U.S. seeks free financial markets in WTO deal

U.S. seeks free financial markets in WTO deal

WASHINGTON (Reuter): The United States wants emerging
economies to free their financial markets in a new round of
global trade talks, but it will "work creatively" to deal with
their worries, Treasury Secretary Robert Rubin said.

A Rubin letter to the head of the World Trade Organization
said WTO talks on financial services offered a chance of a global
deal that would strengthen the sector.

"Financial liberalization is not only critical for successful
economic development, but essential to any strategy for building
domestic financial systems that are resilient and durable," said
the letter, dated Aug. 15 and released by the Treasury Department
on Monday.

The United States, eager for U.S. banks and financial
companies to win easy access to emerging economies, has been a
strong lobbyist for open markets for financial services, which
are due to be ready by December under a WTO deadline.

"I am hopeful that key countries will table offers before the
December 1997 deadline which are sufficiently improved to allow
the conclusion of a strong WTO agreement on financial services,"
Rubin said.

But many governments in the developing world view open
financial markets as an unfair challenge to domestic banks or a
threat to national security because they expose a country to the
whims of international speculators.

Rubin said the United States was ready to address the concerns
of the developing countries or to allow countries to phase
changes in over time.

"We have stated our willingness to work creatively in this
negotiation to address the fullest range of legitimate emerging
markets' concerns," he said.

"We want to consider with our negotiating partners phased
commitments, over agreed timeframes appropriate to a country's
circumstances, as well as other measures which we believe can
smooth the transition to a more open economic environment."

But Rubin said the United States wanted emerging markets to
improve their offers on liberalizing financial services before a
WTO deadline expired at the end of this year.

"The United States recently submitted a comprehensive offer in
the WTO financial services negotiations," he said.

"To make this offer unconditional it is essential that our
trading partners, especially a number of key emerging markets,
make substantially improved offers before the negotiating
deadline."

A team of U.S. trade and treasury officials is holding talks
this week in several Asian states, including the tiger economies
of Thailand, the Philippines and Indonesia -- all of which have
been targeted by the speculators in recent weeks.

A senior Treasury Department official said last week he did
not expect concrete deals to emerge from the meetings, although
U.S. officials would lay down broad objectives and outline what
they would do to meet their trading partners' concerns.

The delegation is being led by Jeffrey Lang, deputy trade
representative, and Timothy Geithner, senior deputy assistant
treasury secretary.