ANNUAL REPORT OF THE Committee on trade in financial services

TO THE COUNCIL FOR TRADE IN SERVICES (2024)

Since its previous Annual Report to the Council for Trade in Services^[1], the Committee on Trade in Financial Services held four formal meetings, on 1 December 2023, 26 March, 3 July and 1 October 2024.^[2]

During the period covered by this Report, the Committee addressed the following matters.[3]

1  COST OF REMITTANCES

1.1.  The Committee continued its consideration of the proposal by India, the Philippines and South Africa to organize a thematic seminar on the cost of remittance services. The proposal was originally submitted by India and was subsequently co-sponsored by the Philippines and South Africa.[4] At the meeting held in December 2023, the Committee adopted the annotated agenda for the seminar containing the revisions that had been introduced by the proponents in light of Members' comments.[5]

1.2.  The seminar was held on 25 March 2024.[6] As a follow-up to the seminar, various Members elaborated further on their respective national experiences in this area at the meeting held on 26 March 2024. Members considered that the seminar had been a success and allowed a better understanding of the issue. There was a general sense that the issue of remittance services would be worth exploring further. However, it was felt that the Committee should focus on aspects related to trade in financial services, avoid duplicating work carried out by other international organizations and identify the specific role and contribution of the Committee in this matter.

1.3.  At that meeting, India submitted another proposal, this time calling for the establishment of a work program on reducing the cost of remittance services.[7] All Members recognized the importance of remittances for developing countries. However, while there had not been consensus to establish a work program, delegations converged on the need to continue discussions with a view to identifying more clearly the trade-related aspects that the Committee could focus on, as well as the potential deliverables of the work. India was asked to revise its proposal in light of the comments made. It was also suggested that in order to deepen the understanding of the issue and broaden the evidence base, interested Members could share their experiences in this area, eventually through thematic sessions.

2  Follow-up to the thematic seminars

2.1.  At the meetings held in March and July 2024, Members continued discussing possible work to follow up to the thematic seminars on "Financial Services: Trade, Inclusion and Accessibility" (held in June 2023) and "Cost of Remittance Services", with a view to further exploring some of the issues raised but not sufficiently explored at the seminars. Various suggestions were made in that regard. A recurring theme in those suggestions was that of financial technology, including how to leverage the potential of digital technology for development and financial inclusion.

2.2.  In that context, in the July 2024 meeting, China submitted a room document on facilitating international visitors' payments in China, which reviewed the main measures aimed at enhancing payment accessibility and the rationale for payment facilitation initiatives in China.[8] At the same meeting, another Member presented orally an elaborated proposal to organize a dedicated technical workshop on the role of financial services in driving travel and tourism diversification and growth. Both submissions were favourably received by Members, who considered that they provided a good basis for discussions.

2.3.  The discussions on the follow-up to the thematic seminars continued at the meeting held in October 2024, this time under a broad agenda item entitled "Financial Services: Trade, Technology and Inclusion", which aimed at capturing the intersection of all suggestions for further discussion made by Members thus far – the role of digital technology, the contribution to financial inclusion and the relationship with trade in financial services. It was under this agenda item that China introduced a new proposal on facilitating electronic payments.[9] While the submission of the proposal was generally welcomed, Members indicated they would revert to it with more detail at the following meeting. Moving forward, Members requested to have separate agenda items for issues on which Members had submitted concrete proposals so as to allow more focused discussion on those submissions.

3  Follow-up to MC13 outcomes

3.1.  Under this agenda item, Members considered three MC13 outcomes of relevance to the CTFS, namely WTO reform (functioning of the Committee), reinvigoration of work on trade in financial services, and crisis preparedness (paragraphs 4, 18 and 21 of the Ministerial Declaration, respectively).

3.1  WTO Reform - Functioning of the Committee on Trade in Financial Services

3.2.  At the meeting held in March 2024, the Committee agreed to align its working procedures with those of the Council for Trade in Services and adopted, on a trial basis until the end of 2024, the changes introduced by the Council to its functioning, namely the issuance of the convening notice 15 days prior to the date of the formal meetings, and the use of the eAgenda. The latter was presented by the Secretariat at the July 2024 meeting and launched for the October 2024 meeting.

3.2  Reinvigorating work on trade in financial services

3.3.  The Committee deliberated the issue at the meetings held in March and July 2024. Discussions focused on procedural aspects, i.e. how to identify the topics for discussion and the modalities that the work might take, e.g., thematic seminars, dedicated or thematic discussions, experience-sharing sessions. The general view was that the process should be Member-driven and work should arise out of Members' proposals. In that regard, some Members considered that, as evidenced by discussions under other agenda items, the Committee was not short of substantive issues or suggestions for future work. However, those suggestions should be further elaborated through written proposals. Other Members, while not contradicting the Member-driven nature of the process, considered that some flexibility should be allowed as to the way proposals were formulated whether in writing or orally at formal meetings. Further discussions on the latter issue at the October 2024 showed some flexibility on the part of Members to consider oral proposals as long as they were fairly elaborated and were fully reflected in the minutes of the respective meeting.

3.3  Crisis preparedness

3.4.  The Committee addressed paragraph 21 of the MC13 Ministerial Declaration at its meetings in July and October 2024, prompted by one delegation, who suggested that the Committee take steps to operationalize that paragraph of the Declaration. The suggestion was supported by some other delegations. While delegations were in general open to further consider the issue, the point was made that the substance and the modalities of such discussion should be based on specific proposals by interested Members.

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