The WTO Committee on Trade in Financial Services: The Exercise of Public Authority within an Informational Forum

Abstract

The Committee on Trade in Financial Services (hereinafter, Committee or CTFS) is a committee subsidiary to the Council for Trade in Services (CTS), which itself reports to the General Council of the WTO. Shortly after the WTO Agreement entered into force, the CTS established the Committee in its Decision on Institutional Arrangements for the General Agreement on Trade in Services (Institutional Decision). The Committee acts primarily as a forum for dissemination of regulatory information specific to the often opaque financial services sector. This permits a meeting of national finance ministers and experts, as opposed to (mere) trade negotiators and representatives, who may not be in a position to understand the unique nature of national financial regulation. Fundamentally, a state's finance sector underlies all other sectors of international trade, since any transaction for goods or services requires compensation, usually monetary, thereby making the financial sector function as a sort of central nervous system for global trade. The financial services sector, therefore, is peculiar among WTO trade sectors. Indeed, the regulatory constellation for financial services within WTO law is unique: it includes two annexes to the General Agreement on Trade in Services (GATS) and two Protocols to GATS, negotiations extended well beyond the Uruguay Round and the Marrakesh Agreement's entry into force, and there is asui generisset of heightened commitments called the Understanding on Commitments in Financial Services. The Committee also acts as a monitoring body, overseeing both the implementation of legal commitments under the relevant Protocols and the specific progress of China under the Protocol on the Accession of the People's Republic of China.