USTR Report Cites Limits on U.S. Telecom Equipment Exports
There’s growing concern that U.S. telecommunications equipment manufacturers may be disadvantaged by the growing use of local content requirements in countries such as Brazil, India, and Indonesia, the U.S. Trade Representative said in its 2012 annual review of telecommunications trade agreements. The report also cites the use of equipment standards and conformity assessment procedures (including testing requirements) that act as barriers to entry for U.S. telecommunications equipment, including policies in the following countries: China (multi-level protection scheme), India (restrictions on use of strong encryption and onerous security requirements for the importation of telecommunications network equipment), and Brazil, China, Costa Rica and India (mandatory certification requirements and requirements for local testing).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The office of the USTR said the report means it will focus its monitoring and enforcement efforts this year on those areas, but said some efforts to resolve the problems already are underway.
Among the trade barriers it cited were foreign investment limits, typically in the form of limits on the percentage of equity a foreign firm can control, which are a trade-distortive barrier. This year’s report focuses on Thailand, Canada and Mexico.
There has been progress on key issues in Mexico and Canada,said USTR Ron Kirk. “In Mexico … providers have resolved several disputes with a U.S.-affiliated competitor and agreed to work on long-term solutions to pricing and access. In Canada, the government has recently proposed lifting investment limits on companies comprising less than 10 percent of the market. … In addition, we are monitoring potentially positive action in India, where the regulator is reviewing rules governing access to submarine cable landing stations; and Germany, where the regulator has proposed new rules to ensure fair access to ‘Next-Generation networks’ -- for instance, Internet-protocol-based networks.”
Also, the U.S. and Mexico successfully concluded a Telecommunication Mutual Recognition Agreement that will permit recognized U.S. laboratories to test telecommunications products for conformity with Mexican technical requirements, and vice versa. This saves manufacturers the time and expense of additional product testing and lowers prices for consumers. The agreement covers equipment subject to telecommunications regulation, including wire and wireless equipment, and terrestrial and satellite equipment.
Specific barriers to U.S. export of telecommunications equipment cited in the report include:
- Concerns with China about framework regulations for information security in critical infrastructure known as the Multi-Level Protection Scheme (MLPS). If China issues implementing rules for the MLPS regulations and applies the rules broadly to commercial sector networks and IT infrastructure, they could adversely affect sales by U.S. information security technology providers in China.
- U.S. companies are concerned that India will develop policies to implement the 2008 Amendments to the Information Act of 2000 that will impose unnecessarily stringent and burdensome encryption requirements or even ban the use of certain encryption technologies.
- India issued a series of requirements for telecommunications service providers (TSP) and equipment vendors that would have applied to the purchase of imported products but not products manufactured in India by Indian-owned or Indian-controlled manufacturers. In response to concerns raised by the U.S. and others, India suspended implementation of the license, but USTR said some concerns remain.
- Various countries have proposed or adopted policies that require the use of local content in their telecommunication sector infrastructure, specifically Brazil, Indian and Indonesia.
- U.S. industry continues to identify conformity assessment procedures relating to information and communications technology (ICT) equipment as a significant barrier to trade, focusing in particular on certain electromagnetic compatibility (EMC) testing and certification requirements, such as those by China, Costa Rica, India, and Brazil.