Telecommunications: Primacy of Power and Regulatory Battles for Promoting National Standards - Part 5

Upon accession China was required to make major tariff reductions and by 2007 to reduce average import-weighted average tariffs to 6.8%. Almost all China's nontariff trade barriers have been eliminated. Nearly all imports and export quotas and licenses were removed by 2005 (China's WTO Accession Protocol, 2001). Specific to China's commitments on telecom market access:

China commits to open its telecom sector, both to the scope of services and to direct investment in telecom business. Tariffs on all IT products will be reduced to zero by 2005. China will phase out all geographic restrictions for paging and value-added services in two years, mobile/cellular in five years and domestic wireless services in six years. China's key telecom services corridors in Beijing, Shanghai, Guangzhou, which account for approximately 75% of all domestic traffic, will open immediately on accession in all telecom services. China will allow 49% foreign investment in all services and will also 50% foreign ownership for value-added paging services in two years; for mobile services, 49% in five years and for international and domestic services, 49% in six years (China's WTO Accession Protocol, 2001).

A third, though related point, is that as China agreed to sign the TRIPS and TBT agreements on entering the WTO, these two particular agreements also have directly constrained Beijing's policy options. With the worldwide reduction or elimination of trade tariffs, thanks to the multilateral negotiations sponsored by GATT and now the WTO, countries have begun to use more and more nontariff barriers (NTR). Countries began to use technical requirements as a way to close their markets to imports. This concern was addressed in the WTO TBT agreement, which lays out the principle that countries should adopt international standards whenever possible or practicable. Specifically, it states that “where technical regulations are required and relevant international standards exist or their completion is imminent, Members shall use them … as a basis for their technical regulations” (GATT TBT Agreement, article 2.4). TBT is further reinforced by another WTO multilateral agreement — TRIPS. Trade-related property rights for the first time are legally protected in the WTO framework and Intellectual Property Rights (IPR) are used as a strategic asset in standards development. Many developing countries have raised two correlated concerns within the context of today's knowledge economy. First, WTO members are obliged to protect IPR associated with foreign international standards.

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