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.