US cites progress in battle for world talks on trade in services
Punta del Este, Uruguay
West Germany requires all foreign companies to do their data processing in Germany. South Korea insists that foreign banks maintain much higher capital requirements than domestic banks. Brazil restricts the importation of computer equipment, causing Brazilian and United States firms to ``bootleg'' US parts. Currently, none of these practices are banned by international law because they involve services. But such restrictions may be coming. On Thursday, US Secretary of Commerce Malcolm Baldrige said negotiators meeting here had moved closer to a consensus on adding trade in services to the agenda for talks early next year under the General Agreement on Tariffs and Trade. At press time, it was unclear what form the ground rules for the negotiations would take.
The US and its major trading partners are intent on including services in GATT, the legal contract under which 92 nations have agreed to global trade rules, mainly on manufactured goods and products.
The service question has been one of the most controversial issues facing the participants attending the GATT conference here as they prepare the agenda for a new round of trade negotiations.
In the US, services -- such as engineering, communications, construction, travel, advertising, banking and data processing -- represent about two-thirds of the gross national product. Globally, they now account for about 30 percent of all trade. According to Mr. Baldrige, world trade in services could surpass trade in manufactured goods within a decade.
The developing countries, however, are afraid of opening up their economies to competition in services. Says Ruy Nogueira, spokesman for the Brazilian delegation here, ``We want some time so we can compete internationally.''
Brazil is part of a group of mainly less developed countries called the Group of 10, which has fought the inclusion of services in GATT. They speak for countries that not only are suffering from troubled economies and mounting foreign debts, but also from plummeting revenues from exports in cheap raw materials.
They fear that including services formally under the GATT umbrella could leave them vulnerable in sensitive areas. ``If we are to sell shoes to the US, perhaps we will be called upon to pay [by opening up] to foreign services such as data processing,'' says Mr. Nogueira.
This debate is hardly academic since the US has brought a trade action against Brazil's exclusion of US computer parts. President Reagan will decide by Oct. 6 whether to retaliate on Brazilian goods.
The Group of 10 argues that including services could threaten national sovereignty.
Politicians find support for this argument at home. This week, the leading Rio de Janeiro daily, O Globo, ran an editorial ``In favor of national industries.'' The normally cautious columnist Carlos Castello Branco wrote, ``The international organ [GATT] won't be the vehicle for imposing the implantation of banking agencies all over the world.''
The US argues that the developing countries, in fact, will benefit the most by including services under GATT. ``It helps them more than it does us,'' says Baldrige. ``They get our technolgy and expertise faster.''
Mac Margolis contributed to this report.