Research On Rules Of Cross-Border Trade In Financial Services In FTAs

The development of information technology has changed the traditional way of suppling financial services.New financial services based on digital technologies such as big data,blockchain and artificial intelligence come into being.The first set of rules on trade in services(GATS),which was reached in the Uruguay Round,has divided the provision of services into four models(cross-border supply,consumption abroad,commercial presence and movement of natural persons)as well as included the regulation of financial services in the form of attachment.Also,it is urgent to form a set of rules on cross-border supply in financial services with the application and popularization of “Internet+finance”.But recently,WTO is in trouble due to the well-known reasons.It is difficult to advance the negotiation on financial services rules.Thus,the rules on cross-border financial services appear in regional free trade agreements which exist large differences in terms of the rules system and the specific rules.This thesis will focus on the differences of these rules and the trends reflected by the rules,as well as the characteristics of the application of the rules.In the end,the thesis will find the advantages and disadvantages of these rules from the prospective of value.Then it will construct a cross-border financial service trade rule system that can promote the liberalization of financial services and better safeguard national security.The system is intended to provide advice for China's participation in the development of international rules.Excluding the introduction part and the conclusion part,this thesis is composed of 5 chapters which are taken in a progression from general to specific and general ended:The first chapter is about overview of rules of cross-border trade in financial services in FTAs.Cross-border trade in financial services is centered on the cross-border of financial elements,including three modes of cross-border provision(cross-border supply,consumption abroad and movement of natural persons)and relies on cyberspace rules.The free flow of financial data is the key to it.Cross-border trade in financial services is based on the theory of “disruptive financial innovation” in terms of the nature of the “change” observed,its “substitutive potential” and its “structural impact”.The new theory changed the traditional theory based on financial repression and financial deepening from the aspects of “market access” and “business operation”.The liberalization of cross-border trade in financial services has become the trend of nation development.It has been developed a relatively complete rule system since the occurrence of NAFTA.The features of the system are following : Market access has become the precondition of cross-border financial service trade,non-discriminatory treatment rules have become the intermediate guarantee of cross-border financial service trade,and prudential exception rules have become the risk barrier of cross-border financial service trade.The second chapter is about the rules on market access of cross-border financial services in FTAs.Market access is the prerequisite for the process of trade in services.The rules on market access in GATS apply to the two modes—cross-border supply and commercial presence,but it is clear that the supply of cross-border financial services based on product classification is insufficient,which mainly reflects in the following aspect: the market access framework is not conducive to the realization of cross-border financial services trade liberalization,cross-border financial data flow becomes the focus of market access disputes,exceptions impede the implementation of liberalization measures,and DSU cannot effectively resolve cross-border financial services trade disputes,etc.The points of DSU about market access rule include the meaning of cross-border supply,the relationship between 16(1)and 16(2),the measures of market access and so on.New FTAs are concluded under the theory of “disruptive financial innovation”,which can be divided into GATS type,CPTPP type,EU type and other four types.All these types make up for the shortcomings of GATS,such as Comprehensive market access obligations and free flow of cross-border financial data.However,there are still some shortcomings in a few aspects especially in financial services.The thesis suggests that there is no need to incorporate market access rules whether from the aspect of the nature of market or the importance of the free flow of cross-border financial information.The third chapter is about rules on non-discrimination of cross-border financial services.Non-discrimination treatment is an important guarantee for maintaining an equal competition environment at home and abroad after the liberalization of cross-border financial services.However,the legal security,the stability of cross-border financial services,the balance between international obligations and national security,and the particularity of cross-border financial data determine the universality and particularity of GATS in the difference between cross-border supply and consumption abroad,the identification of the origin of services,the issue of “likeness” in the non-discriminatory treatment provisions and the interpretation of de facto discriminatory treatment.The new generation of FTAs has responded weakly to the above issues,but it has not substantially promoted the development of cross-border financial services liberalization.The future non-discriminatory treatment rules for cross-border financial services should be more flexible and predictable.It could solve the difficulty of proofing the exception clause,the uncertainty of the judgment standard of financial service similarity and construct the element-based flexibility non-discrimination standard.The fourth chapter is about rules on prudential exception of cross-border financial services in FTAs.The particularity of financial services and market failures determine that there must be prudential regulation.Financial services trade is divided into principled supervision and regular supervision.The former is result-oriented and depends on the principle of universal application,while the latter refers to the existence of specific rules.However,the service providers and consumers of cross-border financial services trade are often in different jurisdictions.And the prudential exception clauses they rely on are inherently supervised and thus have a greater degree of flexibility.There were a few debates when prudential exception clauses negotiated.The panel's decision in Argentina — Measures Relating to trade in Good and Service remain discussed.New FTAs changed GATS on terms,relationship requirements and anti-abuse requirements,which aims to better meet the development of cross-border financial services.However,the principle of the prudent exception clause itself determines that it is impossible to form a uniform standard at the international level.And it can be seen from the practice of GATS for nearly 30 years and the provisions of the new FTAs regarding the prudent exception clause,there are still some differences in the concept of chemistry,which will undoubtedly increase the difficulty of reaching a consistency and prudential exception clause.The successful experience of the EU in the financial services integration market is worth learning.The principle of mutual recognition also requires that the application of the prudent exception clause for cross-border financial services needs to be mutually recognized by the sovereign countries.The fifth chapter is the suggestions for China on perfecting the legal system of cross-border financial services.The reduction in trade costs brought about by information technology has made cross-border financial services industry an important trend in the future development of the financial industry.International high-standard economic and trade rules have gradually begun to pay attention to cross-border financial services.The opening of the financial services industry is an important topic of WTO,mainly involving market access,non-discrimination,business scope and prudential regulation of financial services.Cross-border supply in financial services covers three modes of service trade in addition to the commercial presence.The new generation of regional trade agreements represented by CPTPP set a high standard of open trade rules for cross-border financial services,posing a challenge to China.In the field of cross-border trade in financial services,China has shown many deficiencies in both domestic laws and regulations and in the signed FTAs,mainly manifested in more market access restrictions at the level of domestic law,less regulations involving cross-border financial service trade in FTAs and different regulations on Prudential exception clauses in FTAs.On the one hand,there are still disputes on cross-border financial data flow,lack of financial behavior supervision ability,on the other hand,it is also due to the lack of conditions and consideration of risk prevention.It is suggested to consider the domestic cross-border trade in financial service system,China's FTA negotiation on cross-border trade in financial service rules and the improvement of cross-border financial service trade regulatory technology.Enhance the market access of cross-border financial service trade,strengthen the rules of cross-border trade in financial service in FTAs,and integrate financial technology into Prudential exception clauses.In a conclusion,rules on cross-border financial services are becoming more and more important in the FTA,and its rules system is gradually improving.However,compared with GATS,there is still room for further development in terms of basic rules such as market access,non-discrimination treatment and prudential exception.In order to link and lead the development of cross-border financial services trade rules,China can consider from the aspects of improving the domestic cross-border financial services trade system,accelerating the negotiation of cross-border financial services trade rules in the FTA,and promoting the supervision and management of cross-border financial services.