U.S. Rejects EU’s Deal on Opening Financial Markets

The United States on Monday spurned European efforts to get it to join a proposed global deal freeing trade in the multibillion-dollar market for financial services in banking, insurance and securities.

“The U.S. position on financial services is unchanged,” Treasury Secretary Robert Rubin said in a statement after meeting European Union Trade Commissioner Sir Leon Brittan.

Washington walked out of the financial services negotiations at the World Trade Organization at the end of June, saying market-opening offers from many developing countries were inadequate.

Brittan was in Washington with Spanish Foreign Minister Javier Solana for meetings with U.S. officials on ways to strengthen economic, political and security ties. Spain chairs the 15-member European Union until the end of this year.

The EU is spearheading an effort to try to forge a deal in financial services and has won the agreement of other WTO nations to extend negotiations until Friday.

Rubin welcomed the EU’s efforts to persuade other nations not to withdraw their market-opening offers but made clear that Washington did not intend to join the talks.

Brittan said he was not surprised, adding that he did not try to change the U.S. position during his meetings here.

But he voiced hope that Washington could eventually be persuaded to join the proposed agreement at some point during its planned 2 1/2-year life.

The European envoy told reporters that a financial services deal was near despite the U.S. decision not to join.

“We are very close,” Brittan said. “We merely need the cooperation of our Japanese and Korean friends.”

He voiced confidence that Tokyo would participate.

The EU wants Japan to pledge to give financial services firms from other nations the same treatment it accorded U.S. companies in a bilateral pact between Tokyo and Washington earlier this year.

Japanese Vice Finance Minister Kyosuke Shinozawa told reporters in Tokyo on Monday that Japan was still not ready to say whether it would join the deal brokered by the EU.

In a separate telephone conference with reporters, U.S. Trade Representative Mickey Kantor defended Washington’s position not to participate in the proposed financial services pact.

With Washington no longer involved in the negotiations, Kantor said the Clinton Administration is likely to renew its support for congressional efforts to strengthen its ability to retaliate against unfair trade in financial services.

“The Administration position has been clear for quite a while,” Kantor said. “And I assume that support will continue.”

The Administration had put its support for those efforts on hold while it was still participating in the international negotiations on financial services.