WASHINGTON-The near collapse of free trade telecommunication talks in Geneva last month has raised concerns in Congress, and could provide the spark for legislation next year to further open the U.S. market to foreign investors.
The House subcommittee on commerce, trade and hazardous materials last Thursday heard from government policymakers and industry representatives in the aftermath of World Trade Organization negotiations on basic telecommunications services that were supposed to end April 30, but have been extended to Feb. 15, 1997.
The United States, which said it was prepared to open its $215 billion telecommunications market of local, long-distance and international services, abruptly withdrew its offer the weekend before the April 30 deadline after American negotiators decided against opening their international and satellite markets because they were dissatisfied with offers made by other countries.
Though significant progress was made, it is unclear whether another 10 months of deliberations among nations will produce an agreement that can be implemented on Jan. 1, 1998.
“The United States intends to continue to be the world leader in opening markets,” said Jeffrey M. Lang, deputy U.S. trade representative in written testimony.
“At the same time,” he added, “we will insist that future market opening comes on a fair, reciprocal basis, especially among our peer countries in the industrialized world.”
While the U.S. limits foreign investment in wireless and wireline common carriers to 25 percent, the American telecommunications market is still relatively more open than those of many other nations.
Mike Oxley (R-Ohio), chairman of the House subcommittee that oversees international trade and one of Congress’ leading advocates of free trade, said the American position would be stronger if the domestic telecommunications market were more liberalized.
“To me, it undermines our credibility in these talks when we fail to address essentially a World War I vintage statute and to modernize, and then we go to Geneva and ask other countries to liberalize their telecommunications sector,” said Oxley to reporters prior to Thursday’s hearing.
A provision to relax foreign ownership restrictions on a reciprocal basis was dropped from the telecommunications reform bill before passage of the legislation in February after House and Senate conferees ceded to objections from Sen. Ernest Hollings (D-S.C.), whose support Republicans needed to pass the bill.
Hollings wanted a “snap-back” provision to block foreign access to the U.S. telecommunications market of any trading partner that erected new barriers to entry after opening its own.
Oxley said he opposes that tack, explaining that it scares off foreign investment in American companies, and “is certainly not the kind of signal we want to send to encourage foreign investment.”
“It will clearly be front and center on my agenda next year,” Oxley stated.
“America is slam-dunking the world in the information revolution, and this presents us with an unprecedented opportunity for economic growth and for exporting American ideas,” said Oxley.
