WASHINGTON-The global telecommunications free trade pact goes into effect this week, following last week’s decision in Geneva that promises to open the floodgates to increased foreign capital and to wireless opportunities overseas.
The 69 signatories to the World Trade Organization accord-which originally was to go into force Jan. 1, but was delayed to give 20 countries more time to ratify it-comprise more than 90 percent of the world’s $675 billion telecom services.
“The agreement’s entry into force assures more open and competitive global markets and expanded opportunities for U.S. firms,” said Charlene Barshefsky, U.S. trade representative.
Barshefsky added that “U.S. consumers will also reap benefits as greater competition brings about lower prices and more advanced service availability in the months and years to come.”
Wireless phone startup companies, facing stiff competition from cellular carriers and huge expenses from license acquisition and system buildout, are turning increasingly to foreign investment.
“The commission will monitor developments in these countries closely, and … expects that our trading partners will act quickly to fulfill their commitments and not lose the benefits associated with a liberalized telecommunications sector,” said Bill Kennard, chairman of the Federal Communications Commission.
Last November, the FCC adopted new rules consistent with the WTO telecom pact.
As a result, foreign firms in countries that are part of the agreement now can own 100-percent interest in U.S. telecom carriers. Previously, foreign firms were restricted to a 25-percent stake in American telecom companies.
The European Union has threatened to file a complaint against the United States because new FCC rules can limit foreign telecom investments for trade, national security and other reasons.
Even with the Feb. 1 start date, 13 countries have yet to implement the WTO basic telecom agreement. Barshefsky said WTO members have agreed to give those particular parties until July 31 to make the necessary legal and procedural changes to do so.
At the same time, she noted that more countries are signing onto the free trade pact. Cyprus and Barbados, according to Barshefsky, committed to the agreement last month and Romania recently passed legislation to join the WTO agreement.
The telecom trade agreement was supposed to have been reached in April 1996, but disputes resulted in the pact finally winning endorsement one year ago this month.
