Measuring the Barriers to Trade in Financial Services in BRICS Economies: Commitments and Current Practices Under the General Agreement on Trade in Services (GATS)

This study aims to measure barriers to trade in financial services 1 in BRICS economies including both trade and domestic restrictions based on specific commitments made by the BRICS countries to the General Agreement on Trade in Services (GATS). We constructed indices separately for banking and insurance services and also for overall financial services. We found that in insurance services, Russia is the most open followed by China, Brazil, South Africa and India. Regarding banking services, we observed that Brazil appears to be the most open followed by China, Russia, South Africa and India. For overall financial services, the study reveals that China is the most open followed by Brazil, Russia, South Africa and India. More interestingly, on the basis of commitments, China is the most open in financial services among the BRICS countries, and India the most restricted. However, in practice, Brazil has come out to be more open in financial services among the BRICS countries followed by South Africa which is in the fourth position in term of commitments. Russia is in the third position in practice but was second in terms of commitments. Surprisingly, China, which is at the first place in terms of opening financial services on the basis of commitments, is in the fourth position on the basis of practice. India remains on the bottom both on the basis of commitments and in practice.