The Agreement on Financial Services, also known as the Financial Services Agreement (FSA), is a binding multilateral agreement between member countries of the World Trade Organization (WTO). The FSA was created to promote international trade in financial services by eliminating discriminatory barriers and expanding market access.
The FSA was negotiated during the Uruguay Round of trade negotiations, which began in 1986 and concluded in 1994. The FSA was one of the agreements reached during the Uruguay Round and entered into force in 1995. The FSA is considered one of the most significant agreements reached during the Uruguay Round because it covers a broad range of financial services.
The FSA covers several sectors of financial services, including banking, insurance, and securities. The FSA also covers related services, such as financial information services and advisory and consulting services. The FSA aims to eliminate discriminatory barriers to trade in financial services, such as restrictions on foreign ownership or access to markets.
One of the key features of the FSA is the national treatment principle. This principle requires WTO member countries to treat foreign financial service providers the same as domestic providers. This means that foreign financial service providers cannot be discriminated against in favor of domestic providers. This principle also applies to the treatment of foreign investments in the financial sector.
Another important feature of the FSA is the market access principle. This principle requires WTO member countries to grant foreign financial service providers access to their markets. This means that foreign financial service providers must be allowed to establish operations in a member country and offer services to customers in that country.
The FSA has been instrumental in promoting international trade in financial services. According to the WTO, since the FSA entered into force, there has been a significant increase in cross-border trade in financial services. The FSA has also led to the liberalization of financial services in many countries, which has resulted in increased competition and innovation in the sector.
In conclusion, the Agreement on Financial Services is a binding multilateral agreement between member countries of the World Trade Organization. The FSA aims to promote international trade in financial services by eliminating discriminatory barriers and expanding market access. The FSA is considered one of the most significant agreements reached during the Uruguay Round of trade negotiations and has been instrumental in promoting international trade in financial services.