Mr. Speaker, I will be sharing my time with the hon. member for Thornhill.
By November 30, of this year, Canada will have deposited an Instrument of Acceptance in Geneva signifying Canada's commitment to one of the most important trade agreements of the 21st century, the agreement on basic telecommunications.
As of January 1, 1998 this agreement will open a global market of $880 billion to Canadian telecommunications companies. Canadian telecom service providers and Canadian telecom manufacturers are the best in the world. Now they will have the opportunity to connect the world and build a new global information society by bringing Canadian ingenuity to the world.
Canada was a key participant in the drive to liberalize the world's telecommunication markets. At the end of the Uruguay round of multilateral trade negotiations that established the World Trade Organization, it was recognized that there were serious gaps in the services component of the WTO and the General Agreement on Trade and Services covered many service sectors but did not cover some fundamental business enablers such as financial services or basic telecommunications.
After two years of negotiations an agreement was reached on February 15, 1997. On that date, 69 countries with over 90% of the world's telecom revenues agreed to liberalize their markets for the provision of telecommunication services.
As a result of the agreement on basic telecommunications, the ABT, there will now be multilateral rules for trade and investment in basic telecommunication services. Local and long distance telephone, cellular, data transmission and satellite services will be open to competition. Furthermore, Canada will now be able to resort to the WTO dispute settlement process should Canada's trading partners not implement their obligations to open their markets to Canadian companies.
Each of the countries participating in the agreement has made specific commitments, setting out the terms and conditions under which foreigners are permitted to supply basic telecommunication services in their market. For example, Canadian firms will now have full access to the U.S. market for the provision of basic telecommunication services. The use of reciprocity tests by the U.S. Federal Communications Commission will be severely curtailed. Canadian companies will be able to provide local telephone services in the member states of the European Union and in Japan. All of Canada's major developing country trading partners have committed to allowing foreign competition into their markets and to allowing foreign investment of between 25% and 49%.
Besides making market access commitments, the countries participating in the agreement on basic telecommunications have committed to follow the GATS most favoured nation national treatment and transparency provisions. Countries will no longer be able to treat one country's telecommunication services providers better than another. This means that Canadian companies will be able to compete on a level playing field with other foreign companies in international markets.
For telecommunication services where countries have made market access commitments, countries will have to treat foreign companies in exactly the same way as they treat local companies. So, a Canadian company in the European market will be treated the same way as a European company.
Finally, any relevant changes to government policies, regulations or administrative guidelines must be notified to the WTO. As well, countries must respond promptly to requests for information on telecommunications policies and regulations. No longer will Canadian companies be stymied by walls of obscure foreign red tape when trying to enter telecommunications markets abroad.
Furthermore, in order to ensure that as countries move from monopolies to competitive markets, the local telecommunications companies do not abuse their dominant position. The agreement includes a reference paper on regulatory principles.
This means that measures affecting trade in telecommunications services must be administered in a reasonable, objective and impartial manner. Licensing requirements and technical standards must be based on objective and transparent criteria and must not be more burdensome than necessary to ensure the quality of the service.
Canadian telecom companies will be able to obtain interconnection with local telephone companies in foreign markets under non-discriminatory rates, terms and conditions. Perhaps most important, all participating countries must establish independent regulatory bodies which are separate from and not accountable to the local telephone company.
In addition to opening foreign markets to Canadian telecommunications service providers, the agreement on basic telecoms will result in the world-wide market of $800 billion, which means the market will double or triple in size over the next 10 years. This will generate a new demand for the products of Canadian telecommunications manufacturers as telecom operators around the world prepare for a new global environment of open markets and competition.
Companies such as Nortel and Newbridge as well as dozens of small and medium size companies from Newfoundland to British Columbia have carried the Canadian reputation for high quality, competitively priced telecommunications equipment. Now this reputation should earn them a healthy share of this dynamic and expanding market.
Canadian manufacturers will also benefit from the recently concluded information technology agreement. Under the provisions of the ITA, tariffs on information technology products including computers semiconductors and telecommunications equipment will be eliminated by the year 2000. This means that a market of $500 billion will become tariff free and will allow Canadian manufacturers to compete abroad on the basis of their products and their prices. They will be free from the market distorting effects of tariffs.
This government has promised to create jobs for Canadians and to make Canada a cornerstone of the global information society. In successfully negotiating the GATS agreement on basic telecommunications, we have done both. Canadian telecom service providers will launch into newly opened markets and Canadian telecom manufacturers will find that the demand for their products will double or triple over the next 10 years.
New opportunity translates into jobs for Canadians and a chance for Canadians to make their mark on the global information society of tomorrow.