Reaction Paper 4

International communication was majorly impacted by the growing trends of privatization and deregulation worldwide.

The results of the Uruguay Round, of the General Agreement on Tariffs and Trade that later evolved into the World Trade Organization, established a worldwide trade structure based on liberalization of the market and free flow of information, including, and most importantly for international communication, in the services sector. Free flow of information was especially important for the WTO as one of the key component for an effective communication infrastructure that would allow optimal economic growth and trade. The efforts for market liberalization and state deregulation by the WTO had the goal of opening up foreign markets to outside competition, especially in the telecommunications sector. The latter’s quality as a particularly fast-growing and profitable market made it a priority for Western advocates, which resulted in a GATS (General Agreement on Trade in Services) Annex on Telecommunications. This annex allowed private companies, generally from the West, to make investments in the private sector of developing countries. The privatization of infrastructures in developing countries meant that national suppliers had no advantage over foreign suppliers, and were to be considered in the same respect.  In short, the purpose was to establish the structure for Western corporations to be able to integrate foreign markets especially in “Southern” countries.

Trade is a major part of international relations, and a very beneficial one at that. Seeing the importance of commercial trade, it was only a given that free trade and free flow of information rules would spread out to include the services sectors, and of course the telecommunications sector, of which the importance surged at the time and continues to grow even today. In general, I do not regard privatization as a negative thing, especially when it comes as a response to state control and regulations. It also avoids creating a monopoly by the state. I also agree with the liberalization argument that competition makes for a better service and better prices for customers.

However, that only applies when there is the potential for fair competition. Often, and especially in the case of developing countries, privatization of the market means that a Western foreign competitor is able to come and dominate the sector, simply because national corporations lack the means and the infrastructure to be able to compete. In this case, the argument for better services and better prices becomes invalid as the market simply switches from state monopoly to corporate monopoly.