Four securities industry associations have joined forces in calling for the liberalization of trade in financial services and providing a roadmap to achieve that goal.

The four trade groups, the Investment Dealers Association of Canada, the U.S. Securities Industry Association, the International Capital Market Association, and the International Banks and Securities Association of Australia, have released three papers that are being circulated to members of the World Trade Organization.

WTO members are making final preparations for the Hong Kong Ministerial Conference in December, where they hope to agree on a negotiating framework for a new WTO agreement.

One of the papers calls for the free movement across borders for both consumers and suppliers of capital markets-related services. It argues that financial services, as well as the companies that provide such services, should also be free to cross borders. When they do, those companies and their services should receive the same legal treatment as their domestic counterparts, says the paper. In order to achieve these and other goals, the paper calls on developed nations to provide technical assistance to other countries on both a bilateral and multilateral basis.

A second paper documents why the liberalization of trade in financial services – and in capital markets-related services in particular – is central to advancing the goals of the WTO’s Development Round. It examines both empirical research, which demonstrates that liberalizing trade in financial services can promote balanced economic growth, and financial system stability.

Another paper proposes a “model schedule” of WTO commitments for capital markets-related services. It serves as the industry’s view as to how the market opening principles contained in the Recommendations paper should be translated into WTO commitments. It is designed to be used by WTO member countries as they develop their own market opening offers, evaluate the market opening offers made by other members or undertake domestic liberalization measures outside the WTO context.

“Development and expansion of the financial sector can serve as both the wind in the sails of a nation’s economic growth and provide the even keel of greater financial stability,” said Marc Lackritz, president of the SIA. “Countries that have embraced capital market liberalization grow faster, diversify risk better, improve capital allocation and reduce exposure to foreign currency-denominated debt. That makes financial services reform a win-win for both the nations that undertake it and for international trade.”

“Removing the barriers to global trade in financial services benefits national economies and capital markets by promoting capital formation and offering better portfolio returns and diversification,” added Joe Oliver, president and CEO of the IDA.

The reports will be posted on SIA’s website at: http://www.sia.com/international/pdf/wtoModel_.pdf