RESTRICTED  WORLD TRADE  
ORGANIZATION  S/FIN/M/54 
2 July 2007 
 (07-2786) 
Committee on Trade in Financial Services  
 
 
 
REPORT OF THE MEETING HELD ON 7 JUNE 2007 
 
Note by the Secretariat1 
 
 1. The Committee on Trade in Financial Services held  a meeting on 7 June 2007.  The agenda is 
contained in airgram WTO/AIR/3024.   
A. 
APPOINTMENT OF THE NEW CHAIRPERSON  
2. The Committee elected  Mr. Paul Myler, from Australia, as the chairperson of the Committee 
for this year.   
B. ACCEPTANCE OF THE FIFTH PROTOCOL TO THE GENERAL AGREEMENT ON TRADE IN 
SERVICES EMBODYING THE RESULTS OF THE FINANCIAL SERVICES NEGOTIATIONS  
3. The Chairman  recalled that three WTO Members had yet to accept the Fifth Protocol:  Brazil, 
Jamaica, and the Philippines.  He invited these thre e Members to provide information on the status of 
their domestic processes. 
4. The representative of Brazil said that one of the main impediments to the acceptance of the 
Protocol had just been removed, as the Brazilian Co ngress approved early this year a law that ends the 
State monopoly in the reinsurance sector.  He added th at the law was already in force, and that the 
complete regulation of the reinsurance sector was due  to be concluded very so on.  Parliamentary work 
was still ongoing with a view to completing the accepta nce procedure, but it was difficult to foresee 
when the congressional process would be completed.   
5. The Chairman  said that the new status of regulation and operation of the reinsurance sector 
might be something of interest to the Committee unde r other items of the agenda in the near future. 
6. The representative of Jamaica said that consultations were still be ing held in order to arrive at 
a final decision regarding the ratification of the pr otocol.  This was an extensive exercise aimed at 
determining the scope and possible implications of  the commitments under the Fifth Protocol, which 
involved relevant stakeholders from the public and pr ivate sectors.  The issue of ratification was still 
under review and a meeting between the Bank of Jamai ca and relevant agencies was to be held shortly 
to continue the discussions.  Jamaica was not ye t in a position to report on the outcome of the 
consultations, nor able to indicate a concrete time frame for accepting the Protocol.  The mood of the 
consultations could be characterized as generally positive, she added.   
7. The Chairman  said that the Secretariat and himself stood ready to assist Jamaica with any of 
the issues or hurdles under consideration in those consultations.  
                                        
1  This document has been prepared under the Secr etariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/FIN/M/54 
Page 2 
 
 8. The representative of the Philippines
 said that the situation had not changed since the last 
report made to the Committee.  It was not possibl e to provide any timeframe since the ratification 
process was beyond the contro l of the Executive Branch. 
9. The Chairman  encouraged these three Members to accel erate their internal procedures for the 
acceptance of the Protocol, and reiterated his willin gness – and that of the Committee – to be of 
assistance in addressing any concerns that domestic st akeholders might have.  The Protocol contained 
promises made almost ten years ago, and its acceptance would send a positive signal about the 
seriousness of negotiations at the WTO.  
10. The Committee took note  of the statements made and decided  to revert to this agenda item at 
the next meeting. 
C. TECHNICAL ISSUES  
11. The Chairperson  recalled that there had been no discussion under this agenda item at the last 
meeting.  He said that the Committee could have a role in supporting the market access negotiations 
that were underway, primarily through a better expl oration of technical issues.  There was clearly 
scope for the Committee to provide greater transparen cy on technical developments in the regulation 
of financial services.  He indicated his willingne ss to explore this with Members in informal 
consultations over the coming months.    
12. The Committee took note  of that statement and decided  to revert to this item at the next 
meeting. 
D. RECENT DEVELOPMENTS IN FINANCIAL SERVICES TRADE  
13. The Chairman  noted the absence of discussions under this agenda item at the last meeting.  
However, there had been some very significant de velopments in financial services in the recent past, 
such as the growing internationalization of the sect or, including the expansi on of financial services 
suppliers from – and among – developing countries;  the growing number of international regulatory 
initiatives intended to set minimum prudential standa rds at global level; the increasing number of 
regulatory dialogues among different countries with a view to identifying potential spill-over effects 
of legislation in each other’s jurisdictions; the ri se of outsourcing; and – last but not least – the 
liberalization of financial services trade in the co ntext of bilateral FTAs.  He said he would be 
interested in exploring with Members, through form al or informal consultations, whether and how the 
Committee could get abreast of these developments in the coming months. 
14. It was his conviction that it would be in every Member's interest to keep updated of these 
developments, since they formed the backdrop of current market access negotiations.  Presentations on national experiences, interesting as they might  be, were one way of getting updated about 
developments in the marketplace.  While Member s should be encouraged to come up with such 
presentations, these could be complemented, for exampl e, by presentations or discussions on bilateral, 
regional or even multilateral initiatives regarding re gulation or the global trends affecting trade in 
financial services. 
15. The representative of Brazil
 said that in a recent meeting held in the WTO on the Aid for 
Trade initiative, the issue of export credits was addressed .  One of the issues raised at the meeting was 
the so-called Basel II capital adequacy framework  negotiated at the Basel Committee on Banking 
Supervision.  He got the impression, from the presenta tions, that when Basel were to come into force 
in national legislations, access to credit would be mo re difficult for developing countries, since risk 
assessment was likely to be reflected  in their credit ratings and credit worthiness.  He thought that the 
issue would deserve attention and discussion at th e Committee.  He suggested that the Secretariat 
could make an assessment on the impact of Basel II on trade in financial services in general, and on S/FIN/M/54 
Page 3 
 
 
the effects on access to credit by developing countri es.  He added, however, a note of caution to his 
own suggestion, mindful of the fact that Basel II had been negotiated at another international 
organization.  He thought nonetheless that it would be useful for Members of  the Committee to think 
over these issues. 
16. The representative of the United States  appreciated the idea put forward by Brazil, as well as 
the points raised by the Chair.  However, she wo uld need to consult with her authorities before 
agreeing to a Secretariat report on this matter. 
17. The representative of Japan  said he needed to consult with his capital on the Brazilian 
suggestion.  Consultations with interested Members would also be useful.  
18. The representative of China  said that she would need to c onsult with her country's financial 
authorities to see whether there was an interest in exploring the idea put forward by Brazil. 
19. The representative of the European Communities  said that some time was needed to think 
about the Brazilian proposal.  She added that some cons ultations with the Chair would also be helpful. 
20. The Chairman  said that a number of Members wanted  to consult further on the Brazilian 
proposal.  He added that he would be willing to take up the issue of Basel II with Members.  The best 
way would be holding some informal consultations in  small group configurati ons.  He intended to call 
those consultations in the coming weeks, with a view to discussing this as well as other potential 
agenda items. 
21. The representative of the United States  noted that, while the Chair was free to have 
consultations under his auspices and own responsibility , the United States had not agreed to conduct a 
substantive debate on the proposal put forward by Br azil.  In the United States' view, many countries 
at different level of economic development ha d found the means to accommodate regulatory 
sensitivity in taking on commitments, and she was not sure whether institutions like the Basel 
Committee were fully aware of the nature of co mmitments in the GATS context.  If the Chair 
convened a meeting, she would share more of these views with Members.  
22. The Committee took note  of the statements made and decided  to revert to this item at the next 
meeting.  
E. DATE OF THE NEXT MEETING  
23. The Committee agreed  to hold its next meeting during the next cluster of services meetings.  
The exact date would be announced in due course.   
F. OTHER  BUSINESS 
24. There was no issue raised under this agenda item. 
 
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