The European Information Technology Round Table failed in a final attempt to dissuade the European Commission from introducing a directive that it says will put European telecommunications equipment manufacturers at a distinct disadvantage to those in Japan, the US, and Canada. It has been trying to persuade Community officials to hold back on the plan to introduce semi-free competition in public procurement of telecommunications equipment, which comes into effect on January 1, and is causing particular agitation in unashamedly protectionist France (CI No 2,074). As of then, public telecommunications carriers may favour local equipment only if the price is less than 3% above the competing tender from outside the Community. The Round Table feels that since markets outside Europe are not open to similar levels of competition either they are closed or carriers are maintaining traditional relationships with local suppliers – opening up the European market would give manufacturers outside Europe an unfair advantage. A spokesman for Alcatel Alsthom SA, which chairs the Round Table, points to the example of Canada where Bell Canada Ltd maintains strong links with local company Northern Telecom Ltd, making it very difficult for other companies to make successful bids. Similarly, AT&T Co buys the majority of its equipment from affiliated companies, making the US, too, something of a closed market. The Commission said on Thursday that it does not plan to redraft the legislation even though the world trade talks have not been concluded, but it will issue a report shortly on access by Community suppliers to third country markets. The Commission could recommend that some countries be excluded from the directive’s scope, but that it favoured a solution within General Agreement on Tariffs & Trade. Ironically, the US is not happy with the agreement either, and in February threatened the European Community with sanctions if it did not have completely free access to European markets. Indeed, while the Information Technology Round Table feels that the 3% price advantage its members will still have is too little, the US feels that this figure is 3% too much.
