the next steps, and replying to the point raised by the United States, the 
Chairperson clarified that the Secretariat had not prepared a Note for the workshop to commemorate 
the Fifth Protocol, but made a presentation inst ead.  Having said that, he asked Members whether 
there would be any objection to the Secretariat pr eparing a Note on the GATS provisions specifically 
relevant for trade in financial services.  
73. The representative of the United States  suggested that the Secretariat might give Members a 
general idea of the type of work envisaged for such  a note, or the proponents could explain what use it 
would have.  In her view, it was fairly clear fro m the GATS text what provisions were specifically 
relevant for trade in financial services.  So, she wondered whether the Note would contain simply a 
list of those provisions or whether there would be an interpretation of measures. 
74. A representative of the Secretariat  said that it was his understanding that the Secretariat would 
produce a Note that would not actually contain any reference to specific measures at all, but would 
rather focus on the provisions of the GATS of partic ular relevance to financial services.  He reminded 
Members that in one of the presentations made at the workshop held in March this year, the 
Secretariat had focused on the elements of the GAT S, such as Articles I (scope and definition), the 
Most-Favoured-Nation principle, Part III of the Agreement (market access, national treatment, and 
additional commitments), and explain what those provisions meant for financial services.  That 
presentation also reviewed Article XI of the Agreement (payments and transfers), and the various components of the Annex on Financial Services.  He said that the GATS not only contained many  
horizontal, generally applicable, provisions, but al so some sector-specific provisions.  As he 
understood it, a Secretariat Note along those lines would review the provisions of the GATS, but not interpret them.  It would basically explain how those provisions are read and how they had been 
applied.  However, it was his understanding that th e Note would not involve any reference to the 
measures that had been referred to, either in the DG re ports or in Members' statements.  In a sense, the 
Note could be considered as technical assistance ma terial, since it would be in the same vein as the 
explanatory material that the Secretariat usually ci rculated in workshops and seminars destined for 
government officials, academics and the public, but with a little more specificity. 
75. The representative of Argentina
 replied to the question posed by the United States about the 
usefulness of such a Note.  It would not be the fi rst time that the Secretariat produced a Note on the 
relevant provisions of individual WTO agreements.  He  failed to see any problem with such a request.  
Additionally, some Members had sought assurances that the study envisaged in the proposal would be specifically confined to the GATS and to trade in financial services.  A Note by the Secretariat on 
these issues could help Members better frame such a study.  
76. The representative of the United States
 said that his deepest concern was that the Note might 
get into the interpretation of provisions, and that w ould be a difficult line to walk.  That did not mean 
that this was not feasible or that such a product mi ght not be of value to some Members who had not 
been involved in GATS matters as deeply as others.  However, at the same time, his delegation had S/FIN/M/60 
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  requested the proponents to submit a revised propo sal in writing so as to get a better sense of the 
scope of the work proposed.  His delegation would rather look at the work proposed as a package.  
From that perspective, he would prefer to furt her consider what the specific value-added of a 
Secretariat Note on the GATS would bring beyond a mere recitation of provisions.  The suggestion 
from Argentina and others to bring in outside expe rts was probably the best idea, since Members did 
not have the expertise to analyze these measures.  No one would complain or argue against bringing 
outside experts to enlighten Members on what ha d happened and how Members had been affected by 
the crisis and by the mitigation efforts.  He al so noted New Zealand's comments about looking at the 
counterfactual.  This was a worthy topic to pursue, but it must be done in a balanced way, bringing in 
competent people to provide appropriate information,  and only then could a decision be taken on the 
steps Members might need to consider for future work. 
77. The Chairperson
 said that it would be now for the pro ponents to circulate the revised proposal 
in writing.  Members could subsequently revisit th e suggestion to request the Secretariat to draft a 
Note on GATS provisions of particular relevance to financial services trade.  He would hold informal 
consultations in the coming weeks.  He then turned to the suggestion made in the proposal to have a 
half or one-day seminar during the next cluste r of services meetings, and asked Members whether 
they could agree to organizing such an event.   
78. The representative of the United States  said that her delegation would like to see the revised 
proposal before taking any further steps on this topic. 
79. The Chairperson  said that the proponents would circulate a revised proposal in writing.  All 
subsequent steps would be subject to consultations with all interested Members.  He urged other 
Members to come forward with any proposal on issues they might deem relevant for the Committee.   
80. The Committee took note  of the statements made and decided  to revert to this agenda item at 
the next meeting.   
D. OTHER BUSINESS  
81. The Chairperson  informed Members that the next meeting would start on Monday, 
2 November, and continue on Monda y, 9 November.  On 2 November , the Committee would consider 
item A of the agenda (Acceptance of the Fifth Protoc ol) and would carry out the transitional review of 
the implementation by China of its commitments.  The rest of the agenda, including the dedicated discussion on Islamic finance, would be taken up on 9 November.  Since the meeting would start on 2 
November, according to the rules of procedure, the Airgram would need to be issued at the latest on 
23 October.   
 
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