[Federal Register Volume 63, Number 5 (Thursday, January 8, 1998)]
[Notices]
[Pages 1139-1141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-206]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Trade Policy Staff Committee (TPSC); Request for Comments
Concerning Compliance With Telecommunications Trade Agreements
AGENCY: Office of the United States Trade Representative.
ACTION: Notice of Request for Public Comments.
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SUMMARY: Pursuant to Section 1377 of the Omnibus Trade and
Competitiveness Act of 1988, (19 U.S.C. Sec. 3107), the Office of the
United States Trade Representative (USTR) seeks comments on the
operation and effectiveness of telecommunications trade agreements with
Japan, Canada, Mexico, Korea, and Taiwan and on implementation of the
World Trade Organization (WTO) Basic Telecommunications Agreement (the
Fourth Protocol to the WTO General Agreement on Trade in Services).
Section 1377 requires USTR to conduct an annual review of
telecommunications trade agreements and to determine whether any
country is not in compliance with the terms of such agreements or
otherwise denies ``mutually advantageous market opportunities'' to U.S.
telecommunications products and services. The USTR will conclude the
review on March 31, 1997.
DATES: Submissions must be received on or before February 6, 1997 with
respect to telecommunications trade agreements with Japan, Canada,
Mexico, Korea, and Taiwan, and on or before February 16, 1997 with
respect to the WTO Basic Telecommunications Agreement.
ADDRESSES: Comments must be submitted to the Executive Secretary, Trade
Policy Staff Committee, Office of the United States Trade
Representative, 600 17th Street, N.W., Washington, D.C. 20508.
FOR FURTHER INFORMATION CONTACT:
Jonathan McHale (202-395-5656), Office of Industry or Joanna McIntosh
(202-395-7203), Office of the General Counsel, Office of the U.S. Trade
Representative, 600 17th Street, NW, Washington, D.C. 20508.
SUPPLEMENTARY INFORMATION: Section 1377 of the Omnibus Trade and
Competitiveness Act of 1988, (19 U.S.C. Sec. 3107), requires USTR to
review annually the operation and effectiveness of all trade agreements
regarding telecommunications products and services that are in force
with respect to the United States. The purpose of the review is to
determine whether any act, policy or practice of a country that has
entered into a telecommunications trade agreement is not in compliance
with the terms of such agreement, or otherwise denies to U.S. firms,
within the context of the terms of such agreements, mutually
advantageous market opportunities.
Specifically, for the current review, USTR seeks information on
whether:
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(1) Japan, Canada, Mexico, Korea, and Taiwan have failed to comply
with their commitments under bilateral agreements or the North American
Free Trade Agreement (NAFTA);
(2) Any WTO member countries that have accepted the WTO Basic
Telecommunications Agreement have failed to take steps to ensure
compliance with commitments that will take effect when this agreement
enters into force;
(3) Any of these countries otherwise have denied, within the
context of the terms of these agreements, mutually advantageous market
opportunities to U.S. firms; and
(4) Levels of trade conform with the levels that would be expected
based on these agreements.
In addition, the USTR seeks relevant information on the underlying
competitiveness of U.S. providers of telecommunications products and
services.
Japan--Bilateral Procurement Agreement
The United States has two telecommunications procurement agreements
with the Government of Japan. The first, the Nippon Telegraph and
Telephone (NTT) agreement, is designed to ensure that the majority
government-owned, dominant telecommunications provider in Japan employs
open, non-discriminatory and transparent procedures in procuring
telecommunications products. On September 30, 1997 this agreement was
extended and improved. NTT agreed to improve its procurement procedures
by providing greater transparency, additional procurement data, better
access to technical information, and a stronger commitment to
international standards.
The second procurement agreement is the 1994 U.S.-Japan Public
Sector Procurement Agreement on Telecommunications Products and
Services. Under this agreement, Japan introduced procedures addressing;
enhanced participation by foreign suppliers in pre-solicitation
development and specification-drafting for large-scale
telecommunications procurements; transparent and non-discriminatory
award criteria that include greatest overall value for procurement
decisions; decreased sole sourcing; and the establishment of an
effective bid protest mechanism. Based on provisions of the Public
Sector Procurement agreement, Japan agreed in March 1997 to issue a new
tender for a major telecommunications system being procured by the
National Police Agency. This procurement, which has not yet been
awarded, is being monitored closely to ensure that it is transparent
and non-discriminatory.
The USTR seeks information regarding any difficulties that U.S.
telecommunications product and service providers are encountering
selling in Japan under the terms of these two telecommunications
procurement agreements. Specifically, we seek evidence of practices
such as: favoring traditional suppliers despite competitive foreign
alternatives; failing to provide adequate access to necessary technical
information; using non-transparent criteria to evaluate proposals and
bids and award procurements; and relying on proprietary standards where
international standards exist.
Japan--Additional Telecommunications Trade Agreements
The United States has a number of additional telecommunications
trade agreements with Japan, including commitments made under the
Market Opening Sector Specific (MOSS) process from 1985 to 1988, and a
series of agreements on: international value-added network services
(IVANS) (1990-91); open government procurement of all satellites,
except for government research and development (R&D) satellites (1990);
network channel terminating equipment (NCTE) (1990); and cellular and
third-party radio systems (1989).
The USTR seeks information regarding any difficulties that U.S.
telecommunications product and service providers are encountering
selling in Japan based on non-compliance with these agreements.
Canada and Mexico
Several chapters of the NAFTA include market liberalization
commitments that benefit trade in the telecommunications sector:
Chapter 11--investment; Chapter 12--services; and Chapter 13--
telecommunication. Chapter 13 includes commitments relating to access
to and use of public telecommunications networks, conditions for
providing enhanced services, equipment approval processes and
associated telecommunications standards issues, and general competitive
safeguards. The NAFTA also requires tariff reductions for
telecommunications equipment.
The USTR's March 31, 1996 review found Mexico to be in non-
compliance regarding its obligation to accept test data for product
safety of telecommunications products. On April 18, 1997, the U.S. and
Mexico concluded an agreement to permit U.S. laboratories to establish
relationships with counterpart Mexican laboratories for the purpose of
testing telecommunications products to Mexican product safety
requirements. From January 1, 1998, broader conformity assessment
obligations under the NAFTA will come into effect and U.S. laboratories
and certification bodies will be eligible to apply for accreditation to
test (and in some cases certify) telecommunications equipment to
Mexican standards--for product safety, terminal attachment, and other
mandatory and voluntary standards.
The USTR seeks information regarding any difficulties that U.S.
telecommunications product and service providers are encountering
selling in Canada or Mexico based on noncompliance with the NAFTA, and,
in particular, any difficulties with Mexico relating to testing and
certification of telecommunications products and accreditation of test
labs and certification bodies.
Korea
The United States has agreements with Korea to address barriers to
U.S. telecommunications product and services providers in the areas of
protection of intellectual property rights (IPR), type approval of
telecommunications equipment, transparent standard-setting processes
and non-discriminatory access to the government-owned Korea
Telecommunications's procurement of telecommunications products.
On August 11, 1997, the USTR revoked Korea's identification as a
priority foreign country under Section 1374 of the Omnibus Trade and
Competitiveness Act of 1998, which had been in place since July 1996.
USTR concluded that Korea had taken adequate steps to address market
access barriers, which included Korean Government interference with
procurement by private telecommunications service providers, lack of
liberalization of foreign investment in telecommunications service
providers, discriminatory and non-transparent licensing and regulation
of telecommunications service providers, ineffective competition
policies for telecommunications service providers, high tariffs on
telecommunications and information technology products, and
discriminatory customs procedures for such products.
The USTR seeks information regarding any difficulties that U.S.
telecommunications product and service providers are encountering
selling in Korea based on
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noncompliance with these commitments.
Taiwan
In July 1996, the American Institute in Taiwan, on behalf of the
Office of the United States Trade Representative, concluded an
agreement with the Taiwan authorities on the licensing and provision of
wireless services through the establishment of a competitive,
transparent and fair wireless market in Taiwan.
Specifically, the Directorate General of Telecommunication (DGT)
and the Taipei Economic and Cultural Representative Office confirmed
that: the telecommunication regulatory function and telecommunications
service provider function have been entirely separated: DGT would
initiate procedures to remove the profit cap and draft a new formula
for tariff schedules; interconnection agreements between wireless
operators and Chunghwa Telecommunications Co. (CUT) would be cost-
based, transparent, unbundled and non-discriminatory and that the terms
of such agreements publicly available; DGT would not permit cross-
subsidization between CUT's fixed-line and wireless operations; DGT
would relax the debt/equity ratio for wireless bidders and not restrict
a bidder from obtaining all three regional licenses, subject to the
policy that an island-wide licensee is not eligible for a regional
license; and DGT would remove unauthorized spectrum users. DGT also
agreed to review foreign ownership limitations.
The USTR seeks information regarding any difficulties the U.S.
telecommunications service providers are encountering to provide
wireless services in Taiwan based on noncompliance with these
commitments.
WTO Basic Telecommunications Agreement
On February 15, 1997, seventy parties--69 territorial entities and
the EU--committed to opening up their markets for basic
telecommunications services by concluding the WTO Basic
Telecommunications Agreement. So far, 55 WTO member countries which are
parties to the agreement have accepted the agreement and the remaining
fifteen have given their assurances that they intend to complete their
acceptances of the agreement as soon as possible.
The agreement encompasses commitments in three main areas: market
access, investment, and pro-competitive regulatory principles. For
countries making full commitments, market access commitments open the
local, long-distance and international service markets through any
means of network technology, either on a facilities basis or through
resale of existing network capacity. Investment commitments ensure that
companies can acquire, establish or hold a significant stake in
telecommunications companies. The pro-competitive regulatory
principles, incorporated in WTO Members' schedules, commit members to
establish a regulatory body independent of any carrier; to guarantee
that former monopolies will provide interconnection to their networks
at non-discriminatory, cost-oriented prices; to maintain measures to
prevent anti-competitive practices such as cross-subsidization; and to
mandate transparency of government regulations and licensing. Some
members have staged implementation of these commitments over several
years. Summaries of each member's commitments are available on the WTO
web site, at www.wto.org.
The Basic Telecom Agreement was to enter into force on January 1,
1998. However, since fifteen signatories to the agreement have not yet
offered their final acceptances, WTO members will meet in January to
decide on the date of entry into force of this agreement.
The USTR seeks information on whether any parties to this agreement
have not made the necessary legislative or regulatory changes to
satisfy the commitments that will come into effect in 1998 under the
agreement, or are permitting practices in their markets inconsistent
with these commitments.
Public Comment: Requirements for Submissions
Comments must be in English and provided in 15 copies to: Gloria
Blue, Executive Secretary, Trade Policy Staff Committee, Office of the
U.S. Trade Representative, 600 17th Street, NW., Washington, D.C.
20508. Comments, except for business confidential information, will be
available for public inspection by appointment in the USTR Reading
Room, Room 101, Monday through Friday, 10:00 a.m. to 12:00 noon and
1:00 p.m. to 4:00 p.m. For an appointment, call Brenda Webb at 202-395-
6186.
Business confidential information will be subject to the
requirements of 15 CFR 2003.6. Any business confidential information
must be clearly marked as such on the cover letter or page and each
succeeding page, and must be accompanied by a non-confidential summary
thereof. The nonconfidential summary will be placed in the file that is
open to public inspection.
Gordana Earp,
Acting Assistant United States Trade Representative for Industry.
[FR Doc. 98-206 Filed 1-7-98; 8:45 am]
BILLING CODE 3190-01-M