U.S., Japan OK Telecommunications Pact
The United States and Japan forged an agreement Wednesday to open the Japanese market to further inroads by U.S. telecommunications firms.
The detailed pact, based on a March 30 accord that helped Japan avoid the threat of U.S. trade sanctions, is designed to allow foreign manufacturers to provide sophisticated international telecommunications services and equipment in the largely closed Japanese market.
Negotiators faced an Aug. 1 deadline for reaching the final agreement.
The telecommunications accord would open the Japanese market for products known as network channel terminating equipment, used by computers to talk over phone lines. It would eliminate many of the obstacles that Japan has erected to prevent U.S. companies from providing communications networking services, such as voice mail and electronic banking, directly to Japanese companies involved in international communications.
The agreement only applies to international communications in and out of Japan, which is not required to open up its domestic market to foreign telecommunications firms.
U.S. officials estimated that American companies, which serve only about 4% of the market for Japan’s international telecommunications, could win a substantial share of a services market expected to grow to more than $2.5 billion annually during the next few years. They also expect U.S. firms to make strong inroads into the $750-million market for equipment as well.
“This agreement represents an important step toward giving U.S. firms in Japan access comparable to the access Japanese firms enjoy in the United States,” U.S. Trade Representative Carla Anderson Hills said.
U.S. companies will be able to communicate electronically--internally, among affiliates and with regular customers and suppliers--essentially free of regulation.
“As a result, U.S. manufacturing, financial and other firms that do business with Japan should be able to run those operations more easily and economically,” Hills said.
She said Japan also promised to take safeguards against anti-competitive conduct in the telecommunications services sector.
“These agreements will play a growing role in maintaining the competitiveness of American firms in providing benefits for consumers worldwide,” Hills said.
