On February 15, 1997, sixty-nine governments signed an agreement seeking to liberalize the world telecommunications market – a market, according to Renato Ruggiero, the Director-General of the World Trade Organization (WTO), worth “well over half a trillion dollars per year.” According to Ruggiero, these sixty-nine countries making commitments account for more than 90% of telecommunications revenue worldwide. In a statement issued February 17, 1997, Ruggerio congratulated the governments for their “determination and foresight in bringing this negotiation to a successful conclusion.” Perhaps in acknowledgment of the many delays in concluding the agreement, Ruggiero said that not all the decisions had been easy. “But in the end,” he concluded, “member governments have put their faith in the multilateral process of the WTO, and the WTO has delivered.” [1]

 

Is that, however, truly the case? Is the WTO Agreement on Basic Telecommunications an agreement which the ever sober Economist said “[i]n scope alone … is the most ambitious yet [of the WTO]” [2] really a triumph for the WTO, the General Agreement on Trade in Services and the multilateral process as a whole?

 

At first glance, the agreement does seem to be rather a triumph. The services covered under the agreement extend broadly to almost every sector of the telecommunications market: voice telephony, data transmission, telex, telegraph, facsimile, private leased circuit services (resale), fixed and mobile satellite systems and services, cellular telephony, mobile data services, paging, and personal communications services (PCS). The liberalization of the services in these market sectors will occur not only in cross-border supply of telecommunications, but also allows for services to be provided through the establishment of foreign firms, or commercial presence in foreign countries, including “the ability to own and operate independent telecom network infrastructure.” [3] In other words, when the agreement is fully implemented, AT&T or MCI could be selling long-distance in Sweden and building a new fibre-optic network in El Salvador, while Telia (Sweden’s formerly national telecommunications carrier) could be selling network service to U.S. businesses, while building a new digital cellular network in Bulgaria with a joint venture partner such as Ericsson.

 

The agreement not only offers nearly comprehensive telecommunications sector coverage, but it offers extensive national market coverage as well. The sixty-nine countries signing the agreement include all the world’s industrialized countries, as well as forty developing countries from all regions of the world. The developing countries include large nations such as India, small nations such as Belize, as well as economies in transition from the former Warsaw Pact such as the Czech Republic. [4]

 

On the surface, therefore, the agreement does seem to be a victory for the WTO, and a reaffirmation the principle of multilateralism enshrined in the GATT. When one begins to look a bit deeper, however, and compares the actual legal text of the General Agreement on Trade in Services (born in 1994 with the GATT Uruguay Round Agreement), with the various incentives for countries to avoid liberalization, and recent developments in the world telecommunications market, a different picture emerges. It is a picture of the triumph of technology and market forces rather than a triumph of multilateralism; a picture in which the agreement seems to have come about not due to, but rather in spite of the GATS itself. In his statement, perhaps without even realizing, Director-General Ruggiero acknowledged this triumph:

 

Perhaps most importantly of all from a longer-term perspective, this deal goes beyond trade and economics. It makes access to knowledge easier. It gives nations large and small, rich and poor, better opportunities to prepare for the challenges of the twenty-first century. Information and knowledge, after all, are the raw material of growth and development in our globalized world. [5]

In the final analysis, the real triumph of this agreement belongs not to the WTO, but to the force of the information economy itself.

 

Eric Senunas *