The global scope of world trade negotiations brings down the barriers to the successful export of our insurance expertise, says Marie-Louise Rossi

Campaigners are not latter-day saints opposing iniquity and Mammon, but misguided and ill-informed individuals, some even enjoying the thrills of street violence, with a distorted and often contradictory view of the issues.

The true knights of today are their supposed adversaries, the `faceless' bureaucrats in 142 capitals, in particular our own trade negotiators in Brussels and Whitehall. Thanks to them and their achievement at Doha, we now have the start of another comprehensive trade round in services.

The UK insurance industry and the London Market, in the shape of the International Underwriting Association (IUA), Lloyd's and the Association of British Insurers (ABI), have been actively supporting the work of the British and European civil servants in driving through the agreement to talks. But just what does it amount to in plain English?

The agreement is an important step in the World Trade Organisation's (WTO) long campaign to bring about liberalisation. It opens the way for talks about removing the barriers that deny UK insurers and the London Market fair access to many parts of the world. It should eventually lead to the removal of red tape and the financial squeezes that deter financial services companies from exporting their know-how while making a return on capital.

Global scope
The global scope of the WTO approach makes it different from anything we have known in previous generations. It is the triumph of multilateralism over bilateralism, of the big picture of world economic expansion over the narrow vision of limited piecemeal gains for individual countries.

Instead of representatives from each country being trapped in countless, separate complicated talks with each of their neighbours, they negotiate all together and at the same time.

Gains insurers and reinsurers can expect to see discussed in the next round of talks include:

  • easier access for cross-border trade, particularly reinsurance and marine aviation and transport

  • transparency of regulations in host countries

  • regulatory regimes that conform to international standards and whose decisions are subject to impartial review

  • management control over joint ventures

  • majority control over subsidiaries

  • guarantees of acquired status and rights

  • removal of fixed premium rates and tariffs.

    It has been suggested that the WTO is of greater benefit to the more advanced countries than the less advanced. That is not true. Indeed, a big issue is protectionism in the US towards its own insurance and reinsurance industries - a stance that is out of line with the spirit of liberalisation.

    Meanwhile, concessions from the developed world will enable the less advanced countries, when responsibly managed, to develop their export industries. This in turn enables them to earn capital to pay for new infrastructure, public services and economic expansion.

    Insurance and reinsurance are as much a part of the essential infrastructure of a developing economy as more tangible assets. The presence of foreign life assurance companies not only makes available foreign capital, but encourages saving and the accumulation of capital for investment in the local economy.

    It has been estimated that eliminating trade barriers would increase wealth in developing countries by $155bn a year, three times the value of all international aid.

    The fact that China and Taiwan are joining the WTO is of particular significance. It offers insurers and reinsurers access to the largest and fastest growing market in the world. Russia may also be about to join.

    With these two great peoples enjoying the benefits of the new world economy, future generations may enjoy a greater chance of peace than ever before. n

    Marie-Louise Rossi is chief executive of the International Underwriting Association

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