Investment banks are mounting a late bid to persuade trade negotiators to include opening up financial services markets in developing countries in the Doha Round of global trade liberalisation talks. Lobbyists said the banks are concerned China in particular is making it harder for them to enter its market, even though Beijing recently joined the World Trade Organisation, which polices global trade and is organising the negotiations. China said on Wednesday it is considering stricter market entry rules for foreign banks to protect local lenders. Banks also want to stop WTO candidate Russia taking similar steps.
"Including financial services in a trade agreement would help put a stop to these retrograde actions," a financial industry source said.
Lobbying was started by US investment banks and the US Securities Industry Association, and has only gathered pace in recent weeks even though time is running out for the topic to have a chance of making it to the Doha Round.
"We are not going to have another chance to get this on the agenda of trade talks for many years," a banking source familiar with the situation said.
"Technically, financial services are part of Doha under services, but all the focus has been on commercial banking and insurance and we want to extend this to investment banking, securities and fund management," the source said.
The source said some developed countries may not want to include more financial services in case it makes it difficult to win ground in other areas such as agriculture.
Countries are under pressure to meet the goal of reaching an outline deal by a WTO meeting in Hong Kong in December. The Doha Round is due to be completed in 2006.
The US banks are asking European and Japanese peers to back the campaign, and have met European Trade Commissioner Peter Mandelson, who represents the EU in trade talks.
The International Council of Securities Associations will also discuss the issue in Lugano, Switzerland, next week.
"We urge US and EU representatives to provide joint leadership to achieve commercially meaningful WTO financial services commitments from developing countries," James Leigh-Pemberton, chairman of Credit Suisse First Boston European investment banking, told a Luxembourg conference on Wednesday. Mark Sobel, deputy assistant secretary at the US Treasury, told the same conference the United States is keenly interested in including investment banking in Doha.
A British Treasury spokesman dismissed suggestions that Britain, which holds the G7 presidency, is worried that freeing up financial markets in developing countries would set back finance minister Gordon Brown's development programme.
"The UK government is working to ensure that WTO members, particularly developed economies, make significant offers on financial services in the coming negotiations round," a person familiar with the British position said.