SIFMA and AFME Goals for a Potential US-EU Trade and Investment Agreement
SIFMA and AFME white paper discussing goals and objectives for a potential US-EU trade and investment agreement.
The paper outlines the industry’s goals for these potential negotiations, and informs US and EU negotiators that the financial services sector is a strong proponent of the inclusion of financial services in the agreement.
Excerpt
In June 2012, the EU-U.S. High Level Working Group on Jobs and Growth stated in its Interim Report, “…that a comprehensive transatlantic trade and investment agreement, if achievable, is the option that has the greatest potential for supporting jobs and promoting growth and competitiveness across the Atlantic.” The Securities Industry and Financial Markets Association1 (SIFMA) and the Association for Financial Markets in Europe2 (AFME) share this view. We support efforts to initiate negotiations on a comprehensive trade and investment agreement because it presents a unique opportunity to enhance the efficiency of the transatlantic financial markets, facilitate trade, and result in lower cost products to investors and issuers. In order to deliver its full potential, it is imperative that provisions for the financial services sector are an integral part of this agreement.
The U.S. and EU have well-developed financial markets, so we emphasize that any agreement would be supported by already strong domestic regulatory traditions in addition to significant G20 regulatory reforms that are either underway or implemented. Given the global nature of the modern financial services markets and the way firms actually provide the capital markets services that their global customers demand, we urge for the agenda setting for these negotiations to be ambitious. Financial services liberalization is often incorrectly equated with deregulation. We support strong regulation and prudential standards. However, there is much to be gained by focusing on questions of market access, nondiscriminatory treatment, enhancing regulatory efficiency, and promoting appropriate recognition regimes. Opening markets can be done without prejudice to regulatory standards. Liberalizing trade in financial services is about open markets, clear rules and fair competition, not deregulation.
Strengthening economic ties between the U.S. and EU will contribute to economic growth and recovery and create new opportunities for job creation. An agreement that reduces and eliminates obstacles to trade would provide an economic boost for both regions. A report3 by the European Commission’s Directorate-General for Trade shows that annual-wide U.S. and EU economic gains could be as much as $200 billion, with corresponding increases in household income and wages. These benefits, and support for increased economic ties, would also enhance the competitiveness of U.S. and EU based firms in fast-growing emerging markets.