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Liberalization and the Ascendancy of Trade 139

absence of theoretical or empirical arguments, LDCs, led by Brazil
and India, refused to consider even the possibility of service transac-
tions as trade issues. As a Brazilian delegate to the GAIT argued in
1987, liberalization in the trade of services 'could contribute to a new
international division of labor where we [LDCs] are granted some
advantages in certain manufactures but will be permanently excluded
from passing on to a post-industrial or more services-oriented eco-
nomy as is happening in the developed world. ' 30
US foreign communication policy officials began to re-conceptua-
lize free flow of information issues in terms of free trade in the early
1980s. In 1983, the Commerce Department report on 'Long-Range
Goals in International Telecommunications and Information' recom-
mended that the US government 'place a high priority on the reduct-
ion of non-tariff trade barriers affecting the telecommunications and
information industries through vigorous multilateral and bilateral
negotiations in the GATT and elsewhere, but without insisting on
rigid reciprocity.' 31 Foreshadowing revisions to Section-301 of the US
Trade and Tariff Act, the report recommends possible amendments to
US trade law to protect domestic interests from 'unfair industry-
targeting practices and other anti-competitive policies of other coun-
tries.'32
In the minds of many US state and corporate officials, this modi-
fied approach was not difficult to accept given the general failure of
free flow. 33 In a 1985 survey prepared by the USTR on the views of
US corporate representatives on the upcoming GAIT Uruguay
Round, free flow of information issues were directly linked to US
trade policy. Among other private sector groups, the National For-
eign Trade Council told the USTR that 'emphasis should be placed
upon those service sectors, such as communications, which form the
infrastructure of services trade.' Likewise, the Services Policy Advis-
ory Committee submitted that

Telecommunications plays a central role in the international trade
of all information based services because it is the primary
distribution channel for these services .... For this reason, policies
or practices that create barriers to the flow of information or to
the use of telecommunications services should be accorded a
special priority in any trade in services negotiations. 34

In another paper prepared in 1985 by a US government Interagency
Working Group on Transborder Data Flow, both the free flow of