Members who do not live up to their obligations under the agreement will be subject to the WTO's dispute settlement rules. Canada's obligations under the agreement require that we maintain the level of access enjoyed by foreign financial service providers under the existing legislative, regulatory and policy framework. The most significant additional commitment was to permit foreign banks to establish direct branches in Canada, reflecting a policy that was announced by the government prior to the WTO negotiations, in February of 1997. Canadian financial institutions now benefit from more secure access to international markets. This improved access provides job opportunities for Canadians.
Consumers also benefit from the greater domestic competition that the agreement brings over time.
At the end of the Uruguay Round negotiations in 1993, agreement could not be reached in a number of GATS sectors, including financial services. The financial services negotiations were extended until July 1995. However, at that time a permanent agreement could not be reached, primarily because the United States was concerned that access to key developing country markets was inadequate. As a result, WTO Members settled for a two-year, interim agreement on financial services. Under the interim agreement, specific commitments made by individual countries could be modified or removed at the end of 1997, depending on the results achieved during further negotiations that year.