Trade in Financial Services Regionalism: Derivatives Clearing and Settlement in Economic Integration Agreements

Abstract

Trade in financial services is integrated through Economic Integration Agreements (EIAs), in addition to the multilateral trading system developed under the WTO. Securities’ clearing and settlement services have nowadays become more important than ever. The latter have gained enormous strategic relevance due to the global regulatory shift towards tasking clearinghouses to mitigate the risks associated with trading of OTC derivatives. This study assesses the liberalization levels of the financial services in the plurilateral trading system. It aims to shed light on the underlying dynamics that could explain the rationale behind international trade treaties. Most importantly, this contribution assesses the relationship between regulation of international trade and regulation of financial market infrastructure in order to bring into the spotlight problematic features that underscore existing silos in WTO Members’ administrations.