US hopes to put 'services' on big trade-talks agenda
Washington — William E. Brock III doesn't want things to get out of hand.
As President Reagan's special trade representative, Mr. Brock will descend on Geneva in November for the first GATT (General Agreement on Tariffs and Trade) ministerial meeting since 1973. The last such conference kicked off the ''Tokyo round'' of trade liberalization talks. Brock hopes the coming one will be just as substantive, though it convenes at a time when many nations seem to be swinging toward protectionism.
''We need to reestablish a commitment to expanding trade,'' he said at a recent breakfast meeting with reporters. ''If you let it boil down to a catfight ,'' very little will be accomplished.
GATT ministerial meetings occur infrequently. The coming one was called largely at the urging of the United States, which has specific ideas about what should be on the agenda.
''A major goal of US policy is to extend the protection of GATT into the area of services,'' Brock said. In addition, he said, the US hopes the ministers will seriously discuss unshackling international investment, and the touchy subject of high technology - a field where many countries are scrambling to protect domestic manufacturers.
Though aerated by generous loopholes, the General Agreement on Tariffs and Trade, signed in 1947 by 23 countries, has been the basis for much post-World War II international trade policy. It has frequently been used as a hammer to smash tariff barriers. The so-called ''Dillon round'' of talks, held in 1961-62, slashed tariffs on industrial goods an average 20 percent; the ''Kennedy round'' of '64-67 cut tariffs 35 percent on items representing $40 billion in world trade.
But over the years GATT discussions have centered on manufactured goods - things that roll off an assembly line. Now the US wants to talk about more amorphous products, and the rest of the world may not be thrilled about the prospective discussion.
Nations mired in trade deficits are complaining louder and longer about the policies of Japan. The US Congress threatens tough ''reciprocity'' legislation that would hinder imports from countries that are seen as blocking imports of US goods. In turn, Japan mutters that many of the complainers just can't compete. World recession exacerbates the protectionist pressures.
''Right now enthusiasm for a new effort in GATT seems to be located in the United States,'' says Penelope Hartland-Thunberg, a senior fellow at the Center for Strategic and International Studies. ''The Europeans are going along with it , but without real enthusiasm. The Japanese just want to avoid international conferences where they'll be jumped on.''
The slice of GNP produced by services is higher in the US than any other country on earth. Other countries may therefore fear that any liberalization of trade in services ''would redound to the advantage of the US,'' Ms. Hartland-Thunberg says. ''They may be right.''
In addition, she says, very little is known about the figures involved in service trade - relative costs of production, costs of transmission, etc. This ignorance would make agreement a difficult goal.
But trade officials say the US wants only an agreement to study the subject, not a polished piece of international law.
At the breakfast, Brock said restrictions on service trade are ''all nontariff barriers. Those require delicate negotiations. We need to get started now. It will take several years'' before an agreement can even be approached.
The US hopes similarly to begin study of barriers to international investment , such as content laws which require foreign-owned businesses to produce goods with a certain percentage of domestically manufactured parts.
''We're not talking about negotiating new international agreements on investment,'' says a US trade official specializing in international investment. ''It's going to be difficult enough getting a work program. Developing countries view (investment barriers) as a tool for development.''
High-technology trade, however, is a different case. Technological change blasts along so fast that many governments don't quite know what to do about it.
''How do you avoid barriers when the state of the art is constantly in flux?'' Brock complained.
As a result, technology trade may require hard negotiations sooner than the other subjects on the US prospective agenda.
The US also has more minor subjects it hopes to bring up, officials in Brock's office say, such as the politically sensitive problem of agricultural subsidies and safeguards. Another is the establishement of an international counterfeiting code - an issue discussed but dropped at the ''Tokyo round'' of talks on nontariff barriers.
''We want to stop things like those imitation PAC-MAN games being made in Taiwan,'' says a deputy assistant to Brock, though he adds, ''We don't expect our agenda proposal to be the agenda.''