WASHINGTON-The Commerce Department, amid administration warnings that a return to U.S.
protectionism would hurt U.S. firms and exacerbate global financial troubles, last week said commercial wireless
carriers “constitute a thriving industry sector in the United States that has enormous growth potential well into the
next century.”
Commerce’s “U.S. Industry & Trade Outlook ’99,” report attributed growth and
increased demand for wireless services and products to new market entrants, price competition, aggressive marketing
and advertising, network expansion and technological advances.
While voice telephony remains the predominant
wireless application, Commerce said advanced messaging, data and video transmission, local technology, remote
monitoring and other new service applications are expected to enjoy dramatic growth around the turn of the
century.
Commerce Secretary William Daley-one of several administration voices urging Congress last week to
support open global markets in the face of the worldwide economic downturn-repeated U.S. criticism of European
Union efforts to limit the deployment in Western Europe of different third-generation mobile phone
technologies.
Commerce’s bullish prediction for the wireless industry was somewhat offset by the Clinton
administration’s warning to Congress last week that erecting barriers is not an appropriate response to an all-time high
$153 billion U.S. trade deficit.
If the deficit continues to rise another $50 billion this year-as some analysts
reportedly have forecast-U.S. companies, including wireless suppliers, could continue to lose market share
abroad.
Reacting to the global financial meltdown and maintaining a free-trade policy have become a political high-
wire act for the White House.
On one hand, the administration wants to show sensitivity to U.S. industries hurt by
the much-celebrated free-trade global economy.
On the other hand, the White House strongly believes open markets
benefit all nations in the long run, and it fears a retreat to protectionism would backfire on U.S. companies and global
markets overall.
“If the United States, with its very healthy economy, is seen as moving toward restricting
markets, that could well reinforce the newly vibrant voices of protectionism in many countries around the world whose
economies are struggling or less vibrant than ours, and that is enormously against our economic interest,”
Treasury Secretary Robert Rubin stated in written testimony for a Senate Finance Committee hearing last
week.
What the administration fears most is that congressional Republicans and Democrats alike-themselves
mindful of the potential impact of the mushrooming trade deficit and global financial crisis on their constituents-will
again reject approval of fast-track trade authority.
Fast-track authorization would require Congress to vote trade
pacts up or down, without amendments.
In her prepared testimony, U.S. Trade Representative Charlene Barshefsky
said the United States intends to push for commitments from trading partners to liberalize telecommunications services
markets.
The United States helped forge World Trade Organization pacts to open telecom equipment and service
markets.
China, a huge emerging market relatively open to wireless equipment exports but closed to outside
wireless service providers, is not a party to either pact and wants membership in the WTO. The United States is
withholding support for China’s WTO entry until it further relaxes its trade policy.
