SADC negotiations on trade in financial services Workshop for 22 nd TNF Services Johannesburg 4...
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Transcript of SADC negotiations on trade in financial services Workshop for 22 nd TNF Services Johannesburg 4...
SADC negotiations on trade in financial
servicesWorkshop for 22nd TNF Services
Johannesburg4 August 2014
Outline
• State of play in negotiations• Classification• Issues arising from sector study• Summary of requests and offers• Issues related to FIP• How will the negotiations make a difference to regional trade• Decisions required• Key questions for breakout groups
State of play with FS negotiations
• Sector forum – July 2013• TNF’s in July, November 2013, March 2014• Requests from 7 Member States (of which 1 recently received)• Initial offers from 9 Member States (of which 3 recently received)• No revised offers as yet in response to bilateral negotiations
Access to finance
Country Name ATMs per 100,000 Commercial bank branches per
100,000
Access to formal financial services
No access to formal/informal
financial services)
2009 2009 (year in parenthe-sis) (year in parenthesis)
Angola 7.8 5.5
Botswana 29.3 6.9 59% (2009) 33% (2009)
D.R. Congo 0.3
Lesotho 7.1 1.9 21% (2011) 19% (2011)
Malawi 1. 5 1.8 26% (2008) 55% (2008)
Mauritius 37.7 19.4
Mozambique 4.3 2.9 13% (2009) 78% (2009)
Namibia 27.3 7.3 65% (2011) 31% (2011)
South Africa 54.8 8.0 73% (2012) 19% (2012)
Swaziland 156.0 2.9 50% (2011) 37% (2011)
Tanzania 2.6 1.8 16% (2009) 56% (2009)
Zambia 4.5 3.5 23% (2009) 63% (2009)
Zimbabwe 2.8 38% (2011) 40% (2011)
ClassificationW/120 Annex on FSA. Insurance and insurance-related
servicesA. Insurance and insurance-related
servicesa. Direct life and pensions.b. Direct non-life.c. Reinsurance and retrocession.d. Auxiliary services.
i. Direct insurance.a. Life and pensions.b. None-life.
ii. Same as W/120 A(c).iii. Same as W/120 A(d, part of).iv. Same as W/120 A(d, part of).
B. Banking and other financial services B. Banking and other financial servicesa. – l. List of 14 sub-sectors with CPC numbers
v. – xvi. Same list of 14 sub-sectors as in W/120 without CPC numbers.
Issues from sector study – GATS Schedules• Many market access and national treatment limitations listed in WTO
schedules too general and not specific enough
• Many limitations prudential and may not need to be listed
• Some limitations may not or may no longer reflect the current regulatory situation
Issues from sector study
• The importance of keeping banking markets open and competitive
• The apparent paradox between the openness of markets, the lack of
access to finance and the high cost of banking
• The importance of access to micro-finance for low-income consumers
and the emergence of regional micro-finance institutions
Issues from sector study
• Access to the national payments system for non-banking institutions
• An appropriate balance between prudential requirements and
restrictions on market access
• The need for an understanding on financial services, including a
prudential carve-out
Summary of requests
Sub-sector RequestsInsurance and related services 6 requests to 12 Member States
covering all sub-sectors where not already committed in GATS
Banking and other financial services
7 requests to 13 Member States covering all sub-sectors where not already committed in GATS
Summary of offers - insurance
(a)Direct life insurance
(b)Direct non-life
insurance
(c) Reinsurance
(d)Ancillary services
Mode 1 Mainly unbound1 – none
Mainly unbound1 – none
Unbound with some exceptions
2 – none
Mainly unbound
Mode 2 3 – unbound1 – unbound with
exceptions4 – none
2 - unbound2 – unbound with
exceptions4 – none
2 - unbound1 – unbound with
exceptions5 – none
2 - unbound2 – unbound with
exceptions4 – none
Mode 3 1 – unbound4 – limitations
3 – none
1 – unbound4 – limitations
3 – none
1 – unbound5 – limitations
2 – none
1 – unbound5 – limitations
1 – none
Summary of offers – banking and other FS
2 x MS 1 x MS 1 x MS 1 x MS 1 x MS 1 x MS 1 x MS
Mode 1 (a)-(l) - None
(a)-(l) – None except (g)-(h)
Exchange controls
(a)-(g) – None(h)-(l) - Unbound
(a)-(g) – None except (b)-(d)
(a),(f)-(k) – Unbound(b)-(e) – None
(a)-(l) - Unbound
Mode 2 (a)-(l) - None
(a)-(l) – None except (g)-(h)
(a)-(l) - None
(a)-(l) - None
(a)-(g) – None except (b)-(d)
(a),(f)-(k) – Unbound(b)-(e) – None
(a)-(l) - None
Mode 3 Limitations None except (a), (f) – limitations(g)-(h) – not offered
Limitations None, except (j) - limitation
Limitations Limitations None, with limitation
Prudential carve-out
GATS language:
“Notwithstanding any other provisions of the Agreement, a Member shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of the Agreement, they shall not be used as a means of avoiding the Member's commitments or obligations under the Agreement.”
Issues related to FIP Protocol
• FIP Annexes:• Macroeconomic convergence• Cooperation in taxation• Development finance• Non-bank financial institutions• Exchange control policies• ICT for Central Banks• Payment, clearing and settlement systems• Harmonisation of non-banking authorities• Cooperation among stock exchanges• Anti-money laundering
Decisions required
• Whether offers sufficient to meet requests, or improvements needed?• How to achieve any improvements – whether through continuation of
bilateral negotiations or approaches?• What to do about prudential carve-out?• How TIS negotiations and FIP can complement each other?
Additional commitments?• How TIS negotiations in financial services can contribute to regional
integration of financial services markets? How to present results?
Key questions for breakout groups
1. Requests and offersa. How far do current offers meet requests?b. How will business react to the market opportunities offered?c. What improvements if any are needed?d. How to achieve any such improvements?
2. Prudential carve-outa. Is this needed for SADC?b. What do you think of the GATS language?c. How much of the other language from the GATS Annex on FS is also
needed?
Key questions for breakout groups
3. Other issuesa. Is the regional banking (and insurance) environment as open as it seems on
paper?b. What is the future for regulatory reform of SADC financial services?c. Does micro-finance need to be tackled separately from banking? E.g.
through an understanding under the TIS Protocol?d. Is access to national payment systems for non-banking institutions
protectionist? Why? What happens in other regions?e. How can initiatives under the FIP be reinforced by commitments under the
TIS Protocol?
Questions and comments