Mike Moore's speeches
Renato Ruggiero's speeches,
The following is
informal background for information purposes only. It should not be cited or quoted as an
official document of the WTO.
Over 40 developing countries
large and small from virtually every region of the world also took part as did six of the
Central and Eastern European economies in transition. The markets of the participants
accounted for more than 91 percent of global telecommunications revenues in 1995.
negotiations on market access for basic telecommunications had resulted in 34 offers
(covering 48 governments) by the time they were originally scheduled to end in April 1996.
Mid-November 1996 marked the first tangible signs of renewed progress in the negotiations
when the European Union, the United States and the Slovak Republic became the first to
formally submit revisions of the offers contained in the package achieved in April. In
January 1997 momentum began to build as seven more governments submitted revised offers
and six governments added completely new offers to the package of results. In February, 17
more new offers were submitted and another 22 governments submitted first-time revisions
of their April 1996 offers. This raised to 23 the total number of new offers submitted and
to 32 the total number of revisions (covering 46 governments) of the 34 offers tabled in
related to establishing a regulatory environment conducive to market entry were discussed
at length during the negotiations. Many participants suggested that regulatory disciplines
might be inscribed as additional commitments in schedules (an approach made possible by
GATS Article XVIII) as a way of safeguarding the value of the market access
commitments undertaken. Participants succeeded in elaborating a set of principles covering
matters such as competition safeguards, interconnection guarantees, transparent licensing
processes, and the independence of regulators in a commonly negotiated text called the
Reference Paper. They also agreed that each would use the text as a tool in deciding what
regulatory disciplines to undertake as additional commitments. By the February 1997
deadline, 63 of the 69 governments submitting schedules included commitments on regulatory
disciplines, with 57 of these committing to the Reference Paper in whole or with a few
modifications. This compares favourably with the April 1996 results, when 44 out of the 48
governments submitting offers included commitments on regulatory disciplines and only 31
of these inscribed the Reference Paper.
multilateral level, the results of the telecommunications negotiations are to be extended
to all WTO members on a non-discriminatory basis through m.f.n. treatment. However, the
legal basis for the negotiations made it possible for each WTO Member to decide
individually whether or not to file an m.f.n. exemption on a measure affecting trade in
basic telecommunications services. On 15 February, nine governments submitted m.f.n.
exemption lists to be annexed to the Protocol. The exemption by the United States relates
to one-way satellite transmission of DTH and DBS television services and digital audio
services. That of Brazil relates to the distribution of radio or television programming
directly to consumers. Argentina's exemption applies to the supply of fixed satellite
services by geostationary satellites. One by Turkey relates to two neighbouring countries,
with respect to fees for transit land connections and the usage of satellite ground
stations. Bangladesh, India, Pakistan, Sri Lanka, and Turkey listed exemptions to permit
the Government or the Government-run operator to apply differential measures, such as
accounting rates, in bilateral agreements with other operators or countries -- an issue
also addressed in the final Report on the Group. An exemption by Antigua and Barbuda
enables the Government to extend to nationals of other Caricom-Member countries treatment
equal to its own nationals. While m.f.n. exemptions can sometimes be required by legal
technicalities, a decision to file one can also depend on whether a participant is
satisfied with the quality of commitments made. Without an m.f.n. exemption, a Member must
treat the services or service suppliers of every other Member as favourably as those of
any other country, Member or not. But even if it files an exemption, a Member may only
apply it to unscheduled services or to grant special preferences over and above the market
access restrictions indicated in its schedule.
to which the schedules and m.f.n. exemption lists tabled in February will be annexed, is
open for acceptance until 30 November 1997. The Protocol and its annexed documents are
scheduled to formally enter into force on 1 January 1998. Once in force, the schedules on
basic telecommunication services will constitute part of the GATS schedules of services
commitments already in force since the Uruguay Round concluded in 1994. In a number of
schedules, a Member's commitments for particular services are to be "phased in".
For these, while the schedule will formally enter into force on the date of the Protocol
as a whole, the actual implementation date for such commitments will be on the date
specified in the schedule.
At the outset
of the negotiations, participants agreed to set aside national differences in 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
under negotiation were 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.
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 the extended negotiations. Nevertheless, a few
participants chose to include them in their offers. Examples include on-line data
processing, on-line data base storage and retrieval, electronic data interchange, e-mail
or voice mail) More commonly liberalized than basic services, value added services are
already included in 44 schedules (representing 55 governments) that are in force as a
result of the Uruguay Round and the accession of new WTO Members since the end of the
A set of
ministerial decisions related to services was adopted at the Marrakesh Ministerial Meeting
which closed the Uruguay Round in April 1994. Included in these was a decision to extend
negotiations on trade in basic telecommunications beyond the Uruguay Round. Ministers
hoped that through the extension more liberalization could be captured as the negotiations
could take into account some of the reforms under way in telecommunications regulatory
regimes and rapid advances in technology. The negotiations began in May 1994,
initially with the participation of 33 WTO Member governments, under the auspices of a
group called the Negotiating Group on Basic Telecommunications (NGBT). The Ministerial
Decision directed the negotiations to conclude by 30 April 1996. Participation in the NGBT
was voluntary and, by the end of April, 53 WTO Member governments had decided to
participate fully in the Group. Another 24 governments (including some in the process of
accession to the WTO) requested to participate with observer status. By April, the talks
had resulted in offers from 48 governments (contained in 34 offers), but some saw the
package as not yet sufficient to successfully complete the talks.
At a meeting
on 30 April, WTO Director-General Ruggiero said he wished to preserve the results achieved
so far in the negotiations. He suggested attaching the results to a Protocol and the
establishment of a one-month period early in 1997 during which participants could
re-examine their positions on market access and m.f.n. treatment and modify their
attachments to the Protocol. Participants accepted the Director-General's proposal in a
Decision adopted 30 April by the Council for Trade in Services. The Decision affirmed the
opportunity to negotiate further to try to secure improvements and established 15 February
1997 as the closing date. After April, a new body -- the Group on Basic Telecommunications
(GBT) -- was responsible for implementing the further extension of negotiations. This
Group agreed to modify the rules on participation in meetings so that all WTO Members had
a full voice in its activities and only those governments under accession to the WTO
participated, upon request, as observers. The talks resumed in July 1996 and then in the
autumn of 1996 participants met monthly and held numerous bilateral negotiations on their
market access offers. They also maintained informal contacts at the December 1996 WTO
Ministerial Meeting in Singapore and returned to Geneva on 15 January 1997 to prepare to
meet the February deadline.
The WTO and
By the time
of the signing of the Final Act in Marrakesh in April 1994, 125 countries were
participating in the Uruguay Round of Multilateral Trade Negotiations. In addition to
representing the biggest package of market access concessions ever negotiated, the Uruguay
Round created a new trading system. The deal also lead to the replacement of the GATT
Secretariat by the new World Trade Organization (WTO) with a strengthened mandate and a
streamlined dispute settlement system.
The WTO is
responsible for administering all the agreements concluded within the framework of the
Uruguay Round. It is the forum for all future trade negotiations, and administers the new
dispute settlement mechanism. In its structure the WTO consists of a Ministerial
Conference, mandated to meet once every two years, a General Council that meets more
frequently, a Dispute Settlement Body and three subsidiary Councils-- on services, goods
and intellectual property rights.
telecommunications sector in its broader sense includes both services and equipment (i.e.,
goods). From this perspective, several of the agreements which the WTO oversees are
relevant. On the equipment side, the GATT schedules of tariff concessions and developments
in Agreement on Technical Barriers to Trade (Standards) are important. Developments that
address both telecom goods and services are the expanded coverage of the Government
Procurement Code and the new rules on trade related aspects of intellectual property
rights. Then, there is the General Agreement on Trade in Services (GATS), which put trade
in telecommunications services, both basic and value-added, within the ambit of the new
multilateral trading system. All of these agreements taken together, and in particular the
GATS, have far-reaching implications for the telecommunications sector.
formally consists of 29 articles, 8 annexes, and 130 schedules of commitments (each WTO
Member must submit a schedule) on specific services or service sectors. The articles of
the GATS lay out the scope of the Agreement and the general obligations and disciplines to
be observed. They also define the specific commitments to be inscribed in schedules and
how to go about negotiating them. Finally, there are provisions for dispute settlement and
the establishment of the Council for Trade in Services.
Obligations and Disciplines
One of the
most important general obligations of the GATS is most-favoured-nation (m.f.n.) treatment.
M.f.n. treatment prohibits Members from discriminating among themselves, or in fact from
treating other members less favourably than any other country, member or not. M.f.n.
treatment is the cornerstone of multilateralism, without it the WTO would be little more
than an overseer of special bilateral and regional trade deals. Another principle,
transparency, requires governments to make public their laws, rules and regulations
affecting trade in services, so that service suppliers can know the rules under which they
can do business. It is a key element in promoting the stability and predictability of the
on general obligations and principles vary in character. M.f.n., for example, applies to
all services and all measures covered by the agreement. Some apply only to the sectors or
sub-sectors for which commitments have been taken in schedules, and still others define
the exceptions to the GATS which are permitted under specified circumstances. Finally,
some articles mandate further negotiations, e.g., the articles on government procurement,
subsidies and emergency safeguards. These negotiations are just now beginning.
general obligations of the GATS are of particular relevance to telecommunications. Article
VI on domestic regulation sets out some rules of fair play for regulations not directly
addressed by commitments entered in the schedules. Article VIII on monopolies and
exclusive service providers and Article IX on restrictive business practices are relevant
because of the prevalence of monopolies in this sector and, where competition has been
introduced, the frequent presence of telecom providers with a dominant market share and
the potential to take unfair advantage of their position.
of services commitments submitted by each member are considered an integral part of the
Agreement. This is the means by which they, like the GATT tariff schedules on goods, are
made legally binding commitments to provide specified levels of access to trade in each
Member's market. The schedules are the result of intensive negotiations undertaken during
the Round. Through successive rounds of negotiations, these commitments are to be
progressively expanded and liberalized.
contain each Member's commitments on market access and national treatment, and can also
contain additional commitments. Market access (Article XVI) is defined primarily in terms
of quantitative restrictions, but also includes some other forms of limitations such as
caps on foreign equity participation. National treatment (Article XVII) is defined as
treatment of foreign services or service suppliers that is no less favourable than that
granted to domestic services or suppliers. Additional commitments (Article XVIII), create
an open-ended possibility to negotiate commitments on measures affecting trade in services
that are not expressly captured by market access and national treatment. In the schedules,
Members may grant full market access and national treatment or they may enter any
limitations they will maintain. Whether full or limited access is granted, Members may not
take measures that reduce the level of access inscribed in their schedules.
Many of the
leading service sectors included in schedules are considered intensive users of
telecommunications services. The sectors most frequently listed in schedules were, in
order: tourism, financial services, and business services, followed closely by transport
and telecommunications. All schedules of industrialized countries contain commitments on
business services, communications, construction and engineering, distribution services,
financial services, tourism, and transport.
In the GATS
schedules already in force, 67 governments have made commitments on telecommunications
services (56 schedules since the EU Member States submit a single schedule). Commitments
were made by most countries representing major markets for telecommunications services.
However, most of the schedules (44 of them, covering 55 governments) listed mainly
value-added or enhanced telecommunications services, since basic telecommunications were
subject to the extended negotiations.
The Annex on
Most of the
annexes to the GATS concern particular service sectors -- such as air transport, financial
services, and telecommunications. One of the annexes permits individual members a one-off
chance to exempt certain measures from the m.f.n. obligation (these were inscribed by some
members in lists of m.f.n. exemptions which also form part of the Agreement).
The Annex is
composed of seven sections, but its core obligations are contained in a section on access
to and use of "public telecommunications transport networks and services"
(meaning essentially basic public telecommunications). It requires each Member to ensure
that all service suppliers seeking to take advantage of scheduled commitments are accorded
access to and use of public basic telecommunications, both networks and services, on
reasonable and non-discriminatory basis.
these obligations whether or not they have liberalized or scheduled commitments in the
basic telecommunications sector. This is because the Annex addresses access to these
services by users rather than the ability to enter markets to sell such services; the
latter is addressed in schedules of commitments. As such, the beneficiaries of the
disciplines in the Annex will be firms that supply any of the services included in a
Member's schedule of commitments; not only be value-added and competing basic
telecommunications suppliers, but banking or computer services firms, for example, that
wish to take advantage of market access commitments made by WTO Member. The annex
obligations strike a fragile balance between the needs of users for fair terms of access
and the needs of the regulators and public telecommunications operators to maintain a
system that works and that meets public service objectives.