Financial Services Liberalization, Preferential Trade Agreements

348 Pages·2010·2.54 MB·English

by  World Bank Group

d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c
bli
u
P
d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c DIRECTIONS IN DEVELOPMENT
bli
u Trade
P
d
e
z
ri Financial Services and
o
h
ut
A
e Preferential Trade Agreements
r
u
s
o
cl
s Lessons from Latin America
Di
c
bli
u
P Mona Haddad and
Constantinos Stephanou,
Editors
d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c
bli
u
P

Financial Services and Preferential
Trade Agreements

Financial Services and
Preferential Trade Agreements
Lessons from Latin America
Mona Haddad and Constantinos Stephanou,
Editors
© 2010 The International Bank for Reconstruction and Development / The World Bank
1818 H Street, NW
Washington, DC 20433
Telephone: [phone]
Internet: www.worldbank.org
E-mail: [email protected]
All rights reserved
1 2 3 4 13 12 11 10
This volume is a product of the staff of the International Bank for Reconstruction and
Development / The World Bank. The findings, interpretations, and conclusions expressed in this
volume do not necessarily reflect the views of the Executive Directors of The World Bank or the
governments they represent.
The World Bank does not guarantee the accuracy of the data included in this work. The bound-
aries, colors, denominations, and other information shown on any map in this work do not imply
any judgement on the part of The World Bank concerning the legal status of any territory or the
endorsement or acceptance of such boundaries.
Rights and Permissions
The material in this publication is copyrighted. Copying and/or transmitting portions or all of
this work without permission may be a violation of applicable law. The International Bank for
Reconstruction and Development / The World Bank encourages dissemination of its work and
will normally grant permission to reproduce portions of the work promptly.
For permission to photocopy or reprint any part of this work, please send a request with com-
plete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA
01923, USA; telephone: [phone]; fax: [phone]; Internet: www.copyright.com.
All other queries on rights and licenses, including subsidiary rights, should be addressed to the
Office of the Publisher, The World Bank, 1818 H Street, NW, Washington, DC 20433, USA; fax:
202-522-2422; e-mail: [email protected].
ISBN: 978-0-8213-8273-8
eISBN: 978-0-8213-8312-4
DOI: 10.1596/978-0-8213-8273-8
Cover photo:Old Stock Exchange, Santiago, Chile; Richard Nowitz/National Geographic/Getty
Images
Cover design:Naylor Design, Inc.
Library of Congress Cataloging-in-Publication Data
Financial services and preferential trade agreements : lessons from Latin America / Mona Haddad
and Constantinos Stephanou.
p. cm.
ISBN 978-0-8213-8273-8 — ISBN 978-0-8213-8312-4 (electronic)
1. Financial services industry—Government policy—Latin America. 2. Latin America—
Commercial policy. 3. Commercial treaties—Latin America. I. Haddad, Mona
II. Stephanou, Constantinos, 1971- III. World Bank. IV. Title.
HG185.3.L3H33 2010
332.1098—dc22
2010016950
Contents
Foreword xiii
Acknowledgments xvii
Contributors xix
Abbreviations xxi
Chapter 1 Financial Services Liberalization, Preferential
Trade Agreements, and the Latin American
Experience: An Introduction 1
Mona Haddad, Pierre Sauvé, and
Constantinos Stephanou
Key Policy Messages 2
Structure of the Volume 8
Notes 10
References and Other Resources 11
v
vi Contents
Chapter 2 Financial Services and Trade Agreements:
An Overview 13
Marilyne Pereira Goncalves and
Constantinos Stephanou
Overview of Trade in Financial Services:
Liberalization of Trade in Financial
Services and Financial Liberalization 14
Financial Services and Preferential
Trade Agreements 22
Negotiating Financial Services
Liberalization 37
Negotiating Financial Services in PTAs:
International Experience 37
Lessons from Latin America and
the Caribbean 39
Conclusions 45
Annex 2A: GATS Definition of
Financial Services 48
Annex 2B: Financial Services in Latin
American and Caribbean PTAs 50
Annex 2C: Liberalization Commitments in
Financial Services for Selected Countries 50
Notes 67
References and Other Resources 71
PART I Horizontal Issues 77
Chapter 3 Architectural Approaches to the Treatment of
Trade and Investment in Financial Services in
Selected Preferential Trade Agreements 79
Pierre Sauvé and Martin Molinuevo
Carving Out All Sectors 80
How Are Financial Services Covered in PTAs? 81
Concluding Remarks 89
Annex 3A: Substantive Obligations and
Scheduling Approaches in PTAs 91
Notes 98
References and Other Resources 98
Contents vii
Chapter 4 Conducting a Trade-Related Regulatory
Audit in Financial Services 101
Pierre Sauvé
Preparing for Services Negotiations 102
Addressing the Challenge of Domestic
Regulation in Services Trade 105
A Trade-Related Regulatory Audit in Services:
Means and Ends 107
Key Questions Involving Services Negotiations
and Domestic Regulations 110
Annex 4A: Examples of Nonconforming
Measures in Financial Services 110
Annex 4B: Services Negotiations and Domestic
Regulation—Key Questions 114
Notes 118
References and Other Resources 118
PART II Country Case Studies 121
Chapter 5 Trade in Financial Services: The Case of Chile 123
Raúl E. Sáez
Chile’s Financial System 124
Chile’s Trade Commitments in Financial
Services before the Negotiations with
the EU and the United States 133
Preparing the Negotiations: The Issues Involved 135
Preparing for and Conducting the Negotiations:
Informing the Private and Public Sectors 139
The Outcome of the Negotiations with the
United States and the EU 144
The Aftermath of the Negotiations 155
Lessons from the Chilean Experience 157
Final Thoughts on Preparing for a Bilateral
Negotiation in Financial Services 160
Annex 5A: Summary of Chilean
Trade Agreements 165
Annex 5B: Origin of the Texts of the Chile-EU
and Chile-U.S. Financial Services Chapters 168
viii Contents
Annex 5C: Chile’s Commitments in Financial
Services in the Uruguay Round 171
Annex 5D: Transfer and Payment Regulatory
Provisions in Chile’s Trade Agreements 173
Notes 179
References and Other Resources 183
Chapter 6 Financial Services in the Colombia–United
States Free Trade Agreement 185
María Angélica Arbeláez, Andrés Flórez,
and Natalia Salazar
Recent Evolution of the Colombian
Financial Sector 186
The FTA Negotiating Process 203
The U.S. FTA’s Financial Services Chapter 216
The Colombian Financial Sector after the FTA:
Impacts and Lessons 225
Annex 6A: Colombia’s Schedule of Specific
Commitments Undertaken in GATS 228
Notes 234
References and Other Resources 240
Chapter 7 The CAFTA-DR-U.S. Negotiations on Financial
Services: The Experience of Costa Rica 243
Roberto Echandi
The Financial Liberalization Process in
Costa Rica, 1984–2006 244
Evolution of Trade Policy Reform in Financial
Services in Costa Rica since the 1990s 256
The Negotiation of the CAFTA-DR-U.S.
Chapter on Financial Services 261
The CAFTA-DR-U.S. Chapter on Financial
Services 277
Effect of CAFTA-DR-U.S. on the Costa Rican
Financial System 278
Conclusions 281
Annex 7A: Principal Laws Governing the
Financial Sector in Costa Rica 283