Mexico case was the first dispute case handled by the World Trade Organizations filed against the telecommunication provider, the Voice Telephony in Mexico (Ortiz Mena & Rodriguez, 2005). The bilateral efforts between the two parties could not solve the case, and the US sought the intervention of the WTO in the year 2002(Ortiz Mena & Rodriguez, 2005). This essay will discuss the case of Mexico versus Telecom and highlight the verdict of the WTO. The complainant is the US, the respondent is Mexico, and the judging panel is the World Trade Organization.

The complainant arguments

The US accused the Mexico of failing to open its cross-border telecommunicationmarket as required by the GAT, which led to many disagreements between the two parties. According to the complainant, Mexico failed to ensure that Telmex provides interconnection of the US cross-border suppliers on reasonable terms, conditions, and cost as demanded by section 2 of its reference paper commitments. The complaint also accused Mexico of failing to maintain the appropriate measures that will limit Telmex engagement in anti-competitive practices. Mexico also failed to provide access to the US suppliers to public telecommunications networks in Mexico, thus prevented them from providing non-facility based services within Mexico.

The respondent’s reaction

Mexico, who were the respondents, said that Annex did not apply to use and access the public telecommunications transport networks and services for the provision of the basic telecommunication services. Mexico also claimed that it did not make any commitment regarding the cross-border suppliers or commercial agencies. Mexico said it had no obligations of providing such services to the US since there was no agreement for the provision of such services.

According to Mexico, the reference paper commitment applied only to matters with its borders and not anything to do with the cross-border issues. Mexico also argued that it had all the appropriate measures for prevention of anti-competitive practices under its general competition laws, therefore, cannot take the blame. Mexico added that the US did not indicate that Telmex was its major supplier in the telecommunication market; hence, its behavior does not make it not compliant to the anti-competitive practices.

The panel discovered that uniform settlement rates and proportional returns required Mexicans to engage in cartel-like practices, which shows that Mexico had no measures to curb anti-competitive practices. The panel also made it clear to the Mexicans that anti-competitive practices were part of the reference paper even if they concerned the internal law. The panel also realized that Telmex was a major supplier, and, therefore, the US complaint on Mexico as its major supplier of telecommunication services was right. The panel in its judgment found that access rates were not reasonable hence Mexico violated its obligations under section 5(b) on the provision of reasonable charges. The panel made a conclusion that Mexico did not comply allowing the US to access the private leased circuits and interconnections to their telecommunication transport networks. The panel ruled that Mexico did not comply with the obligations as required by the GAT Annex Communications. According to the Annex telecommunication requirements, any country that opens a particular market, the foreign suppliers of the services have the right to use the host country’s telecommunication networks and services to do their businesses.

The panel’s ruling was in favor of the US and stated that the services under contention are part of the cross-border services as the complainant argued in the application. By looking at the definition of the cross-border services in GATs, the panel concluded that the definition applied to more than one supplier. The supplier needs not to be in Mexico, and hence the US complaint was genuine.

Conclusion

The US accused the Mexico of failing to open its cross-border telecommunication and decided to seek the WTO assistance to settle the matter. Mexico replied that Annex did not apply to use and access the public telecommunications transport networks and services for the provision of the basic telecommunication services. The panel’s ruling was in favor of the US and stated that the services under contention are part of the cross-border services as the complainant argued in the application. The ruling was after a though investigation of the trade agreements between the US and Mexico as required by the GAT annex telecommunications.

References

Chung, C. (2006). Interpreting “interconnection”. New York, NY: NYU School of Law.

Naiki, Y. (2004). The mandatory discretionary doctrine in WTO law the US-Section 301 Case and Its Aftermath#The Mandatory/Discretionary Doctrine in WTO Law. Journal Of International Economic Law, 7(1), 23-72. doi:10.1093/jiel/7.1.23

Ortiz Mena L.N., A., & Rodriguez, R. (2005). Mexico’s international telecommunications policy: Origins, the WTO dispute, and future challenges. Telecommunications Policy, 29(5-6), 429-448. doi:10.1016/j.telpol.2005.03.005

Sherman, L. (2005). Clarifying the meaning of WTO telecommunications obligations: Mexico – measures affecting telecommunications services. INFO, 7(6), 16-32.

Voon, T., & Mitchell, A. (2011). The NBN and the WTO. TJA, 61(1). doi:10.7790/tja.v61i1.181.