WORLD TRADE  
ORGANIZATION  RESTRICTED 
S/FIN/M/70 
11 October 2011 
 (11-4965) 
Committee on Trade in Financial Services  
  
 
REPORT OF THE MEETING HELD ON 26 SEPTEMBER 2011 
 
Note by the Secretariat
1 
  
1. The Committee on Trade in Financial Services  held a meeting on 26 September 2011, under 
the chairmanship of Mr Quan ZHAO (China).  The agenda for this meeting was contained in 
Airgram WTO/AIR/3799.   
2. The Chairperson indicated that, under Other Busi ness, he would like to include a point of 
information regarding the forthcoming final re view under the Transitional Review Mechanism 
(TRM) of the implementation of commitme nts and other obligations by China.   
3. The agenda was adopted. 
A. TRADE  IN FINANCIAL  SERVICES  AND  DEVELOPMENT 
4. The Chairperson recalled that the Committee had discussed this issue at the last two 
meetings, during which Members had made insi ghtful comments on the Secretariat Background 
Note, and shared their own experiences with the liber alization of trade in financial services.  It had 
become clear that there was an interest in pursuing this discussion further, not just in the abstract, 
but in a concrete and realistic way, focusing on asp ects of the relationship between trade in financial 
services and development that might be of direct relevance for Members.  Some suggestions had 
been made in that regard, although no clear  consensus had emerged on what to do next. 
5. Two issues had been proposed by China in a ro om document. First, Members could identify 
the activities of foreign financial institutions that  were most relevant and conducive to economic 
growth and social development, and exchange  views on their experiences in promoting such 
activities.  Second, the Committee could explore ways  to enhance developing Members' capacity to 
(a) carry out effective and efficient supervision a nd regulation over the financial market and foreign 
financial institutions, and (b) identify the essentia l components of the regulatory framework that 
would protect market from external shocks and en sure its stability, while opening it to foreign 
competition. The latter suggestion was related to another point, made orally at the meeting by 
Hong Kong China, to further discuss the relations hip between financial services liberalization and 
regulation. 
6. In terms of process, it was suggested that a seminar-type of format might be appropriate.  It 
was also mentioned that other international organiza tions specialized in the field should be invited to 
share their work with Members.  The Chairpers on recalled a brief discussion of this item at the 
informal meeting of 19 September:  
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/FIN/M/70 
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  - The delegation of China had announced  a contribution reflecting China's 
national experience with foreign estab lished financial in stitutions.  Other 
delegations, including Switzerland, had expressed their intention to make 
submissions as well.  Concerning the orga nization of the seminar, delegations 
seemed to be flexible.  It was felt, how ever, that more time was needed for 
reflection.  A few delegations had also expressed the view that, while it might 
be desirable to invite other interna tional organizations, the Committee should 
ensure an appropriate balance. 
- Another suggestion, made by India, was to request the Secretariat to revise or 
complement its Note on Trade in Fi nancial Services and Development in 
order to (a) to elaborate further on pub lications dealing with the relationship 
between financial sector development and growth; and (b) include more 
information about studies on the impact of the recent financial crisis on trade in financial services and economic de velopment.  During the informal 
meeting of 19 September, different vi ews had been expressed in this regard. 
7. The Chairperson then opened floor for discussion. 
8. The representative of China referred to a room  document submitted by her delegation at the 
June meeting ("Next steps for the discussion on Tr ade in Financial Services and Development", 
RD/SERV/55), proposing to address this agenda item from two specific perspectives.  The first was 
to identify the activities of the foreign financial ins titutions that were most relevant and conducive to 
promoting economic growth and social devel opment, and to encourage Members to share 
experiences in this regard.  The second perspectiv e was to explore ways to enhance developing 
Members’ capacity to effectively and efficiently su pervise their financial markets.  Delegations had 
shown interest in both perspectives and made valuable contributions.  In order to push the discussion 
forward, at this meeting, China would like to share its own experience.  
9. Concerning the first perspective, since China’ s accession to WTO in 2001, foreign financial 
institutions had experienced a development boom.  At the end of 2010, there were 185 banks from 
45 countries and regions with 216 representative of fices in China, and 74 banks from 25 countries 
and regions operating 90 branches in the country.  In addition, there were 40 legal foreign banks, 
two joint venture banks, and one wholly-owned fina nce company.  The total assets of foreign banks 
had reached RMB 2 trillion.  The geographical dist ribution of foreign participants was extremely 
unbalanced.  According to Central Bank figures, by the end of 2010, 94.4 per cent of the assets of 
the foreign financial institutions was located in th e eastern, economically advanced part of China.  
However, this situation was changing gradually.  
10. According to a report by PricewaterhouseCoopers , in 2010, most financial institutions had 
confidence in the future developm ent of China’s financial market.  Based on this judgment, while 
exploring the market of major urban areas in Ch ina and serving multinational corporations, foreign 
banks in China had also begun to enter rural market s and engage in micro-credit, encouraged by the 
regulators.  For example, the Westpac Banking Corp oration from Australia held 19.9 per cent equity 
of Shanghai Rural Commercial Bank, and had al so established a wholly-o wned branch in the 
western part of China.  In addition, other large foreign banks like HSBC, Standard Chartered, and 
Citibank had branches in rural areas engaging in small-scale projects.   
11. The China Banking Regulatory Commission, CBRC, by formulating incentive policies, such 
as setting up a "green corridor" for foreign fina ncial institutions to establish outlets in 
underdeveloped regions, played a key role in en couraging foreign banks to contribute to local 
economic growth and social development.  This he lped balance the overconcentration of the foreign 
financial service providers in the big cities, a pr actice often referred to as "cherry-picking" or  S/FIN/M/70 
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  "cream-skimming".  Encouraged by these policie s and in response to China’s macro national 
development strategies, such as the Northeast Revitalizing Project and the Western Development Program, foreign banks were beginning to establis h their sales network in inland cities and rural 
areas in order to improve the local financial ser vices.  At the end of 2010, foreign banks had 
established branches in 45 cities of 27 provinces,  among which 89 branches were in northeast and 
western regions.  
12. Another policy focus was on diversifying the financial services supplied by foreign banks 
and fostering a complementary competition environment in the financial sector.   Foreign banks and 
local banks had their respective comparative advant ages.  Foreign banks had a rich experience in 
almost all financial services including QFII, QD II, financial derivatives transactions and personal 
banking.  They were competitive in supplying servi ces such as trade finance, SMEs financing, 
banking cards, e-banking, foreign exchange, cross- border transactions, assets management, etc.  In 
turn, the local banks had wide networks and long- established customers.  Since China had started 
liberalizing its financial sector, foreign banks and local banks were developing together and 
achieving win-win outcomes.  By the end of 2010, 41 foreign financial institutions held shares in 32 
local banks, and the total investment  had reached US38.4 billion.  
13. The second perspective of China’s proposal w as on financial supervision and regulation in 
developing countries.  Financial liberalization alone  would not lead to growth and development; 
healthy development of financial sectors needed appropriate regulato ry policies.  One of the most 
significant policies pursued by the CBRC was the 'Legal person status policy'.  Encouraged by this 
policy, many foreign banks in China had been tr ansformed from branches to locally incorporated 
banks.  In 2007, Citibank was among the first forei gn banks with legal person status in China.  
Meanwhile, the number had increased to 40, represen ting 87.4 per cent of the total assets of foreign 
banks in China.  The 'Legal person status policy'  effectively shielded the financial market from 
external shocks in crises, and protected the cust omers’ interests.  The legal person status also 
facilitated foreign banks’ entry into the local financ ial market.  At present, more and more foreign 
financial institutions choose to establish local incorporated banks instead of branches.  
14. In conclusion, China’s experience showed that  trade in financial services and development 
could be mutually supportive if there were appr opriate policies guiding the liberalization process.  
She invited contributions from other Members, based on their experiences, to ensure that the discussion would finally lead to some valuable s uggestions and lessons for the whole Membership 
and, in particular, for developing countries. 
15. The representative of Switzerland thanked the delegation of China for a very substantive 
presentation and also commended Australia for a submission that had been circulated as room 
document.   Like China, Switzerland was highly in terested in future work concerning financial 
sector development and intended to ma ke substantive contributions.  He felt that the two issues that 
had been proposed for discussion were equally im portant and meaningful.  Also, Switzerland very 
much supported the idea of a seminar.   For the cu rrent meeting, his delega tion had prepared a short 
proposal focusing on the first issue (S/FIN/W/78).  It was tabled bearing in mind that the Committee would need to make choices with regard to seminar titles,  and Switzerland's submission might be 
viewed in that light as well.  
16. Switzerland's proposal dealt with the specifi c activities carried out by a Swiss financial 
institution which aimed to foster economic growth a nd social development in developing countries.   
A short presentation of this institution, the Swiss Investment Fund for Emerging Markets (SIFEM), 
was contained in document S/FIN/W/78.  SIFEM w as a joint stock company, owned by the Swiss 
Confederation and managed by a private invest ment advisory group called Obviam.  As an 
independent financial institution, SIFEM was supervised by the Swi ss financial market supervisory 
authority.  It provided long-term finance to pr ivate equity funds and financial institutions in S/FIN/M/70 
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  developing countries, with the main objective of pr omoting sustainable private sector-led growth in 
these countries, with a view to reducing poverty a nd contributing to increasing living standards.  
SIFEMs' activities must focus on investing in lo cal and regional private equity funds, which 
intended to participate in small- and medium-sized  enterprises (SMEs).  As part of its activities, 
SIFEM might also directly invest in financial institutions with an SME or micro-finance lending 
focus.  SIFEM was engaging on a commercial basis in enterprises that were most likely to be 
economically viable and, as a result, sustainable on  a long-term basis.  In addition, SIFEM also 
provided technical assistance to private equity funds and the SMEs in which it had directly or indirectly invested.  Its technical assistance cove red areas such as corporate governance, accounting, 
reporting, quality control, marketing and business st rategy.   The basic idea was to allow commercial 
investors to receive risk adjust ed returns while at the same time contributing to sustainable 
development in local communities.   It would be mo st useful to examine fu rther such initiatives in 
the context of a workshop or seminar. 
17. The representative of Australia also expressed  appreciation for China's leadership in 
discussing trade in financial services and developm ent, and acknowledged the high level of interest 
in this subject, particularly from developing countri es.  With this in view, Australia had prepared a 
paper on its own experience with trade in financial services.  Strong regulation and the contestability 
of markets were important pre-conditions for fina ncial sector development.  Australia’s financial 
sector policy recognised that efficiency and compe titiveness were more likely to be evident in an 
economy that was open to international competition and world’s best practice.   
18. As a result of major reforms over the last few decades, Australia now had one of the world's 
most open financial service sectors.  It was unde rpinned by a robust regulatory and supervisory 
environment and strong prudential requirements to ensure stability while being as least trade-
restrictive as possible.  The Australian Financ ial System Inquiry of 1981 was a major reform 
initiative to enhance the competitiveness, including international competitiveness, and efficiency of 
Australia’s financial system.  It also sought to improve the range and qualit y of financial products.  
Following the Inquiry, Australia progressively opened its banking system to foreign banks.  With 
the relaxation of foreign investment guidelines on th e ownership of merchant banks in 1984, 16 new 
trading bank licences were issued to foreign banks in 1985.  Since 1992, foreign banks had been 
authorised to operate branches in Australia.   
19. The Inquiry into the Australian Financial System of 1997 was another major reform 
initiative to ensure an effi cient, responsive, competitive, flexible  and stable financial system.   Its 
major outcome was the adoption of the ‘twin peaks’  model of financial supervision conducted by 
two specialized, independent regulatory institu tions:  the Australian Prudential Regulation 
Authority, responsible for the prudential regula tion of deposit taking ins titutions, general and life 
insurance companies, and superannuation funds;  and the Australian Securities and Investments 
Commission, responsible for  regulation and superv ision of real-time financial markets, market 
conduct regulation and consumer protection.   Four  years later, the Financial Services Reform Act 
2001 introduced amendments to legislation and a single licensing regime for financial services and 
dealings in relation to financ ial products.  The regulatory frame work covered a wide range of 
financial products, including securities, derivatives,  general and life insurance, superannuation, 
managed investments, deposit accounts, non-cash paym ents and foreign exchange contracts.   
20. These reforms over the last few decades ensured that Australia’s financial services sector 
was underpinned by a robust regulatory and su pervisory environment and strong prudential 
requirements.  They helped ensure that Australia ’s financial system was well placed to weather the 
global financial crisis, and f acilitated improvement in the international competitiveness of 
Australia’s financial sector.  S/FIN/M/70 
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  21. At present, trade in financial services (includi ng insurance and pens ion) represented about 
three per cent of Australia’s total trade in servi ces.  Financial services exports (banking and related 
services) were slightly in excess of A$1 billion in  2008, while exports of  insurance and pension 
services amounted to about A$400 million;  this compared with financial services imports of just over A$1 billion and imports of insurance and pension services of close to A$950 million.  
However, trade in financial services, and its c ontribution to economic development, were much 
greater than these data indicated.  The activities of  foreign affiliates abroad made up a substantial 
part of Australia’s financial services trade.  Over  the period 2000-10 delivery via foreign affiliates 
accounted for 96 per cent of total sales a nd 95 per cent of total purchases.  
22. Concerning the work programme, she felt that th e Secretariat's Note did not need to be 
updated.  As regards the proposed workshop, a rele vant issue for consideration could the role and 
contribution to liberalisation of strong and eff ective financial service regulation in developing 
countries. 
23. The delegation of Canada saw the steps propo sed by China for the discussion of Trade in 
Financial Services and Development as a good b asis for further work within the Committee on 
Trade in Financial Services.  As conveyed in the Secretariat’s comprehensive Background Note, 
Canada considered that financial sector liberaliza tion supported growth and development.  The fact 
that Canada was able to weather the global financ ial crisis better than other countries reflected both 
the strength of its financial institutions and the ro bustness of its regulatory regime;  strong regulation 
began at home.  Importantly, under the GATS, Memb ers maintained flexibility to take prudential 
measures in order to safeguard their domestic financial systems.    
24. Her delegation appreciated Australia's sharing its experience with financial sector reform 
and liberalization.  Australia's submission was both helpful and informative, and other Members 
should feel encouraged to talk as well about their experiences regarding regulatory reform and 
opening to foreign competition.  Like Australia, Canada's financial sector  benefited from a robust 
regulatory and supervisory environment, with strong prudential requirements a nd the participation of 
foreign firms which supported competition and stre ngthened, deepened and diversified financial 
markets.   
25. She looked forward to participating in further discussions of trade in financial services and 
development within the CTFS.  Her delegation was open to inviting outside financial sector experts 
with the understanding that they would present balanced views.   
26. The representative of India also commended China for its initiative and supported the 
proposed two perspectives, i.e., identifying the activ ities of foreign financial institutions that were 
conducive to growth and development, and discussi ng developing country’s capacity for regulation.  
Both were very relevant from a developing co untry point of view.  Regulatory capacity was 
becoming increasingly important as it involved issu es of cross-border co-operation in supervision 
and exchange of information with overseas regulator y and supervisory authorities.  The approach of 
India to regulatory supervision and calibrated opening was vindicated by the resilience of its 
financial sector in the face of the worst global financial crisis.  
27. His delegation was willing to e ngage constructively in this discussion and collect further 
inputs from relevant regulators and ministries.  He had heard with interest the presentation by the Australian delegation about the openness of the financ ial sector and the presence of foreign banks.  
It would be helpful if further information c ould be provided on the number of foreign banks 
originating from developing countries.  
28. Regarding the participation of international bodies in the proposed seminar, his delegation 
had already raised a systemic issue in the Council for Trade in Services about the participation of S/FIN/M/70 
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  intergovernmental international organizations wit hout observer status.   More time was needed to 
examine this issue.  Moreover, in the last two me etings of this Committee, he had already requested 
a revision of the Secretariat Note, supported by ma ny Members.  He reiter ated the sa me request 
since, in India's opinion, the Note was incomplete.   One delegation, the United States, had pointed out in the last meeting in June that the Committee should look not only at the recent crisis, but also 
at the preceding one.  He had no problems with this proposal, but felt that a more informed 
discussion should be based on a Note that touched upon all aspects.   
29. The representative of the European Union expr essed support for the work plan suggested by 
China.  The EU was ready to contribute to it, provided the overall purpose and objective of this 
discussion which had already started a couple of meeti ngs ago, was further clarified.  This issue had 
already been raised in the precedi ng informal consultations.   As far as the EU experience with trade 
in financial services was concerned, she referred back to the statements made on 12 May and 21 
June.  Nevertheless, her delegation was ready to continue contributing constructively to future 
discussions. 
30. The representative of the United States felt as well that it would be helpful to share 
experiences with financial services reform, as done by  China, and encouraged other Members to do 
likewise.  Concerning the first part of the propo sal, he could certainly support future work.  The 
second part, about enhancing the regulatory capacity, was an important element as well, as already 
noted by other delegations.  It was important to understand the relations hip between regulatory 
practices and trade commitments.  Work in this Committee could help bridge existing gaps.  He 
thanked the Swiss delegation for its contribution a nd expressed interested in learning more about the 
results of this Investment Fund, the countries wh ere it had invested, the criteria used to make 
decisions, and so forth.  He also commended the Australian delegation for its paper which 
corroborated that efforts to implement prudential regulation were not impeded by the GATS.  This 
was an important point to underscore.    
31. Concerning future work, his delegation could s upport in principle the idea of a workshop or 
work programme, which should be well structured  and balanced to enhance the discussion that 
China had helpfully started.  As regards the Secret ariat Note, he continued to see no need for further 
elaboration.  If a Member disagreed with the Note, it was certainly free to submit its own contribution with evidence to the contrary, but it w as not the role of the Secretariat to revise its 
papers to reflect one particular point of view. 
32. The representative of Japan also lauded Chin a, Switzerland and Australia for excellent 
presentations on this important topic.  As already mentioned in the meetings in May and June, Japan 
supported in principle the idea of a workshop that would allow for a detailed study of the relationship between trade in financial services a nd economic development.  One issue to bear in 
mind was to avoid duplication with already existing studies by other international organizations.  It 
might thus be necessary to exchange information with  institutions such as the IMF, the OECD or the 
BIS, to clarify the relationship between what woul d be done in this Committee and what had already 
been studied by other international institutions and to clarify the topics.  The Japanese government 
was willing to consider bringing some private-sector  experts to this event as had already been done 
before.  Concerning the financial crisis, as alre ady mentioned, Japan saw no need for further 
elaboration since this topic had already been studied and discussed over and over again. 
33. The representative of Turkey, in  addition to thanking China,  Switzerland and Australia for 
their room documents and presentations, supported th e idea of a seminar or workshop to discuss the 
two perspectives mentioned by China.  Her delega tion was willing to contribute to the discussion as 
it had done in recent meetings and, in particular, share Turkey's experience in relation to the second 
part of the proposal.  There was merit in inviting experts from international financial institutions.  
Finally, she reiterated that the Secretariat Note n eeded to be revised in order to capture studies  S/FIN/M/70 
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  carried out after 2008;   the Secretariat would be able to incorporate literature assessing the impact 
of the recent global turmo il on developing countries. 
34. The representative of Chinese Taipei also expr essed his appreciation for the contributions 
made by China, Australia and Switzerland and reca lled his delegation's presentation in previous 
meetings.  In particular, he would be interest ed in getting more detailed information, including 
statistics, on the operation of Switzerland's SIFEM.  For example, what was the Fund's capital base, 
and how many SMEs in how many countries had already received investments?  Regarding future work, he supported the idea of a seminar or work shop for Members and outside experts to share 
experiences, and looked forwar d to participating in it. 
35. The representative of Malaysia considered the presentations made by China, Switzerland 
and Australia to be very useful.  Malaysia ha d already submitted a pape r discussing its experience 
with financial sector regulation, the liberalizati on of the banking sector and its opening to foreign 
competition.  Even during the financial crises of  2008, the government had introduced measures to 
liberalize insurance and capital markets.  Like ot hers, the Malaysian delega tions supported the next 
steps proposed by China;  it would be very inte resting to share Members' experiences concerning 
deregulation and developmen t of the financial sector. 
36. The representative of Hong Kong, China refe rred to his authorities' experience with 
financial sector liberalization as had been explained in  previous discussions of this agenda item.  He 
had nothing particular to add, but wanted to regist er his continued interest in this issue and thank 
China, Australia and Switzerland for their contri butions.  Similar submissions from other Members 
would be highly welcome to provide a broader pict ure.  His delegation had an open mind concerning 
the format as well as the choice of participan ts for future discussions of this issue. 
37. The representative of Brazil also commended the delegations of China, Australia and 
Switzerland for their presentations, which highlighted important points.  In the case of the Australian 
submission, he was very interested in the role of financial regulation and supe rvision.  Regarding the 
next steps proposed by China, he echoed the obser vations made by Japan on the involvement of 
other institutions, which could play a very useful ro le.  However, duplication must be avoided and a 
clear link established with what the Committee intended to do.   
38. The representative of Norway was ready to c ontinue discussing issues related to trade in 
financial services and development b ased on the contributions made at  this meeting and previously.  
Norway was open concerning the format;  China's effort to narrow down the discussion and organize 
a workshop seemed constructive.  She was particul arly pleased with China's focus on supervision 
and regulation since financial st ability was imperative for the real economy.  The presence of 
foreign companies necessarily in creased the need for macroeconomic stability and appropriate 
financial sector regulation and overs ight, including for pr udential reasons, to safeguard the integrity 
and stability of the system.  Norway's own system  where all types of financial enterprises were 
covered by a single supervisory body ha d proven appropriate for the country. 
39. The representative of India explained again his position concerning the revision of the 
Secretariat Note.  While he agreed that it was not us ually the task of the Secretariat to keep revising 
papers time and again - India had never before re quested this in the Committee - in this case it was 
necessary to present a balanced and complete picture.   In order to stimulate discussions and lay the 
basis for a work programme, partly focusing on regulatory capacity, it was important not to omit 
events which were systemically relevant and to pr ovide insights on regulatory issues.  This was of 
particular interest for developing countries, wh ich relied strongly on the availability of high-quality 
Notes from the Secretariat. S/FIN/M/70 
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  40. Reiterating comments made at the meeting in June, the representative of the Republic of 
Korea supported the work plan proposed by Ch ina.  Korea was willing to contribute to the 
discussion under this item in the near future, and w as grateful for other Members' contribution at the 
current meeting.  Regarding the format of future  discussions, it did not matter whether a seminar or 
a workshop were chosen.  It was desirable, however, that relevant international organization such as 
the IMF and the FSB were invited. 
41. The representative of China expressed her appreciation for the comments received from 
other delegations on the proposed agenda item.  It was as important an issue as it was sensitive and 
technically complicated.  She thus agreed with th e need to avoid duplications with studies prepared 
by other international organizations. The focal  issue for this Committee was the link between 
financial services trade and development.  Financ ial sector studies by other organizations were less 
likely to pay similar attention to the trade and deve lopmental context.  The relevant approach might 
need to be further refined in future meeti ngs, including through informal consultations.  She 
encouraged delegations to come up with empirical  studies reflecting their own experiences.  For 
example, Switzerland could provide more details  on the scope, frequency and duration of SIFEM 
investments in SMEs of emerging economies.  Chin a welcomed all contributions under this item, 
whether in the form of more specific ideas or c oncrete examples.  The ultimate objective would be 
to develop a balanced and comprehensive picture of this complicated issue that might be of interest 
to all Members. 
42. The Chairperson complimented delegations for a very interesting and fruitful discussion.  
There seemed to be broad interest  in pursuing this issue further, building on the very substantive and 
concrete inputs from China, Switzerland and Austra lia.  There was broad agreement on organizing a 
workshop, which could possibly be held early next ye ar in order not to interfere with the Ministerial 
Conference in December.  A further element of convergence was the intention to avoid overlaps 
with the work of other international organizations  and to ensure a balance of views.  He would 
consult informally on the organization of the works hop and the invitation of international experts.  
Finally, it appeared that Members agreed to a pr oposal, from the Secretariat, to circulate a draft 
program based on his consultations.   
43. Responding to a question from the delegation of Switzerland, the Chairperson clarified that, 
based on China's proposal, the event might ultimatel y be called 'workshop' rather than 'seminar'. 
Although no delegation had made such a distincti on during the discussion, he felt, like the Swiss 
delegation, that the term 'workshop' better reflect ed the common intention not to organize lectures 
for experts, but to offer a forum for the par ticipation of as many Members as possible.   
44. The representative of China proposed that, in or der to remain closely linked with the work 
of the Committee, only experts nominated by Members and representing their regulatory agencies or 
financial markets be invited.  Nevertheless, she w as not opposed to the participation of experts from 
other organizations insofar as this was c onsistent with general WTO practice.   
45. The representative of Australia reiterated th at she was completely open to external 
participation as long as duplication w as avoided and balanced ensured.  
46. The Chairperson stressed that, should no sp eakers from international organizations be 
invited, it would be particularly important that Members contributed actively to the workshop.   
47. A representative of the Secretariat agreed th at, while the distinction between 'workshop' and 
'seminar' was somewhat unclear, the former seeme d to imply a stronger element of interactive 
discussion.  He stressed the need to secure a so lid programme from the beginning and add as many 
national contributions as possible.  In his initial s uggestion, the Chairperson had suggested he would 
consult on the expected contribution from other or ganizations.  The Secretariat would then contact  S/FIN/M/70 
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  these organizations and, on this basis, develop a draft programme that would be circulated to 
Members for comments.  Should Members decide no t to invite any international organizations, it 
would be imperative that they developed very clear id eas, at an early stage, of their contributions in 
terms of national presentations.  This was a necessa ry condition for the Secret ariat to be able, as 
expected, to draft the programme.  Clarity was need ed.  In the absence of external participation, 
there must be a strong commitment from Members not only to contribute, but to specify their 
contributions in time.  Finally, he did not share concerns that the proposed workshop, depending on 
its programme and participation, could cause overl aps or frictions with other WTO Committees or 
Councils.  The CTFS had its specific mandate.  On this basis, the Committee had conducted the 
dedicated discussion on the financial crisis where invited organizations had given presentations that 
did not overlap or duplicate discussions elsewhere in the WTO.  
48. The Chairperson summarized that  Members agreed in principle to hold a workshop on trade 
in financial services and development early next year .  In his informal consultations, he would seek 
Members' opinion on the organization of the workshop.  In the discussion surrounding the Secretariat Note, which some Members would like to be revised, positions had not changed.   He 
proposed that the Committee take note of the points rai sed, and revert to this agenda item at the next 
meeting.  It was so agreed. 
B. TECHNICAL  ISSUES  (CLASSIFICATION )  
49. The Chairperson recalled the Committee's d ecision to renew its consideration of 
classification issues. The first such discussion had been  held at the last meeting on the basis of a 
Secretariat Note (JOB/SERV/79).  A summary of that discussion, which was conducted – as agreed 
– in informal mode, was contained in document JOB/SERV/83, prepared under his responsibility. 
50. The Committee then turned to  informal mode. The summary of the discussion, under the 
Chair's responsibility, was circulated as JOB/SERV/87.  
51. At the request of the delegation of India, a representative of the Secretariat explained that 
existing commitments would be interpreted in acco rdance with the classification system that was 
followed at the time these commitments had been negotiated and the schedule submitted.  Even if 
there were variations across schedules, each commi tment was to be interpreted in accordance with 
the terms under which it had been negotiated and the classification system referred to therein.  There 
would thus be no implications for old commitment s if classification systems were to be changed 
subsequently.  The validity of a commitment and the interpretation of its sectoral scope relied 
exclusively on the classification system followed at  the time and any kind of negotiating history that 
might have existed.  There were some dispute cases  in which classification issues had been raised, 
and the scope of the commitments concerned was al ways assessed in light of the classification used 
in their negotiation.  
52. The Committee took note of that statement and deci ded to revert to this agenda item at its 
next meeting. 
C. ACCEPTANCE  OF THE  FIFTH  PROTOCOL  TO THE  GENERAL  AGREEMENT  ON 
TRADE  IN SERVICES   
53. The Chairperson recalled that Brazil and Jamaic a had yet to accept the Protocol and invited 
them to provide any update on the status of thei r domestic ratification processes.  In response, the 
representative of Brazil stated that the situati on had remained unchanged in his country.  The 
internal procedure had not yet been completed, a nd he was not in a position to indicate when this 
would happen. S/FIN/M/70 
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  54. The Committee took note of that statement and deci ded to revert to this agenda item at its 
next meeting.  
D. RECENT  DEVELOPMENTS  IN FINANCIAL  SERVICES  TRADE 
55. The Chairperson noted that the Committee ha d not had any discussion under this agenda 
item at the last meeting.  This was a standing item,  and Members were welcome to raise any relevant 
trade issue in financial services, whether relate d to recent developments in global or national 
markets.   
56. There were no interventions under this agenda item.  
E. OTHER  BUSINESS 
57. As he had indicated at the beginning of the meeting, the Chairperson informed about the 
forthcoming Transitional Review Mechanism (TRM ) of the implementation of commitments and 
other obligations by China.  The TRM was governed by Section 18 (Part I) of China's Protocol of Accession (document WT/L/432).  Paragraph 4 of th at Section provided that the review "will take 
place after accession in each year for eight years.  Thereafter there will be a final review in year 10 
or at an earlier date decided by the General Counc il."  Pursuant to this ma ndate, the Committee, like 
all WTO subsidiary bodies involved in the TRM (liste d in footnote 1 to paragraph 1, Section 18 of 
the Protocol) would conduct the final review this y ear (i.e. the 10th year after accession).  This final 
review was scheduled on 31 October.   
58. The representative of Ecuador requested the floor  to revert to the issue of financial services 
and development.  In view of the severe impact the financial crisis on the majority of Member 
economies and the need for the WTO to ease th e recovery process and support the efforts 
undertaken at national level, Ecuador considered  it essential for this Committee to study whether 
macroeconomic measures could be a pplied within the scope of the GATS to ensure the stability of 
the international financial system.  It should be recognized that financial markets had experienced 
technical and institutional changes since the Urugu ay Round, and the recent crisis had seriously 
affected countries across the world, including in particular developing countries.  It must be 
recognized that access to financial resources at all levels, global, regional an d national, could help 
mitigate the effects of the crisis and bridge ga ps in the availability of financial services.  
Accordingly, it was necessary to examine th e policy space conferred under relevant WTO 
provisions.  The GATS ought to be applied in such a way as to enable all Members to fully regulate and control their financial industry.  With this in view, Ecuador would be  proposing a paragraph to 
be included in the Declaration prepared for the coming Ministerial Conference.   It would cover a 
number of areas for which his delegation sought to fi nd consensus language, and he wished that this 
issue be included in the agenda of the next meeting of this Committee. 
59. The representatives of Hong Kong, China and th e United States sought further clarification 
on whether and to what extent Ecuador wanted th is issue to be addressed in the Committee, for 
example under the agenda item on Trade in Financ ial Services and Development, or in the 
preparatory process for the Ministerial Conference.   The representative of Ecuador felt that the 
Committee's agenda item on Trade in Financial Serv ices and Development might be relevant;  in 
any event, his delegation would like to submit a draft statement for discussion at the next Committee 
meeting. 
60. At the request of another delegation, a represen tative of the Secretariat sought to clarify the 
process for submitting issues for consideration by Minist ers, via the General Council.  Anything that 
went from this Committee to the General Council procedurally should go through the Council for 
Trade in Services, since the Committee was a subsidia ry body of the latter.  However, if a delegation  S/FIN/M/70 
 Page 11 
 
 
  wished to make a direct  submission to the General Council, it al so had the option to do so with any 
matter that related to the work of the WTO in ge neral.  In a preparatory process for a ministerial 
conference, each delegation could thus choose its most appropriate and most efficient procedural 
route to pursue its interests.  A combination was al so conceivable.  Ecuador might wish to have a 
proposal discussed in the Committee a nd at the same time, with respect to proposing an insertion of 
any language in the draft ministerial declarati on, it could make a submission to the relevant 
preparatory process.  In any event, according to his understanding, Ecuador would like to make a 
written submission under agenda item A, Trade in Financial Services and Development, at the 
Committee's next meeting. 
61. The Committee took note of the statements, and the meeting was adjourned.  
 
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