By Doug Palmer
WASHINGTON (Reuters) - The United States cannot agree to a world trade deal until more concessions are made for big banks, insurance companies and other service companies, the top U.S. trade official said on Tuesday.
"We know that the biggest gains to the global economy are likely to derive from multilateral services liberalization, but the offers on the table right now fail to deliver on that promise," U.S. Trade Representative Ron Kirk said.
"We have said flat out that there will be no deal without a solid result on services, which would result in new market opportunities, but we believe that a positive outcome is still achievable," Kirk told the Global Services Summit.
The event was organized by the Coalition of Service Industries, a group representing banks, insurance, accounting, shipping, software, telecommunication and other service companies unhappy with being sidelined in world trade talks for nearly eight year as negotiators argued over agriculture and manufacturing trade issues.
The trade talks, known as the Doha round, were launched in the capital city of Qatar with the goal of helping poor countries prosper through trade.
Kirk expressed sympathy for that view and complained that many of the largest emerging markets are "still walled off to services trade."
"Often these policies are unwritten and unspoken, but they have the same effect blocking us out of those markets and that's one of the things that have to stop," Kirk said.
Speaking at a conference in Berlin on Tuesday, World Trade Organization chief Pascal Lamy argued completing Doha would give a boost to the fragile global economy, as governments begin to unwind massive stimulus packages.
Lamy also said a sharp decline in trade volume caused by the global financial crisis appeared to be "bottoming out." But protectionist measures taken over the past year could impede recovery, said Lamy, who will speak at the services summit on Wednesday.
Kirk received strong support from EU Trade Commissioner Catherine Ashton, who said better services offers from key developing countries would help bridge the remaining gaps in agriculture and manufacturing.
"It's central to Doha. It's not yet had its day. It needs a bigger voice. It needs a bigger push," she said in Washington.
LESS THAN 20 PERCENT OF WORLD TRADE
Services like banking, shipping and telecommunications account for upward of 75 percent of rich economies and a growing share of many developing countries.
But they still account for less than 20 percent of world trade. So many rich countries believe the biggest gains from a Doha deal could come in services.
But agriculture has dominated the Doha round. The United States and the European Union had to offer big cuts in its farm subsidies and tariffs before developing countries detailed their own concessions.
Manufacturing concerns have received more attention in recent years, but services talks still lag behind.
India, the United States, the EU and other major trading partners agreed at a recent meeting in New Delhi that it is time for negotiations on services to proceed.
But a "balanced and fair" Doha deal needs to take into account that developed countries already have a much larger share of services trade than developing countries, Indian Commerce and Industry Minster Anand Sharma said.
"I think offers have to be good from everyone, also from the United States of America," Sharma told Reuters.
The U.S. services market is relatively open, so compared to the agriculture and manufacturing talks, the United States has fewer interests it needs to defend.
One politically difficult issue is India's demand that the U.S. Congress grant more temporary-entry visas for Indian software engineers and other professionals.
Kirk said the United States remained committed to a successful Doha agreement, but is exploring options for boosting services trade within APEC, whose 21 members include China, Japan, Taiwan and South Korea.
(Additional reporting by Brian Rohan in Berlin)