U.S. flashes WTO card in NTT spat

Kyodo

The United States said Tuesday it plans to file a petition with the World Trade Organization over access to Japan’s telecommunications market unless Tokyo promises a substantial cut in interconnection fees charged by Nippon Telegraph and Telephone Corp. by July 28.

Washington apparently wants the new prime minister to resolve the long-standing dispute in a meeting with U.S. President Bill Clinton that is planned to take place on the sidelines of the upcoming Group of Eight summit in Okinawa from July 21-23.

The Office of the U.S. Trade Representative unveiled the deadline in an annual report released earlier in the day that details foreign compliance with U.S. telecom trade accords.

The report was compiled under Section 1377 of the Omnibus Trade and Competitive Act of 1988. The report’s Japan portion was released last week but did not include a specific deadline on the NTT issue.

A senior U.S. trade official hinted during a telephone news conference that Washington could opt for direct U.S. trade sanctions, saying, “we rule nothing out.”

The official said the U.S. would try to break the deadlock through talks with Japan on ministerial and other levels. A chance for high-level talks will come in May when Posts and Telecommunications Minister Eita Yashiro attends a ministerial-level Asia-Pacific Economic Cooperation meeting on telecom issues in Mexico. U.S. officials are also expected to attend the event.

The U.S. set the new deadline after a rupture developed in high-level talks in Tokyo on March 23.

Efforts by the two countries to compile a third comprehensive joint deregulation program by the end of March were aborted due to the impasse over the NTT issue.

Tokyo has repeated its earlier proposal to cut fees NTT charges other carriers for using its intracity networks by 22.5 percent over four years.

But the U.S. has demanded a deeper cut, preferably 50 percent, over two years.

The U.S. has long maintained the interconnection fees levied by NTT are 4.5 times more than those of U.S. local carriers and four times those of European firms.