In addition to building support for Ecuador's proposal to discuss financial regulation policy space at the World Trade Organization (WTO), members of the Our World Is Not for Sale Network (OWINFS) spent the week before the Oct. 1 discussion of Ecuador's proposal attending the annual WTO Public Forum in Geneva. Public Citizen joined an array of OWINFS partner organizations in seizing the opportunity to impress upon WTO member states that civil society stands behind countries' right to regulate finance.
Our own Melinda St. Louis asked the following question at the WTO Public Forum opening session (which was attended by over 700 government officials and stakeholders):
“Rules governing trade in financial services were negotiated in the 1990s when financial deregulation was in vogue. We believe that, to succeed, the multilateral trading system must make sure that it learns lessons from the global financial crisis. The global consensus has now shifted toward the need for more regulation of the financial sector to ensure stability. Therefore the WTO must ensure its coherence with that consensus toward more macroprudential financial regulation. Many trade and finance experts have noted possible conflicts between WTO / FTA rules and some common-sense macroprudential regulations. Recently labor, consumer and development organizations representing hundreds of millions of citizens around the globe signed a statement supporting a discussion at the WTO to ensure all members have confidence that WTO rules governing financial services could not hinder or chill macroprudential financial regulation. I hope this week will provide an opportunity for members and stakeholders to reflect on these lessons to ensure that the financial sector supports the real economy instead of spinning out of control and leading to instability.”
Director-General Pascal Lamy answered (paraphrasing):
“I’ve been debating this with Public Citizen for 10 years. Let me repeat as clearly as possible so that we don’t have a nightmare about something that has no chance of happening. Especially in the financial services agreement – always and until today – a government can take regulatory action. There has never been a case where a government was willing to take regulation that was challenged at the WTO. Many topics deserve a lot of attention, but this one is already settled and any competent lawyer would tell you so.”
On Wednesday, September 26, the Our World Is Not for Sale (OWINFS) network sponsored a session at the WTO Public Forum entitled “Doha and the Multilateral Trade System: From Impasse to Development?” The session was moderated by Martin Khor, Executive Director of the South Centre, and the panel included:
- H.E. Jayant Dasgupta, Ambassador of India to the WTO
- H.E. Angelica Navarro, Ambassador of Bolivia to the WTO
- H.E. Faizel Ismail, Ambassador of South Africa to the WTO
- Dr. Andrew Cornford, Observatoire de la Finance
- Deborah James, Center for Economic and Policy Research
The session was very well-attended – standing room only in a room of 100 filled chairs. Attendees included government delegations from: Swaziland, Korea, Macedonia, Iceland, South Africa, Singapore, European Union, Congo, India, Nicaragua, El Salvador, Mozambique, Bangladesh, Switzerland, Lesotho, Serbia, Indonesia, Philippines, Brazil, Turkey, Bolivia, Cuba, Zimbabwe, and the United States. More than 100 copies of the global civil society sign-on statement in support of Ecuador were distributed to the attendees. In addition, in bilateral conversations with the three WTO ambassadors from South Africa, India, and Bolivia after the session, all expressed their appreciation for the sign-on statement and stated their intention to support Ecuador’s proposal in the upcoming meeting of the WTO's Committee on Trade in Financial Services (CTFS).
Throughout the week, Melinda and Dr. Cornford also held bilateral meetings with services negotiators from several delegations to ensure that they were well aware of the global civil society support for a financial regulation discussion in the CTFS. In the weeks prior to the activism and outreach by global groups, the United States and European Union had signaled a hard line with respect to Ecuador’s proposal. But by the end of last week, there was indication that those positions had softened. Click here to see the global wave of media and lobbying that helped achieve this step in the right direction.