Trade and Industry

Sunday, 15 June 2003

WTO Negotiations in Telecommunications: How Should SADC Countries Respond?

  • Year: 2003
  • Organisation: SATRN
  • Author(s): James Hodge
  • Countries and Regions: Southern African Development Community (SADC)

Telecommunications services are an important focus for most industrial countries in the current round of trade talks in services. Initial negotiating positions and country requests by these industrial countries all call for full liberalisation of the sector. SADC countries have already embarked on reform in telecommunications but few have made commitments in the WTO and almost none propose going as far as full liberalisation in the foreseeable future. Fortunately, merely by committing to the current and planned future liberalisation, SADC countries can improve their existing offers in this sector dramatically. However, in developing a negotiating position each country needs to consider whether they might have to or want to go further than merely committing to their autonomous liberalisation.

SADC countries might have to go further if their position is inadequate to satisfy demands placed on them in the negotiations or if they want other countries to open up beyond what they are currently doing. Telecommunications reform might also be used as an offering to compensate other countries for refusing to open up another sector adequately. SADC countries may also want to go further because it might be in their own economic interests to liberalise the sector faster but cannot do so because of internal opposition. Negotiations offer an opportunity to get compensatory market openings from other countries in this or other sectors - an opportunity that might not arise for another 10 years! These market openings can help compensate the losers of any additional reform and in so doing overcome political opposition.
Even if some SADC countries are unwilling to commit beyond their current reform programme in telecommunications, they will need to prepare an adequate defence of their policies in order to fend off demands. They may also want to make use of the special and differential treatment provisions for developing countries in order to either limit the extent of their commitments or use the negotiation process to assist in sector development.

This paper examines possible negotiating positions that SADC countries may want to take in telecommunications. It begins with an overview of how telecommunication services are covered in the GATS and how specific articles may influence telecoms policy. It then examines the current liberalisation path that is being followed in SADC countries, including the rationale for such a path. Understanding the rationale for the approach is crucial to looking at the potential offers for SADC countries because it articulates the development goals and special market considerations that would form the basis for any articulation of special and differential treatment in the WTO. The current and planned future policy is also the basis for an immediate offer that would require no internal policy review. The paper then moves onto a brief assessment of the current policy regime in most SADC countries in telecommunications. This too is important for two reasons. First, if the policy is not effective then there is a basis for changing policy and therefore revising what one might commit to in the WTO. Second, if there is a decision to commit to more than the planned reform, then one needs to understand what might be the additional offers that are easiest to make and what the potential impact of such a move would be.

The paper then moves to specific WTO offers, requests and negotiating strategy. The current commitments by SADC countries are summarised and a maximum offer based on planned reform is converted into a GATS schedule. While most countries have very similar reform plans and hence a similar schedule, some countries do differ and so individual potential offers for each SADC country appear in the appendix. The paper then discusses various negotiating positions that countries might take.