Commission's efforts to liberalise EU telecoms regime in jeopardy

THE European Commission is expected to have trouble convincing EU foreign ministers to improve their offer now in world talks…

THE European Commission is expected to have trouble convincing EU foreign ministers to improve their offer now in world talks on liberalising telecommunications trade when they meet today.

Given that several governments oppose the idea, the ministers may end up confirming their present market opening offer while noting that it matches the best offers from the EU's major trading partners, EU officials have said.

The Commission has proposed that the EU submit a more liberal offer in an effort to entice new or improved bids from other partners - including Japan and Canada in the World Trade Organisation talks that are now in their final stages.

But some governments have argued in preliminary discussions that the EU's present offer is already as open as any on the table, and others that they could have legal problems at home if they went further, EU officials said.

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Belgium, France, Greece, Portugal and Spain - which would have to give up foreign ownership restrictions that were allowed in the first offer - have lined up against the plan, officials said.

Belgian Telecommunications minister, Elio Di Rupo, told reporters on Thursday the EU should not "open its arms" to foreign competitors before they had opened their own markets.

He said Belgium would insist on keeping its 49.9 per cent limit on non EU ownership of telecoms companies and its restrictions on the number of operators in specific telecoms sectors.

The EU has offered to allow foreign companies to benefit from its internal plan to open all telecoms sectors to competition by January 1st, 1998, in most countries.

Ireland has a derogation until 2003, but the Minister for Transport, Energy and Communications, Mr Lowry has set the year 2000 as the target date for introducing competition.

But Europe has come under pressure to do better since the US raised its own bid by agreeing to open up its local telecommunications market. The governments that are resisting do not necessarily rule out the possibility of improving the EU's offer later, but see no reason to do so yet, officials said.

Mr Di Rupo specifically complained about remaining restrictions in the US offer in areas including satellite communications and submarine cable licenses.

"They are anxious not to move if they think their offer is just going to be pocketed by their partners without anything in return," Mr Peter Guilford, spokesman for EU Trade Commissioner Sir Leon Brittan, told reporters.

He said the key question was what were the best tactics to bring about better results from other trading partners. Britain has said before that the foreign ownership restrictions in the original offer were negotiable.