USTR RELEASES PROPOSALS FOR WTO SERVICES NEGOTIATIONS
U.S. Trade Representative (USTR) Robert Zoellick released American proposals this week for World Trade Organization (WTO) services negotiations, including recommendations for WTO members to remove “discriminatory trade restrictions” in telecom and IT sectors. Proposals for liberalizing trade in services lacked details such as specific requests that USTR is making of other WTO members. USTR spokesman said deadline for hard bargaining in WTO services negotiations wasn’t until next March and USTR would outline more details as that date drew nearer. “We are still very early in the process,” he said, with U.S. still receiving requests from other WTO members. In part, U.S. is seeking: (1) In telecom services, full privatization of incumbent telcos in WTO member countries that haven’t yet taken that step and commitments on cable network services. (2) In area of IT, increased access for data processing services, as well as software and hardware-related services.
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New multilateral trade negotiations were launched in Nov. at 4th Ministerial Conference of WTO in Doha, Qatar. In those talks, WTO members signed on to work program to liberalize trade across several areas, including services, and June 30 deadline was set for members to submit services proposals. WTO services negotiations are scheduled to end by year-end 2004. Next deadline for formal negotiating offers in response to most recent round of proposals is next March 31. Agreements reached as result of those negotiations would modify WTO General Agreement on Trade in Services.
In area of telecom, U.S. proposal covers increased access for both basic and value-added telecom services and asks that WTO members adopt commitments in WTO basic telecom reference paper outlining “procompetitive regulatory obligations,” USTR said. “In addition, the United States may urge members who have not fully privatized their incumbent telecommunications carrier to do so in the near future. The United States also is requesting commitments in cable network services, defined as owning or leasing cable facilities for the distribution of video programming services.” Telecom services section, which estimates market value of sector at $1 trillion as of 2001, also covers e-commerce services. USTR said some estimates placed revenue generated by e- commerce at $1 trillion globally in 2001.
While it has been understood that cable was covered under WTO basic telecom services agreement, Miller said mention of cable by USTR appeared to signal decision that cable language needed to be made explicit.
Another industry source said specific mention of cable in telecom section also could point to extent to which cable modems now were used more widely for Internet access, rather than cable infrastructure as more traditional pipeline for content, compared with when WTO telecom agreement was signed 4 years ago.
As for IT services, U.S. document said Internet increasingly was used as infrastructure by which computer and software services were delivered. “While the Internet increases the potential for cross-border trade, the physical location of computers and other equipment and personnel can affect the delivery of many services, and thus commercial establishment and the movement of personnel retain their importance for many service suppliers,” USTR said. “Access to computer services is becoming increasingly important as customers rely more and more on information technology service providers to meet their information services needs.” USTR said that last year for first time international spending on IT services at $426 billion exceeded global spending on IT hardware at $376 million. As for audiovisual services, USTR said “electronically delivered” audiovisual products and services were helping to encourage investment in future digital networks. It called for “open and predictable” environment for trade in that area while allowing members to address “public concern” for preservation of cultural values. The U.S. asked that commitments of countries in that area “reflect current levels of market access.”
Information Technology Assn. of America Senior Vp-Global Affairs Allen Miller said USTR’s initial set of trade in services proposals appeared to devote more attention to computers and related services than in last round. “In the last round, they were not viewed as important services and they didn’t receive a whole lot of attention,” he said: “It looks as if in these negotiations they will receive a lot more attention.” When GATS agreement was signed in 1997, definitions covered areas such as software services and consultancy but not more recently evolved offerings such as Web hosting, he said. USTR’s document appears to begin formation of counterargument for countries that might contend they never made a trade in services agreement that be applied to areas such as Web hosting, Miller said. USTR appeared to be teeing up answer to that question, which is that those newer services simply are combinations of services that were covered under original agreement, and therefore trade commitments still apply, he said.