India and Brazil are leading other Third World nations in opposing the Reagan administration's push to start a new round of global trade talks next year, government officials and western diplomats said here today.
The Third World nations especially oppose a major aim of Washington in the trade talks: setting new rules to ensure free trade in the service sector, where the United States now holds an edge over most of the world.
"We feel the extension of GATT the General Agreement on Tariffs and Trade, which sets trading rules for the noncommunist world to services is something that is not appropriate at present," said a senior official of the Indian commerce ministry. He spoke on the condition that his name not be used.
"It is very clear that, legally, services cannot be discussed at GATT" because the multilateral agency was set up after World War II to deal only in trade in manufactured products, he continued.
The Reagan administration wants the new round to remove what it sees as barriers that thwart the United States from extending its advantage in such service sectors as banking, insurance, information and engineering to other countries to counterbalance the record U.S. merchandise trade deficit.
But India and Brazil also see themselves as emerging leaders in their regions in trade in services, and fear their industries in those sectors will be submerged by the more advanced Western nations, according to a Western diplomat here who follows trade affairs closely.
"The Indians see services as an infant industry and are not yet prepared for free trade in that area," he added.
The 23-nation bloc formalized its opposition to a new round in a paper submitted to a GATT committee meeting in Stockholm last week. While the Third World bloc agreed to further discussions at a meeting in Geneva in September, the Indian official emphasized that did not signal approval for the new round.
Prime Minister Rajiv Gandhi underscored India's opposition to the new round at a press conference today in Geneva where, according to United News of India, he said it is more important to consider the views of the developing nations on promoting trade and overcoming protectionism than to go ahead with new trade talks.
Thus India appeared to distance itself from the fast-growing newly industrialized countries (NICs) that dominate trade in textiles, footwear and consumer electronics and are likely to be the major beneficiaries of any market-opening moves of industrialized countries.
The leading NICs are the Pacfic Rim "gang of four" -- Taiwan, Korea, Hong Kong and Singapore -- along with some Asian nations such as Malaysia and Indonesia.
Along with Japan, these nations are the strongest supporters of the Reagan administration's call for new trade talks, which first surfaced in the president's 1984 State of the Union message, but took on new urgency this year as the White House's main trade initiative in the face of a soaring merchandise trade deficit. The deficit reached a record $107.4 billion in 1984 and appears to be heading higher this year.
Aligned with India and Brazil are Third World nations covering a wide swath of the globe and spanning the political spectrum -- Argentina, Bangladesh, Burma, Cameroon, Colombia, Cuba, Cyprus, Egypt, Ghana, Ivory Coast, Jamaica, Nicaragua, Nigeria, Pakistan, Peru, Romania, Sri Lanka, Tanzania, Uruguay, Yugoslavia and Zaire.
The Indian official said that, instead of pressing for a new round of global trade talks, the United States and its allies should focus on improving the multilateral trading system run by GATT, which has been under increased strain in recent years. In the Indian view, this strain has been caused by a retreat from the GATT principles of nondiscrimination in trade -- especially in textiles -- and by U.S. threats to forge bilateral agreements -- such as the recently completed U.S.-Israeli free trade pact -- if it cannot get a new global round.
"The need of the hour is to repair the system," the senior Indian official said.
He was especially critical of Reagan administration efforts over the past 18 months to curtail U.S. imports of textiles and apparel. He said the new rules are targeted unfairly at Third World nations, ignoring a massive surge in the sale of European textile products in the United States.
Diplomatic sources said India also would like reforms of the international monetary system tied into a new GATT round, a position also held by France.
Other countries and some key congressmen believe the major cause of the soaring U.S. trade deficit is the high dollar -- a product of Reagan administration economic policies -- which should be tackled before any action is taken on a new trade round.