Furthering its mission to promote market access in telecommunications markets
abroad, the Office of the United States Trade Representative (USTR) announced
today the results of the 2003 annual review of foreign compliance with
telecommunications trade agreements (the "Section 1377" review).
The key issues
identified this year include continued problems with high wholesale prices for
access to foreign telecom networks and foreign regulators that lack the will or
ability to address these and other problems. Countries such as the United
Kingdom, Italy and Germany have made important progress in addressing these
issues over the past year. Others, such as Mexico and Japan, are beginning to
develop possible solutions.
"Telecommunications is a critical part of
the infrastructure of modern and growing economies, and access to overseas
markets is important to not only the American telecom sector, but is also key to
stimulating economic growth and development. The lack of fair, transparent
regulatory treatment of telecom companies in foreign markets has proven one of
the biggest obstacles to ensuring competitive opportunities and the development
of telecom networks," said U.S. Trade Representative Robert B. Zoellick.
"Without fair and
transparent telecom regulatory treatment, the investment needed for the growth
and development of the telecom sector will be constrained – hurting consumers,
workers and companies here and abroad. The United States will keep a sharp focus
on implementation of these rules, engaging directly with trade partners and,
where appropriate, pursuing enforcement action in the WTO," said Zoellick,
noting a recent case in the WTO filed against Mexico.
WTO rules provide
pro-competitive guidelines for regulators to follow in ensuring reasonable
access to networks and impartiality of the regulatory processes. These have been
key to important progress that has occurred in many markets relating to concerns
identified last year (noted in full report identified below).
To bolster WTO
disciplines in these areas, USTR has negotiated strong provisions in Free Trade
Agreements with Singapore and Chile, and will propose similar rules in
additional FTAs now being pursued. In addition, USTR will seek additional
commitments in the WTO for more effective regulatory oversight in the
telecommunications sector as part of the WTO service negotiations.
reviews the operation and effectiveness of U.S. telecommunications trade
agreements pursuant to Section 1377 of the Omnibus Trade and Competitiveness Act
USTR conducted this review on the basis of public comments submitted
by U.S. industry and other interested parties and in consultation with other
U.S. Government agencies and U.S. trading partners.
this year as hindering market access include:
high prices for the service of connecting U.S. networks with both fixed and
mobile networks in countries as diverse as Argentina, the Dominican Republic,
Germany, Japan, Mexico and Switzerland;
• lack of reasonable access to
leased lines, particularly in Australia, France, Germany, Mexico and Singapore;
• willingness of foreign authorities to tolerate breaches of domestic
telecom rules by favored companies, in countries such as Mexico.
USTR's focus on
these issues and the engagement with foreign governments during the review, can
produce favorable results. For example, the issue of denial of market access to
the mobile telecom market in Antigua, raised during this review, was recently
resolved favorably through a coordinated interagency effort.
USTR has urged
national regulators to fulfill their responsibility to address such problems and
initial signs of success are promising, addressing a number of issues identified
in last year's report. For example, some foreign regulators (e.g. Italy and the
United Kingdom) are beginning to address the issue of high charges for access to
mobile networks, and governments in Germany, Japan, Switzerland and Mexico are
crafting more effective tools regulators need to combat anti-competitive
practices. USTR will actively monitor progress on these issues over the coming