RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSS/W/101
10 July 2001
(01-3437)
Council for Trade in Services
Special SessionOriginal:  Spanish
COMMUNICATION FROM MEXICO
Telecommunications Services
The following communication has been received from the delegation of Mexico with the
request that it be circulated to Members of the Council for Trade in Services.
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1. The objective of this proposal is to spark off a discussion by Members on this sector with a
view to reducing or removing barriers to trad e in telecommunications services and thereby
contributing to Members’ economic growth and development.1
2. Mexico recognizes that balanced and successful negotiations on market access in the
telecommunications services sector will require strict observance of the applicable WTO legal
framework.  Therefore, during these negotiations on telecommunications services and in keeping with
the Guidelines and Procedures for the Negotiations on Trade in Services2, Members shall observe,
inter alia , the provisions of Articles IV3, XIX.24 and XIX.35 of the General Agreement on Trade in
Services.
I. INTRODUCTION
3. The last decade has seen the telecommunications sector undergo an extremely rapid
transformation, partly owing to the pace of technolo gical change and the regulatory reform processes
undertaken in this sector by a large number of countries.  What was, in most cases, originally the
province of a single state enterprise has become an environment in which competition is permittedand the legal framework of which have been modern ized and strengthened to avoid new participants
being confronted with any anti-competitive practices by the main operator.
4. A key factor in the transformation of this sector was the outcome of the negotiations on basic
telecommunications which followed the Uruguay Round and in which 89 Members, representing
                                                     
1 Mexico reserves the right to amend this proposal at any time. This negotiating proposal does not
prejudge Mexico’s position on other service sectors or any future proposal in relation to this or any other sector.
2 Job No. S/L/93 of 28 March 2001.
3 "The increasing participation of developing c ountry Members in world trade shall be facilitated
through negotiated specific commitments, by different Members pursuant to the Parts III and IV of this
Agreement, relating to:
(c) the liberalization of market access in sectors and modes of supply of export interest to them."
4 "...There shall be appropriate flexibility for individual developing country Members for opening
fewer sectors, liberalizing fewer types of transactions, progressively extending market access in line with theirdevelopment situation and, when making access to their ma rkets available to foreign service suppliers, attaching
to such access conditions aimed at achieving the objectives referred to in Article IV".
5 "... the Council for Trade in Services shall carry out an assessment of trade in services in overall terms
and on a sectoral basis with reference to the objectives of this Agreement, including those set out in paragraph 1of Article IV."S/CSS/W/101
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90 per cent of world income from telecommunications services, made far-reaching liberalization
commitments in some or all telecommunications subsectors.  Moreover, 66 Members also adopted the
Reference document, either in part or in full.
5. The speed at which these changes have taken place in Mexico exceeds even the international
average. Telephony, originally a public monopoly prior to its privatization in 1990, has been openedto competition and there is now foreign capital participation in all sector segments.
6. Within the framework of the WTO, Mexico adopted the Reference document in full and its
schedule of commitments on basic telecommunications provides for national treatment and market
access for all services, with the exception of satellite services which require the use of Mexican
satellites for the provision of domestic services.
7. Mexico considers that, even if the outcome of the 1997 telecommunications negotiations was
satisfactory, commitments need to be further consolidated since market conditions have changed andwhat was not technically or politically viable for many countries five years ago is now perfectly
feasible.  Commitments undertaken in this sector during this round of negotiations should reflect the
new reality of trade in telecommunications services.
II. PROPOSAL
8. Mexico considers that these negotiations should pave the way for the future liberalization of
telecommunications.  The reference framework of its negotiating proposal is based on the following:
(i) When scheduling specific commitments and classifying the telecommunications
services under negotiation and in order to be consistent with the Cooperation
Agreement between the International Telecommunication Union (ITU) and the WTO,
the ITU's work on definitions will have to be taken into consideration and the servicessectoral classification list in document W/120 and the definitions in both the GATS
Annex on Telecommunications and the 1997 Reference document should continue to
be used as a basis for negotiations.
(ii) Mexico considers the "Understanding on Accounting Rates" to be in force unless, as
stated in its own mandate, Members decide by consensus that the general conditionswhich led to the creation of this legal instrument no longer exist.  It is clear from the
review of the Understanding, conducted at the ordinary session of the Council for
Trade in Services, that most Members are of the opinion that these conditions still
apply.  Likewise, the review took into consideration work carried out by the
International Telecommunication Union (ITU) which reveals that differentiated
Accounting Rate systems do still exist.  For this reason, and without prejudging the
outcome of the ITU's work, Mexico considers the review of the Understanding to becomplete and believes that Members should proceed to agree upon a new review date,
thereby allowing market access negotiations to go ahead with legal certainty.
(iii) Negotiations on specific commitments in the telecommunications sector will have to
take into account the outcome of the assessment of trade in services, whose mandate
under Article XIX of the General Agreement on Trade in Services and the Guidelinesand Procedures for the Negotiations on Trade in Services provides for sectoral work.
Such work is already under way in the Services Council negotiating session, but has
remained within the horizontal scope of trade in services.  Mexico is of the opinion
that a proper assessment of trade in services in this sector will allow Members to
identify both their market access opportunities and national development needsbefore embarking upon market access negotiations.S/CSS/W/101
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(iv) In the light of the importance of the telecommunications sector, the aim of these
negotiations is the progressive liberalization of its services.  In practice, this should
mean greater market access with a view to promoting national development, with due
respect for national policy objectives and the level of development of individual
Members.  Thus, when the Council for Trade in Services considers it appropriate tocommence the "Request/Offer" process, developed country Members will be able to
give special consideration to requests from developing country Members, irrespective
of the mode of supply, in order to grant them effective market access and, on the
other hand, respect the latter’s level of development when they make their respective
requests.
(v) Members will have to devise principles for developing international Internet networks
which fulfil the objectives of making information technology available to allcountries with a view to promoting their economic development.  Similar work
carried out in other fora exists as a basis to help Members achieve this without
duplicating previous efforts, such as the APEC principles on "International Charging
Arrangements for Internet Services", agreed upon by the telecommunications
ministers of the member economies of the Asia-Pacific Economic Cooperation Forumat the fourth Ministerial Meeting in May 2000 (APEC TELMIN4).
(vi) Mexico adopted the 1997 Reference document and acknowledges and applies the
commitments established therein through its domestic legislation which has since
been fully consistent.  Nevertheless, Mexico considers that competitive principles
should not be the subject of negotiations on market access for services or "certain"sectors of particular interest to some Members, rather they should form part of much
more far-reaching and wide-ranging negotiations which take the interests of all
parties and their different levels of development into account.
(vii) In view of the anomaly of having competitive obligations in only one sector and for
only some Members and so as to create a situation governed by common pro-competitive principles for all countries, efforts should be made to ensure that these
telecommunications negotiations pave the way for all Members which make
commitments in this sector to adopt the Reference document.
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