WASHINGTON-The World Trade Organization telecom pact could put the United States at a disadvantage with major trading partners and should be subject to legislation, some lawmakers said last week.
The accord, reached among 69 countries in Geneva last month and which becomes effective Jan. 1, allows unlimited foreign investment in U.S. common carriers and opens the door for American firms to expand overseas telecom service business. The agreement also calls for competition, fair rules and effective enforcement-all tenets of the 1996 Telecommunications Act.
Reed Hundt, chairman of the Federal Communications Commission, told the House telecommunications subcommittee last week the historic WTO agreement would not have been possible had Congress not passed the telecommunications reform bill last February.
Hundt said the telecom law sent a strong signal to the rest of the world of the United States’ desire for free trade and competition and gave the United States credibility and leverage after it broke off negotiations last April when some countries refused to improve their offers.
Several major countries, Japan, Canada and Mexico in particular, continue to keep their markets partially closed.
“There are notable underachievers in this agreement,” said Rep. Edward Markey (D-Mass.).
Markey said legislation is needed to update the communications act to reflect the WTO accord.
But U.S. Trade Representative Charlene Barshefsky said, “the administration’s firm view is that no implementing legislation is needed.”
Barshefsky and Hundt said the United States reserves the right under the WTO agreement to limit foreign investment by Canada, Japan, Mexico and others if they fail to remove remaining trade barriers or pose a national security risk.
But lawmakers were cautioned the global free-trade deal could fail to live up to expectations if signatories do not ratify the accord within each country and if there is not vigorous enforcement.
Rep. Ron Klink (D-Pa.), noting the failure of the North American Free Trade Agreement to deliver on the promise of new jobs, said the WTO agreement raised economic and national security issues. Rep. Anna Eshoo (D-Calif.) pressed Hundt repeatedly on whether he believed the WTO agreement had loopholes potentially detrimental to the United States. Hundt said he did not believe so, though he-unlike Barshefsky-supported Markey’s call for implementing legislation.
Barshefsky assured lawmakers that the International Maritime Satellite Organization and the International Telecommunications Satellite Organization and any affiliates of the two multinational consortia did not secure any competitive benefits from the WTO agreement.
Aside from the dispute over implementing legislation and other issues, the deal represents a huge opportunity for U.S. wireless carriers. International telecom services represent a $600 billion market. The global equipment sector is a $150 billion business. USTR predicts those figures will triple during the next 10 years.
Many countries-developed and developing alike-lack sophisticated telecommunications networks. It is said half the world’s population has never made a phone call. As such, wireless technology appears well positioned to leapfrog wireline technology and become a key component of the telecommunications infrastructure in many nations.
“It is … quite an achievement for the United States, which took a leadership role in these negotiations from their beginning almost three years ago to the exciting conclusion one month ago,” said Billy Tauzin (R-La.), chairman of the subcommittee. `But, the U.S. government’s efforts were understandable, given that U.S. companies, as the most competitive in the telecommunications sector, are in the best position to compete and prosper in newly opened markets.”
Rep. Thomas Bliley (R-Va.), chairman of the House Commerce Committee, raised questions about where the administration stood on fast-track trade authority and on the chances of China, Russia and Taiwan being accepted into the WTO.
