Five developing countries have refused to budge from their opposition to inclusion of the service sector in a new round of world trade talks, even after two weeks of bargaining, a top U.S. trade official told a press conference today.
The five nations -- Brazil, India, Egypt, Argentina and Yugoslavia -- are continuing to insist that any new round of talks concentrate only on goods, said Peter Murphy, the U.S. ambassador to the General Agreement on Tariffs and Trade.
Their opposition threatens agreement on a new round of talks to be discussed Monday at a conference here of the 90 nations that adhere to the GATT. If the five nations still refuse to compromise at that conference, Murphy said, the United States will insist on a vote on the issue even though GATT normally operates by consensus.
"We don't want to go that route, but if we have to, we will," said Murphy, who is also a deputy U.S. trade representative. "We are determined to pursue this problem to a decision. There's a lot at stake right now, and if we mishandle this conference there are going to be serious consequences."
Washington would like to see the new round of GATT talks start next year, but the five developing nations are delaying the start by blocking inclusion of the booming world trade in such services as insurance, banking, computer software and telecommunications.
The five, all of which have considerable regional service sectors themselves, would like to see the new round focused on trade in goods only. Washington, however, has committed itself to getting services included on the agenda.
The five successfully blocked a consensus decision on including services when the issue arose at a session of the GATT council in July. The United States then outflanked the holdouts by calling for the special session of all GATT members set for Monday. The call for a meeting to discuss the matter was supported by 65 countries, more than the 51 percent needed.
"If there is no decision on this matter by November, there will be a major rethinking in the United States of what we want to do, and how much we want to rely on the multilateral trading system," Murphy said. "There is a wide body of thought in the United States which says that GATT isn't functioning properly -- that it's too easy to block ideas there and too hard to make substantial progress."
Murphy noted that President Reagan, in his foreign trade speech this week, said that if the United States can't get what it wants in GATT, it will resort to bilateral negotiations of its trading problems.