Despite fresh hope that a global trade pact is in the official U.S. banking industry officials say there is little reason to believe it will bring any real breakthrough in opening markets for financial services.
"We don't really see any movement on financial services" in the General Agreement on Tariffs and Trade talks, said Thomas L. Farmer, general counsel for the Washington-based Bankers Association for Foreign Trade.
"There's been a general undertaking to negotiate on access, but nobody's put anything specific on the table."
U.S. banks with international operations would like to see an agreement that gives them greater access to protected markets in developing countries in Latin America and Southeast Asia.
The so-called Uruguay Round of the GATT talks, involving 108 states in negotiations on trade in services, patents and copyrights, textiles, and farm produce, is the most wide-ranging effort ever undertaken to liberalize international commerce.
The negotiations, which began six years ago, virtually ground to a halt over U.S. demands that the European Community phase out agricultural subsidies.
The talks are scheduled to resume in Geneva this week following key concessions by the Europeans.
However, bankers and industry sources doubt that any country is prepared to make enough concessions for the entire agreement to be completed.
"We've got economic distress, high unemployment, social unrest, and a large number of countries worried about their internal economies," said Kevin Mulvaney, executive vice president for global banking at Bank of Boston Corp.
"We've got negotiations going on in an economic climate that makes it difficult to come to an agreement."
Bankers also warn that time is running out to draw up a comprehensive package that will include freer world trade in financial services.
They point out that participants will need to work round the clock to meet the Dec. 19 deadline and complete a package before March 1, the date on which the U.S. administration's "fast track" authority from Congress expires.
Under the fast-track authority. Congress must either reject or approve an international agreement as a whole within 90 days. The lawmakers cannot rip it apart with deletions, additions, or amendments that might not be acceptable to other GATT members.
Given the lack of any meaningful concessions so far, the short time remaining, and threats by France that it may yet torpedo an agreement, many bankers predict negotiations could end in a stalemate and be postponed indefinitely.
This, they warn, will accelerate a worldwide trend toward setting up protectionist regional trading blocs, increase barriers to world trade, and trigger trade disputes at the worst possible moment.
But some still hope that ground rules for freer trade in financial services, drafted by GATT Secretary General Arthur Dunkel last December, could yet pave the way for a broader agreement if the will to reach a deal is there.
"We're sort of halfway there," said William Canis, vice president for international corporate affairs at American Express Co.
"We've got an international framework for the future, and that's good, but we're missing the liberalization and the tools to deal with countries that don't want to make specific commitments."
The ground rules do not require GATT members to open their borders to international competition in banking, securities, and insurance, but they do require them not to discriminate against banks from other countries and to negotiate the restrictions they wish to retain or are prepared to ease.
How Committed Are They?
Bankers say talks starting this week in Geneva will show just how committed GATT member countries are to those ground rules.
"We're not exactly starting from zero," said one senior U.S. banker close to the talks.
"But everybody's going to have to come clean over the next few weeks about just what they're willing to offer."