Globalization Wto And Gats

For most of the 1990s, at least until the breakout of the Asian financial crisis, trade in financial services was seen as a necessary step towards globalization. Indeed, the growth rate enjoyed by the Asian 'tigers' had reached miracle status (Murinde, 1996). However, after the crisis and the associated contagion effects, governments and major financial institutions are counting the costs as the collapse of prices and spreads across the emerging markets (Taylor, 1999).

The inauguration of the WTO introduced new and important issues to trade negotiations, mainly pertaining to trade-related intellectual property rights, trade-related investment measures, and trade in services, as represented by the GATS. However, the provisions regarding trade in financial services, as contained in the GATS, have proved to be a source of considerable anxiety for the non-industrialized countries generally. Partly, this may be because the consequences of the GATS are not well understood and there is a sense among these countries that they are being pressurized into signing up for something which may yet turn out to be to their detriment.

Chapter 26 by Murinde and Ryan in this book evaluates the potential effects of the GATS on developing countries. It is argued that developing countries have concerns which differ considerably from the bulk of the developed nations. In general, with respect to the banking industry, there is a general presumption that the GATS will largely enshrine historic comparative advantage and favour the existing market leaders at the expense of other countries with a less developed presence in international financial markets. However, it would be wrong to imagine that the gains from financial liberalization will accrue only to the suppliers of international financial services or indeed that domestic banks will be wiped out, at least on the basis of the evidence from the European Single Market experiment. The recommendation offered by Murinde and Ryan (Chapter 26 in this book) is that the developing economies should respond strategically to the prospect of the GATS in terms of restructuring their domestic banking industry well ahead of the full liberalization required by the WTO and the GATS.

Financial End Game

Financial End Game

How to profit from the global crisis and make big bucks big time! The current global financial crisis has its roots embedded in the collapse of the subprime markets in the United States. As at October 2007 there was an estimated loss on the subprime market of approximately 250 billion. If you want to come out on top, you have come to the right place.

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