02-9959. WTO Dispute Settlement Regarding Telecommunications Trade Barriers in Mexico

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (“USTR”) is providing notice that, on April 17, 2002, the Dispute Settlement Body (“DSB”) of the World Trade Organization (“WTO”) established a dispute settlement panel to examine U.S. claims regarding certain Mexican Government measures affecting basic telecommunications services and the consistency of such measures with Mexico's commitments under the General Agreement on Trade in Services (“GATS”). The United States requested establishment of a panel on February 13, 2002. USTR invites written comments from the public concerning the issues raised in this dispute.

DATES:

Although the USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before May 25, 2002 to be assured of timely consideration by USTR.

ADDRESSES:

Submit comments to Sandy McKinzy, Monitoring and Enforcement Unit, Room 122, Office of the United States Trade Representative, 600 17th Street, NW, Washington, DC, 20508, Attn: Mexico Telecommunications Dispute. Telephone: [phone].

FOR FURTHER INFORMATION CONTACT:

Demetrios J. Marantis, Associate General Counsel, Office of the United States Trade Representative, 600 17th Street, NW, Washington, DC, [phone].

SUPPLEMENTARY INFORMATION:

Pursuant to section 127(b) of the Uruguay Round Agreements Act (URAA) (19 U.S.C. 3537(b)(1)), the USTR is providing notice that, on April 17, 2002, the WTO DSB established a dispute settlement panel at the request of the United States to examine Mexican measures affecting basic telecommunications services. The United States requested establishment of a WTO dispute settlement panel on February 13, 2002. The United States previously invited comments from the public after the United States requested consultations with Mexico regarding telecommunications trade barriers in August 2000.^[1] USTR is hereby providing additional opportunity for comment on the issues identified in the February 13, 2002 panel request and described below.

Major Issues Raised by the United States

Mexico maintains measures—largely as a result of its “International Long Distance Rules”—that the United States considers to be inconsistent with Mexico's commitments under the GATS. For instance the current “interconnection” rate that all Mexican carriers must charge their foreign counterparts for connecting their calls to Mexico is 13.5 U.S. cents per minute. This rate exceeds the cost of providing this service by over 200 percent even though Mexico committed under the WTO Reference Paper to ensure that its dominant phone company provides “interconnection” at rates that are “basadas en costos,” or “based on cost.”

Moreover, Mexican measures grant Mexico's dominant phone company the exclusive authority to negotiate this cross-border “interconnection” rate. Such measures empower Mexico's dominant phone company to set monopoly rates even though Mexico has an obligation under the WTO Reference Paper to maintain measures to prevent this company from engaging in anti-competitive practices.

Mexico's measures also discriminate against foreign suppliers by preventing them from sending calls into and out of Mexico over leased lines. However, Mexico has committed under the GATS to permit the supply of basic telecommunications services over leased lines on a national treatment basis and committed under the GATS Annex on Telecommunications to ensure that foreign basic telecommunications service suppliers have access to and use of leased lines to provide scheduled services.

Procedural Background

On August 17, 2000, the United States requested consultations with the Government of Mexico pursuant to Article 4 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and Article XXIII of the GATS regarding a wide range of measures affecting telecommunications services. The United States and Mexico held these consultations on October 10, 2000. The consultations provided helpful clarifications but did not resolve the dispute.

On November 10, 2000, the United States requested the establishment of a panel pursuant to Article 6 of the DSU. The DSB considered this request at its meeting on December 12, 2000, at which time the Government of Mexico objected to the establishment of a panel. On November 10, 2000, the United States also requested additional consultations with the Government of Mexico pursuant to Article 4 of the DSU and Article XXIII of the GATS regarding additional measures affecting telecommunications services. These consultations, held on January 16, 2001, provided additional clarifications but did not resolve the dispute.

Since the United States initially requested consultations, the Government of Mexico has taken steps to address several of the issues on which the United States and Mexico consulted. However, Mexico has not yet taken steps to address U.S. concerns regarding measures affecting Mexico's international telecommunications market, notably the International Long Distance Rules.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in the dispute. Comments must be in English and provided in fifteen copies to Sandy McKinzy at the address provided above. A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the submitting person. Confidential business information must be clearly marked “BUSINESS CONFIDENTIAL” in a contrasting color ink at the top of each page of each copy.

Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information or advice may qualify as such, the submitter—

(1) Must so designate the information or advice;

(2) Must clearly mark the material as “SUBMITTED IN CONFIDENCE' in a contrasting color ink at the top of each page of each copy; and

(3) Is encouraged to provide a non-confidential summary of the information or advice.

Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room: USTR Reading Room, which is located at 1724 “F” St., NW., Washington, DC 20508. The public file will include a listing of any comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened, the U.S. submissions to that panel, the submissions, or non-confidential summaries of submissions, to the panel received from other participants in the dispute, as well as the report of the panel; and, if applicable, the report of the Appellate Body. An appointment to review the public file (Docket WTO/DS-204, Mexico Telecom Dispute) may be made by calling the USTR Reading Room at [phone]. The USTR Reading Room is open to the public from 9:30 a.m. to 12 noon and 1 p.m. to 4 p.m., Monday through Friday.

Bruce Hirsh,

Acting Assistant United States Trade Representative for Monitoring and Enforcement.

Footnotes

1.  65 FR 52469 (August 29, 2000).