The financial services sector has been going through a dramatic process of change for the last two decades. Technological change, deregulation, and the opening up of financial systems to international competition, amongst other factors, have reshaped the financial landscape for ever. Against this background, trade in financial services (understood as both cross-border financial transactions and the establishment of premises abroad) has expanded at a rapid pace, prompting a deeper integration of markets worldwide.
In parallel to these developments, countries have negotiated international agreements in order to consolidate and foster the expansion of cross-border competition in financial services. The WTO General Agreement on Trade in Services concluded at the end of the Uruguay Round is a clear example, at the multilateral level, of this type of agreements. More recently, however, riding on the wave of preferential trade agreements, many countries have resorted to bilateral deals in order to further liberalize trade in financial services. More than forty PTAs negotiated since 2000 have incorporated disciplines and commitments on the liberalization of trade in financial services; and many more are currently being negotiated, in a trend that seems unstoppable.
The time therefore seems ripe for a first assessment of the financial service liberalization achieved in these trade agreements, and for a debate on both the usefulness of bilateral negotiations in this area and the implications for the multilateral trading system.