australia-china free trade agreement conference brian pilbeam, pr

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8One reason why the investment environment in Chinese telecommunications is so challenging,is that China has no primary telecommunications legislation. However, this situation is soongoing to change: after many years of drafting, the new Chinese telecommunications law is in itsfinal stages and will come before the State Council very shortly.Reports on the draft law suggest that there is much that foreign investors will find encouraging.Unlike the current Services Classification Catalogue with its narrow interpretation of foreignparticipation in Value-Added and Basic Telecoms Services, we understand that the passage ofthe new telecoms law will greatly expand opportunities. It is particularly important that, coupledwith the new telecoms law, foreign investors should be accorded the full benefits of nationaltreatment within the scope of China's WTO commitments.The FTA offers the prospect of accelerating access and establishing a process for formaldialogue to sort out the issues I’ve detailed – provided it contains particular reference totelecommunications.Firstly, Telstra is strongly committed to the view that the FTA should include a specificcomponent on telecommunications services to provide for improved market access. If in theend the FTA incorporates mechanisms to bring greater parity in the overall investmentopportunities available to each of our countries, this would strengthen Telstra’s position.Secondly, on the issue of regulation, we recognise there are significant differences betweenour regimes in terms of both industry regulation and competition policy. Australia has hadcompetition in the telecommunications area since the entry of Optus in 1992, while China’smarket opening process has only just begun.Telstra’s preferred option would be the development of a regulatory regime in China that islargely harmonised with conditions in Australia. The long term aim of a telecommunicationschapter in a FTA could be expressed as a harmonisation of the two regulatory regimes, andthat their regulation should reflect international norms.It is Telstra’s understanding that China’s Ministry of Information Industry, or MII, holds thecurrent Australian model of telecommunications regulation in high regard. Therefore, Telstra
9proposes that the scope of a FTA include a ‘Statement of Principles of Best PracticeRegulation’, to which both countries would subscribe.This would set in place the guidelines for a workable path to harmonisation. It would provide forbilateral arrangements, under which stretch targets could be set for us to work towards thisobjective. That is particularly important from Telstra’s position.At the government level, the agreement should incorporate the WTO rules to create a flexiblemechanism for ministers to meet regularly to canvass common issues.But let’s also look creatively at some of the ways we could approach this. On our doorstep, wecan draw on the example of the Australia-New Zealand Closer Economic Relations agreement.Here we have the most comprehensive, effective and mutually compatible free tradeagreement in the world and one of the most successful examples of economic integration.The CER agreement is a role model that goes beyond the standard FTA concept, providing aforum for debate and allowing interchanges between the Australian Consumer and CompetitionCouncil and the New Zealand Commerce Commission.Significant advantage could be gained by developing a similar partnership with China’s StateCouncil for Information or the MII.Additionally, benefit could be gained as China prepares to become a more customer-focusedtrading nation in encouraging the Australian Telecommunications Users’ Group or itsinternational counterpart, INTUG, to create a better understanding among the Chinese carriersas to what standards customers expect in a global world.There is already a model on which this could be based. A body structured on these lines existsin Hong Kong, one of the world’s major global business regimes.5. ConclusionSumming up, Telstra is keen to work with both Governments to achieve telecommunicationscomponent in an FTA on China. We believe the agreement could yield enormous economic
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australia-china free trade agreement conference brian pilbeam, pr

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