RESTRICTED
WORLD TRADE S/GBT/M/9
10March 1997
ORGANIZATION(97-0955)
Group onBasic Telecommunications
REPORT OFTHE MEETING OF15FEBRUARY 1997
1. TheGroup onBasic Telecommunications helditsninthandfinalmeeting on15February 1997.
Theagenda forthemeeting consisted ofthreeitems: discussion oftheReport totheCouncil forTrade
inServices; presentation ofnewandrevised draftschedules; andgeneral comments ontheoutcome
ofthenegotiations.
2. Report totheCouncil forTrade inServices. Introducing therevised draftofthisreport, the
Chairman drewattention toanewparagraph dealing withaccounting ratessystems. Ithadbeennoted
thatsome delegations hadsubmitted Article IIexemptions withrespect toaccounting ratessystems;
though theirrighttodosowasnotinquestion, itwould havebeenundesirable thatalarge number
ofother delegations feltitnecessary totakesimilar exemptions onthebasis ofuncertainty about the
interpretation oftheissueofaccounting ratesinthesenegotiations. Inorder toavoid suchanoutcome
hesuggested thataparagraph beinserted intheReport recording theunderstanding oftheGroup that
theapplication ofaccounting ratesunder theInternational Telecommunications Regulations would not
giverisetodispute settlement action under theWTO. TheChairman stressed thatthiswasmerely
anunderstanding, which could notandwasnotintended tohavebinding legalforce. Ittherefore did
nottakeaway from Members therights theyhaveunder theDispute Settlement Understanding; it
wasmerely intended togiveMembers whohadnottaken MFN exemptions onaccounting ratessome
degree ofreassurance. Healsodrewattention tothestatement intheparagraph thatthisunderstanding
willbereviewed before thecommencement ofthenextRound ofnegotiations. Some delegations
suggested some other changes, which were incorporated intheReport.
3. Presentation ofnewandrevised draftschedules. Belize andDominica introduced newdraft
schedules, bringing thetotalnumber ofdraftschedules to55.TheSecretary General oftheCaribbean
Telecommunications Union (CTU) alsointroduced adraft schedule from theBahamas. Since the
Bahamas isnotaMember oftheWTO, itsschedule onbasictelecommunications would notbeattached
totheProtocol; however, theChairman noted thattheBahamas might wish toinclude itinits
negotiations foraccession totheWTO. TheSecretary General oftheCTU saidthatthedraftschedule
ofSaintVincent andtheGrenadines would alsonotbeattached totheProtocol, asitwould beformally
submitted after15February. Chile, theEuropean Union, Korea, Indonesia, Mexico andPoland
introducedfurtherrevisionsoftheirdraftschedules.TheUnitedStatessubmittedanArticleIIexemption
onone-way satellite transmission ofDTH andDBStelevision services andofdigital audio services.
Brazil announced thatitwastabling anArticle IIexemption ontelecommunications services supplied
fordistribution ofradioandtelevision programming fordirect reception byservice consumers. Several
delegationsincludingtheCzechRepublic,HongKong,Hungary,Morocco,Senegal,Switzerland,Turkey
andVenezuela introduced technical changes totheirdraftschedules. Turkey andBangladesh submitted
Article IIexemptions regarding accounting rates. Argentina saidthattheywerecontinuing negotiations
onarevised schedule andthattheyhoped tobeabletosubmit itbefore thedeadline.S/GBT/M/9
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4. Therepresentative oftheEuropean Union noted thatintheframework oftheDecision on
Negotiations onBasic Telecommunications, Article IIexemptions were onlypermitted forservices
covered bythose negotiations. HesaidthatDTH andDBSaswellasdigital audio transmission services
didnotfallwithin thescope ofthenegotiations onbasic telecommunications services andthatthe
United States themselves indicated thisfactinthecover notetotheirtelecommunication offer. The
European Union anditsMember States therefore reserved alltheirWTO rights regarding theArticle II
exemption tabled bytheUnited States, andnoted thatsuchanexemption could notconstitute aprecedent
forfuture negotiations. TheUnited States explained thattheirArticle IIexemption referred tothree
types ofsatellite services, which weretreated astelecommunications services intheUnited States and
notasbroadcasting services. Forthisreason theywere notincluded intheUnited States Uruguay
Round commitments regarding radioandtelevision transmission services. Thedelegation oftheUnited
States alsonoted thattheGATS doesnotoperate under asingle nomenclature ofsector classification
andthatcountries arefreetoselect theirowniftheysochoose. GATS Commitments should beread
inthelightofeachsystem, andthiswasparticularly trueforthose countries, liketheUnited States,
which hadnever relied ontheCPCcodes forscheduling intheaudiovisual orbasictelecommunications
sectors. Thedelegation ofJapan stressed theimportance oftheMFN principle fortheGATS and
regretted thedecision oftheUnited States totableanArticle IIexemption. Theysaidthattheyreserved
theirrights astothevalidity oftheArticle IIexemption tabled bytheUnited States, asthere wasno
consensus toinclude those services inthescope ofthisnegotiation. Korea expressed concern about
theArticle IIexemption taken byamajor trading partner andreserved itsrighttomake ajudgement
astowhether suchexemption wasconsistent withtheGATS Agreement. Canada saidtheyregretted
thattheUnited States haddecided totableanArticle IIexemption andthatitwould beunfortunate
ifthisaction were tobecome aprecedent forfuture negotiations. However, theysaidthatthis
development didnotaltertheirjudgement thattheoverall balance ofbenefits inthesenegotiations clearly
warranted concluding themonthebasisoftheoffers nowonthetable. Mexico regretted theinclusion
ofexemptions fromMFN, which wasoneofthefundamental pillars ofthemultilateral trading system.
Norway saidthattheyweregenerally pleased withtheoutcome ofthenegotiations andwiththebenefits
thatitwould bring about, butthattheArticle IIexemptions which hadbeentabled should notconstitute
aprecedent forfuture negotiations. Thedelegation ofIndia stressed thattheirArticle IIexemption
onaccounting rateswastaken asapurely defensive measure toensure thatthematter wasnotsubject
todispute settlement. There wasnoquestion ofIndiaresorting todiscriminatory practices. TheMFN
exemption onaccounting ratesalsodidnotmean thatIndia hadchanged itsviewthatGATS hadno
bearing onmatters relating toprices.
5. TheChairman asked delegations whether theyagreed toadopt theReport, withtheattachment
ofthelistoftheSchedules ofSpecific Commitments andListsofArticle IIExemptions, andwiththe
attachmentofthetwoNotesbytheChairmanonSchedulingofCommitmentsandonSpectrum/Frequency
Management. TheGroup adopted theReport andtheattachments.
6. General comments ontheoutcome ofthenegotiations. Many delegations intervened toexpress
satisfaction atthesuccessful outcome ofthenegotiations, andnoted thatliberalization ofbasic
telecommunications services would confer major economic benefits onindustry aswellasonconsumers
inthisfield. Itwasnoted thattheagreement onbasic telecommunications services would reinforce
thecredibility oftheGATS andofitsagenda ofprogressive liberalization indifferent service sectors.
Onedelegation underlined thesignificance ofbringing animportant service sector suchasbasic
telecommunication within thefieldofmultilateralism andthatthisprovided asolidfoundation forthe
success ofmultilateral negotiations inother service areas. TheDirector General oftheWTO
congratulated delegations fortheefforts made inthenegotiations andfortheresult obtained. Hestressed
theimportance ofthesocial andeconomic benefits which could derive from thisagreement andthe
rolethatliberalization inthebasic telecommunications sector could haveinpromoting growth and
development inaglobalized world. Henoted thatthisagreement could alsoenhance thehuman aspect
ofglobalization bymaking access toinformation andknowledge easier.S/GBT/M/9
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7. Alldelegations joined inconveying thanks andcongratulations totheChairman oftheGroup,
NeilMcMillan, forhisuntiring leadership throughout thisnegotiation, andforhispersonal contribution
toitssuccess.