The Uruguay
Round of multilateral trade negotiations not only resulted in the creation of the World
Trade Organization, it also gave birth to the first multilateral agreement to apply the
disciplines of the trading system to services. The Services Agreement extends to all
tradeable services the principles of market access, national treatment and
non-discrimination which have been the basis of the GATT trading system and of the
enormous post-war expansion of trade in goods. I am quite sure that the expansion of
services trade, based on the GATS, will be even faster. In telecommunications
the Agreement covers every conceivable service, those existing and those yet to be
imagined. During the Uruguay Round more than 60 countries made market access commitments
on "value-added" services, which in many countries have been opened up to
competitive supply. But it was found that in basic telecommunications the dominant role of
public monopolies added a special dimension of political difficulty to the subject, and
governments decided to continue negotiating on these services, with a deadline of April
1996 for completion.
The economic
interests involved in this negotiation are enormous; I understand that the current world
market for telecommunications is estimated at 513 billion dollars, and the worth of the
global information industry as at least 1.3 trillion dollars. But the importance of the
negotiation goes far beyond the sphere of economics and trade. The construction of a
global information society will revolutionize human society itself in ways that we cannot
imagine. It will soon be possible to bring high-quality education, health and business
services to every village in the world. The potential for job creation and enhancement of
human opportunities among people who are now deprived is very great. The job of the
negotiators in the WTO is to create the right political environment for this to happen.
Because we
are building a global information society, this negotiation is of tremendous relevance to
developing countries. I understand concern about the continuation and even exacerbation of
a "two-tier" information society of haves and have nots. Many important factors
underlie this concern - for example, worries about the goal of universal service, not yet
attained in many parts of the world. But liberalization of telecommunications should be
seen as a way of promoting universal service, not as an obstacle to it.
Even more
important in bridging the information gap is economic development itself. Manufacturing as
well as services are now information-hungry industries. As I have said, modern
communications hold out hope of generating better and more highly paid jobs for the
peoples of developing countries. Employment opportunities are already growing in data
processing and software development. On-line access to state-of-the-art services of every
kind will upgrade entire economies. For individuals to reap the benefits of expanded
employment and for emerging industries to become competitive, they need the best
telecommunications systems that modern technology can offer. Inefficient
telecommunications are a tax on the whole economy.
The GATS
consists of two parts: the framework of obligations and disciplines that apply to all
services, and the national schedules of commitments. Examples of the key obligations are
non-discrimination among trading partners (or most-favoured-nation treatment) and
transparency of national rules and regulations. The 114 national schedules of the GATS
specify the services on which governments have guaranteed market access and national
treatment, and at what level. The commitments, like the rules of the framework, are
legally binding and enforceable under the WTO dispute settlement mechanism.
The objective
of the basic telecoms negotiations is to secure market opening commitments from as many
countries as possible. The commitments will involve the introduction of competition into
the sector by removing restrictions which now prevent or make difficult a supply of
services by foreign companies. They may cover every mode of supply - through cross-border
trade and foreign direct investment, through resale and through the ownership and
operation of networks and infrastructure.
Negotiators
are also discussing commitments that concern the telecoms regulatory environment. These
include safeguards on interconnection rights and ways to prevent the abuse of market
power. It is clear that such commitments will be indispensable to realizing the full
benefits of liberalization in this sector. The benefits would be severely constrained if
it were to remain possible for dominant operators to dictate prices and control access to
the infrastructure that is so critical to effective global communications.
I have heard
it said that unrealistically high expectations could pose a threat to the success of the
negotiations. I have also heard it suggested that failure to meet such expectations could
make a multilateral solution impossible.
For my part,
I would never want to characterize high ambition as a problem. It is the attempt to reach
for the highest possible objectives that drives these and, for that matter, any
negotiations forward. I support those, in industry and government, who are looking for a
big step forward in this negotiation. Of course, it must be borne in mind that the
participating countries are at different "starting positions" in efforts to
reform their national telecom regimes.
But I am
convinced that the liberalization of telecommunications must remain a global endeavour
within the multilateral system - and this means preserving the principle of
most-favoured-nation treatment. Modern telecoms technologies require global approaches
because they abolish national boundaries and render national monopolies obsolete.
Bilateral or discriminatory solutions to trade problems may seem attractive in the
short-term, but their rewards are usually disappointing and their political costs are
often very high. Nor can they be enforced under the WTO dispute settlement mechanism. I
have said that rules on competition will be an essential element of this negotiation. Such
rules can only be global, and only a multilateral system can give them legal security and
political legitimacy.
The extended
negotiations on basic telecommunications began in May 1994 and are now coming to the
crunch. Forty-two governments are participating and more are expected to join.
Participants began tabling initial offers at the end of July. On Friday, a high-level
meeting of the Negotiating Group will take stock of the situation and give a political
impetus for the final stretch.
By next
April, many of the participants are likely to be offering market access levels well beyond
what is possible under their existing regulatory regimes. A few years ago this would have
been unthinkable, but the rate of change taking place in this industry is virtually
unknown in any other business today.
What I am
asking you, as representatives of the public and private sector, is to help ensure that
the promise of an open, multilateral agreement by the end of April 1996 will be kept. The
events taking place at TELECOM 95 this week demonstrate to all of us that the Global
Information Society is within our reach. The technology is available; we have to build a
political environment that makes full exploitation of the technology possible. That is
what this negotiation is about. |
