Mike Moore's speeches
Renato Ruggiero's speeches,
negotiations represent an effort to go beyond what was negotiated in the Uruguay Round
schedules of commitments and achieve more far-reaching multilateral progress towards
opening markets for basic telecommunications services.
To date, 19
draft offers (covering 33 governments) have been submitted.(2) These are
initial offers, that is they are the starting positions of negotiators. Most
participants have reflected their current regimes, or the status quo, in these initial
offers. They are also understood to be conditional offers. That means they may
be subject to revision, either improvement or subtraction, or even total withdrawal,
depending on the quality of offers made by other participants. Finally, they will be
converted to legally bound schedules of commitments reflecting the results of the
bilateral sessions and the overall outcome of the negotiations.
The coverage of the
negotiations are comprehensive in scope, with no basic telecommunications excluded a
priori. To maintain this broad scope and because of the rate with which technology was
offering new services in the market, negotiators chose not to develop a definitive listing
of what constitutes basic telecommunications, but agreed that the negotiations will cover
any and all telecommunications services that involve simple transmission (i.e. without
adding value). Such services can include international as well as domestic voice
telephony, data transmission, telex, telegraph, facsimile, private leased circuits,
satellite services, mobile services and video transport services.
also agreed that basic telecommunications services provided on an infrastructure-basis, as
well as those provided through resale, shall both fall within the scope of negotiations.
As a result, in addition to negotiating market access commitments on the cross-border
supply of basic telecommunications, negotiators are able to negotiate market access
commitments on commercial presence relating to the ability of foreign firms to own and
operate telecommunications networks and infrastructure.
services are to be distinguished from value-added or enhanced services -- that is services
carried over public telecommunications transport networks which usually employ computer
processing applications, many of which are subject to the Uruguay Round commitments
already in schedules, and are not included under the purview of the extended negotiations.
These include electronic mail, voice mail, on-line information and database retrieval,
data processing and electronic data interchange.
negotiations in the Uruguay Round
Round Agreement on Trade in Services (GATS), including its schedules of commitments and
sectoral annexes, has already established the framework of rules, rights and obligations
for all WTO Members. The schedules, containing market access and national treatment
commitments on specific services, are contractual obligations on Members to guarantee
specified conditions for foreign service suppliers. One of the annexes permits temporary
exemption from the most-favoured-nation (mfn) rule (Article II of GATS) for measures
specified by Members -- in other words, it allows discrimination concerning foreign
services suppliers. In general, this provision could be used only at the conclusion of the
annex, which deals specifically with the telecommunications sector, guarantees that
suppliers of services included in schedules will have fair and non-discriminatory access
to public telecommunications networks and services they need to do business.
Round results in the telecommunications sector included 48 schedules of commitments
(counting the EC and its member states as one), most of which were limited to value-added
telecommunications; 22 governments included some commitments on basic telecommunications
in their final schedules, but the extent of these was narrow. A few schedules listed a
commitment on a single basic telecommunications sub-sector, such as facsimile or data
transmission services. Included in these were a few commitments on voice telephone
services, but limited in almost all instances to mobile or cellular telephony.
of commitments reflected the fact that, in the closing stages of the Uruguay Round, the
participating governments recognized that in the basic telecommunications services sector
there were particularly rapid advances underway in regulatory regimes and technology which
were leading to greater potential for opening telecommunications markets to competitive
supply. Governments also recognized that, given the importance of basic telecommunications
not only as a distinct sector of economic activity in itself but also as an important
facilitator for other economic activity, this sector should be the subject of extended
negotiations. At the end of the Round, therefore, many governments, with the extended
negotiations in mind, withdrew offers they had made on basic telecommunications.
The legal basis for the
Round results included the Decision on Negotiations on Basic Telecommunications and the
Annex on Negotiations on Basic Telecommunications.
permitted WTO Members to enter into the negotiations 0on a voluntary basis with a
view to the progressive liberalization of trade, and it established the Negotiating
Group on Basic Telecommunications (NGBT) to oversee the negotiations. It also contains a
standstill commitment, which came into effect in April 1994, under which participants are
expected not to apply any measure affecting trade in basic telecommunications in
such a manner as would improve its negotiating position and leverage, but with the
proviso that this commitment would not rule out the pursuit of commercial and
governmental arrangements on basic telecommunications services while the
negotiations were under way.
The role of
the Annex on Negotiations on Basic Telecommunications is to address a legal technicality
related to the negotiations. It provides that mfn treatment, in Article II of the GATS,
and the Annex permitting mfn exemptions (see above) would be suspended for basic
telecommunications (except those which are now listed in Schedules) until the
implementation of the results of the negotiations, or should the negotiations not succeed,
when the NGBT issues its final report. At that time, the commitments must be applied on a
non-discriminatory (mfn) basis, unless a Member has decided to list an exemption from mfn
treatment for any measures (such as domestic reciprocity provisions) related to basic
virtue of this Annex it will be legally possible for Members to list Article II exemptions
that were not listed at the conclusion of the Uruguay Round. If the Annex did not exist,
such delayed mfn exemption requests could only be made under the waiver provisions of the
opportunity to reserve their options on whether to take an mfn exemption on basic
telecommunications, participants were able to agree to withdraw, or in some cases to
refrain from listing, mfn exemptions on basic services as part of the Uruguay Round
results. However, for commitments on basic telecommunications which are already included
in schedules, Article II (mfn) and the exemptions Annex apply.
Technical aspects of
role of the meetings has been to discuss and clarify a number of technical issues in a
multilateral setting. Understanding such issues properly is essential for consistent and
accurate representation of commitments in schedules.
discussions on schedules have focused on an informal "model schedule" on basic
telecommunications, which negotiators designed to serve as a guide to help them inscribe
their commitments clearly and accurately. The model schedule is based on a standardized
format for schedules defined during the Uruguay Round, but includes certain modifications
to help describe more precisely the telecommunications service being committed, and
illustrations of schedule entries related to market access, national treatment and
additional commitments that may be particularly relevant to telecommunications. Since the
model schedule left certain issues unresolved, continuing discussion in the NGBT has
focused on some of the following issues:
- how the
GATS may apply to measures related to international agreements between operators,
particularly the accounting rates system. Proposals that participants address these issues
by scheduling market access commitments on termination services have not so
far been found acceptable. Other proposals involve extending a greater degree of
transparency to the accounting rates system, by such means as publishing the accounting
rates that result from operator-to-operator agreements.
- whether any
sector-specific clarifications of modes of delivery are needed. In this context,
participants have generally arrived at an understanding that the cross-border and possibly
the consumption abroad modes of supply cover not only traditional international
operator-to-operator traffic but also call back and calling card services, such that, if a
Member restricts such services, relevant limitations must be entered in the schedule.
- whether or
not to schedule non-discriminatory limitations on the number of service suppliers as
limitations on market access when these are established strictly for technical reasons,
i.e., the availability of radio spectrum or frequencies. At present, some participants are
indicating frequency availability in their initial offers as a factor limiting the number
of service suppliers without limiting the possibility for market access to a specific
number of operators, while others indicate binding to specified numbers of market
issues, which are regarded by some as key determinants of market access, one objective in
the discussion has been to try and arrive at an understanding of the extent to which some
concerns might already be adequately addressed by obligations of the GATS, in particular
the obligations of Article VI on domestic regulation and the Annex on Telecommunications.
Some of these regulatory issues are briefly summarized below:
Interconnection. This refers to the terms and conditions of interconnection between
telecom service suppliers for access to one another's networks or circuits. How
interconnection occurs -- whether it is non-discriminatory and cost-based, allowing new
entrants to compete on the same terms as each other and as the incumbent supplier -- can
clearly influence market access and effective competition. The specification of terms and
conditions of interconnection is as relevant in respect of dominant private sector
suppliers as it is in the case of state-owned suppliers.
Competition safeguards. These are safeguards to prevent dominant network operators
from abusing market power through anti-competitive behaviour. Some of the issues that have
been raised under this rubric include rules against cross-subsidization of competing
services from monopoly service revenues, and guarantees of access to information regarding
terms and conditions of interconnection and technical standards. General provisions
relating to transparency are also considered important by some participants.
Licensing. The issue that has been raised here is that criteria for licensing service
suppliers should be timely, objective and transparent and no more burdensome than
necessary. Licensing criteria and procedures should not in themselves constitute barriers
to market entry.
Independence of regulatory bodies. Under monopoly arrangements, regulatory functions
often fall under the responsibility of the supplier of services. It has been suggested
that the performance of regulatory functions should be independent of the supply of the
Standards and type approval. This has to do with the technical specifications relating
to infrastructure and equipment, and the manner in which standards are determined. The
concern is to ensure that neither the substance of standards nor procedures relating to
their determination and adoption should act as entry barriers.
of way and planning. New market entrants may wish to supply services either by
interconnecting to existing networks or by establishing independent infrastructure. It has
been suggested that a commitment to permit the development of independent infrastructure
could be meaningless if rights of way for the construction of such infrastructure were
Universal/public service. A common public policy objective is to ensure that
telecommunication services are available to the public at large, regardless of commercial
viability. The concern in the negotiations is that universal service obligations are
addressed in an equitable manner and do not become an impediment to competition.
and accounting rates. The relationship between costs and prices, and the way in which
charges (including international accounting rates) are set for the transmission of
telecommunications traffic, are considered vital elements of market access. But views
differ as to how far GATS obligations should go in this area. The more competitive the
market, the less concern there will be about regulatory authority over pricing -- the
market would decide. Where a dominant supplier is operating, a question is whether GATS
obligations should be established for cost-oriented and non-discriminatory pricing.
Australia, Barbados, Brazil, Canada, Chile, Cuba, Cyprus, Czech Republic, Dominican
Republic, Ecuador, Egypt, the European Communities and their Member States (Austria,
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
Netherlands, Portugal, Spain, Sweden, United Kingdom), Hong Kong, Hungary, Iceland, India,
Israel, Japan, Korea, Mauritius, Mexico, Morocco, New Zealand, Norway, the Philippines,
Poland, Singapore, Slovak Republic, Switzerland, Tunisia, Turkey, the United States and
Canada, Chile, Czech Republic, European Union, Hong Kong, Hungary, Japan, Korea, Mexico,
New Zealand, Norway, Philippines, Singapore, Slovak Republic, Switzerland, Turkey, the
United States and Venezuela.