Japanese telecom leaders suggest they will lift some foreign investment restrictions in cellular if they can get greater access to Western markets in return.
Fifty-one countries are negotiating trade rules for their telecommunication businesses at the World Trade Organization meeting in Geneva. It is scheduled to conclude April 30.
The WTO’s goal is to reach high-level commitments “from a critical mass of key countries” that will let manufacturers and investors compete for business opportunities worldwide.
The United States limits foreign investment in wireless common carriers to 25 percent, according to the Federal Communications Commission. Japan has international investment limitations as well, particularly through Nippon Telegraph & Telephone companies.
Washington responded to Japan’s proposal by suggesting foreign investment be allowed in U.S. telecom through U.S. subsidiaries of foreign firms, according to a government report.
Some progress has transpired through the 1994 cellular phone agreement between the United States and Japan, which has opened the Japanese cellular phone market in the Tokyo-Nagoya corridor, according to a WTO 1995 annual report. Subscribers to the North American Total Access Communications system grew from 22,000 in 1994 to 600,000 at the end of 1995, the report states.
Last summer, U.S. trade representatives reviewed the progress of trade in light of the 1994 U.S.-Japan Public Sector Procurement Agreement on Telecommunications Products and Services. While the United States has seen a decline in sole-source bids, there has been little improvement in foreign market share, the government reports.
Congress, as well as U.S. Trade Representative Mickey Kantor, has expressed a willingness to relax U.S. foreign investment restrictions under the right circumstances. Such a provision was included in drafts of the 1995 telecommunications reform bill, but it was dropped after the House and Senate couldn’t agree on the matter.
The European Union also has been pushing Asia for the relaxation of investment restrictions. However, while many EU nations are opening their wireless markets to new licensees, most countries allow only 25 percent foreign ownership.
EU member states are not required to liberalize fully until Jan. 1, 1998; countries such as Greece and Ireland have asked for even more time.
“We all share the same objective and some countries have said they will try and do better. But time is now very short,” said Sir Leon Brittan, EU trade commissioner.
When the Geneva-based WTO was established on Jan. 1, 1995, its top goals were to loosen trade restrictions in telecommunications worldwide, as well as liberate trade in financial services and maritime transportation. Talks last year on financial services and sea transport were unsuccessful, according to international news reports. Hence, sources involved in current talks say there is pressure on the WTO to produce some agreements this time around.
