WASHINGTON-As prospects grow that the Jan. 1 start date of the global telecom free trade pact will be delayed, the United States is coming under fire by the European Union for the Federal Communications Commission’s implementation of the trade agreement.
Fifty of the 69 signatories to the World Trade Organization telecom pact, including the United States, have implemented the accord in their respective countries.
Because the 19 other countries to the agreement did not implement WTO telecom rules by Dec. 1, the United States and other signatories that have done so have the option of pushing back the effective date.
That option is now alive. A clearer picture will emerge later this month after trading partners complete their latest round of talks, according to U.S. trade representative spokeswoman Christine Wilkas.
“We are working with our trading partners on a number of concerns, including the shortened period given to national governments for ratifying the [WTO] protocol,” said the USTR official.
The reason some countries have yet to integrate the WTO telecom agreement into their domestic regulations is tied to the tight timeline they had after the trade accord was reached last February.
Originally, the WTO basic telecom services agreement was to be completed by April 1996 but the date was extended when the United States walked away from the bargaining table out of frustration with the lack of acceptable offers from various countries.
While the WTO telecom snag is expected to be eventually worked out, opening the $600 billion international telecom market to robust wireless trade, the real problems may occur once that happens.
China, the world’s largest and potentially most lucrative emerging market for wireless products and services, is not a party to the WTO and likely will be locked out until Beijing loosens its tight grip on the telecom services sector and improves its human rights record.
The EU is making noises of filing complaints with the WTO against the FCC for allegedly erecting trade barriers to foreign entry.
In particular, the EU is upset with a “public interest test” in FCC rules that lets the FCC, the U.S. trade representative, the State Department and the Pentagon thwart foreign access to the American telecom market on competitive, trade or national security grounds.
“We reserve the right to take WTO action if the U.S. does not meet its obligations (under the agreement),” EU spokesman Nigel Gardiner told Reuters.
Gardiner said the EU hopes the “public interest test,” which European countries say is vague and provides too much leeway to block foreign entry into America’s lucrative telecom market, will be changed before the WTO agreement goes into effect.
In a related matter, the EU has written U.S. trade representative Charlene Barshefsky to complain about an FCC ruling to require London-based ICO Global Communications to pay $2 billion to relocate incumbent licensees at 2 GHz.
The EU said the relocation plan, which is modeled on the approached used to clear the 2 GHz band for personal communications services in the United States, is a barrier to entry and could trigger protectionist retaliation against U.S. firms around the world.
The FCC said relocation costs will have to be borne by all new occupants of 2 GHz spectrum, not just ICO.
The FCC, responding to EU criticism, accused the EU of contributing to a possible delay in putting the WTO telecom pact into force, yet said it remains optimistic. Spain, Belgium and Portugal are three of the countries that did not meet the Dec. 1 deadline for implementing the WTO telecom agreement.
Elsewhere, the United States and a group of its trading partners reportedly are close to adding products they want included in the WTO Information Technology Agreement. That accord will eliminate tariffs on telecom and information technology equipment by 2000. So far, 180 products are covered by the ITA.
