Coordination in the Asian Financial Markets and the Case of TiSA
Andrew D. Mitchell and Ana María Palacio
ABSTRACT: Due to the stalemate of multilateral negotiations, WTO members have resorted to preferential trade agreements to further liberalize trade and create a common ground for the regulation of goods and services. The negotiation of the Trade in Services Agreement (TiSA), a plurilateral agreement between 23 WTO members, represents a move in the direction of co-habitation between multilateral, preferential and domestic regimes of services regulation (and liberalization). This co-habitation scenario makes it necessary to explore the effect that TiSA could have for the future dynamics of regional financial coordination in Asia, considering not only the resilience and potential for growth of Asian financial markets, but also the outstanding differences across countries in terms of development of their financial systems and regulatory approaches. The leadership of the United States and the European Union in the TiSA negotiations continues to reinforce the position of these two players as rule-makers and pushes towards ‘global’ financial regulatory coordination with their leadership. However, TiSA membership creates limitations in terms of further liberalization and regulatory coordination for Asian countries, as important emerging Asian economies either continue to refuse or have not yet been accepted to participate in the ongoing negotiations. Moving forward, this situation would require further negotiations at the multilateral, regional or bilateral level to achieve higher levels of liberalization and regulatory coordination within financial markets in Asia. In order to understand the potential effects of TiSA on the coordination efforts within Asia it was necessary to examine the negotiations in terms of its internal architecture and the potential relation between TiSA and the General Agreement on Trade in Services.