Washington, D.C. and Mexico City - The United States and Mexico
reached an agreement today to resolve their ongoing WTO dispute over international
telecommunications services. The agreement implements recommendations included in the WTO panel
report released on April 2, 2004 and formally adopted today.
The main features of the agreement notified to the WTO Dispute
Settlement Body are:
- Mexico will remove the
provisions of Mexican Law relating to the proportional return system, uniform tariff system, and the requirement that the
carrier with the greatest proportion of outgoing traffic to a country negotiate the
settlement rate on behalf of all Mexican carriers for that country. Both countries believe that the
elimination of these provisions will allow the competitive commercial negotiations of
international settlement rates.
- Mexico will allow the
introduction of resale-based international telecommunication services in Mexico by 2005, in a manner consistent with Mexican
- The United States recognizes
that Mexico will continue to restrict International Simple Resale (use of leased lines to carry cross-border calls) to
prevent the unauthorized carriage of telecommunications traffic.
The annual volume of traffic between the two countries is over six
billion minutes, representing services worth over two billion dollars.
In order to place a telephone call from one country into another,
carriers must generally connect into the second country’s telecommunications network. This
is commonly done by either paying a carrier in the other country for assistance in
completing the call, or by leasing a telephone line in the other country and routing calls over that
leased line (commonly referred to as “ISR”). In February 2002, the United States requested a WTO
panel to address restrictions imposed by Mexico on international telecommunications services
between the two countries. In a report released in April 2004, the panel recommended that
Mexico remove certain restrictions on the commercial negotiation of international settlement rates,
but concluded that Mexico should be allowed to maintain restrictions on ISR. The panel also
concluded that Mexico should allow the resale of international services from Mexico to other