USTR Reviews Telecommunications Trade Barriers

by Glen Shapiro, LawAndTax-News.com, New York

10 April 2006

US Trade Representative Rob Portman on Thursday announced the results of the 2006 annual review of the operation and effectiveness of telecommunications trade agreements, the "Section 1377 Review".

The report identifies barriers facing US telecommunications services and equipment providers, evaluates progress towards resolving ongoing problems, and lays out the specific telecommunications-related issues on which USTR will focus its efforts this year.

"Barriers in foreign telecommunications markets negatively impact US telecommunications manufacturers and operators, as well as US consumers and any US company that does business abroad," explained Ambassador Portman, continuing:

"They also hurt our trading partners’ ability to reap the benefits of competition, integrate into efficient global networks, and promote economic growth and development. The 1377 review identifies practices that interfere with these goals that we will focus on over the coming year to modify or eliminate."

"One issue that is particularly troubling to us is the emergence of new regulations around the world that are being billed as universal-service related, that may, in fact, limit competition or create barriers for foreign telecom operators," added Portman. "USTR will continue to monitor these programs to ensure that they conform, where applicable, to WTO commitments on universal service."

The main problems identified in this year’s review include existing practices or prospective concerns relating to:

1. Excessively high mobile termination rates in Germany, Japan, Mexico and Switzerland;
2. Restrictions on access to and use of leased lines in Germany, India, and Singapore; and
3. Concerns associated with universal service related programs in Jamaica and Japan.

The USTR review suggested that countries requiring particular attention this year include China, Jamaica and Mexico. The department also revealed that it will pay particular attention to developments in two additional markets, namely Egypt and India.

In addition to the problems identified in this year’s 1377 Review, USTR also marked significant progress on issues identified in past years in several key markets, including Peru’s resolution to lower rates for access to its mobile market and Japan’s decision to open its mobile market to new entrants.

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