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Big Four trade partners

edge closer on telecoms

KOBE: The world's Big Four trade powers on Sunday edged closer to a deal to open their huge telecoms markets to spur a global pact and denied they had papered over disputes on nudging foward the world trade agenda.

"We have not just papered over cracks, we made progress...and have etched out a path for the future," European Union Trade Commissioner Sir Leon Brittan told a news conference after wide-ranging weekend talks with his counterparts from Canada, Japan and the United States.

Efforts to open the $513 billion world telecoms market to lower phone bills for both consumers and businesses topped the agenda at the meeting of the "quadilateral" trade chiefs.

But the ministers also mulled topics like a possible pact to abolish tariffs on information technology products, a push to halt bribery to win government contracts and the touchy topic of the link between labour standards and trade.

The trade ministers touted their progress toward a telecoms deal and said it should spur a drive to clinch a global deal by an April 30 deadline but admitted a lot was left to be done.

"In the area of telecommunications I think we have advanced the matter substantially, though of course, there are important issues still outstanding," Brittan said.

He said the progress by the Big Four should convince other countries debating the telecoms pact under the Geneva-based World Trade Organisation (WTO) to put forward or improve existing offers.

Many developing countries worry a global liberalisation accord would let big Western-based firms gobble up their markets and quash home-grown service providers. On other matters the trade ministers agreed to differ to varying degrees. "The Quad is all about nudging the trade agenda forward," an EU official said. "We have to be very diplomatic." In a formal statement issued at the end of Sunday's talks, the ministers said they "strongly support" negotiations to abolish tariffs on information tech products and would work to achieve it "on the basis of mutual benefit".

The words, however, concealed a simmering dispute over an EU effort to link the so-called Information Technology Agreement (ITA) with Brussel's desire to be included in a contentious U.S.-Japan microchip pact.

Washington wants Japan to renew the pact on access to Japan's microchip market when it expires in July, while Tokyo says the pact has outlived its usefulness and should be scrapped at that time. Brussels, meanwhile, wants to be counted in if a new deal is clinched, whether government-to-government or industry-to-industry.

In the weekend talks, Brittan insisted that settling the three-way microchip squabble was essential to working out the high-tech product tariff deal. "It is clear you can't really expect us to give up our tariffs in an ITA without resolving a major problem in the important part of it represented by semiconductors," Brittan said.

Acting U.S. Trade Representative Charlene Barshevsky, however, insisted the chip pact was a separate matter. "The ITA will stand or fall on its own merits," she said on Saturday.

The ministers, including Japanese Trade Minister Shunpei Tsukahara and Canadian Trade Minister Art Eggleton, also agreed to set up an informal WTO working group on investment with a view to creating a formal body at WTO ministerial talks in Singapore in December. They said they would also work to wrap up talks on the topic under the Organisation for Economic Cooperation and Development (OECD).

That phraseology smoothed over gaps between Europe, which wants to expand the talks on new investment rules to include developing countries, and the United States, which has in the past preferred to keep the discussion within the OECD, where it hoped to get stricter rules.

On the thorny debate over whether to link labour standards with trade and investment, the four Quad members said the matter was a human rights issue and the responsibility of the International Labour Organisation, but agreed to discuss the tie between such standards and trade in Singapore.

Washington says the issue is an economic one, a position Japan has rejected, in part because it sees itself as representing other Asian nations who make cheap products using low-cost labour.-Reuter