[Federal Register Volume 61, Number 149 (Thursday, August 1, 1996)]
[Notices]
[Page 40279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19591]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Identification of Korea as a Priority Foreign Country in 
Telecommunications Trade

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of identification.

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SUMMARY: The Acting United States Trade Representative (USTR) hereby 
identifies Korea as a priority foreign country under section 1374 of 
the Omnibus Trade and Competitiveness Act of 1988 (the Act). Upon such 
designation, the USTR is required to negotiate with the Government of 
Korea for the purpose of entering into a bilateral trade agreement 
which addresses specific negotiating objectives set by the USTR. If 
negotiations are unsuccessful, the USTR is required to take appropriate 
action to achieve U.S. negotiating objectives.

DATES: The identification of Korea as a priority foreign country was 
made on July 26, 1996.

FOR FURTHER INFORMATION CONTACT: Sean Murphy (202-395-6813), Office of 
Asia and Pacific Affairs, or Laura B. Sherman (202-395-3150), Office of 
the General Counsel, Office of the U.S. Trade Representative, 600 17th 
Street, NW., Washington, D.C. 20508.

SUPPLEMENTARY INFORMATION: Section 1374 of the Omnibus Trade and 
Competitiveness Act of 1988 (19 U.S.C. 3103) provides that the USTR may 
identify countries that maintain barriers that deny U.S. 
telecommunications products and services mutually advantageous market 
opportunities. In making identifications, the U.S. Trade Representative 
must take into account factors such as: (a) the nature and significance 
of the acts, policies and practices that deny mutually advantageous 
market opportunities to telecommunications products and services of 
United States firms; (b) the economic benefits (actual and potential) 
accruing to foreign firms from open access to the United States market; 
(c) the potential size of the foreign market for telecommunications 
products and services of United States firms; (d) the potential to 
increase U.S. exports of telecommunications products and services, 
either directly or through the establishment of a beneficial precedent; 
and (f) measurable progress being made to eliminate the objectionable 
acts, policies or practices.
    In 1989, the U.S. Trade Representative identified Korea as a 
``priority foreign country'' that denied U.S. telecommunications 
products and services providers ``mutually advantageous market 
opportunities.'' At that time, many of the specific negotiating 
objectives were focused on improving access for competitive U.S. 
telecommunications products and services to Korea Telecom(KT), which 
was the monopoly telecommunications service provider. In 1992, the 
United States and Korea concluded a series of agreements that improved 
access to procurement by KT and addressed concerns relating to the 
standards-setting process, provision of value-added services and the 
Korean government's approval of telecommunications equipment. As a 
result of those agreements, the USTR determined that Korea had met the 
negotiating objectives set out in 1989. Pursuant to section 1377 of the 
Act, the USTR has annually reviewed the effectiveness and operation of 
the telecommunications agreements reached with Korea and entered into 
subsequent agreements to address problems in implementation of them.
    Changes in the Korean telecommunications market since 1992 have 
created new barriers for U.S. providers of telecommunications goods and 
services that are not covered by the existing agreements with Korea. KT 
is no longer the only service provider as competition by private firms 
and other government-owned entities is being allowed. Yet Korean 
Government intervention in procurements by private Korean companies and 
other practices cited by U.S. telecommunications products and services 
providers create effective barriers to access to the Korean market. The 
Korean Government's policies and actions relating to the promotion of 
domestic manufacturing of high-technology telecommunications products 
results in additional lost opportunities for U.S. suppliers. At the 
same time, Korean manufacturers have unrestricted access to the United 
States market for telecommunications products. Korean limitations on 
foreign ownership of telecommunications services are more restrictive 
than those of the United States. Korea firms are taking advantage of 
this more favorable access to increase their penetration into the U.S. 
telecommunications goods and services market.
    The potential Korean market for telecommunications products and 
services is significant, particularly with the recent award of cellular 
and other licenses which is estimated to result in procurements of $6.5 
billion. The total Korean market for telecommunications equipment and 
services during the 1996-2000 period is estimated at $100 billion. As 
U.S. telecommunications products and services are the most competitive 
in the world, there is tremendous potential to increase U.S. exports to 
the Korean market. Before deciding to identify Korea as a priority 
foreign country, the United States held intensive consultations with 
Korea beginning in March 1996, to achieve improved market access. No 
progress was made in eliminating Korea's objectionable policies and 
practices. As a result, to achieve mutually advantageous market 
opportunities as our respective telecommunications markets have 
evolved, I have identified Korea as a priority foreign country under 
Section 1374. Consequently, the United States will seek to negotiate an 
agreement with Korea that achieves U.S. objectives. If these 
negotiations are unsuccessful, action will be taken under section 
1376(b) of the Act. The United States does not intend to use the full 
negotiating period provided in the Act to make a determination on next 
steps if it becomes clear that progress is not being made.
Charlene Barshefsky,
Acting U.S. Trade Representative.
[FR Doc. 96-19591 Filed 7-31-96; 8:45 am]
BILLING CODE 3190-01-M