WASHINGTON-As the Feb. 15 deadline for reaching a global telecom trade pact closes in on Geneva negotiators, Congress and the administration find themselves embroiled in a bitter dispute over foreign ownership that could itself torpedo the deal.
Such an outcome would be a major setback for the wireless telecom industry because of the immense export opportunities in high-growth, emerging markets in Asia, Latin America and Europe.
Several key lawmakers, led by Ernest Hollings (D-S.C.) in the Senate and Edward Markey (D-Mass.) in the House, last week warned President Clinton against agreeing to a deal that opens the U.S. telecommunications market but keeps American firms out of foreign markets.
Doing so, they argue, would conflict with current law that caps foreign investment in wireless and wireline common carriers at 25 percent, absent a waiver, and that allows the Federal Communications Commission to make a public interest finding.
Signing an agreement without changes to current law, according to a congressional source, could make the United States subject to penalties by the World Trade Organization if a foreign entity is denied full access to the U.S. telecom market.
Hollings, Markey and others insist implementing legislation is needed. A widely supported provision in the 1996 telecom reform bill to liberalize foreign ownership was stripped out by House-Senate conferees because differences between Hollings and Rep. Mike Oxley (R-Ohio), an influential telecom policymaker in the House, couldn’t be resolved and, thus, threatened passage of the bill.
Acting U.S. trade representative Charlene Barshefsky, whom Clinton has nominated to serve on a permanent basis in his second term, has taken the position that the U.S. offer before the WTO is consistent with statute and, therefore, implementing legislation is unnecessary.
“We take strong exception to this action by USTR, which we believe is specifically designed to circumvent the constitutional role delegated to the Congress,” Clinton was told in a Feb. 4 letter signed by Sens. Hollings, Daniel Inouye (D-Hawaii), Robert Byrd (D-W.Va.) and Byron Dorgan (D-N.D.).
The lawmakers accused USTR of flip-flopping its position on implementing legislation, pointing to an April 1994 letter to Byrd from then-U.S. trade representative Mickey Kantor that pointed to the benefits of legislation.
“By amending the legislation as we suggest,” said Kantor, “the Congress would provide effective market-opening authority for both multilateral and bilateral negotiations on basic telecommunications services.”
Lawmakers, according to a congressional source, do not lay all the blame on Barshefsky. But Senate confirmation, which till now seemed assured, could run into problems if the controversy is not cleared up.
Lawmakers, according to the congressional source, believe Jeffrey Lang, deputy U.S. representative, and Donald Abelson, chief negotiator for communications and information, got too far out front and now fear that congressional input at this late and critical stage of negotiations could sidetrack a historic telecom trade accord.
Aside from the politics, the deal faces major obstacles in terms of getting 60 countries to come forward with market-opening proposals.
“It’s far from a done deal,” said Jay Ziegler, a spokesman at USTR. Ziegler, noting USTR is consulting with Congress on the legislation question, said problems remain with offers from both developing and industrialized Asian nations.
The United States is not completely happy either with recent Canadian concessions, according to USTR. Top U.S. trade negotiators this week will join technical advisers, who have been in talks in Geneva for weeks.
