WikiLeaks financial services trade agreement needs to help Australia

Analysis

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Leaked documents indicate international moves that could override Australian financial regulations: Malcolm Maiden analyses the opportunities and dangers for local businesses.

The Trade in Services Agreement document that WikiLeaks has obtained is arcane, but it shows that Australia, the United States, the European Union and 20 other large and small countries are talking about unprecedented mutual access to their financial service sectors.

The question to be answered as negotiations continue is whether Australia can collect gains that outweigh potential losses in its power to regulate its own highly regarded financial sector, including its ability to decide what financial services groups come to this country, and the circumstances in which they come.

The new agreement would take into account the globalisation of markets since the 1995 creation of another multilateral agreement, the General Agreement on Trade in Service (GATS).

It contemplates data processing exchanges, and dispute resolution mechanisms that could override local rules and regulations that are deemed to be protectionist. Financial groups in countries that have signed the agreement could also more easily establish themselves and expand in other countries that have signed up.

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Expansion by acquisition would be possible, and one of several small South American countries negotiating the accord, Panama, wants no ''numerical restrictions'' on how expansion occurs.

Australia has one of the most open and deregulated financial markets in the world. Its financial markets are not rule-free, however, and the new services trade agreement has the potential to conflict with or even override rules that are in place.

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WikiLeaks financial services trade agreement needs to help Australia