Statement of Ambassador Charlene Barshefsky
Basic Telecom Negotiations
February 15, 1997
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I am pleased to announce today the successful conclusion of one of the most important trade agreements for the 21st century. Three years ago [1994], in Buenos Aires, Vice President Gore called on the nations of the world to join in building the Global Information Infrastructure. One year ago, Congress delivered a clear and compelling blueprint in the 1996 Telecommunication Act. And now, under President Clinton's leadership, the U.S. has effectively exported American values of free competition, fair rules and effective enforcement to global telecom services providers.

This agreement represents a change of profound importance. A 60-year tradition of telecommunications monopolies and closed markets has been replaced by market opening, deregulation and competition -- the principles championed here and embodied in the 1996 Telecommunications Act.

The agreement reached today covers over 95% of world telecom revenue and was negotiated among 70 countries -- both developed and developing. It ensures that U.S. companies can compete against and invest in all existing carriers. Before this agreement, only 17 percent of the top 20 telecom markets were open to U.S. companies; now they have access to nearly 100 percent of these markets.

The range of services and technologies covered by this agreement is breath-taking. From submarine cables to satellites, from wide-band networks to cellular phones, from business intranets to fixed wireless for rural and underserved regions, the market access opportunities cover the entire spectrum of innovative communications technologies pioneered by American industry and workers

The agreement has three parts: market access, investment and procompetitive regulatory principles. With respect to market access, the agreement provides U.S. companies market access for local, long-distance and international service through any means of network technology, either on a facilities basis or through resale of existing network capacity. On investment, the agreement also ensures that U.S. companies can acquire, establish or hold a significant stake in telecom companies around the world. Finally, 65 countries adopted procompetitive regulatory principles based upon the landmark 1996 Telecommunications Act. This agreement is fully enforceable.

Today, telecommunications is a $600 billion industry; under this agreement it will double or even triple over the next ten years. U.S. companies are the most competitive telecommunications providers in the world; they are in the best position to compete and win under this agreement. We expect the agreement will lead to the creation of approximately a million U.S. jobs in the next ten years -- not only in communications companies but also in high- tech equipment makers and in a range of industries such as software, information services, and electronic publishing that benefit from telecom development.

This agreement will also save billions of dollars for American consumers. We estimate that the average cost of international phone calls will drop by 80% -- from $1 per minute on average to 20 cents per minute over the next several years. Every American with relatives or friends overseas and every business that operates internationally will benefit from this agreement.

This agreement will build the Global Information Highway. It is the perfect complement to the global Information Technology Agreement (ITA) that we successfully concluded two months ago. U.S. makers of telecommunications equipment, are among the world's leaders. They will profit by meeting the new demand stimulated by the deregulatory, procompetitve terms of this agreement. Our information technology industry is poised to lead the growth of the American economy in much the same way the automotive industry spurred tremendous growth 40 years ago.

I will now outline more fully the elements of the market access, investment and regulatory commitments in the agreement.

Scope of Market Access Commitments

Our international long distance industry will gain access to serve over 53 markets in Europe, Asia, Latin American and Africa, gaining the right to use their own facilities and to work directly with their customers everywhere their customers go -- providing seamless end-to-end services, not handing calls off to monopoly providers elsewhere. From the European Community to Korea, from Japan to El Salvador, Mexico and Canada, countries have made these commitments. And the range of services that can be provided internationally includes all voice and data services, provided by fixed or by mobile service networks or both.

The countries providing market access for telecommunications services account for 99 percent of all revenues from telecom services worldwide. The world's businesses today spend more money on telecommunications than on oil. Less expensive and better telecom services means that the United States and other nations that are active in global trade will reduce one of their largest costs of doing business

An even larger number of markets will be opened to competition for domestic local and long distance services. For example, U.S. communications companies operating in Europe will be able to bypass former monopolies and build networks directly to and among customers in all member states of the European Union. U.S. firms will market any and all communications services in developing countries such as India, Indonesia, Malaysia, South Africa and elsewhere. They will have a fair chance to build communications networks that are the key to worldwide economic development. Mexico, for example, has guaranteed the market access rights of the U.S.-invested firms that are operating there to provided fixed wireless, mobile wireless and wireline local and long distance services.

This agreement also provides market access and effective interconnection rights for the resale of telecom services. Almost every offer made in these negotiations to provide market access for facilities-based competition also included the opportunity to resell service and to interconnect with existing networks at reasonable rates, terms and conditions.

Investment and regulatory commitments

The agreement also offers important opportunities for American investors and entrepreneurs who will be able to acquire, establish or hold a significant stake in telecom companies around world. These opportunities span all sectors. American companies will now be free to offer cellular telephone service in Mexico, satellite-delivered internet access in Japan, intra-Europe and domestic long distance in Germany, hand-held satellite telephony in Korea, international business networks in Singapore, and video-conferencing in the United Kingdom. In all these technologies, our companies are the world leaders, and in all these technologies our companies will be free to compete.

Our firms will gain not only the opportunity to compete but they will also benefit for the first time from fair rules and effective enforcement. Sixty-five countries representing 93% of the world market have bound themselves to enforceable regulatory principles based upon the framework for competition that our Congress enacted in the landmark Telecommunications Act of 1996. Sixty of these countries have agreed to a specific set of regulatory principles that even we did not have one year ago. The global adoption of these pro-competition principles, embodied in a binding Reference Paper, is an extraordinary testimony to the compelling nature of Congress' vision in this area. The Reference Paper commits foreign countries to establish independent regulatory bodies, guarantees that our companies will be able to interconnect with networks in foreign countries at fair prices, forbids anti-competitive practices such as cross- subsidization, and mandates transparency of government regulations and licensing. We will be able to enforce all of these rights, as well as the market access and investment commitments, at the WTO and through our own legislation. The agreement takes effect on January 1, 1998. Countries remain free to further improve their offers and we will work to that end.


We have always said that trade is not a zero sum game. Through the right kind of trade agreements, we can create jobs and prosperity at home while other nations also prosper and develop. Nothing could be more illustrative than this agreement. We sometimes forget that more half the world's population has never made a telephone call. This agreement will spur prosperity and opportunity around the world and it will benefit U.S. companies, workers and consumers.

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