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Global agreement on telecoms liberalization

On 15 February 1997, 69 members of the World Trade Organization (WTO) reached agreement on a deal to liberalize global telecommunications markets. The agreement, which will enter into force on 1 February 1998, covers around 90% of global telecoms revenue.

Mr. Renato Ruggiero,...
On 15 February 1997, 69 members of the World Trade Organization (WTO) reached agreement on a deal to liberalize global telecommunications markets. The agreement, which will enter into force on 1 February 1998, covers around 90% of global telecoms revenue.

Mr. Renato Ruggiero, Director-General of the WTO congratulated the governments concerned on reaching agreement following lengthy negotiations, held in Geneva, which continued right up to the deadline set in 1996. "This agreement promotes liberalization, and it enhances certainty, security and predictability through a clear set of rules", he said. "The telecoms deal will contribute to lower costs for consumers and the price reductions will be very significant", he continued, noting that these benefits would accrue to both firms and families. Mr. Ruggiero suggested that the agreement could mean global income gains equivalent to 4% of world GDP over the next ten years.

For the European Community, where telecoms liberalization has already been agreed (from 1 January 1998) Sir Leon Brittan, Vice-President of the Commission, and Europe's lead negotiator, welcomed the deal. In particular, he said that the deal would be an important factor in the development of the Global Information Society. He also hoped that the successful telecoms deal would give further impetus to other negotiations on liberalization, including in those relating to information technologies, financial services and agriculture.

The commitments made by the negotiating governments apply to all telecommunications services, both public and private, that involve end-to-end transmission of customer supplied information (for example, the relay of voice or data from sender to receiver). These governments also agreed that basic telecommunications services provided over network infrastructure, as well as those provided through resale (over private leased circuits), would both fall within the scope of commitments.

As a result, market access commitments will cover not only cross-border supply of telecommunications but also services provided through the establishment of foreign firms, or commercial presence, including the ability to own and operate independent telecoms network infrastructures in third countries.

Examples of services covered by this agreement include voice telephony, data transmission, telex, telegraph, facsimile, private leased circuit services (i.e. the sale or lease of transmission capacity), fixed and mobile satellite systems and services, cellular telephony, mobile data services, paging, and personal communications systems.

Value-added services (or telecommunications for which suppliers "add value" to the customer's information by enhancing its form or content or by providing for its storage and retrieval) were not formally part of these negotiations. Examples include on-line data processing, on-line data base storage and retrieval, electronic data interchange, e-mail or voice mail. Such value-added services are already included in a number of agreements already in force as a result of previous global trade talks.
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