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17 February 1997

Ruggiero congratulates governments on landmark telecommunications agreement

"This deal goes well beyond trade and economics"

Mr Renato Ruggiero, Director-General of the WTO, congratulated member governments for their determination and foresight in bringing the negotiations on basic telecommunications services to a successful conclusion.

Sixty-nine governments made multilateral commitments in a market that is worth well over half a trillion dollars per year, and these countries account for more than 90 per cent of telecoms revenue worldwide.

"I want to congratulate governments for their determination and foresight in bringing this negotiation to a successful conclusion. Not all the decisions have been easy. But in the end, member governments have put their faith in the multilateral process of the WTO, and the WTO has delivered.

"This agreement promotes liberalization, and it enhances certainty, security and predictability through a clear set of rules. This is particularly valuable at a time when rapid growth and technological development are changing the face of the telecoms industry.

"The telecoms deal will contribute to lower costs for consumers, and the price reductions will be very significant. This is good news for firms, which in the aggregate spend more on telecommunications services than they do on oil. It is also good news for families that in today's world are so often separated by physical distance.

"It is difficult to be very precise in these matters, but telecoms liberalization could mean global income gains of some one trillion dollars over the next decade or so. That represents around 4 per cent of world GDP at today's prices.

"Lots of other benefits flow from greater competition in telecoms markets: people and nations can communicate more easily and understand one another better; consumers enjoy more choice and better quality; modernization and investment are enhanced worldwide; and more jobs are created.

"It is in recognition of these benefits that so many governments have joined together to make this negotiation a success. We have seen very different countries, at very different levels of development engaged in this endeavour, sitting on the same side of the table and pursuing the same objectives.

"Perhaps most importantly of all from a longer-term perspective, this deal goes well beyond trade and economics. It makes access to knowledge easier. It gives nations large and small, rich and poor, better opportunities to prepare for the challenges of the twenty-first century. Information and knowledge, after all, are the raw material of growth and development in our globalized world."


Some salient features

On 15 February 1997, 55 schedules See footnote 1 of commitments representing 69 WTO member governments had been agreed to. These schedules are annexed to the Fourth Protocol to the General Agreement on Trade in Services which will remain open for acceptance until 30 November 1997. The commitments will enter into force on 1 January 1998.

At the outset of the negotiations, governments agreed to set aside national differences on how basic telecommunications might be defined domestically and to negotiate on all telecommunications services both public and private that involve end-to-end transmission of customer supplied information (e.g. simply the relay of voice or data from sender to receiver. They also agreed that basic telecommunications services provided over network infrastructure, as well as those provided through resale (over private leased circuits), would both fall within the scope of commitments. As a result, market access commitments will cover not only cross-border supply of telecommunications but also services provided through the establishment of foreign firms, or commercial presence, including the ability to own and operate independent telecom network infrastructure. Examples of the services covered by this agreement include voice telephony, data transmission, telex, telegraph, facsimile, private leased circuit services (i.e. the sale or lease of transmission capacity), fixed and mobile satellite systems and services, cellular telephony, mobile data services, paging, and personal communications systems.

Value-added services (or telecommunications for which suppliers "add value" to the customer's information by enhancing its form or content or by providing for its storage and retrieval) were not formally part of these negotiations. Examples include on-line data processing, on-line data base storage and retrieval, electronic data interchange, e-mail or voice mail. Value-added services are already included in 44 schedules (representing 55 governments) that are in force as a result of the Uruguay Round.

The results of these negotiations are to be extended to all WTO members on a non-discriminatory basis through the "most-favoured-nation" (m.f.n.) principle. However, the legal basis for these negotiations made it possible for each government to decide, at the end of the negotiations, whether or not to file an m.f.n. exemption on a measure affecting trade in basic telecommunications services. At the end of the negotiations on 15 February 1997, 9 governments See footnote 2 filed lists of m.f.n. exemptions.

Footnote: 1Antigua & Barbuda, Argentina, Australia, Bangladesh, Belize, Bolivia, Brazil, Brunei Darussalam, Bulgaria, Canada, Chile, Colombia, C˘te d'Ivoire, Czech Republic, Dominica, Dominican Republic, Ecuador, El Salvador, EC & its member states, Ghana, Grenada, Guatemala, Hong Kong, Hungary, Iceland, India, Indonesia, Israel, Jamaica, Japan, Korea, Malaysia, Mauritius, Mexico, Morocco, New Zealand, Norway, Pakistan, Papua New Guinea, Peru, Philippines, Poland, Romania, Senegal, Singapore, Sri Lanka, Switzerland, Slovak Republic, South Africa, Thailand, Trinidad & Tobago, Tunisia, Turkey, United States and Venezuela.

Footnote: 2Antigua & Barbuda, Argentina, Bangladesh, Brazil, India, Pakistan, Sri Lanka, Turkey, and United States.