WASHINGTON-Despite major progress recently on opening up global telecommunications markets, the Clinton administration last week said barriers to equipment and services trade remain.
The 387-page foreign trade barriers report comes during a major Democratic fund-raising scandal in which the White House sought to award big contributors with coveted seats on trade missions.
“We cannot afford to retreat,” said Charlene Barshefsky, U.S. trade representative. “Increasingly, we see new trade alliances in Asia and our own hemisphere forming around us rather than with us. These alliances have the potential to reduce U.S. export opportunities. At the same time, we will not allow our trading partners to take advantage of our open market while maintaining closed markets at home.”
The report gave significant attention to Japan, China and the European Union among the 46 countries cited for trade problems.
It said the 1994 Nippon Telegraph and Telephone Corp. telecommunications equipment procurement agreement and the 1994 public sector procurement agreement on telecommunications products and services accord with Japan have not created the level of competition expected by U.S. officials.
The United States expressed particular concern about sole sourcing in Japan, and cited one case, as an example, involving a U.S. firm that was cut out of a major public-safety radio communications contract. “The exclusion appears to violate provisions of this procurement agreement and efforts to resolve this issue continue,” the report said.
“Despite recent progress with procurement among some Japanese government agencies, I am particularly concerned that the results U.S. companies have achieved with NTT compared with the private Japanese telecommunications sector suggest that NTT is still captive to its monopoly legacy and not fully responsive to market principles,” said Barshefsky.
Despite the tension, the U.S. government has achieved significant inroads in wireless trade with Japan in recent years. Just last week, Motorola Inc. announced it received the largest cellular infrastructure contract in the world to date.
As for Europe, the report said U.S. access to the continent’s telecommunications service market is limited by European Union actions but improvements are expected as a result of the World Trade Organization’s telecom trade agreement in January.
The report notes that infrastructure competition in mobile telephony opened last July.
China had a $39.5 billion trade surplus with the United States in 1996, but promises to be one of-if not the most-lucrative telecommunications export market for U.S. wireless companies.
At the same time, Justice Department and congressional investigations of Democratic fund-raising are focusing on alleged Chinese links to congressional and presidential elections and to claims that economic and national security may have been compromised by Asian-related fund-raising activities.
The United States, according to the trade report, wanted a 1995 space launch agreement with China to ensure “that Chinese participation in the LEO (low-earth-orbit mobile satellite) market be proportionate and non-disruptive.”
Major trade differences remain with Korea, owing to that government’s promotion of the telecom industrial sector, according to the report.
Because of the problems and lack of cooperation by Korea, the report said, the United States made Korea a “priority foreign country” last July. That means the United States has one year to iron out the trade dispute. If there is no progress, the United States may impose trade sanctions on Korea.
Canada still refuses to allow full foreign ownership of its telecom common carriers, a posture at odds with the WTO telecom accord. Canada has a 46.7 percent cap on foreign investment and routing restrictions to foster use of Canadian telecom facilities for domestic traffic.
