Hopes rise for WTO telecoms deal

Date: 25/04/1996

By Fiona McHugh

NEGOTIATORS at the World Trade Organisation are now cautiously optimistic that an agreement aimed at liberalising the 400-million-ecu a year global telecoms market will be reached by a self-imposed deadline of 30 April.

“We feel reasonably confident that a deal is within reach, but the final week will be crucial,” said an EU trade diplomat this week.

This was echoed by a US negotiator, who said: “There is no question of the deadline being shifted. I think most of the key partners are ready to concede ground to prevent the collapse of the talks.”

Trade chiefs from the four big economic powers emerged delighted from last weekend's meeting in Kobe, Japan, at which they discussed the telecommunications pact, saying substantial progress had been made and a deal was now in sight.

Trade Commissioner Sir Leon Brittan indicated at that meeting that the EU would be willing to relax restrictions on foreign ownership in Spain, Belgium, France, Greece and Portugal - a major sticking point for the Americans.

Diplomats in Geneva say this could mean either the complete abolition of bans on foreign investment, or the granting of permission to invest through companies based in Europe.

The US, for its part, seems ready to grant European telecommunications firms limited access to the American market via satellite and underwater cables, although it has not yet revealed exactly how generous it is willing to be.

The EU is said to be happy with Tokyo's new improved offer, which among other things eases foreign investment rules. But the decision not to break up Japan's dominant domestic carrier, NTT, may still cause problems for the US.

A number of other hurdles will have to be cleared before a final victory can be declared at the fledgling trade organisation.

Canada, for example, which has so far failed to satisfy widespread demands for a relaxation of its foreign ownership regime, still has to convince the Union of its commitment to the liberalisation process. “Canada's restrictions are a major problem for us,” said an EU trade diplomat.

Meanwhile, the US remains concerned that the competition safeguards being put in place will not go far enough.

Washington threw down the gauntlet at the talks earlier this year, offering its partners unrestricted access to its newly-deregulated telecoms market, but only if they agreed to do the same.

That immediately sparked a row between the Union's liberalisers and its protectionists, with the latter accusing the former of selling EU phone companies short.

After heated discussions, Spain, Belgium, France, Greece and Portugal agreed to lift their restrictions, but only if they could squeeze comparable concessions out of the Union's partners. That remains the EU's official position in the run-up to the deadline.

The hope is that if the four main trading powers manage to reach an informal agreement this week, developing countries will be moved to upgrade their offers before the end of the month. Some of these, such as Venezuela, Hungary and the Czech Republic, have tabled quite ambitious liberalisation proposals.

But many, including India, Indonesia, Malaysia, South Africa and Thailand, have yet to make offers, or have proposed timid ones.