Nothing makes people's eyes glaze over like a rip-roaring discussion of international trade agreements.

But talk trade to John Price, managing director for government affairs at Chemical Banking Corp. and current president of the Washington-based Bankers Association for Foreign Trade, and he perks right up.

In fact, Mr. Price is one of a select group of senior bankers at major money-center banks who devote the better part of their working days to monitoring trade agreements and legislation and their implications for the banking industry.

As these bankers see it, the most recent international trade agreement under the General Agreement on Tariffs and Trade has left ample room for improvement.

Bankers are unhappy even though the agreement included provisions for free trade in financial services, primarily because GATT failed to set a firm schedule for requiring countries around the world to open their markets to international competition.

If other countries don't move to open their markets to U.S. financial firms, they predict, the United States will likely set its own policies for deciding whom we let into our own market.

"Unless we see more progress, the U.S. is probably going to take a most favored nation exemption," Mr. Price warns.

"We do not want to lock ourselves into an agreement unless other countries are making some movement."

Other bankers are less categorical but still say more needs to be done to level the playing field for U.S. banks around the world.

"The problem as of last December was that there were not countries willing to put forward a schedule that moved toward improved market access compared with the status quo," says William F. Hawley, the Washington-based director of international government relations for Citicorp and Citibank.

"That doesn't mean we would take action to close our market and nothing changes in an automatic sense, but it does mean we are reserving our right to use whatever leverage is appropriate to work for more open markets abroad."

Adds John Hanley, vice president for government affairs at Chase Manhattan Corp., "The implementation of GATT on a worldwide basis will create a negotiating basis, but there are some concerns in the financial services community that negotiations are going to be a bit more difficult than anticipated."

Negotiations on financial services under GATT are scheduled to go on until next July 1, but that'll be the "drop-dead date" if nothing is concluded, he adds.

After talks dragged on for more years than most people would care to remember, the 117 countries that belong to GATT finally reached agreement setting rules of trade into the next century.

The agreement is due to go into effect in 1995 and reduces or scraps scores of tariffs and nontariff barriers to international trade.

But many developing countries in Latin America and Asia remain unwilling to open their financial markets for fear of being swamped by foreign institutions.

Financial services were left out of the agreement, leaving empty handed the U.S. banks, securities firms, insurance companies, and nonbank banks that had hoped the agreement would eliminate discriminatory barriers.

Their one recourse, Mr. Price says, is to figure out how to use the option the United States retained under GATT to unilaterally respond to unfair trade practices.

Unless there is progress, he predicts, Congress is likely to begin reviewing proposed legislation incorporated into the now defunct Fair Trade in Financial Services Act that would provide for more active retaliation against countries that do not open their financial markets.

"It'll be a perennial issue unless progress is reached," Mr. Price says. "We'll continue to have new versions of the FTFS popping up again and again."

Underscoring Mr. Price's remarks, the U.S. Treasury this month announced that the "United States seeks binding commitments to reduce or eliminate barriers to national treatment and market access within a clearly specified and reasonable period of time."

"We want to keep our markets open to foreign financial institutions," said Treasury Secretary Lloyd Bentsen. "But we also need to ensure that foreign countries provide the same degree of access to our firms in their markets."

Mr. Bentsen added: "While many countries have begun to recognize the economic benefits that come from liberalization of the financial sector, national treatment is still the exception rather than the rule in too many important markets."

His comments accompanied the release of the latest in a series of four-year surveys tracking the degree of market access to U.S. banks and financial institutions in 41 countries around the world.

The report noted that although multilateral and bilateral "negotiations have brought significant improvements in the terms on which U.S. firms compete in financial markets abroad ... many significant denials of market access and equality of competitive opportunity remain."

The study noted bilateral negotiations have succeeded in increasing access to financial markets in Japan, China, Korea, and Taiwan. Other countries, including Brazil, Chile, the Czech Republic, Malaysia, Singapore, and Thailand have halted issuing banking licenses to foreign institutions.

Still other countries, such as Colombia, Hungary, Indonesia, Poland, Russia, and South Africa, block foreign banks from setting up branches.

Sometimes these countries set limitations on the kinds of transactions foreign institutions can do while others limit the extent of business or prohibit non-native banks from dealing in local currencies. "Lack of transparency in the development and implementation of laws and regulations is still a serious problem in a number of countries," the report stated.

To be sure, tough talk goes against Mr. Price's better instincts. As a banker, he emphasizes, he would much prefer to see an amicable resolution to the problem.

"What's so remarkable about banks around the world is that they have more in common with each other than differences," Mr. Price says.

He adds that cooperation is in the interest of many of the countries that opposed eliminating worldwide barriers in financial services.

"If they don't want to open their own markets, the rest of the world is just going to move on," the banker says. "There's a kind of a force of nature to world capital flows that will push them toward the higher-yielding, easier markets," he says.

His warning is ominous: "Countries that don't adjust are the ones that will get left behind."

One way to avoid a confrontational situation, he suggests, is that even if the 117 member countries of GATT don't want to reach a general agreement, the United States can still develop bilateral agreements on financial markets such as the one that was incorporated into the North American Free Trade Agreement.

More such agreements, he suggests, might be the answer to trade barriers if universal agreement cannot be reached.

With financing of the U.S. economy now heavily dependent on foreign banks with offices in the United States, Mr. Price himself remains ambivalent about how much good tough retaliatory action will do.

"There's been fairly consistent support in the banking industry for open markets around the world," Mr. Price says. "But the thinking is we still have the biggest and most innovative banking market in the world, and that market should continue to stay open."

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