Final countdown in talks to liberalise telecoms market

Date: 11/04/1996

By Fiona McHugh

NEGOTIATORS at the World Trade Organisation face a race against the clock when they resume talks in Geneva next week aimed at reaching an agreement on liberalising the world's telecommunications market.

With the deadline for an accord just three weeks away, the prevailing mood at the trade body, fuelled by Canada's decision to table an improved offer in the coming days, is one of cautious optimism.

“We do not expect everyone to agree to full liberalisation by the deadline, but we should have enough on the table by the end of the month to strike a deal,” said one EU diplomat.

The stakes could not be higher. “Most countries realise that it is now or never. We simply must meet the deadline,” insisted a US negotiator.

The expectation is that Toronto's move will prod other nations into making concessions. “We hope this will help bring the talks to a successful conclusion. The offer has been the subject of very serious cabinet discussions and I think it demonstrates our commitment to the liberalisation process,” said a Canadian official.

It is not yet clear, however, whether the offer will satisfy widespread demands that Canada relax its foreign investment regime and end Teleglobe's monopoly of most international traffic.

“Of course, we are delighted to hear that Canada has decided to upgrade its offer. But we do not yet know what it contains, so I am afraid we can not say whether it will be satisfactory,” commented an EU diplomat.

In any case, the EU is unlikely to improve its offer until other countries, notably Japan, concede some ground. So far, Japan has been slammed by both the EU and the US for being parsimonious. Of particular concern to them are Tokyo's foreign investment rules and its decision to postpone the break-up of NTT, the dominant domestic carrier.

But Japanese WTO officials now say they are willing to relax laws restricting foreign ownership of phone companies as part of a revamped deregulation package. “We are now preparing a new offer which should include less strict foreign ownership laws - but only if others do the same,” said one.

The US threw down the gauntlet last month by offering unrestricted international access to its newly deregulated telecoms market, but with the proviso that its generosity had to be matched by others.

Washington immediately put the EU under pressure to scrap foreign ownership rules in five of its member states, sparking a row between the bloc's liberalisers and its protectionists.

Spain, Belgium, France, Greece and Portugal, concerned that the EU was being short-changed at the talks, flatly refused to comply with US wishes, forcing Brussels to say it would lift restrictions only when others made equally generous concessions.

Trade Commissioner Sir Leon Brittan, visiting the US this week, will try to persuade American officials that the EU remains as committed as ever to advancing the talks.

The Canadian offer may help to flush out improved offers from the developing countries. Some, such as Venezuela, Hungary and the Czech Republic, have tabled quite ambitious liberalisation proposals, but many others, including India, Indonesia, Malaysia, South Africa and Thailand, have yet to make offers or have proposed tentative ones. Few developing countries have powerful telecoms companies, so they have less to gain from global liberalisation.

The fate of the talks may depend on whether they can, nonetheless, be persuaded to sign up to a wide-ranging deal.

Some 50 members, together accounting for about 90&percent; of the world's telecommunications traffic, are taking part in the talks. They have until the end of April to wrap up a global liberalisation deal.