USCIB knocks Mexico, China for telecom trade barriers

16 January 2004 New York, NY Lightwave -- The United States Council for International Business (USCIB) charged that what it called "Mexico's failure to open its telecommunications market to foreign competition" is a top concern for U.S. firms. A paper issued by the group also labeled China, France, Germany, and India as failing to comply with their telecom obligations under the World Trade Organization.

16 January 2004 New York, NY Lightwave -- The United States Council for International Business (USCIB) charged that what it called "Mexico's failure to open its telecommunications market to foreign competition" is a top concern for U.S. firms. A paper issued by the group also labeled China, France, Germany, and India as failing to comply with their telecom obligations under the World Trade Organization.

Originally founded in 1945 to promote free trade and help represent business in the newly formed United Nations, the USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade. Its membership includes some 300 U.S. companies, professional services firms, and associations whose combined annual revenues exceed $3 trillion.

In comments to the U.S. Trade Representative's office on the operation and effectiveness of U.S. telecommunications trade agreements (a process mandated by Section 1377 of the 1988 Trade Act), USCIB President Thomas Niles commended the U.S. for its efforts to bring Mexico into compliance with international trade rules, including the 2002 complaint that is presently before a WTO tribunal. But more needs to be done, he said.

"Major problems concerning Mexico's failure to allow fully open markets in domestic services also must be addressed," wrote Niles, "as well as the lack of an effective and independent regulator."

Mexico's telecommunications market is worth an estimated $14 billion annually and the country constitutes the second largest international route for U.S. calls, the USCIB claims.

The USCIB said it provided guidance to U.S. negotiators on objectives for ongoing WTO talks on liberalization of trade in services, with the goal of improving access for American providers of telecommunications and value-added services, as well as computer and related services. It also advises U.S. negotiators on key bilateral initiatives in these areas.

On China, USCIB said it recognized and appreciated the positive steps the country had taken to implement its WTO commitments. However, China's "overly narrow interpretation of market access, coupled with its lack of an independent regulator, harms U.S. companies and contravenes China's WTO commitments," the group alleges.

"We are especially concerned by China's unreasonably high capitalization requirements for basic services, which will greatly limit market access," wrote Niles.

The USCIB paper said that several members of the European Union (EU) had failed to implement the a new EU framework on telecom liberalization in 2003, and that warnings from the European Commission to member states were not being taken seriously.

France and Germany were singled out among EU members for imposing multiple barriers to U.S. firms. "The governments of Germany and France maintain significant ownership in their respective incumbents, and therefore have an incentive to delay transposition of the new EU regulations as long as possible," the USCIB statement said.

The USCIB emphasized it belief in the importance of strong, effective, and independent telecom regulatory authorities, with powers necessary to ensure compliance with their decisions. In all markets, such regulatory authorities would enhance compliance with trade commitments and minimize barriers to foreign participation, it said.

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