WTO/GATS and new rules for Regulators

WTO/GATS and new rules for RegulatorsEgyptian Telecommunication Regulations ( ETRs)

in context of WTO/BTADr. Sherif Guinena

NTRA, EGYPT

National Telecommunication Regulatory Authority, National Telecommunication Regulatory Authority, EgyptEgypt

ReferencesReferences General Agreement in Trade in Services.General Agreement in Trade in Services.

Guidelines for the scheduling of specific commitments under GATS Guidelines for the scheduling of specific commitments under GATS “”Adopted by “”Adopted by the council for Trade In service on 23 March 2001 “”.the council for Trade In service on 23 March 2001 “”.

Egypt- Schedule of specific commitments Supplement 3Egypt- Schedule of specific commitments Supplement 3 “” “” GATS/SC/30/SUPPL.3 5 June 2002””.GATS/SC/30/SUPPL.3 5 June 2002””.

Understanding WTO - Understanding WTO - “” 3“” 3rdrd edition Previously published as “Trading into the edition Previously published as “Trading into the Future - September 2003 “”Future - September 2003 “”

Telecommunication Reform- How to Succeed Telecommunication Reform- How to Succeed “Viewpoint – note no.130 October “Viewpoint – note no.130 October 1997””.1997””.

The Gats and new rule for regulators. The Gats and new rule for regulators. “” Telecommunication policy, vol.21, “” Telecommunication policy, vol.21, no.9/19, 1997””.no.9/19, 1997””.

Open Market Policy : Open Market Policy : IP3 training course – November 2003.IP3 training course – November 2003.

WTO : Rights & Obligations WTO : Rights & Obligations – – ILI training course – December 2003.ILI training course – December 2003.

www.wto.orgwww.wto.org

http://www.wto.org/

Topics to be coveredTopics to be covered

What is the WTO? And what is the objective of its What is the WTO? And what is the objective of its establishment?establishment?

What are the benefits of the WTO trading system ?What are the benefits of the WTO trading system ?

What is the WTO’s structure ?What is the WTO’s structure ?

Does the WTO dictates policy? And are smaller countries forced Does the WTO dictates policy? And are smaller countries forced to join the WTO ?to join the WTO ?

What are Egypt’s commitments in the basic telecommunication What are Egypt’s commitments in the basic telecommunication services?services?

How can the NTRA’s role towards its obligation within this How can the NTRA’s role towards its obligation within this international organization be arranged?international organization be arranged?

What is the GATS and ITO ? And how is it related to the WTO?What is the GATS and ITO ? And how is it related to the WTO?

AgendaAgenda Historical backgroundHistorical background

World Trade Organization ( WTO )World Trade Organization ( WTO )- Fact File.- Fact File.- Principles of the WTO trading system.- Principles of the WTO trading system.- What about small countries ?- What about small countries ?-The WTO agreements structure.-The WTO agreements structure.

General Agreement for Trade in Services ( GATS )General Agreement for Trade in Services ( GATS )

Egyptian schedule for specific Commitments in Egyptian schedule for specific Commitments in Telecommunication.Telecommunication.

NTRA’s Role – The Actual Plan.NTRA’s Role – The Actual Plan.

Expectations Expectations The Next phase The Next phase

Historical backgroundHistorical background International Trade Organization (ITO) & General Agreement on Tariffs and Trade (GATT).International Trade Organization (ITO) & General Agreement on Tariffs and Trade (GATT).

- Great depression of 1930’s.- Great depression of 1930’s.- 50 countries negotiations. - 50 countries negotiations. - Specialized agency of the United Nations.- Specialized agency of the United Nations.- ITO Charter was ambitious (Trade, rules on employment, commodity agreements, - ITO Charter was ambitious (Trade, rules on employment, commodity agreements,

restrictive business, international investment , and services) restrictive business, international investment , and services) - 23 of the 50 participants in 1946 to negotiate to reduce and bind customs tariffs (GATT).- 23 of the 50 participants in 1946 to negotiate to reduce and bind customs tariffs (GATT).- It entered into force in January 1948, while the ITO Charter was still being negotiated.- It entered into force in January 1948, while the ITO Charter was still being negotiated.- Ratification in some national legislatures proved impossible.- Ratification in some national legislatures proved impossible.- Without US, the ITO was effectively dead.- Without US, the ITO was effectively dead.

Achievements of GATT.Achievements of GATT.- Massive cut in tariff.- Massive cut in tariff.

Weakness of GATT.Weakness of GATT.

- Economic recessions in the 1970s led governments to seek bilateral market-sharing - Economic recessions in the 1970s led governments to seek bilateral market-sharing arrangements.arrangements.

- Covered only trade in goods. - Covered only trade in goods. - Weak dispute resolution.- Weak dispute resolution.- These and other factors convinced GATT members that a new effort to reinforce and - These and other factors convinced GATT members that a new effort to reinforce and

extend the multilateral system should be attempted. extend the multilateral system should be attempted. - That effort resulted in the Uruguay Round, the Marrakesh Declaration, and the creation - That effort resulted in the Uruguay Round, the Marrakesh Declaration, and the creation

of the WTO.of the WTO.

World Trade Organization WTOWorld Trade Organization WTO

Born in 1995, but not so Born in 1995, but not so young.young.

cause it is Result of Uruguay cause it is Result of Uruguay

Round Negotiation 1986-1994Round Negotiation 1986-1994 the goal is to help producers the goal is to help producers

of goods and services, of goods and services, exporters, and importers exporters, and importers conduct their business, while conduct their business, while allowing governments to allowing governments to meet social and meet social and environmental objectives.environmental objectives.

”“The WTO was born out of negotiations;

everything the WTO does is the result of negotiations””

WTO Fact File

Location: Geneva, SwitzerlandEstablished: 1 January 1995Created by: Uruguay Round negotiations

(1986-94) Membership: 148 countries (on

13 October 2004)Budget: 162 million Swiss francs for 2004Secretariat staff: 600Head: Supachai Panitchpakdi (director-

general)

Functions:• Administering WTO trade agreements• Forum for trade negotiations• Handling trade disputes• Monitoring national trade policies• Technical assistance and training for developing countries• Cooperation with other international organizations

Historical backgroundHistorical background

YearPlace/ nameSubjects coveredCoun

tries1947GenevaTariffs231949AnnecyTariffs131951TorquayTariffs381956GenevaTariffs261960-1961

Geneva (Dillon Round)

Tariffs26

1964-1967

Geneva (Kennedy Round)

Tariffs and anti-dumping measures62

1973-1979

Geneva (Tokyo Round)

Tariffs, non-tariff measures, “framework” agreements

102

1986-1994

Geneva (Uruguay Round)

Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc

123

The GATT trade rounds

The WTO replaced GATT as an international organization, but the General Agreement still exists as the WTO’s umbrella treaty for trade in goods

Principles of the WTO trading systemPrinciples of the WTO trading system

Trade without discrimination.Trade without discrimination. - - Most-favoured-nation (MFN): This sounds like a contradiction.Most-favoured-nation (MFN): This sounds like a contradiction.

- - This is what happens. Each member treats all the other members equally as This is what happens. Each member treats all the other members equally as “ “most-favoured” trading partnersmost-favoured” trading partners

National treatment: Treating foreigners and locals National treatment: Treating foreigners and locals equally.equally.

Freer trade: gradually, Lowering trade barriers through Freer trade: gradually, Lowering trade barriers through negotiation.negotiation.

Predictability: through binding and transparency. Predictability: through binding and transparency.

Promoting fair competition.Promoting fair competition.

Encouraging development and economic reform Encouraging development and economic reform

What about small countriesWhat about small countries? ?

Reasons for restricting TradeReasons for restricting Trade- - Weak domestic industries may not be able to compete.Weak domestic industries may not be able to compete.- security– needed in time of war (especially food).- security– needed in time of war (especially food).

Benefits of TradeBenefits of Trade Economic Benefits:Economic Benefits:

- - Trade stimulates economic growth.Trade stimulates economic growth.- It provides more choice of products and qualities. - It provides more choice of products and qualities. - Consumer benefit from greater competition.- Consumer benefit from greater competition.- Trade raises incomes- Trade raises incomes..

Political benefits:Political benefits:- - Economic integration reduce likelihood of war (pearl harbor, EU, ..etc) Economic integration reduce likelihood of war (pearl harbor, EU, ..etc) - Governments are shielded from lobbying.- Governments are shielded from lobbying.- The system encourages good government.- The system encourages good government.- Disputes are handled constructively.- Disputes are handled constructively.- Rules make life easier for all- Rules make life easier for all

Developing countries in WTODeveloping countries in WTO- - For “developing countries” there is a degree of self-selection.For “developing countries” there is a degree of self-selection.- - Longer transitional period.Longer transitional period.- developing countries can receive technical assistance.- developing countries can receive technical assistance.

The WTO agreements structureThe WTO agreements structure

UmbrellaAGREEMENT ESTABLISHING WTO

GoodsServicesIntellectual property

Basic principlesGATT (1994)GATSTRIPSAdditional detailsOther goods

agreements and annexes

Services annexes

Market access commitments

Countries’ schedules of commitments

Countries’ schedules of commitments(and MFN exemptions)

Dispute settlement

DISPUTE SETTLEMENT Understanding (DSU))

TransparencyTRADE POLICY REVIEWS Mechanism (TRRM))

General Agreement for Trade In Services General Agreement for Trade In Services (GATS)(GATS)

What is the GATS ?What is the GATS ?

Set of fundamental principle that sustain the multilateral trading Set of fundamental principle that sustain the multilateral trading system.system.

Ensuring fair treatment for all participant (non discrimination Ensuring fair treatment for all participant (non discrimination and transparency).and transparency).

Structure of GATSStructure of GATS: (: (32 Article , 8 Annexes32 Article , 8 Annexes))

- - General obligation and disciplines (General obligation and disciplines (17 Articles17 Articles).).- Specific commitments (- Specific commitments (3 Article : Market Access , National 3 Article : Market Access , National

Treatment, and additional treatment Treatment, and additional treatment).).- Annexes elaborate further on certain sectors or obligations. - Annexes elaborate further on certain sectors or obligations. ( (Ex. Annex on TelecommunicationsEx. Annex on Telecommunications.).)- Schedules contain commitments submitted by each WTO - Schedules contain commitments submitted by each WTO

member ( member (Ex. Egyptian schedule of specific commitmentsEx. Egyptian schedule of specific commitments).).

Egypt’s General Egypt’s General ObligationsObligations

• Most-Favored-Nation TreatmentMost-Favored-Nation Treatment• TransparencyTransparency• RegulationsRegulations• RecognitionRecognition• International Payment and TransferInternational Payment and Transfer• Progressive Liberalization Progressive Liberalization

Egypt’s SpecificEgypt’s SpecificCommitments in TelecommunicationsCommitments in Telecommunications

Egypt undertook specific Egypt undertook specific commitments regarding:commitments regarding:

• Market Access : Market Access : is defined mostly in terms of is defined mostly in terms of quantitativequantitative restrictionsrestrictions (numbers of (numbers of companies allowed in), but also includes companies allowed in), but also includes some other forms of limitations such as some other forms of limitations such as limits limits on foreign ownershipon foreign ownership in an eligible company. in an eligible company. ( Article XVI of GATS ) ( Article XVI of GATS )

• National Treatment : National Treatment : means treating means treating foreignforeign and and domesticdomestic companies (or services) companies (or services) equally equally (Article XVII). (Article XVII).

Egyptian schedule for specific Commitments in Egyptian schedule for specific Commitments in TelecommunicationTelecommunication..

•Clear definition of the sector.

•Countries are free for selecting the sectors.

•12 sectors: business, communication, construction, engineering, education, distribution, environment, financial, health, tourism,

recreation, transport, and other

- Opportunity to provide services in the market:

- Access to public networks on reasonable and

discriminatory terms.

-some measures are:

* Limitation on number of service providers.

* Limitations on total value of services, transactions or assets.

* Number of service operations

* Total QoS.

* Total number of persons that are employed in a particular sector.

A member wishing to maintain any limitations on national treatment- that is any measures which result in less-favorable treatment of foreign services or service suppliers- must indicate these limitation in the third

column of its schedule.

•Additional commitments relating to measures•Ex.: qualification, standards, licensing matter•Used to indicate positive undertaking, not the listing of additional limitations or

restrictions.


1 Continuation of ENT beyond 31/12/2005 shall be subject to consultations between Egypt and WTO Members, taking into consideration progress of the CTS discussions on ENT.


[1] A license is required



Egyptian schedule for specific Commitments in Egyptian schedule for specific Commitments in Telecommunication.Telecommunication.Access LimitationsAccess Limitations..


Domestic voice:Domestic voice:• Telecom Egypt maintains monopoly on facilities-based Telecom Egypt maintains monopoly on facilities-based

domestic fixed voice services until 31/12/2005domestic fixed voice services until 31/12/2005• Resale of TE’s domestic service allowedResale of TE’s domestic service allowed

Domestic data, private leased lines, Domestic data, private leased lines, internetinternet services:services: • Market access permittedMarket access permitted

International voice:International voice:• Telecom Egypt maintains monopoly on facilities-based Telecom Egypt maintains monopoly on facilities-based

international voice and data services until 31/12/2005international voice and data services until 31/12/2005• Resale of TE’s international voice and data services allowedResale of TE’s international voice and data services allowed

Egyptian schedule for specific Commitments in Egyptian schedule for specific Commitments in Telecommunication.Telecommunication.Access LimitationsAccess Limitations..


Digital Mobile ServicesDigital Mobile Services • Duopoly until 30/11/2002Duopoly until 30/11/2002• Open for new entrants.Open for new entrants.

Market Access permitted for Market Access permitted for • Domestic PayphonesDomestic Payphones• Domestic VSAT services Domestic VSAT services • Domestic value-added services Domestic value-added services

((PPCC, IVR, VP, SMSPPCC, IVR, VP, SMS,…) ,…) All licenses subject to economic needs All licenses subject to economic needs

test until 31/12/2005test until 31/12/2005 ((Infrastructure Licenses, Infrastructure Licenses, VAS LicensesVAS Licenses ) )

Egyptian schedule for specific Commitments in Egyptian schedule for specific Commitments in Telecommunication.Telecommunication.National TreatmentNational Treatment..


No limit on foreign ownership , except TE can sell only 49% of No limit on foreign ownership , except TE can sell only 49% of its sharesits shares

All licensees must be companies registered in EgyptAll licensees must be companies registered in Egypt All companies must train local human resourcesAll companies must train local human resources All Licensees must participate in R&D activitiesAll Licensees must participate in R&D activities

(Actually Not National Treatment(Actually Not National Treatment butbut National Regulation)National Regulation)

NTRA’s RoleNTRA’s Role

Difficult Equation but……Difficult Equation but……

There is a points of successThere is a points of success

1.1. Be with the eventsBe with the events2.2. To be fully aware of our commitments and To be fully aware of our commitments and

obligation.obligation.3.3. Implementing our national telecommunication Implementing our national telecommunication

reforms programs.reforms programs.4.4. Implementing an Integrated strategy.Implementing an Integrated strategy.

”“Regulatory authorities dealing with telecom reform now need to be fully aware of the

obligations their government has assumed in the GATS””

NTRA’s Regulatory FrameworkNTRA’s Regulatory Framework

LegislationLegislation Licenses Licenses Regulatory StatementsRegulatory Statements Regulatory DirectivesRegulatory Directives Interconnection IssuesInterconnection Issues



NTRA’s Regulatory FrameworkNTRA’s Regulatory Framework”“Regulatory authorities dealing with telecom

reform now need to be fully aware of the obligations their government has assumed in the

GATS””

LegislationLegislation LawsLaws::

19/199819/1998 Transform ARENTO into TE.Transform ARENTO into TE. 10/200310/2003 Telecom regulation Act.Telecom regulation Act.

DecreesDecrees:: 165/2003165/2003 Conformity to the LawConformity to the Law 258/2003258/2003 Wireless devices and frequencies Wireless devices and frequencies

assignments assignments 259/2003259/2003 Wireless Institutes. Wireless Institutes.

Directives:Directives: Importing & Manufacturing comm. devicesImporting & Manufacturing comm. devices



GATS””

LicensesLicenses FixedFixed MobileMobile WirelessWireless VASVAS Data & InternetData & Internet VSAT & GMPCSVSAT & GMPCS



GATS””

Regulatory statementRegulatory statement AuthorizationAuthorization RegistrationRegistration Notification-Notification- Regulatory directives or codes.Regulatory directives or codes.



GATS””

InterconnectionInterconnection ROIROI Dispute Resolution Dispute Resolution



GATS””

Market survey

Regulation Scheme

Procedures & Recommendations

Approval

Implementation & Follow-up

Denial Preliminary acceptance

Market Survey

Studies

Economic

Technical

Regulatory

Petitions Petitions ComplaintsComplaints

New RegulationNew Regulation International & International & National National

CommitmentsCommitments

The Rule Making ProcessThe Rule Making Process



GATS””

Regulation Regulation thenthen DeregulationDeregulation

NTRA’s Role – The bligationsNTRA’s Role – The bligations

NTRA’s Obligations:NTRA’s Obligations:(From Telecom. Annex, Schedule of specific commitment, Reference paper (From Telecom. Annex, Schedule of specific commitment, Reference paper on communications)on communications)

are:are:

1.1. Competitive safeguardsCompetitive safeguards2.2. Interconnection.Interconnection.3.3. Universal service.Universal service.4.4. Allocation and use of scarce resources.Allocation and use of scarce resources.5.5. Transparency (Public availability of licensing criteria).Transparency (Public availability of licensing criteria).6.6. Independent RegulatorIndependent Regulator



NTRA’s Role – Actual PlanNTRA’s Role – Actual Plan”“Regulatory authorities dealing with telecom


GATS””Reform Reform Program/ProjectProgram/Project

Licensing FrameworkLicensing Framework

Scare resources Scare resources Regulation (spectrum Regulation (spectrum – Numbering – Right – Numbering – Right of ways)of ways)

Competition PoliciesCompetition Policies

Interconnection and Interconnection and network unbundlingnetwork unbundling

Universal servicesUniversal services

Rule MakingRule Making

OthersOthers

Dec 04

Q1 05 Q2 05 Q3 05 Q4 05

•Licensing program notification

•Comments on licensing

•Finalize the licensing program.

•US data collection

•US: obligation , analysis

•US: Tenders

•US: Implementation & USF

•Competition & Interconnection: Market Definition & SMP

•Competition : Merger & Acquisition rules Interconnection: RIO negotiation

•Rule Making:

Notification

•Rule Making:

Implementation

•Spectrum Management

•Frequency Pricing

•Numbering

Actual PlanActual Planbased onbased on: :

• Integrated strategyIntegrated strategy• National telecommunication reforms programs.National telecommunication reforms programs.

LicensingLicensing

Transparent licensing process and criteriaTransparent licensing process and criteria Deregulation plan towards 2005Deregulation plan towards 2005

MobileMobile Towards tariff structuring for existing networksTowards tariff structuring for existing networks Preparation for 3rd Mobile OperatorPreparation for 3rd Mobile Operator

InternetInternet Free Internet licensingFree Internet licensing Refinement of the overall Internet licensing environmentRefinement of the overall Internet licensing environment Broad bandBroad band

Fixed NetworkFixed Network Unbundling of the Local LoopUnbundling of the Local Loop PayphonesPayphones TE LicensingTE Licensing

Opening new services for competitionOpening new services for competition PP Calling CardsPP Calling Cards WiFi- WIMAXWiFi- WIMAX CDMACDMA Trunked Digital Public Mobile Radio Service (TEREA)Trunked Digital Public Mobile Radio Service (TEREA)

Licensed ServicesLicensed Services

PSTNPSTN 1 1 Pay PhonePay Phone 33 PPCCPPCC 44 MobileMobile 22 Data GatewayData Gateway 33 PDNPDN 77 Internet (ISP)Internet (ISP) 170 170 GMPCSGMPCS 22 VSATVSAT 22 FrequenciesFrequencies 42304230 TetraTetra 11

The Radio Spectrum Allocation Plan ofThe Radio Spectrum Allocation Plan ofEGYPTEGYPT

Universal ServiceUniversal Service

Expenditures of the USF are utilized by Expenditures of the USF are utilized by virtue of Act no.10 of 2003 on the virtue of Act no.10 of 2003 on the following aspectsfollowing aspects:: Infrastructure projectsInfrastructure projects Reallocation of frequency spectrumReallocation of frequency spectrum Projects of the Telecom National Plans Projects of the Telecom National Plans

(CIT)(CIT) Compensating Telecom operators for price Compensating Telecom operators for price

deficienciesdeficiencies

The US Fund is established and is ready The US Fund is established and is ready for implementation.for implementation.

Expectations Expectations The Next PhaseThe Next Phase

Interactive exercises on schedules of telecom commitments.Interactive exercises on schedules of telecom commitments.

Examples of regional regulatory initiatives. Examples of regional regulatory initiatives.

WTO dispute settlement processes.WTO dispute settlement processes.

Interconnection Dispute Resolution alternatives (case studies).Interconnection Dispute Resolution alternatives (case studies).

Interconnection agreements in the era of converged services.Interconnection agreements in the era of converged services.

Other WTO agreements and issues relevant to the Other WTO agreements and issues relevant to the telecommunication and ICT (technical barriers to trade TBT, telecommunication and ICT (technical barriers to trade TBT, Information Technology, Government procurement.)Information Technology, Government procurement.)

Contact with MCIT for more cooperation during negotiation and Contact with MCIT for more cooperation during negotiation and consultation between Egypt and WTO members.consultation between Egypt and WTO members.

Thank youThank you

Documents

WTO/GATS and new rules for Regulators