Financial Services and Preferential Trade Agreements : Lessons from Latin America

Abstract

This book deals with financial
 liberalization issues in the context of trade negotiations.
 The liberalization of trade and investment in financial
 services is only a subset of the broader financial
 liberalization agenda. The purpose of trade and investment
 liberalization is to increase financial market access and
 remove discriminatory and other access-impeding barriers to
 foreign competition. By contrast, the main purpose of
 financial liberalization is to remove distortions in
 domestic financial systems that impede competition and the
 allocation of capital to its most productive and profitable
 uses. In turn, financial liberalization can be divided into
 domestic financial reform and capital account opening, and
 there is a rich literature on its appropriate speed and
 sequencing. The first part of the book covers the
 fundamental principles that affect trade liberalization in
 financial services at both the multilateral and the regional
 levels. It analyzes the various models of preferential trade
 agreements (PTAs) used by negotiators and the architectural
 differences of these models. The second part of this book
 provides concrete examples of how countries have negotiated
 these agreements by focusing on the specific country
 experiences of Chile, Colombia, and Costa Rica. These case
 studies provide the reader with a thorough understanding of
 how countries strategize, negotiate, and implement regional
 trade agreements in financial services.