Canada Files Request for Consultations Against China RE WTO/GATS
On June 20, 2008, Canada filed a Request for Consultations at the WTO commencing a dispute against China on its measures affecting the distribution of financial information services in China. Canada's request for consultation follows the two separate requests for consultation filed on March 3, 2008, by the European Community (DS372) and the United States (DS373) both known as "China - Measures Affecting Financial Information Services and Foreign Financial Information Suppliers". The EC, U.S., and Canadian requests will likely be joined.
Canada has stated that:
"We are concerned that measures imposed by China affecting foreign financial information suppliers are not consistent with WTO obligations.
In 2006, China's Xinhua News Agency issued a set of regulatory measures affecting the supply of financial information in China. Under these measures, foreign suppliers of financial information are not permitted to establish a commercial presence in China or deal directly with financial information consumers. In addition, they are required to disclose confidential business information to the regulator, which is related to a competitor.
These measures could adversely affect the ability of Canadian suppliers to provide financial information services in China - services that are key to ensuring the efficient and transparent operation of financial markets."
The WTO has summarized the United States concerns as follows:
"The United States makes claims against a number of Chinese measures affecting financial information services and foreign financial services suppliers in China. Such measures include no fewer than a dozen legal and administrative instruments which require foreign financial information suppliers to supply their services through an entity designated by Xinhua News Agency (“Xinhua”). Xinhua has designated only one such agent, China Economic Information Service (“CEIS”), one of Xinhua's commercial enterprises. According to the United States, China prohibits foreign financial information suppliers from directly soliciting subscriptions for their services, requiring that solicitation of subscriptions be done through the Xinhua-designated entity. China likewise prohibits users of financial information services in China from directly subscribing to services supplied by foreign suppliers. Furthermore, in order to renew their licenses, China requires foreign financial information suppliers to provide the Foreign Information Administration Center (“FIAC”), a regulatory body within the Xinhua framework, detailed and confidential information concerning their financial information services, their customers and their foreign suppliers. The United States contends that these and other requirements and restrictions accord less favourable treatment to foreign information services and service suppliers than that accorded to Chinese financial information services and service suppliers which are not affected by these requirements and restrictions.
The United States also claims that China is preventing foreign financial information service suppliers from establishing any commercial presence in China other than limited representative offices.
The United States considers that the measures at issue are inconsistent with various provisions of the GATS, the horizontal standstill commitment contained in China's schedule of obligations under the GATS, and China's Protocol of Accession."
