Application Of Difficult Exception Clause And Its Solution

With the tide of economic globalization develops all over the world, the international trade and commerce plays a very important part in global economy. In these several decades, international trade and commerce can be split into two parts, international goods trade and international service trade, each contains the international circulating of commodity and labor service. While the scale of international trade and commerce increases faster and faster, the negotiations for trades among countries go deeper and deeper, the rules to trades become better and more complete. But it is not a plain sailing to get an agreement of negotiation or legislation, the conflict of interest often makes the achievement as a result of compromise. The rules of WTO give the members a variety of rights, meanwhile, the members also have some obligation to obey. Since the WTO rules are in fact a compromise among members of their negotiations, there are some exceptions existing, which embody those compromise results. This paper chooses the Prudential Carve-out as the research object, which is the core clause of the Annex on Financial Service under GATS. Via the research of the general rules of GATS and the basic study of the Prudential Carve-out, the paper talks about the background, the meaning, the details, the effect, and the defect of the Prudential Carve-out, then discusses the problems when it runs, and tries to give some countermeasures to solve the problems. The paper summarizes the problems existing when the Prudential Carve-out runs contains: it is hard to define the prudential reasons, there are some conflicts between financial regulation and financial liberalization, the settlement of dispute is not that fair, besides, the Prudential Carve-out clause may be abused, the risk of abusing cannot be avoided. To solve these problems, the paper gives some countermeasures, to take full advantage of the existing admission mechanism, to ensure a clear criterion of prudential reasons defining, to take some reasonable measures to limit the use of the clause, to set some obligations for the members who use the clause, and to improve the international cooperation of financial regulation among members. Hoping this paper would provide some reference for settling the problems.