COFFEE TALKS FAILURE SEEN PRESSURING U.S. Failure of talks on re-establishing International Coffee Organization, ICO, coffee quotas last week may put political pressure on the United States, particularly the State Department, to reassess its position, but the U.S. is unlikely to back away from its basic demand quotas be set by "objective criteria", U.S. officials said. Jon Rosenbaum, assistant U.S. trade representative and head of Washington's delegation to the talks, told Reuters on his return from London that the United States is willing to resume the coffee negotiations as early as April if necessary. Rosenbaum said the United States will be "flexible" in discussing the method of establishing objective criteria and any transition to new quotas, but not on the basic aim of establishing an objective method of setting quotas. At the ICO talks major consuming nations, led by the U.S., proposed that future coffee export quota shares be calculated by a formula incorporating a producer's recent exportable production and verified stocks, while large producers led by Brazil proposed maintaining the traditional ad hoc division of shares. The consumer position would have in effect reduced the market share of Brazil, by far the world's largest producer. Rosenbaum said the administration would continue to support legislation now before Congress which would allow the U.S. customs service to monitor coffee imports, as a way to comply with any future coffee quotas. He said the Reagan administration would be reviewing the coffee policy situation following the collapse of the London talks, but "nobody is proposing we change our position." However, other U.S. government officials involved in coffee policy said they are bracing for a diplomatic and coffee market offensive from producer countries, led by Brazil and Colombia, to soften the consumer position. "Knowing that its next crop is fairly large, Brazil will kind of want to test the resolve of other producers and consumers," said one U.S. official. The U.S. official, who asked not to be identified, said Brazil and Colombia may flood the coffee market in the next few months in an effort to drive down prices and pressure other countries, particularly the splinter group of small producers who differed with the major producers in London. This in turn could lead to urgent appeals from Latin American countries, faced with mounting debt problems, to the U.S. State department, and to the National Security Council in the White House, for an easing of the U.S. position, U.S. officials said. The State department, a major player in setting U.S. coffee policy, may then face conflicting pressures, particularly from politically-sensitive U.S. allies in Central America, U.S. officials said. El Salvador and Guatemala both backed Brazil and Colombia at the London talks in resisting pressures for quotas based on objective criteria. But the Dominican Republic and Costa Rica joined the splinter group, which said it would agree to objective criteria. There is a strong feeling among some in the State Department that the United States should continue to support the splinter group of producers who have taken the politically-risky step of opposing Brazil on the objective criteria question, U.S. officials said. Within the consuming countries there also is expected to be some pressure to reassess positions. In London, the U.S. was supported by the U.K., the Netherlands, West Germany, Japan, Australia and New Zealand on the issue of objective criteria, U.S. officials said. This bloc represented enough votes among consuming nations to successfully prevent adoption of the producer proposals. However, U.S. sources said West Germany's support was at times qualified and there is some concern that the European Community could come under pressure to be more accommodative to producers in future talks. France backed the Ivory Coast and other African producers during the talks. A softening of the EC stance would make it more difficult, although not impossible, for the U.S. to block producer plans. While political manuevering by small producers and consuming countries will be important, U.S. officials said the key to any future outcome will be Brazil's position. U.S. officials blamed Brazil's intransigence for the failure of the talks and said a more flexible position from Brasilia would be the most important step toward agreement.