Letter to the Editor of the Financial Times
International Chamber of Commerce/Financial Leaders Group, Paris, 22 September 1997
When governments meet at the World Trade Organization in Geneva in December to complete negotiations on liberalizing financial services, they will have a unique opportunity to give powerful and lasting impetus to world economic growth. Opening up restricted financial markets to foreign competition will step up the flow of investment capital and expertise to where it is most needed, and particularly to the emerging economies.
So important are the Geneva negotiations to all business sectors that the International Chamber of Commerce and the Financial Leaders Group have joined forces to appeal to governments for a successful outcome. We write to you in the name of these two private sector organizations.
As the international representatives of financial institutions and corporate users of financial services, we urge the WTO member governments not to miss this extraordinary opportunity. Every nation must play its part through its willingness to liberalize. Compromises may be required, but the basic package - broad, multilateral liberalization of financial services - must be ready on time.
Experience shows that open, transparent financial markets - with full market access and national treatment - are the most competitive, efficient and responsive to the needs of business and domestic consumers. Liberalization encourages wealth creation by providing easier and more varied access to capital. The presence of foreign participants encourages local financial service providers to improve their performance. In turn, local enterprises benefit from greater access to increased inflows of capital and expertise.
Success in the financial services negotiations will crown the achievements of the WTO and its predecessor, the GATT, in dismantling barriers to trade and investment over 50 years. During this period, international trade has expanded faster than domestic economic growth, and has thus become the driving force for global economic progress. The liberalization of trade in goods and services will never achieve its full potential if it is not accompanied by corresponding liberalization of financial services. Financial services fuel the engine of international trade.
Unless governments reach agreement by the 12 December 1997 deadline, the existing interim accord will lapse, and we shall be back to square one. We would then face the daunting prospect of beginning all over again in the year 2000. That would not only be a blow to business confidence but also a significant setback for the world economy.
Full list of signatories