WASHINGTON DC– U.S. Trade Representative Susan C. Schwab today announced the results of the 2007 annual review of the operation and effectiveness of telecommunications trade agreements under Section 1377 of the Omnibus Trade and Competitiveness Act of 1988 (“1377 Review”). The 1377 Review identifies barriers facing U.S. telecommunications service and equipment suppliers, evaluates progress towards resolving ongoing problems, and lays out the specific telecommunications-related issues on which USTR will focus its efforts this year.

“Ensuring that our trading partners comply with their telecommunications trade commitments is fundamental to helping U.S. telecommunications operators and equipment manufacturers compete effectively abroad,” said Ambassador Schwab. “Market barriers impede our efforts to promote vibrant competitive telecommunications markets around the world. Removing these barriers and allowing greater market access in this sector will allow consumers around the world to communicate with friends or business colleagues faster, with a higher quality, and for less money. This year’s 1377 Review identifies practices that interfere with these objectives, and we will work to address these impediments throughout this year.”

This year’s 1377 Review focuses on country-specific concerns, as well as more general issues of concern. Those countries and issues where specific concerns arise include: (1) Egypt with respect to ensuring an open licensing regime for new operators and the public availability of Telecom Egypt’s interconnection arrangements; (2) Thailand with respect to submitting a revised GATS schedule to bind its recent market-liberalizing telecom reforms which it has so far failed to do; (3) Jamaica with respect to its universal service program that disproportionately applies to U.S. operators and raises questions as to its transparency; (4) Mexico with respect to ensuring cost-based interconnection rates, as well as providing market access for telecommunications equipment tested by U.S. testing laboratories; and; (5) Guatemala with respect to delays in ensuring interconnection between carriers.

This year’s 1377 Review also identified general issues of concern in several countries, including: (1) barriers to the provision of satellite capacity; (2) barriers to the provision of Voice over Internet Protocol (VoIP) services; (3) limitations on access to and use of public telecommunications services (including leased lines); and (4) issues related to regulatory independence, transparency, and excessive market entry requirements.

In addition to the problems identified in this year’s 1377 Review, USTR also marked significant progress on issues identified in past years’ reviews in several key markets, including: (1) Australia, which completed the privatization of its dominant operator; and (2) India, which took steps to enhance foreign direct investment in its market and address problems related to competitive access to submarine cables as well as continued its efforts to phase out its access deficit charge.

BACKGROUND

USTR will continue its efforts to open markets and expand trade opportunities in telecommunications through a range of activities including: engaging bilaterally and multilaterally with trading partners to ensure they fully implement their existing commitments; negotiating and adopting strong disciplines to eliminate or prevent the emergence of trade distorting barriers; and where warranted, initiating dispute settlement action.

The Telecommunications Annex of the General Agreement on Trade in Services (GATS) establishes an obligation to ensure reasonable and non-discriminatory access to and use of the public telecommunications network. The Annex is often complemented by additional commitments by WTO Members in their GATS services schedules to adhere to the WTO Reference Paper, which establishes pro-competitive rules in the telecommunications sector to ensure, among other things, interconnection with dominant carriers at cost-oriented rates and the impartiality and transparency of regulatory processes. To bolster the obligations under the WTO commitments, USTR has negotiated strong telecommunications provisions in U.S. free trade agreements (FTAs). These FTA provisions are designed to further promote effective market access for U.S. telecommunications providers. To the extent that these agreements are in force, USTR will continue to use them to assist in opening markets to give U.S. companies the ability to supply new and innovative services abroad.

The full results of the 2007 Section 1377 Review, click here

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