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TechnologyDaily Mobile
China Makes Trade Concessions To U.S.
by Danielle Belopotosky
The Chinese government on Tuesday made a series of trade commitments to the United States, agreeing to open China's telephone market to the U.S. mobile industry, to crack down on software piracy and to improve government transparency.
Speaking after the daylong 17th annual meeting of the Joint Commission on Commerce and Trade, Chinese Vice Premier Wu Yi committed to addressing U.S. concerns in those three areas plus eliminating regulatory barriers to trade in China.
While China's commitments are considered to be a step in the right direction, "One meeting is not going to solve all of our outstanding trade issues with China," U.S. Trade Representative Rob Portman said. Commerce Secretary Carlos Gutierrez made the announcement with Portman, Wu and Agriculture Secretary Mike Johanns.
Wu said the Chinese government has issued a 14-point action plan to address U.S. concerns with China's enforcement against copyright infringement for 2006.
She said China has taken steps to close illegal optical-disc manufacturing facilities and has issued a regulation requiring all computers produced or imported in China to be pre-loaded with legal software. The government also has committed to using legal software in Chinese enterprises and at all levels of government. (See Wednesday's PM Edition for more on IP rights in China.)
To quell U.S. telecommunications industry concerns, China restated its position on ensuring neutral standards for its so-called third-generation, or 3G, wireless service. China agreed "to ensure telecommunications service providers will be allowed to make their own choices as to which standard to adopt," according to a joint statement. China further said it would issue licenses for all 3G standards, instead of staggering them, so as to not favor one over another.
China agreed to remove burdensome capital requirements for U.S. telecom providers to gain market access. While no firm date has been set, the telecom working group for the joint commission will meet to discuss implementation of the changes.
Moreover, China announced that it would begin formal negotiations to join the World Trade Organization's Government Procurement Agreement by the end of 2007.
The United States and China also agreed to establish a high-technology trade working group to review export controls.
Toward World Trade Compliance
In an effort to close a $202 billion U.S. trade gap with China, Wu said Chinese businesses would increase investments in U.S. computer software, electronics, medical devices and telecom equipment. She said business leaders will sign 107 purchase agreements totaling $16.2 billion during their visit to the United States this week.
U.S. industry was cautiously optimistic about the outcomes of this week's meetings. "These discussions are headed in the right direction, and we remain hopeful that the Chinese government will translate these principles into concrete action," Business Software Alliance President and CEO Robert Holleyman said in a statement.
"As with everything else," Gutierrez said, "numbers will ultimately tell the story" as to whether China's pronouncements will bring them into full compliance with WTO commitments.
The National Association of Manufacturers said it hopes Chinese President Hu Jintao will take even greater steps to "make major improvements" during his April 20 visit to the United States.
Tuesday's commitments are "certainly positive developments," NAM Vice President for International Economic Affairs Frank Vargo said in a statement. "But we have to face up to the fact that China did not deliver on some important commitments," including declarations on China's currency control and even greater IP enforcement," he added.
In related news, Wu said China last week delivered a report to the WTO on its subsidies program. The nation has not submitted its subsidies report since it became a WTO member in 2001.
Critics argue that China's subsidies unfairly protect domestic companies from foreign competition. Each WTO member is supposed to submit its subsidy list annually.
Chinese To Monitor Internet Phone Traffic
Mountain View, Calif.-based Narus has been selected by China's state-owned Shanghai Telecom to monitor its Internet telephone service to "detect and mitigate rogue" traffic on its network, according to Narus.
In an effort to improve management and security, Narus said it will perform "deep-packet inspection" for Shanghai Telecom while "correlating every link of the network."
Critics allege that the Chinese government has sanctioned the company's right to block Internet phone traffic and consider the move anti-competitive.
In the United States and Britain, meanwhile, adult usage of voice-over-Internet protocol is on the rise. Nearly half of British adults have heard of or used Internet telephony, up from 37 percent just nine months ago, according to a new Harris Interactive survey. The increase was similar among American adults.
The study further revealed that women are less likely to have heard about the technology. While "broader marketing efforts may be having success in building awareness of VoIP ... more targeted communications strategies may be needed to fill the gaps" among demographic groups, Derek Eccleston, the research director at Harris Interactive, said in a statement.
Europe Defers Extension of Universal Service
The European Commission on Tuesday announced that European stakeholders have come to a consensus not to extend a push for universal telecom service in Europe to high-speed Internet and mobile services, according to the European Commission.
The commission last year sought public comment on the scope of universal service rules and now has concluded that universal service "does not need to be updated for the Internet age," Information Society and Media Commissioner Viviane Reding said in a statement.
Many of the 76 comments received by industry stakeholders reported that it would be "problematic" to mandate any technology-specific services, according to the commission. They further said that changing the scope of universal service could hinder telecom investment, deter competition and stifle innovation.
"This report reflects the broad stakeholder consensus that bringing mobile and high-speed Internet services to users is best left to the market" unless structural problems exist, Reding said. In remote or rural areas, she said public investment still may be necessary to "bridge the broadband gap."
The commission will submit its findings to the European Parliament and Council.
On Tuesday, meanwhile, the commission formally asked Hungary to abolish its restrictions on cable television services. The commission said the restriction violates EU competition rules.
Under a 2002 European directive, EU nations cannot impose restrictions that prevent the transmission of electronic communications services, including high-speed Internet service. The commission claims that a Hungarian law limits cable operators' rights to provide broadcasting services in areas that cover "no more than one-third" of its population.
"Hungary is depriving cable operators of their right to provide broadcasting transmission services wherever they see fit," Competition Commissioner Neelie Kroes said in a statement. He further said Hungary is restricting competition among cable operators and "between infrastructures to the detriment of consumer choice."
The commission said if Hungary fails to comply within two months it may refer its case to the European Court of Justice.
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