Mr. Chairman,

1. May I begin by welcoming on behalf of the WTO Secretariat, all of the very distinguished people who have been kind enough to join us today. In particular I want to thank all those who have agreed to participate in the two panels and to give us the benefit of their experience as regulators. Several of them are old friends. I hope it will not be taken amiss if I say a special word of welcome to one very old friend, B.K. Zutshi who is very well known to many people in this room as one of the most influential and powerful negotiators of the Services Agreement itself, and who is therefore more responsible than most for the fact that this meeting is taking place at all.

2. In the original U.S. proposal which served as the basis for agreement on this meeting, it was suggested that the Secretariat might provide a general background or overview of the evolution of the GATS regulatory undertakings in relation to Telecoms. I cannot do justice to the subject in a very few minutes, but I will make one or two key points.

3. When we think about the regulation of Telecoms, what immediately comes to mind is the Annex on Telecommunications and the Reference Paper on regulatory principles which is now attached to more than 60 schedules of commitments. But it is worth remembering that the point of departure for both of these was the obligations already embodied in the framework of the GATS itself: the Telecoms negotiations were in some ways unique, but they are firmly embedded in the General Agreement.

4. What the Telecom's negotiators did, both in the Annex on Telecommunications, which became an integral part of the GATS text of 1994, and in the subsequent elaboration of the principles found in the Reference Paper, was to clarify and amplify some of the basic principles of the GATS, in a way that goes far beyond what has been achieved so far in any other sector. In fact, some have since suggested that the reference paper approach might be a possible model for work in other sectors; this was considered in the context of accountancy services, for example.

5. When telecommunications officials from capitals first joined their WTO delegations in Geneva in 1990 for meetings of the telecommunications working group of the Uruguay Round, they were invited to consider the existing provisions of what was then a draft of the GATS. Their mandate was to suggest whether or not there was a need for elaboration or adjustment in view of the particular characteristics of the sector. What emerged fairly soon in these discussions were proposals that focussed on the GATS provisions in four areas:

(a) transparency, or the publication of all government measures relevant to the Agreement (Article III);

(b) monopolies and exclusive suppliers (Article VIII) - which requires Members to ensure that such suppliers in their jurisdiction do not behave in a way that is inconsistent with the principle of non-discrimination -- that is most-favoured-nation treatment -- or inconsistent with scheduled commitments;

(c) the related, but weaker, provision on “business practices” (Article IX) -- which calls on governments to consult if firms without monopoly or exclusive privileges are thought to be engaging in practices that restrain competition; and

(d) domestic regulation (Article VI) which establishes the basic principles of reasonableness, transparency, objectivity, and impartiality in respect to domestic measures, as well as the important concept that regulatory requirements should be no more burdensome than necessary.

6. From the outset it became clear that among telecom experts pondering the new services trade principles, there was agreement at all about the paramount importance of access to telecommunications -- that is, of ensuring that service suppliers needing Telecoms services to do their work should have fair and reasonable access to them, so that commitments to allow foreign supply of services should not be negated by denial of an essential tool. Since most national telecommunications companies were still monopolised, there was an obvious need for such a discipline. Negotiators felt while the GATS provisions on monopolies might help ensure access to reserved services, that the provisions on anti-competitive practices would be insufficient during a period of change and transition in the sector.

7. The essential purpose of the Annex on Telecommunications which, in its opening phrases, recognizes that telecommunications is not only a service sector in itself, but also “the underlying transport means for other economic activities”, is to guarantee fair access to and use of public telecommunications networks and services for all suppliers of scheduled services. Since it had already become clear that the days of monopoly suppliers were numbered, but that major and dominant suppliers would continue to exist, the Annex requires governments to ensure access not only to networks and services of monopoly operators but to those of all operators with a “public service” mandate.

8. The theme of access carries over very significantly into the principles of the Reference Paper -- this time, in its particular emphasis on obligations concerning interconnection. There could be no greater anti-competitive force than the denial to new market entrants of access, on reasonable terms, to the essential communications infrastructure under the control of an incumbent competitor. The Telecom Annex was considered not to be strong enough, or explicit enough, to ensure access for foreign Telecoms companies seeking to provide services in direct competition with dominant national incumbents.

9. The principles in the Reference Paper dealing with the maintenance of competition safeguards more generally are also closely linked to the idea of ensuring access. But here, there emerges a second main theme that telecom negotiators sought to emphasize in Geneva. The importance of curbing the entrenched market power of dominant operators -- usually the former monopolies. They would be capable of behaving in a manner that might stall or even reverse the process of deregulation that governments were undertaking. Telecom experts drove the point home to trade negotiators, that competition safeguards in telecommunications would be critical not only to ensuring the fulfilment of GATS commitments and objectives but also to reaping the anticipated benefits of telecom reform for consumers and the economy at large.

10. As a result, GATS obligations and commitments on telecommunications are the first, within the multilateral trading system as a whole, to establish standards for competition policies. It is significant that they apply to the potential anti-competitive practices of privately-owned firms operating in a competitive environment.

11. There may be much left to do, particularly in expanding market-access commitments, but one has to say that by any standard the Telecoms negotiators did a very good job. We owe a great deal to them.