U.S. Officials Report No Progress in Effort to Finish World Trade Pact : Commerce: Informal deadline for negotiations is today. Agreement is apparently still hung up by entertainment, aircraft issues.

With barely a day to complete their negotiations, grim-faced U.S. trade officials met into the night Saturday with major trading partners but reported no progress in their tense effort to reach an agreement that would rewrite the rules of international commerce.

Late in the evening, the U.S. delegation took the unusual step of issuing a formal statement decrying the lack of progress in one arena--that of widening the internationalization of such financial services as banking and insurance. The statement added to the gloom surrounding the talks.

Negotiators spent the day and night behind closed doors, but members of Congress and lobbyists from Washington who remained in contact with them reported that some chance remained that the trade talks would bear fruit.

While the negotiators appeared to be focusing on the two or three most intractable issues, the scope of the debate is huge. If completed, the pact would cut by an average of one-third the tariffs--or taxes--the 116 nations taking part in the talks can charge on imported goods.

Economists estimate that increased business from the lower tariffs would provide a $270-billion surge in the global economy by the year 2002.

The central issues blocking agreement were said to have remained unchanged: the U.S. demand that Europe drop its subsidies and other forms of protection for its entertainment industries, and that European subsidies for production of civilian aircraft--assistance programs to competitors of U.S. aviation firms such as Boeing Co. and McDonnell Douglas Corp.--also be dropped.

But questions remained, too, over several other thorny issues, among them access to the U.S. market by textile manufacturers in developing nations that pay wages well below the rates offered to American workers, and U.S. protection against dumping of products sold at prices below the cost of production.

Officials have said there will be no partial agreement and have emphasized that agreement in any one sector of the economy covered by the pact depends on deals being worked out in each of the others--an insistence that added to the tension.

“It feels like it’s a house of cards, and the question is, if one of these cards slips, does the whole thing come down? I don’t know if it’s that sensitive and totally falling apart. But I get that feeling,” said Rep. Norman Y. Mineta (D-San Jose), chairman of a congressional working group on trade who met with trade negotiators Saturday.

The formal deadline for an agreement is Wednesday, when the authority Congress granted to President Clinton to negotiate a pact that would not be subject to amendment by the House and Senate expires. But the negotiators are actually working against an informal deadline of tonight.

That deadline was set by Peter Sutherland, director general of the General Agreement on Tariffs and Trade, the 46-year-old organization for setting global trading rules. He has said that the days until Wednesday would be needed to translate any agreement into English, Spanish and French, and to work out final technical details.

The depth of the divide over the entertainment industry was reflected in a complaint raised in Brussels by the Belgian foreign minister, Willy Claes, who said: “The defense of our civilization is at stake. The Americans have to understand that.”

But U.S. officials, with representatives of the Motion Picture Assn. here in Geneva, were said to have taken an equally adamant stand.

With the exception of the short written statement on financial services, officials refused to make any formal comment, and normally voluble aides were tight-lipped as they shuttled between GATT headquarters and the building across Rue de Lausanne where the U.S. trade representative maintains Geneva offices.

In the written statement, U.S. Trade Representative Mickey Kantor said that he and Treasury Secretary Lloyd Bentsen “agreed that the United States has not seen the progress we had hoped to see in market access and national treatment in financial services.” This refers to efforts to gain opportunities for U.S. private financial institutions to increase their business in foreign countries.

“We do not now have the basis for an agreement that provides sufficient liberalization to justify the United States’ ” granting special trading privileges to other nations in the financial arena, Kantor said. But he said efforts were continuing.

His statement was issued while he met with representatives of the European Community, Japan and Canada, which along with the United States are the so-called “quad” nations that account for 90% of the value of world trade.

The product dumping question and another that is often linked with it--use of sanctions against foreign countries to force open their markets for U.S. goods--have become central issues for members of a congressional delegation who have spent the past two days in Geneva.

They include key Democrats who were in the forefront of the unsuccessful fight last month to block the North American Free Trade Agreement with Canada and Mexico, and who do not relish the idea of once again opposing a Democratic President on a trade issue.

However, they are heading home today uncertain whether the Clinton Administration will obtain an agreement with strong enough anti-dumping provisions that they will be able to support it.