GENEVA-The United States blocked a telecom agreement among 53 nations of the World Trade Organization by refusing to open its international and satellite markets unless better offers were made by other nations.
“We will not make a deal simply for the sake of making a deal,” said U.S. Trade Ambassador Charlene Barshefsky. “The United States must receive comparable value for what it is offering, or no agreement will be possible.”
U.S. officials said the current offers leave U.S. telecom players out of 40 percent of world telecom revenues and more than 34 percent of international traffic.
For two years, WTO nations have been trying to create a global telecommunications agreement. The recent meeting in Kobe, Japan, raised hopes that a consensus would be reached by April 30, the WTO’s self-imposed deadline.
But an abrupt change in position by the United States a few days before the deadline put the talks on hold; the nations agreed to extend the discussions eight months, until Feb. 17, 1997.
For instance, the United States balked at Hong Kong’s offer because there was no commitment on open market for local and international public wireline/wireless services and facilities, even after Hongkong Telecom’s exclusive rights expire in 2006.
India made no commitments on international satellites. The United States said commitments also were needed from Thailand on long distance, international, satellite, investment and regulatory principles. Mexico has made no commitment on satellite services. Israel offered no open market commitments on local and international wireline and satellite services; cellular licenses are subject to an economic needs test.
International observers describe the United States move as knee-jerk protectionism during an election year. The European Union, the world’s largest trading entity, was disconcerted.
“The EU Council*…*would have been ready to lift its limitations (foreign ownership) in return for the United States lifting its curbs on submarine cables,” said Sir Leon Brittan, EU representative to the WTO.
U.S. long-distance carriers AT&T Corp., MCI Communications Inc. and Sprint Corp. issued statements praising the U.S. position.
“At the moment, too many foreign telecommunications markets are closed to international competition,” said MCI Chairman Bert Roberts. “Just consider the United States’ $4 billion annual trade deficit on telecommunications accounting rates, which represents a direct subsidy of foreign telecommunications service by American consumers.” One concern addressed by the WTO is the so-called “one-way bypass” of international accounting methods for telecom, which allows a company to provide a service and be the recipient of it at the other end, according to U.S. reports.
Motorola Inc., on behalf of its Iridium international satellite telephone project, also stressed the need for a better deal. Current offers by WTO member countries are insufficient to meet the market access goals of Iridium for global service, said Motorola.
The EU’s Brittan said the WTO should not be criticized for the outcome, because matters were handled adeptly and skillfully. “I respect and understand that the requirements of (U.S.) domestic politics can make it very difficult to conclude an agreement in a pre-election year. But the multilateral system loses out as a result,” Brittan said.
Trade in services now accounts for 20 percent of global trade, which is why it’s important to establish a common set of rules, according to the WTO Uruguay Round agreement.
Without international rules, the service sector is subject to different national rules regarding market access, including reciprocity and other forms of discrimination, the WTO said.
The WTO holds to the most-favored nation principle, which disallows countries from offering something to one nation, but refusing the same to another nation. The organization also aims to break down tariffs and further liberalize world trade.
