DRAFT OPINION A

The implications of the WTO agreement on basic telecommunication services for the ITU membership

The second World Telecommunication Policy Forum (Geneva, 1998),

• that each Member State has the sovereign right to regulate its own telecommunication sector, in accordance with the ITU Constitution and Convention, and to set its own timetable for adapting to market liberalization;
• that, in addition, ITU Member States that are also members of the World Trade Organization (WTO) are obliged, under its General Agreement on Trade in Services (GATS), to apply the general principle of most-favoured nation (MFN) treatment to services and service suppliers of other WTO members;
• that WTO members which have made commitments under the agreement on basic telecommunication services, and which entered into additional commitments contained in the WTO Reference Paper, undertook substantial obligations towards liberalization of their telecommunication sector and a predictable regulatory framework, including the establishment of an independent regulatory authority,

• that effective telecommunication networks and low-cost services are vital to the functioning and development of modern economies and for development, fundamental to business activity and a critical enabler of the emerging world of electronic commerce;
• that increased trade in telecommunications, within a transparent and predictable regulatory framework, has the potential to provide several benefits, such as new and improved services, lower prices for consumers, and lower costs for economic activities;
• that the implementation of a competitive telecommunication environment will encourage new investments in this sector, from both domestic and foreign sources, and will improve the overall business environment for telecommunication service providers, and that the overall economy, through the dual role of telecommunications both as a traded service and as a vehicle for trade and development in other sectors, will benefit from a competitive telecommunication environment;
• that opening up telecommunication markets to foreign investment will often provide countries with additional capital to expand their telecommunication sector,
• that the WTO agreement on basic telecommunications will have an impact on all ITU Member States and Sector Members either directly by their participation in the agreement or indirectly through their commercial relationships with operators in countries which have made commitments under the agreement,

• which are WTO members

1. but have not made commitments to the WTO Reference Paper, to consider applying the principles contained in that Paper (attached); or
2. have not yet offered market-opening commitments; or
3. have not yet formally accepted the agreement,

• to consider doing so;
• which are not WTO members to apply the WTO principles when establishing a new regulatory and licensing framework, and to consider applying for membership,

• to accelerate action required by Kyoto Resolution 1 (Annex, Paragraph 26) and, to this effect, to cooperate with the WTO secretariat in identifying areas of common interest, with particular emphasis on regulatory reforms, technical studies and development matters, that may foster the purposes of both organizations to bring expertise existing in the Sectors of the Union;
• to report to the forthcoming Council regarding progress made in this respect;
• to prepare, in co-operation with the WTO secretariat, a draft agreement for consideration by the Council;
• to take action, in co-operation with other international organizations, towards facilitating informal dialogue among regulators to foster adaptation to the changing environment,

• to invite WTO to take account of the urgency attached to the conclusion of a co-operation agreement between WTO and ITU on areas of common interest.

Attachment: WTO Reference Paper.