WASHINGTON (AP) - The United States and Mexico have resolved a trade
dispute
over telephone services, the two governments announced Tuesday. U.S.
telephone companies said the agreement should result in millions of
dollars
in savings for Americans who make telephone calls to Mexico.
The negotiated settlement was announced in a joint statement issued by
U.S.
Trade Representative Robert Zoellick and the Mexican government
following
discussions by trade negotiators from the two countries.
The negotiations occurred after the World Trade Organization ruled in
April
that Mexico was in violation of global trade rules for refusing to
dismantle
barriers to its telephone market. U.S. telecommunications companies
estimated the barriers had cost callers more than $1 billion since
2000.
The United States had contended that Mexico's giant telephone company,
Telefonos de Mexico, known as Telmex, was reaping improper profits by
charging inflated connection charges for long-distance calls.
U.S. companies, including AT&T Corp., had also complained that they
were
unable to use alternative channels for carrying their calls within
Mexico.
The two sides said the negotiated agreement would implement the
recommendations of the WTO dispute panel. The WTO case would be renewed
only
if Zoellick's office felt that Mexico was failing to implement the
commitments made in the negotiated settlement.
The U.S. case was being closely watched by American telecommunications
companies because it represented the first WTO interpretation of
global
rules on telecommunication services.
The United States brought the WTO case in February 2002. In April a
WTO
hearing panel ruled that Mexico was in violation of global trade rules
because of the way Telmex was maintaining restrictions on
international
telephone calls between the United States and Mexico.
Mexico chose to negotiate the dispute after the WTO ruling was made
public
on April 2 rather than appeal the case to a WTO appeals panel.
The ruling on Mexican telecommunication barriers represented a welcome
trade
victory for the United States, which has lost several high-profile
cases
before the WTO.
The WTO has ruled that steel tariffs imposed by President Bush in 2002
violated global trade rules and that a $5 billion tax break for
American
exporters also was in violation of WTO rules.
In the steel case, the administration late last year withdrew the
protective
barriers rather than face retaliation. In the tax case, the EU began
in
March imposing a 5 percent penalty tariff on a selected group of U.S.
products, a penalty that is increasing by 1 percentage point each month
that
Congress fails to pass legislation abolishing the export subsidy.
The Senate in May passed legislation containing $170 billion in
corporate
tax cuts that eliminated the subsidy but the House has yet to take the
measure up.Associated Press:
