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U.S. THREATENS TO TAKE MEXICO TO WTO
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New York, NY April 5, 2000 (ICB TOLL FREE NEWS) The United States accused Mexico on Tuesday of failing to open a telecommunications market dominated by Telmex, and threatened to take the dispute to the World Trade Organisation (WTO).
Mexican long-distance operators affiliated with U.S.-based AT&T and MCI WorldCom have struggled for years to compete with Telefonos de Mexico (Telmex), the former Mexican state phone monopoly, and have put pressure on the Clinton administration to take action.
"I view the situation in Mexico as extremely serious," U.S. Trade Representative Charlene Barshefsky said in a statement.
"In Mexico, it appears that progress toward a level playing field for telecommunications carriers now is stalled," Barshefsky added. "The United States will determine by July 28 whether additional action, including in the WTO, would be appropriate."
The United States has also threatened the governments of Japan and South Africa with complaints to the Geneva-based WTO if they refused to reform.
The announcements followed an annual review of major U.S. trading partners and their compliance with WTO agreements governing telecommunications.
In its statement on Mexico, the Office of the U.S. Trade Representative (USTR) criticised authorities for failing to complete long-promised reforms under international rules and accused Telmex of denying its competitors use of "certain essential facilities."
The USTR based at least some of its report on complaints from MCI and AT&T, which operate Avantel and Alestra, Telmex's biggest long-distance competitors.
According to MCI WorldCom, Mexican regulators have allowed Telmex to raise interconnection rates charged to other carriers for access to local phone networks.
MCI WorldCom has also accused Telmex of refusing to provide private lines and circuits to affiliate Avantel. MCI WorldCom owns 45 percent of Avantel.
"Our goal is to restore the pro-competitive progress that already has benefited U.S. and Mexican consumers through significant reductions in prices for long distance services," Barshefsky said.
Avantel and Alestra have grabbed some 25 percent of the long-distance market since 1997 but say they cannot make a profit because of unfair Telmex practices including high interconnection fees.
Telmex says Avantel and Alestra owe it more than $500 million for special links it has provided.
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