8:25 AM Oct 3, 1995

BILATERALISM AND MULTILATERALISM CAN'T CO-EXIST

Geneva 3 Oct (TWN) -- The head of the World Trade Organization (WTO), Renato Ruggiero expressed himself Monday night at efforts of major trading nations, and their firms, using bilateral or multilateral approaches in trade as mere tactical opportunities for choice.

Ruggiero was speaking at a dinner with the "G-7 Business Round Table" -- the major telecommunication enterprises of the G7 countries at the ITU's Telecom-95.

The negotiations on basic telecommunication services under the WTO and GATS, to be held on a voluntary basis, were continued at Marrakesh by a ministerial decision, with negotiations to be concluded by 30 April.

In his speech, the text of which was put out by the WTO press office, Ruggiero underscored the importance of the ongoing negotiations on liberalising basic telecommunication services, and said that while "liberalization of capital and trade flows is creating a global economy, the liberalization of telecommunications, which can bring high quality, medical, education and business services to every village in the world, will globalize human society itself".

These negotiations at the WTO, Ruggiero said, was within the parameters of the General Agreement on Trade in Services (GATS) which would apply to the basic telecommunication services, whatever its outcome.

The most important GATS obligation was non-discrimination among members, and thus obliged governments not to give preferential access to their telecom markets to suppliers from favoured countries and deny it to others. Commitments arising from the negotiations would have to be extended to all WTO members, whether or not they were engaged in the basic telecom negotiations.

This was the only way the "vision of a global market place" could be realised. While technology dictated global approaches -- by abolishing national boundaries and undermining national monopolies -- the need for rules to governing competitive behaviour (licensing, interconnection and universal service) also "dictated a global, non-discriminatory solution." Non-discrimination was the only way to ensure that business decisions were made on basis of market signals, not political arm-twisting.

Ruggiero then went to express his worry over the "growing tendency" to choose bilateral or discriminatory solutions to trade problems.

Such solutions, he said, were attractive in their apparent facility, but their rewards were usually disappointing and politicized and distorted economic judgements. Nor could they be enforced under the WTO dispute settlement mechanism. This was why liberalisation of telecommunications regime must remain a global endeavour and based on the most-favoured-nation principle.

The WTO head expressed disappointment that the G-7 telecommunication enterprises, in their report to G-7 governments on "Building a Global Information Society" had envisaged bilateral deals to remove barriers to trade, market access and foreign investment as an option to complement multilateral efforts.

"Bilateralism and multilateralism," Ruggiero said, "are not alternative approaches to be adopted or rejected as tactical opportunity serves, but different philosophies. Multilateralism offers a rule based, non-discriminatory and enforceable system. Bilateralism is discriminatory by definition, unstable by nature and very often extremely expensive in political terms."