WASHINGTON-While the United States and Japan avoided a nasty trade fracas by agreeing last week to new measures to open Nippon Telegraph and Telephone Corp.’s $13 billion procurement market, a potentially huge trade fight was shaping up between the U.S. and China in part over access to the latter’s telecommunications services market.
Hours before the existing U.S.-Japan NTT procurement accord expired at midnight Sept. 30, the two countries shook on a deal that would extend and improve that agreement by providing greater access to technical information necessary to build equipment for NTT’s network and by making available more information to suppliers on NTT’s procurement plans for key equipment.
In addition, the revised procurement arrangement calls for extending coverage of the agreement to NTT’s new software subsidiary; convening U.S. and other foreign suppliers to reduce the number of unique standards used by NTT which disadvantage American equipment manufacturers and vendors from other countries; and applying principles of openness and non-discrimination to NTT’s procurement practices.
“I am pleased that we have agreed to extend and strengthen this important telecommunications agreement which ensures continued coverage of Japan’s largest purchaser of telecommunications equipment,” said Charlene Barshefsky, U.S. trade representative.
USTR said United States and other foreign suppliers sold more than $1.5 billion worth of products to NTT last year.
While Japan has made strides in opening up its cellular service market, the latest NTT agreement will offer potentially more opportunities for U.S. wireless vendors.
For years, the U.S. trade deficit with Japan was greater than with any other country. Now, China has surpassed Japan in that category.
Congress voted this summer to back President Clinton’s renewal of most-favored-nation trade status for China, but U.S. policy makers are withholding support of China’s admission to the World Trade Organization until the Asian giant takes further steps to open its markets.
Ameritech Corp. recently decided to drop plans to build cellular systems in China after running up against bureaucratic delay.
Even though the telecom service market is closed, China has relaxed its telecom equipment market enough to allow Motorola Inc. and Lucent Technologies Inc. to sell wireless goods. Overall, China’s telecom market represents at least a $50 billion trade opportunity for America and other trading nations. A hefty chunk of that export market is expected to be taken up by wireless projects.
Nevertheless, given its poor record on human rights and religious freedom, China has become a growing trade and foreign policy dilemma for the Clinton administration. Critics charge the administration created the problem because of its fixation on trade at any cost.
The White House’s constructive engagement policy, which de-links human rights from trade relations, has failed miserably. Clinton admits as much.
The problem is compounded by allegations being investigated by the FBI and Congress that China attempted, possibly with partial administration knowledge, to influence federal elections and U.S. policy through illegal campaign contributions to the 1996 Clinton-Gore campaign.
In that regard, the meeting in Washington later this month between Clinton and Chinese President Jiang Zemin could prove a key moment for U.S.-Sino relations.
