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GGD-94-193R 1 (1994-09-06)

handle is hein.gao/gaobackre0001 and id is 1 raw text is: I fl2' GAO -Cu : o G~ Z1 F~ LU - I~~J - ~Lt4~~ LU cc ~ V ~ CL ~ ~Q cu~ United States General Accounting Offce Washington, D.C. 20548 General Government Division B-257614 September 6,-1994 The Honorable Cardiss Collins Chairwoman, Subcommittee on Commerce, Consumer Protection, and Competitiveness Committee on Energy and Commerce House of Representatives Dear Madam Chairwoman: As agreed, we examined reported restrictions on the marketing of U.S. telecommunications equipment in Canada. U.S.-based companies claimed that a long-term but recently ended preferred supplier arrangement between Bell Canada, Canada's largest telephone company, and its affiliated telecommunications equipment manufacturer, Northern Telecom, had unfairly restricted U.S. marketing opportunities in Canada. The companies alleged that, with certain exceptions, they could compete to sell telecommunications equipment to Bell Canada only when comparable equipment was not available from Northern Telecom. Northern Telecom and its U.S.-based subsidiary are also significant producers and suppliers of telecommunications equipment in the U.S. market. In a March 30, 1993, letter to the U.S. Trade Representative (USTR) you had expressed the subcommittee's concern over impediments to the free marketing of telecommunications equipment in Canada. BACKGROUND The USTR had for several years identified the preferred supplier relationship as a barrier to U.S. telecommunications equipment sales in Canada in its annual National Trade Estimate Report on ForeiQn Trade Barriers (NTE). In January 1993, the U.S. government issued advocacy guidelines to assist federal officials in planning efforts to provide support to qualifying companies that wish to compete for international procurement projects. Among the criteria that may be considered to determine whether a foreign-controlled company is eligible for such government assistance is whether equivalent market opportunities exist for U.S. firms in the company's home GAO/GGD-94-193R Telecommunications Market in Canada

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