Business-Managed Democracy

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• National Government

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• The Trade Agenda

• Trade in Services
• GATS
  • Implications
  • Telmex Ruling
  • Offers and Requests
• Early Business Lobbies
  • American Express
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• Financial Services
  • Gaining Support
  • Business Lobbying
  • Ongoing Goals
• Business Coalitions
  • British Invisibles/ LOTIS
  • Financial Leaders Group
  • European Services
  • Global Services Network
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• Business Strategies
  • Targeted Services
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  • Encouraging Offers
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Business-Managed Democracy » Government » Trade in Services » Financial Services Agreement » Ongoing Goals

Business-Managed Government

Ongoing Goals for Financial Services

The WTO and US and European officials all lavished praise on the Financial Services Agreement (FSA) when it was made: ‘Representatives of US financial service industries rushed into the WTO lobby to distribute effusive statements of support to the pact and how it would enable them to serve consumers globally, but not concealing their glee that they would  now be able to operate and gain in many developing country markets.’

Despite the public elation, corporations regarded the agreement as just a beginning. Most countries committed themselves to little more than locking in their existing levels of market opening.

However, even this is significant given that it meant that no reversal or government controls can be imposed in the future even if there is  democratic decision to do so. This is so undemocratic that in some nations such agreements are thought to be unconstitutional. The Canadian constitution, for example, states: ‘Every Act shall be so construed as to reserve to Parliament the power of repealing or amending it, and of revoking, restricting or modifying any power, privilege or advantage thereby vested in or granted to any person’.

Reference: Andrew Buxton, 'The European Services Network: Keynote Speech', Paper presented at the Preparatory Conference for the World Services Congress, The University Club, Washington DC, 2 June, 1999, p. 3 .

Despite this corporate victory over democracy, Banker Andrew Buxton complained: ‘There are still countries, such as India, where hardly any progress was made in the 1997 agreement and where more pressure is needed … we cannot allow existing members of the WTO to opt out completely.’

Financial corporations sought to gain further commitments following the agreement including commitments to:

Reference: Alistair Abercrombie, ‘Seminar on GATS and Financial Services’, International Financial Services, London, 11 May, 2004; ‘Commentary on Proposals for Liberalisation in Financial Services’, Financial Leaders Group, 21 September 2001 .

• Give foreign investors the right to establish wholly owned businesses, subsidiaries, branches and offices in all financial service sectors with the same rights as local businesses,
• Give foreign investors the same access to domestic and international markets as local companies,
• Lift restrictions on cross-border services and consumption of services abroad,
• Lift limits on investments in joint ventures and domestic financial institutions,
• Facilitate the entry of key business personnel  without onerous restrictions and permitting procedures,
• Grandfather existing investments – that is ensure they are not subject to new rules and restrictions after they have been established,
• Lock in and improve market access to pension provision.

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