TELECOM SERVICES AT THE WTO

9:31 PM May 8, 1996

TELECOM SERVICES AT THE WTO
Trade envoys from 53 countries met Tuesday at the headquaters of the world trade organisation to extend the deadline and salvage what has been described as a "potentially lucrative accord", which according to analysts should provide a major boost to the $500 billion a year telecommunications sector and save corporate and private consumers as much as $1000 billion by the year 2000.

European Union, which proposed the new deadline, accepted by United States, Japan and other major trading powers, did not conceal their disappointment that a deal could not have been reached by midnight of April 30. "It's settled, but it's badly settled," Jean-Pierre Leng, EU amabssador to the WTO told reporters.

Leon Brittan, the EU Trade Commissioner, who had gathered EU trade ministers in Geneva to reassess their offers, blamed U.S presidential elections in December for the U.S. attitude. "I know it is difficult to reach conclusions of a far reaching kind in a year with presidential election, but I am afraid that the international trading system loses as a result," he told reporters.

Under a compromise floated by WTO head Renato Ruggiero earlier on Tuesday when talks faced collapse,the pact should still come into force as planned on 1 January, 1998. "All substance has been saved and the timetable for implementation has been saved, so it's just a question of an extension, which means the negotiations can only go in one direction -- towards improvement of best offers, which have been put on the table," said a visibly relieved Ruggiero.

Although Ruggiero said he had made it clear that governments were expected only to improve upon their offers, under the new timetable, governments will have a one-month period before February 15 to improve, modify or even withdraw their offers.

On Monday, on the eve of negotiating a deadline for the pact, the US delegates unveiled new demands on licencing foreign telephone firms in the United States and were said to be excluding a lucrative satellite sector from the deal.

Hinting a pullout of the accord, hours before it seemed within grasp, US Deputy Trade Representative, Jeffrey Lang told reporters "we are deeply concerned about a lack of critical mass at this stage. (In trade parlance, critical mass means that not enough countries have made strong market-opening commitments for Washington to accept an agreement under the umbrella of the World Trade Organisation).

While Lang himself declined to elaborate, US officials pointed to the absence of any offers from Indonesia and Malaysia.

European Union Trade Commissioner Leon Brittan, speaking after a meeting of EU trade ministers to hammer out a new position, said he found the U.S. shift "profoundly disappointing" at this late stage in the two-year talks.

EU diplomats also complained that U.S. negotiators had laid down new conditions for licensing foreign companies in the United States, by linking their licences with progress made by their home countries in opening up markets.

Said one EU official "Effectively, they want the right to decide themselves in advance, which country will play by the rules and exclude firms from countries they suspect might cheat. They want to be judge and jury."

At a meeting of senior trade envoys to agree to the new deadline, various countries were stated to have expressed support for a stronger deal. Australia's delegate said his country would submit a better offer, while a representative of South Africa, which has not submitted an offer, said his government would now do so.

India had made an offer on April 25, which can be described as good offer, opening each of its 21 service areas to one competitor.

It had no had no objection to the extension of the deadline, as in the telecom sector, it is not one of the great demanders. India, it is stated, would not mind if as a result of the extension of the deadline someone gained.