WASHINGTON-U.S. Trade Representative Mickey Kantor warned that World Trade Organization telecommunications talks will collapse unless more countries agree to open their markets, a development that could complicate efforts to ease foreign ownership restrictions in this country at a time when American firms are scraping for capital to buy and build wireless franchises sold by the government.
Kantor, in a March 4 letter to WTO Director General Renato Ruggiero, said high-level meetings of the Negotiating Group on Basic Telecommunications “will soon be in serious trouble” if a critical mass of nations do not come forward with serious offers to open telecommunications markets.
In addition, Kantor threatened to take off the table a U.S. proposal to open local telecom markets in the United States to overseas carriers and to allow foreign officers and directors on American companies that get licenses from the Federal Communications Commission.
WTO telecom talks are expected to wrap up at the end of April in Geneva.
The current law limits foreign investment in telecommunications firms to 25 percent and forbids U.S. firms from putting foreign officers on their boards.
Foreign ownership is the subject of debate in Congress. While there is general agreement among lawmakers and the Clinton administration to liberalize foreign ownership limits here, there is dispute over how to structure the policy.
A free trade provision championed by Rep. Mike Oxley (R-Ohio) was dropped from the recently enacted telecommunications reform bill after Ernest Hollings (D-S.C.) insisted on language to close off the U.S. telecom market to foreign countries that open but subsequently close their markets to U.S. companies.
Oxley, second in rank on the House telecommunications subcommittee, and Senate Commerce Committee Chairman Larry Pressler (R-S.D.) have vowed to pursue foreign ownership legislation separately this year, but such efforts could be jeopardized by the impasse in WTO telecommunications negotiations.
That has major implications for the wireless business in particular and for the U.S. telecommunications industry as a whole in terms of leadership in the global marketplace. Huge sums of money are needed to buy wireless licenses auctioned by the federal government and build next-generation digital paging and pocket telephone systems. Financing, especially for entrepreneurs, is critical.
Kantor said the lack of ambitious proposals by industrial nations to open their telecom markets appears to have encouraged developing countries and others from coming forward with serious proposals of their own.
The WTO is the successor to the General Agreement on Tariffs and Trade, or GATT, which was grappling with telecommunications trade when the Uruguay Round talks ended two years ago.
