Multilateral Trade Rules

The General Agreement on Trade Services (GATS) and the 1997 WTO Agreement on Basic Telecommunications (ABT) of the World Trade Organisation (WTO) include trade rules applicable to telecommunications regulation and licensing. Signatories to the ABT, as well as countries wising to join the WTO, must bring their regulatory and licensing practicing into compliance with WTO trade rules.

The trade rule relevant to the licensing process are summarised below. Further detail is provided in other modules (e.g. trade rules affecting interconnection, fair competition and universal services). The central themes of all these rules are evolution towards open competitive markets and transparent licensing processes.

General GATS Requirements

All WTO member states are bound by the "general obligations and disciplines" of the GATS. Three of these are directly relevant to the licensing process:

1. Most Favoured Nations (MFN) Treatment (GATS Article II)
   A licensing regime must grant market access to operators from a WTO member country on terms of "no less favourable" than the terms applicable to operators from "any other country"
2. Transparency (GATS Article III)
   All laws and rules affecting trade in services must be published. The Telecommunications Annex to the GATS specifically requires publication of, among other things, all notification, registration or licensing requirements, if any as well as any other forms of recognition and approval (e.g. type approval of terminal equipment) needed before foreign suppliers can do business lawfully in a member country.
3. Barriers to Trade (GATS Article IV)
   Licensing requirements must not "constitute unnecessary barriers to trade".

Specific ABT Commitments

The schedules to the GATS contain additional trade commitments by individual member countries concerning specific services, including basic telecommunication services. Further, national commitments made as part of WTO Agreement on Basic Telecommunications require many countries to provide greater telecommunications market access. In many cases, implementation of these commitments is phased in over a period of several years.

The WTO Regulation Reference Paper, which was annexed to many countries' ABT commitments, binds them to adopt certain regulatory practices applicable to basic telecommunications services. Two of these commitments, which are set out in Box 2-1 are directly relevant to licensing.

The complete text of the WTO Regulation Reference Paper is set out in Appendix A.