Barriers to entry and financial integration in Asia and … outline • ACFS paper compiled mainly...
Transcript of Barriers to entry and financial integration in Asia and … outline • ACFS paper compiled mainly...
Barriers to entry and financial integration in Asia and
RCEP countries
Alex Erskine, Erskinomics Consulting Pty Ltd10 – 11 July 2017
Some highlights from ACFS paper Barriers to entry and financial integration in Asia and RCEP countries, 5 July 2017
https://australiancentre.com.au/publication/barriers-entry-financial-integration-asia-rcep-countries/
Presentation outline
• ACFS paper compiled mainly by mid-2016• Background on the RCEP negotiations and trade in financial services• Focus on barriers to trade in financial services and on the “prudential
carve-out”, broadly interpreted to include policy choices for the exchange rate, consumer protection and financial stability
• Review effectiveness of frameworks for promoting financial integration
• Suggest implications for RCEP negotiations
Countries negotiating the RCEP
The 10 ASEAN countries
and the “Plus Six”
Focus on barriers to trade in financial services
APEC
RCEP Hong Kong, China
China Chinese TaipeiKorea Russia
TPPIndia Australia Canada
Japan ChileNew Zealand Mexico
ASEAN PeruBrunei
DarussalamUnited States of
America
MalaysiaSingaporeViet Nam
Cambodia IndonesiaLao P.D.R. PhilippinesMyanmar Thailand
Timor-Leste and 20+ Pacific Islands
Papua New Guinea
Modes of Supply for trade in services
Mode 3 and Mode 4 are the most important for trade in financial services
These don’t fit easily with Balance of Payments and trade data (which anyway is poor)
Especially need more surveys of operations of foreign affiliates
Measures of barriers to trade in financial services
World Bank (WB) – Services Trade Restrictions Index (STRI)*
OECD – Services Trade Restrictiveness Index (STRI)*
Also Economic Research Institute for ASEAN and East Asia (ERIA) for trade negotiation/agreement coverage and degree of ambition
* The WB and OECD STRIs differ in coverage and can differ in interpretations of laws and regulations
Case studies of frameworks that promote financial integration (plus FTAs & other means to boost cooperation)
Asia Region Funds Passport (ARFP)• Pilot scheme to facilitate cross-
border sales of retail funds in Asia region
• “Competing” with EU Undertakings for Collective Investment in Transferable Securities (UCITS) scheme, China-HK Mutual Recognition of Funds (MRF) and ASEAN Collective Investment Scheme (CIS) Framework
ASEAN initiatives on financial integration• ASEAN 1967• AFAS 1995 and AEC
2007/2015/2025• ABIF 2014 and QABs (2 by 2018-
2019 or before 2025) based on bilateral agreements
• Joint Review 2015 by ASEAN Secretariat and WB
Conclusions
To most effectively promote financial integration• Build into RCEP mechanisms
that involve negotiators, regulators and the private sector in structured follow-up of reviews of barriers to trade in financial services, with accountability and processes
• [Plus suggestions to use RCEP to advance ARFP, FinTech, financial inclusion & data improvements]
To most effectively lower barriers to trade in financial services• Negotiators be cognisant of
exchange rate regime relevance• Focus on countries that have
“unnecessarily high” barriers to trade in view of their exchange rate regime
• Especially as countries transition from relatively fixed to more flexible/floating exchange rates