Free trade agreements contributed to financial crisis

The financial crisis is provoking reactions from every corner of the globe. One solution often suggested is to tighten up regulation of the financial sector. This option was discussed at this year’s World Economic Forum in Davos, and also at the ideological counterpart of this major economic event, the World Social Forum in Brazil.

One participant at the World Social Forum, SOMO senior researcher Myriam Vander Stichele, says that discussions in Brazil focused on other aspects of the financial crisis than Davos. According to Myriam, international free trade agreements are often left out of the discussions to find a way out of the financial troubles.

“International free trade agreements have led to deregulation and liberalisation of financial services and capital flows, and regulating finance would require a new architecture of free trade agreements agreed over the past ten years, including through the World Trade Organization (WTO). “

At the BBC website, Myriam explains how the General Agreement on Trade in Services (GATS), a treaty of the WTO, has been working towards opening up the financial sector. Read her article here(opens in new window) .

Click here(opens in new window) to read more from Myriam Vander Stichele about the financial crisis.