How To Understand The Gta

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1 2006 Monetary Authority of Macao Financial Services in the Current WTO Framework K.H. Lei Abstract This paper examines how the multilateral trading system affects Macao s trade in financial services and its regulatory framework. Relevant parts of the General Agreement on Trade in Services (GATS) are elaborated in the context of financial services. Important concepts, like most favoured nation, market access and national treatment are discussed, while other important multilateral instruments in relation to financial services are also covered in this paper

2 1. Introduction Financial services, which among others include financial intermediation, insurance and pension funding, have been one of the major types of economic activities in Macao. According to available official statistics, the share of Gross Valued Added (GVA) for financial intermediation, insurance and pension funding in GDP at current prices grew from 7.7% in 1995 to 8.8% in Strong foreign presence is one of the characteristics of financial services in Macao. Among the 27 banks authorised to operate in Macao, 23 are branches or subsidiaries of overseas banks. Out of the 24 insurance companies authorised to operate in Macao, 16 are branches of foreign insurance companies. Utilisation of financial services provided by foreign services suppliers, which constitutes a major part of trade in financial services, has been ubiquitous in Macao. On the one hand, it is unambiguous that participation of foreign financial institutions helps diversify risk as foreign financial institutions strengthen and broaden the scope of international financial intermediation between Macao and the rest of the world. Furthermore, foreign financial institutions bring in new expertises, management concepts and skills, and introduce healthy competition in the financial sector. On the other hand, they have complicated the task of regulators by bringing in new elements, which could be irrelevant from the regulators point of view if the sector were not open to foreign institutions. This paper elaborates on how trade in financial services in Macao is being governed by the multilateral trading system. Section 2 reviews the background leading to the creation of the General Agreement on Trade in Services (GATS). Section 3 examines the structure of GATS, especially those parts, which are relevant to the trade in financial services and their regulatory implications. Section 4 points out other important legal instruments related to financial services and the historical background 1 Gross Domestic Product by Production Approach, Statistics and Census Service of Macao, December

3 leading to their creation. Section 5 sums up the multilateral commitments of Macao with respect to trade in financial services. 2. Background As a founding member of the World Trade Organisation (WTO), Macao is indeed under the governance of the GATS and its annexes related to financial services in operating trade in financial services. The creation of the GATS has been hailed as one of the landmark achievement of the Uruguay Round. It has been the first and only set of multilateral rules governing international trade in services. The GATS was essentially inspired by the same objective as its counterpart in merchandise trade, the General Agreement on Tariffs and Trade (GATT), to create a credible and predictable rule-based trading environment in which better business decision could be formed and economic welfare could be enhanced. When the idea of bringing rules on services into the multilateral trading system was first mooted in the early to middle 1980s, a number of countries were sceptical and even opposed. Since a significant proportion of trade in services has taken place within national borders (e.g. via a branch of a foreign bank), these countries believed that their regulatory sovereignties would be undermined by new multilateral disciplines on this kind of economic activities. The structure of GATS reflects the efforts of its creators in providing reasonable level of comfort to allay this fear. In the preamble of the Agreement, the right to regulate and to introduce new regulations on the supply of services within the members own territories in order to meet national policy objectives is enshrined. In the body of the Agreement, there are main text containing general obligations and disciplines, annexes dealing with rules for specific sectors including financial services and individual members specific commitments to provide market access to their services sectors. It should be highlighted

4 that a positive-listed approach has been taken in making specific commitments, meaning that each member would decide on its own whether to incorporate any individual sector in its specific commitments of the GATS. 3. Structure of the GATS Against a background of increasing importance of the service sector in the global economy, the GATS strives to strike a balance between the right to regulate and progressive liberalisation of trade in services while taking into account the need to integrate developing countries into world trade in services through strengthening the capacity, efficiency and competitiveness of their own domestic service sectors. The preamble of the GATS basically reiterates these three considerations that shape the negotiations Scope and definition Article I of the GATS clearly spells out the scope of application of the Agreement. It covers all services, except those supplied in the exercise of governmental authority 2 being defined as any service, which is supplied neither on a commercial basis, nor in competition with one or more service suppliers. 3 Monetary operations provided by central banks and social security schemes offered by relevant government agencies fall easily into the exception. Beside defining the scope, Article I of the GATS also sets out a definition of trade in services in terms of four different modes of supplies: 1) cross-border supply, 2) consumption abroad, 3) commercial presence in the consuming country, and 4) presence of natural persons in the consuming country. This definition merits careful examination as it helps in understanding the special problems and regulatory issues that arise in international trade in services and that shape the principles and rules em- 2 GATS Article I:3(b). 3 Ibid, Article I:3(c)

5 bodied in the GATS, as well as the specific commitments that WTO members have undertaken. Cross-border supply or mode 1, in the jargon of trade negotiators, is defined to cover service flows from the territory of one WTO member into the territory of another member, e.g. banking services transmitted via telecommunication or mail. It should be noted that under mode 1, there is a clear geographical separation between servicesprovider and consumer and only the service itself crosses national frontiers. Rapid developments in the telecommunications in last decade made this mode more relevant than could be foreseen by the creators of the GATS. They have also posed new challenges to regulators around the world. Consumption abroad or mode 2 refers to situations where a service consumer moves into another member s territory to obtain a service, e.g. tourism or study abroad. Supply of services under mode 2 raises few problems in the context of trade, as it does not require the service supplier to be admitted to the consuming country. Commercial presence or mode 3 is the supply of service through the entry of foreign suppliers in the territory of another member. One example is the establishment of branch office or agency to deliver banking or legal advice services. This has been the most important mode of supply of services and has raised the most difficult issues for host governments and for the GATS negotiations. A significant proportion of service transactions require the simultaneous physical presence of service provider and consumer. Multilateral rules dealing with the rights of foreign establishment, level of participation of foreign equity or equal opportunity for local and foreign firms inherently affect regulatory autonomy, which might have other legitimate policy concerns beside trade. Presence of natural persons or mode 4 refers to the admission of foreign nationals to another member to provide services there. In the case of mode 3, foreign firms might want to employ some foreign managers or specialists. For example, a foreign bank

6 might want to send some managers or specialists from its headquarters to ensure the quality of its services. 3.2 General obligation and disciplines From Article II to Article XV, the GATS lays out the general obligations and disciplines, which are the basic rules that apply to all members and to all services, independent of whether specific commitments to market access have been made Most-Favoured-Nation (MFN) treatment Under Article II:1 of the GATS, members are bound to extend immediately and unconditionally to services or services suppliers of all other members treatment no less favourable than accorded to like services and services suppliers of any other country. 4 Like its counterpart in the GATT, MFN in the GATS context means treating one s trading partners equally on the principle of non-discrimination. For example, if a member has decided to allow foreign competition in a sector, equal opportunities in that sector should be given to service providers from all other WTO members. This principle would apply even if the member has made no specific commitment to providing foreign services suppliers access to its market under the WTO framework. However, the principle of MFN is qualified in the context of the GATS. During the Uruguay Round, it was clear that the ambition of unqualified MFN principle (applicable to goods) was not achievable mainly due to the pre-existence of some preferential/bilateral agreements in services among a number of members. The consensus at that time was that it was necessary to maintain these preferences temporarily. Hence, WTO members give themselves the right to keep more favourable treatment to particular members in particular service sectors by listing MFN exemptions alongside their first sets of specific commitments. These exemption lists are governed by conditions set out in a separate annex to the GATS. 4 Ibid, Article II:

7 Basically, the Annex on Article II Exemptions makes it clear that no new exemptions could be added to the lists and some listed exemptions are either subject to a stated time limit or subject to review. A number of MFN exemptions listed by members are related to financial services. This kind of MFN exemptions arises as a result of application of reciprocity as a market access condition for foreign establishment, i.e. Member A would grant establishment right to financial institutions from Member B as long as Member B grants establishment right to financial institutions from Member A. Reciprocity is particularly relevant when there are differences among national financial systems, especially those between countries operating universal banking systems and those with segmented financial markets. Countries with universal banking systems would take bilateral or plurilateral reciprocity into consideration when granting market access to foreign financial institutions, particularly with a view to securing for their financial institutions access to a broader range of activities in countries with segmented financial markets. MFN exemptions listed by certain members in financial services are used as an instrument to provide legal cover for their bilateral/plurilateral reciprocity since the application of reciprocity as a market access condition patently violates the principle of MFN Economic integration The only other way to derogate from over-arching principle of MFN under the GATS is to be members of regional trading arrangements (RTAs). Article V (Economic Integration) of the GATS is a permissive clause, which allows any WTO member to enter into plurilateral agreement to further liberalise trade in services. The requirements for this type of agreement are substantial sectoral coverage, elimination of discrimination measures among the group, and prohibition of new or more discriminatory measures. 5 An RTA that qualifies for Article V must be crafted to facilitate trade among its members and shall not result in an overall increase in trade 5 Ibid, Article V:

8 barriers to non-members of the RTA in the service sectors or sub-sectors covered by the RTA. 6 The Closer Economic Partnership Arrangement (CEPA) between the Mainland and Macao easily falls into the kind of RTAs that would fulfil the requirements of Article V. But it should also be aware that any rights and obligations established under such RTAs would not be protected by the WTO system. Article V, being a permission clause, only provides a legal cover for members of the RTAs to deviate from certain WTO principles such as MFN in order to enter into deeper economic integration but will not turn plurilateral trade benefits members received from any RTAs into rights in the multilateral system Transparency A credible and predictable rule-based trading system would allow traders easy access to information related to laws and regulations, which could affect their business operations. The GATS has therefore carried over from the GATT the principle of transparency in its Article III and requires each member to publish promptly all relevant measures of general application that affect operation of the GATS and to establish national enquiry points to respond to requests from other members for information on these matters. Members must also notify the Council for Trade in Services of the introduction of new or changed laws, regulations or administrative guidelines that affect trade in services covered by their specific commitments under the GATS Domestic regulation The intangible nature of services makes the conventional protectionist measures like tariff and quantitative restrictions futile. On the other hand, domestic regulation related to the quality of the service itself or the qualifications of the services suppliers would seem to be a more pervasive means for a sovereign government to exercise in- 6 Ibid, Article V:

9 fluence or control over trade in services. In this light, it would not be hard to understand why the creators of the GATS would like to set out some disciplines on how regulation should be administered. However, it should be noted that domestic regulations often go to the social and political heart of a country s sovereignty, addressing sensitive areas such as health, consumer protection and stability of financial system. Therefore, WTO members have felt less comfortable in making concessions in the politically sensitive field of domestic regulation than in committing to the elimination of trade restrictive measures. Article VI of the GATS (Domestic Regulation) basically stipulates that measures of general application should be administered in a reasonable, objective and impartial manner. 7 When a member government makes an administrative decision that affects a service, it shall provide an impartial means for reviewing the decision. 8 In application to services covered by specific commitments, the affected supplier should receive the decision within a reasonable period of time. 9 While recognising that measures in relation to qualification requirements and procedures, technical standards as well as licensing requirements and procedures could constitute unnecessary barriers to trade in services, the GATS negotiators failed to agree on any disciplines on them in the Uruguay Round. They have left this unfinished business as a built-in-agenda for the Council for Trade in Services. 10 Until the multilateral disciplines have been developed, a standstill approach will continue to be adopted. Each WTO member is allowed to follow existing principles in applying their requirements and standards as long as these requirements and standards do not nullify or impair specific commitments it has made Ibid, Article VI:1. 8 Ibid, Article VI:2. 9 Ibid, Article VI:3. 10 Ibid, Article VI:4. 11 Ibid, Article VI:

10 3.2.5 Exception As in the GATT, members in specified circumstances are allowed to introduce or maintain measures in contravention of their international obligations under the GATS, including MFN or specific commitments. Article XIV (General Exceptions) spells out the condition that the exceptions are not to be applied as a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail or as a disguised restriction on trade in services, and provides a list of exceptions such as measures necessary to protect public morals and human, animal or plant life or health, to prevent deceptive and fraudulent practices, to protect individual privacy in the handling of personal data, and to secure equitable and effective taxation. At the same time, Article XIV bis is an unqualified clause for security exceptions, which says that nothing in the GATS requires a member to give information, or to take action against its essential security interests. It is worthwhile to mention the so-called prudential carve-out in financial services. Recognising the importance of a stable financial system to an economy, the GATS through the Annex on Financial Services allows members to override other multilateral obligations for the sake of introducing measures for prudential reasons, including protection of investors, depositors, policyholders or persons to whom a fiduciary duty is owed by a financial service supplier, or ensuring the integrity and stability of the financial system. 12 Although this exception is not unqualified as the security exceptions, the qualified condition of not as a means of avoiding commitments or obligations under the Agreement 13 is not as stringent as the requirements of the general exception. It is generally believed that the prudential carve-out provides considerable policy space for regulators to safeguard the integrity and stability of the financial system. 12 Annex on Financial Services, paragraph 2(a). 13 Annex on Financial Services, paragraph 2(a)

11 3.3 Specific commitments Part III of the GATS sets out the rules that enumerate the parameters under which an individual WTO member could make commitments in any particular service sector. Since a positive-list approach is adopted, each WTO member has its own Schedule of Specific Commitments which identifies various service sectors for which the member guarantees a certain level of market access and national treatment with respect to each of the four modes of service supplies defined in Article I. The GATS approach to making sector-specific commitments means that members are not obliged to make commitments for the whole universe of service activities. Each member would choose to make commitments in selected sectors where certain level of foreign competition would be desirable to the overall development and economic welfare. Even though specific commitments are negotiated undertakings for individual members, they are recorded in national Schedule and form an integral part of the GATS Market access With respect to market access through the four modes of supply contained in Article I of the GATS, Article XVI:1 states that each member is to give no less favourable treatment to the services or service suppliers of other members than is provided in its schedule of specific commitments. These specific commitments are bindings which set out the minimum or worst permissible treatment to foreign services or foreign service suppliers and in no way prevent better treatment from being given in practice. Once a commitment is bound, it can only be modified after negotiation with and possible compensation to affected members. Since unbinding is difficult and usually involves a tedious negotiating process, the specific commitments are virtually guaranteed conditions for foreign service suppliers to do business. Article XVI:2 sets out six types of market-access limiting measures which could be maintained or applied only if specified in a member s Schedule. It has been agreed by

12 WTO members that these six types of limitations are exhaustive, i.e. they cover all aspects of limitation on market access that could be specified in national Schedules. They are: a) Limitations on the number of service suppliers; b) Limitations on the total value of service transactions or assets; c) Limitations on the total number of service operations or the total quantity of service output; d) Limitations on the number of persons that may be employed in a particular sector or by a particular supplier; e) Measures that restrict or require supply of service through specific types of legal entity or joint venture; and f) Percentage limitations on the participation of foreign capital, or limitations on the total value of foreign investment National treatment A commitment to national treatment implies that the member concerned shall not operate discriminatory measures benefiting domestic services or service suppliers. The key requirement in Article XVII is not to modify the conditions of competition in favour of the member s own services or service suppliers. Like commitments in market access, the extension of national treatment in the context of the GATS may be made subject to conditions and qualifications set out in national Schedules that represent the minimum or worst permissible treatment to foreign services or service suppliers and in no way prevent better treatment from being given in practice. Articles XVII:2 and XVII:3 address the question of de facto discrimination, i.e. formally identical treatment to both domestic and foreign service suppliers tilts the level of competition in favour of domestic service suppliers. This type of de facto discrimination is particularly relevant in the context of financial services. For example, in the insurance sector, granting the same treatment to foreign as to national insurers might not imply equal or equivalent competitive opportunities. As branches are not locally incorporated but their liabilities are underwritten by the parent entities,

13 the requirements for the maintenance of a certain level of domestic assets to cover expected liability to policy-holders could impose higher costs on foreign than on national insurers due to the sub-optimal geographical diversion of reserves. Thus, requirements commonly applied to national insurers could have inadvertent discriminatory effects when applied to foreign insurers. This type of measures are prohibited in Articles XVII:3 and XVII:2 which make it clear that the requirement for national treatment may be met by either formally identical treatment or formally different treatment Additional commitments Members could also make commitments with respect to measures affecting trade in services not subject to those disciplines under Articles XVI (Market Access) and XVII (National Treatment). In financial services, some members have inscribed regulatory principles or guidelines for administrative procedures while other members have indicated future plans for undertaking further commitments or progress in regulatory reforms. 3.4 Progressive liberalisation To ensure that the current GATS package is only the first fruit of a continuing enterprise, Article XIX of the GATS stipulates that members shall enter into successive rounds of negotiations, beginning not later than five years from the date of entry into force of the WTO Agreement and periodically thereafter, with a view to achieving a progressively higher level of liberalisation. 14 The first round started in January The 2001 Doha Declaration incorporated this round of negotiations in services into the single undertaking of the Doha Development Agenda. 14 GATS Article XIX:

14 3.5 Link to Dispute Settlement Mechanism A rules-based multilateral trading system would not be effective in providing a stable and predicable trading environment if the rules could not be enforced. One of the major cornerstones of the Uruguay Round is the Understanding on Rules and Procedures Governing the Settlement of Dispute. The Understanding sets out a multilateral dispute procedure, which is based on clearly defined rules, with timetable for completing a case. Disputes are essentially about broken promises. In the context of services, Article XXIII of the GATS stipulates that any WTO members may trigger the central WTO dispute mechanism, should it consider any other members failing to carry out its general obligations or specific commitments under the Agreement. If a member is found to have failed to carry out its multilateral commitments under the GATS, it has to bring its policy in line with the rulings and recommendations of the Dispute Settlement Body that always recommend the losing defendant to make its policy or measures in line with its multilateral obligations. If that member continues to violate the GATS, it should offer compensation to affected members or face the consequences of a limited trade sanction (like a suspension of obligations from affected members). Through the WTO dispute mechanism, commitments in the GATS are bindings that could not easily be reversed and hence provide a stable and predictable environment for trade in services. Bearing in mind the importance of a stable financial system to the normal functioning of any economy and the complexity of relevant analysis involved in any possible dispute over financial services, the GATS creators take the views that a credible panel of the dispute settlement mechanism should possess the special knowledge required to rule on the specific financial services under dispute. Therefore, in the Annex on Financial Services, they makes it clear that panels for dispute on prudential issues and

15 other financial matters shall have the necessary expertise relevant to the specific financial services under dispute Important Instruments Related to Financial Services 4.1 Annex on financial services During the negotiation of the GATS, it was generally recognised that financial services would require some special treatments. There was a consensus that governments needed to regulate banks, insurance companies and other providers of financial information closely. Some of the reasons behind the need to regulate closely are still very valid today. For example, a country s economic development is linked to the stability of its financial institutions and the users of financial services need protection against services providers who lack sufficient financial backing or are badly managed or dishonest. The GATS Annex on Financial Services has been designed as the main instrument to address these needs. At the outset, paragraph 1 of the Annex clarifies the scope of application of the Annex on Financial Services by reiterating Article I of the GATS, i.e. applicable to measures affecting the supply of financial services in all modes of supplies. In the context of financial services, paragraph 1(b) of the Annex also categorically defines the coverage of services supplied in the exercise of government authority, which shall not be subject to the GATS disciplines. These services are: (i) Activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies; (ii) Activities forming part of a statutory system of social security or public retirement plans; and 15 Annex on Financial Services, paragraph

16 (iii) Other activities conducted by a public entity for the account or with the guarantee or using the financial resources of the Government. 16 It should also be noted that the exclusion is qualified in the sense that the GATS disciplines shall not be applied as long as domestic non-governmental financial service suppliers are also not allowed to take part in these activities. The most important paragraph of the Annex is indeed the prudential carve-out, a further exception from the GATS disciplines designed to ensure that governments can protect the financial system and its users. 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, policyholders 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. 17 As mentioned in 3.2.5, this exception can perhaps be regarded as similar to the general exceptions in the GATS and like them, is subject to the condition that it is not to be used as an escape route from obligations under the Agreement. With regard to the prudential carve-out, the Annex also allows a member to recognise the prudential measures of another member (by implication thereby giving preferred treatment to financial service suppliers of that member), but must give other members the chance to demonstrate that their prudential measures may be equally effective. 18 In addition, the Annex also requires that panels for disputes on prudential issues and other financial matters shall have the necessary expertise relevant to the specific financial services under dispute. 19 The rest of the Annex deals with definitions, which identify 16 forms of financial services covered by its specific rules, describing them in considerable detail, and dis- 16 Ibid, paragraph 1(b). 17 Ibid, paragraph 2(a). 18 Ibid, paragraph Ibid, paragraph

17 tinguishing between insurance and insurance-related services on the one hand and banking and other financial services on the other. 20 As strongly urged by its trading partners to make its specific commitments in financial services clear, certain and comparable, Macao has adopted the definitions contained in the Annex since the Uruguay Round. 4.2 Understanding on commitments in financial services The Uruguay Round package includes the Understanding on Commitment in Financial Services, which sets out the basis on which a number of developed countries have agreed to schedule their specific commitments on financial services. Since the financial systems of these countries are considered to be more mature, these countries have decided to follow an approach, which goes beyond the liberalisation requirements of Articles XVI (Market Access), XVII (National Treatment) and XVIII (Additional Commitments) of the GATS. They have adopted a standstill principle, whereby their specific commitments in financial services would be at least as liberal as the measures they had actually applied. 21 They have agreed to open government procurement of financial services; 22 to permit cross-border trade without commercial presence in a broad range of financial services including several forms of insurance and related services and provision of financial information and auxiliary services; 23 to permit the provision of new financial services; 24 not to take measures to prevent transfer of information or the processing of financial information; 25 and to permit temporary entry of professional personnel Ibid, paragraph Understanding on Commitments in Financial Services, Section A. 22 Ibid, Section B, Paragraph Ibid, Section B, Paragraphs Ibid, Section B, Paragraph Ibid, Section B, Paragraph Ibid, Section B, Paragraph

18 In addition, the Understanding clarifies the scope of national treatment in the context of financial services. Those developed members signed up to the Understanding have agreed to grant other WTO members access to payment and clearing systems operated by public entities, and to official funding and refinancing facilities in the normal course of ordinary business. 27 Also, when membership, participation in or access to any self-regulatory body such as securities/futures exchange or market and clearing agency is required to provide specific types of financial services, those developed members shall ensure that such entities accord national treatment to financial service suppliers of other WTO members Macao s specific commitments in financial services Mainly attributable to the strategic importance of the financial sector in economic developments, negotiations on financial services remained unfinished at the end of the Uruguay Round negotiations in Specific commitments on market access and national treatment were made but were not considered enough to conclude the negotiations. The Second Annex on Financial Services to the GATS and the Decision on Financial Services adopted at the end of the Uruguay Round allowed negotiations on this sector to extend for another six months after the entry into force of the GATS, i.e. until the end of June The results reached by the end of the extended period were called the Second Protocol to the GATS, which consisted of improved specific commitments and removal, suspension or reduction in scope of MFN exemptions from 29 WTO members. Again, the members were not satisfied with the interim agreement and envisaged further negotiation in Financial services negotiations were reopened in April 1997 and ended in December The result was the Fifth Protocol to the GATS, which consisted of a new and improved set of specific commitments in financial services from 70 WTO members including Macao. Macao was also among the first group of members ratifying the 27 Ibid, Section C, Paragraph Ibid, Section C, Paragraph

19 Fifth Protocol by 29 January 1999 and decided to put the Fifth Protocol to enter into force on 1 March 1999 in accordance with the terms of the Protocol. Macao s Schedule of Specific Commitment 29 annexed to the Fifth Protocol to the GATS has been Macao s multilateral commitments in financial services since In line with its liberal economic philosophy, Macao has not taken any MFN exemptions in the financial sector, as reciprocity would not have a role in the process of decision-making regarding entry into Macao s financial markets. While making specific commitments in financial services, Macao has followed closely the definitions contained in the Annex on Financial Services to ensure that Macao s specific commitments would be fully understood and would be easily compared with specific commitments made by other WTO members in financial services. In addition, Macao s specific commitments have stroke a delicate balance between unfretted market forces and a stringent financial regulatory framework. 5. Conclusion To sum up, the multilateral commitments of Macao with respect to trade in financial services consist of the general obligations and disciplines of the GATS and the Fifth Protocol annexed to the GATS. With its specific commitments using the definition contained in the Annex on Financial Services and reflecting Macao s liberal spirit in managing economic activities, it is therefore widely considered that the multilateral commitments of Macao with respect to trade in financial services provide a conducive and favourable environment for the sustainable development of its financial services sector. Furthermore, the prudential carve-out in the Annex on Financial Services provides considerable policy space for regulators to safeguard the integrity and stability of Macao s financial system. 29 GATS/SC/50/Suppl

20 References Claessens, S. and D. Klingebiel (2001), Competition and Scope of Activities in Financial Services, Research Observer, The World Bank, Vol. 16, No. 1, Spring, Clarke, G., R. Cull, M. Peria, and S. Sánchez, (2003) Foreign Bank Entry: Experience, Implications for Developing Economies and Agenda for Further Research, Research Observer, The World Bank, Vol. 18, No. 1, Spring, Pauwelyn, J. (2005), Rien ne Va Plus? Distinguishing Domestic Regulation from Market Access in GATT and GATS, Paper presented at Symposium on Cross- Border Supply of Services, Geneva, April. Rochet, J.C. (2005), Prudential Policy, Monetary and Economic Studies (Special Edition), Institute for Monetary and Economic Studies, Bank of Japan, October, Schinasi G.J. (2005), Preserving Financial Stability, Economic Issues, No. 36, IMF, Washington. Stiglitz, J (2001), Principles of Financial Regulation: A Dynamic Portfolio Approach, Research Observer, The World Bank, Vol. 16, No. 1, Spring, WTO (1989), Trade in Financial Services, Note by the Secretariat, Ref. No. MTN.GNS/W/68, Geneva. WTO (1994), The General Agreement on Trade in Services, Geneva. (

21 WTO (1994), The General Agreement on Trade in Service, Schedule of Specific Commitments of Macau, Ref. No. GATS/SC/50, Geneva. WTO (1997), Successful Conclusion of the WTO s Financial Services Negotiations, Press/86, Geneva. ( WTO (1998), Schedule of Specific Commitments of Macau: Supplement 1, Ref. No. GATS/SC/50/Suppl.1. WTO (1999), An Introduction to the GATS, Document No. 1397, Trade in Services Division, Geneva. ( WTO (2001), The General Agreement on Trade in Services (GATS): Objectives, Coverage and Disciplines, Document No. 4904, Trade in Services Division, Geneva. ( WTO (2005), Understanding the WTO: The Agreements: Services: Rules for Growth and Investment, Geneva. ( WTO (2005), Understanding the WTO: Settlement Disputes: A Unique Contribution, Geneva. (