U.S. carriers and equipment manufacturers continue to face significant barriers in international markets as depicted in the latest annual report on telecommunications trade issued on Wednesday by the Office of the U.S. Trade Representative (USTR).  

Released under the auspices of Section 1377 of the Omnibus Trade and Competiveness Act of 1988, the USTR report assesses compliance by foreign trade partners with respect to World Trade Organization and other international trade agreements regarding telecommunications products and services.  The report highlights several key accomplishments over the past year that include the withdrawal of policies in Pakistan that had forced U.S. telecommunications exporters to pay rates of more than 400% of the market rate for long distance calls.  In a press statement, however, U.S. Trade Representative Michael Froman also emphasized that “troubling new issues have come to light that need to be address, such as demands that American telecommunications companies reveal proprietary information to foreign governments.”  

Many of the issues outlined by the USTR concern service and equipment markets in China, where officials have proposed to require information communications technology suppliers serving financial institutions to “divulge the source codes of their products to the government and use indigenous technology.”  Other barriers to trade in China include (1) restrictions on cross-border movement of VoIP-enabled services and information, (2) lack of an independent telecommunications regulator, (3) limits on foreign investment, and (4) anti-competitive policies that favor domestic suppliers.  Restrictions on cross-border, web-enabled trade were also reported in Russia, Nigeria and Indonesia Anti-competitive policies were cited in the Dominican Republic and Vietnam, where the government recently established a minimum wholesale rate for international mobile roaming services, thus increasing costs for U.S.-based providers of data services.  International call termination rates, meanwhile, were highlighted in the European Union, Pakistan, Fiji, Tonga and Uganda, where U.S. carriers face “policies and schemes” that “increase the rates U.S. telecommunications operators must pay in order to deliver long-distance calls into the foreign operators’ countries . . . resulting in higher costs for U.S. carriers and higher prices for U.S. consumers.”  

Affirming that the Obama Administration “is strongly committed to standing up for the American jobs that are supported by telecommunications exports all over the world,” the USTR pledged that it will “continue . . . to assist in opening markets to give U.S. companies the ability to supply new and innovative products and services abroad.”