Select Committee on European Scrutiny Fifteenth Report


13 CIVIL AVIATION POLICY

(a)
(26436)
7214/05 
+ ADD1
COM(05) 79

(b)
(26438)
7369/05
COM(05) 77

(c)
(26821)
12039/05
COM(05) 406

(d)
(26822)
12044/05
COM(05) 408

(e)
(26823)
12045/05
COM(05) 409   

(f)
(26844)
12276/05
COM(05) 407

(g)
(26888)
12752/05
COM(05) 451
Commission Communication: Developing the agenda for the Community's
external aviation policy and Commission staff working paper: Annex to the
Commission Communication



Commission Communication: A framework for developing relations with the
Russian Federation in the field of air transport



Commission Communication: Strengthening aviation relations with Chile




Commission Communication: Developing a Community civil aviation policy
towards Australia



Commission Communication: Developing a Community civil aviation policy
towards the Republic of India



Commission Communication: Developing a Community civil aviation policy
towards New Zealand



Commission Communication: Developing a Community civil aviation area
with Ukrain


Legal base
DepartmentTransport
Basis of consideration Minister's letter of 13 December 2005
Previous Committee Report (a) and (b) HC 34-i (2005-06), para 15 (4 July 2005)
(c)-(g) HC 34-vii (2005-06), para 6 (26 October 2005)
To be discussed in Council (a) 27 June 2005
(b)-(g) Not known
Committee's assessmentPolitically important
Committee's decisionClear

Background

13.1 International aviation relations between Member States and third-countries have traditionally been governed by bilateral air services agreements. However, these have been found by the European Court of Justice to be contrary to Article 43 EC where they deny market access to carriers owned and controlled by nationals of another Member State. This in practice marked the start of a Community external aviation policy and an important response from the Commission has been to develop an overall policy for civil aviation relations with third-countries. In advance of a fully developed policy the Commission was mandated to negotiate a comprehensive air services agreement with the US Government and so-called "horizontal agreements" with all third-countries to bring Member States' bilateral agreements with those countries into line with Community law. Negotiations with the US authorities are ongoing. Horizontal agreements have been negotiated with a number of third-countries, including Australia, Chile, New Zealand and Ukraine, so as to alter such air services agreements with Member States as they may have in order to remove discriminatory provisions.

13.2 The latest stage in development of an overall policy is document (a), the Commission's Communication "Developing the agenda for the Community's external aviation policy". It proposed moving increasingly from bilateral agreements with third-countries towards agreements between the Community and those countries — such agreements would be based on the twin objectives of opening up markets and ensuring fair competition. To this end it suggested taking forward an external aviation policy that would:

  • continue to bring existing air services agreements into compliance with the European Court of Justice ruling;
  • create by 2010 a common aviation area comprising the Community and southern and eastern neighbours; and
  • secure comprehensive regional agreements, especially with the US, China and Russia.

13.3 In documents (b)-(g) the Commission requested mandates to negotiate civil aviation agreements, in place of existing bilateral agreements, between the Community and Russia, Chile, Australia, India, New Zealand and Ukraine. The aim would be comprehensive agreements on so-called Open Aviation Areas "combining market opening with a parallel process of regulatory cooperation and/or convergence notably in priority areas such as aviation safety, security, environmental protection, research and technology and application of competition rules ensuring a level playing field and fair and equal conditions for competition". In the absence of horizontal agreements with Russia and India, amongst the matters to be dealt with in their negotiations would be the discriminatory provisions of Member States' bilateral agreements.

13.4 When we considered document (a) (and document (b)) in July 2005 we noted that there might be important implications for the development of the Community's aviation sector. We did not clear them and asked before considering them further to have from the Government an account of the outcome of its consultations with interested parties and other Member States. We also asked what response the Commission had made to comments about the inaccurate description of the role of the European Aviation Safety Agency in the first document. When we had documents (c)-(g) before us in October 2005 we deferred further consideration of them until we had the Government's response to our earlier request. We added that, having noted the rather cursory consideration of subsidiarity in these documents we should like also a clear statement of the Government's own view of the subsidiarity issue.[42]

The Minister's letter

13.5 In her response the Parliamentary Under Secretary of State, Department for Transport (Ms Karen Buck) first puts to rest the issue the role of the European Aviation Safety Agency saying that following the Government drawing the mistakes to the attention of the Commission it corrected the document.

13.6 On the of the results of consultations with other Member States, the Minister tells us that series of discussions about document (a) about future policy took place in the Council working group and other fora. Member States were generally supportive of the Commission's proposed first aim of continued steps to bring existing bilateral agreements into line with Community law. But they did stress the need to take a flexible and collaborative approach to the achievement of this objective, by entering into negotiations itself with third-countries under the "horizontal mandate" and by avoiding actions which could jeopardise the continued operation and development of Member States' bilateral agreements.

13.7 The Minister continues that in relation to the second objective of gradual adoption of ambitious agreements between the Community and third-countries, particularly with the near neighbours and in comprehensive regional agreements, Member States expressed a range of views. They:

  • were generally supportive of measures to extend the common aviation area to neighbouring countries;
  • recognised the potential merits of further global agreements between the Community and third-countries, where these are based on the twin objectives of market opening and regulatory convergence (including fair competition);
  • stressed, however, the need for the Commission to demonstrate, case-by-case, the added value of Community level action before any new negotiating mandates are granted; and
  • stressed the importance of enabling Member States to continue negotiating the bilateral expansion of traffic rights until the point where fully open arrangements are agreed at Community level, in order to avoid freezing development of important bilateral traffic routes.

13.8 The Minister says the Government also held informal discussions with interested parties, including UK airlines. These indicated a broadly similar range of concerns and views, with a strong emphasis on the importance of demonstrating added value in action at Community level and on the need to ensure a level competitive playing field as a basis for market opening.

13.9 Finally in relation to document (a) the Minister tells us that in June 2005 the Transport Council agreed a set of conclusions which reflected the views of Member States she has described for us.

13.10 As for the Communications about mandates to negotiate agreements with Russia, Chile, Australia, India, New Zealand and Ukraine, documents (b)-(g), the Minister reminds us that the Government would wish to gain some assurance that agreements along the lines described by the Commission were a realistic possibility. It would want assurance that, on the basis of initial contacts with the third-country concerned, the Commission expected to be able to secure an agreement based on both a reciprocal opening of markets and achieving a high level of regulatory convergence. She says that information presented by the Commission and other contacts suggests that for most of these countries there would appear to be a reasonable prospect of achieving such agreements were the Commission granted negotiating mandates. The period necessary to secure agreement would be likely to vary considerably from country to country. Australia, New Zealand and Chile, for example, already operate relatively liberalised regimes in a regulatory environment reasonably close to the Community's. But regulatory convergence with some other countries seems unlikely to be achievable in the near future, although, the Minister adds, progress towards that end would in itself be a desirable goal and a possible objective in itself for a Community-level agreement. Nevertheless, the rapid pace of change in some of countries, notably China and India, means that the prospects for regulatory convergence and market opening may well increase markedly in the near future.

13.11 The Minister then reiterates the Government's wish that Member States' ability to maintain and develop their bilateral arrangements would not be frozen for a lengthy period whilst Community-level negotiations were in progress. She says the Council has yet to discuss in detail possible mandates to open negotiations with any of the countries in the documents. But in discussions about a possible mandate to negotiate an aviation agreement between the Community and China Member States and the Commission have agreed in principle that the former should remain responsible for negotiating traffic rights on a bilateral basis until there were a genuine prospect of securing fully open markets. Such an arrangement would meet the Government's concerns on this matter.

13.12 On subsidiarity the Minister notes that there are many aspects of aviation now subject to Community legislation. She tells us the Government believes that:

  • bilateral aviation agreements should be replaced by Community-level agreements only where there are clear benefits in doing;
  • there may well be cases where the Community may be better able to achieve the objectives set out in the Council's conclusions than individual Member States; and
  • the Community and its Member States acting collectively may enjoy increased negotiating power.

But she adds that an assessment would be needed case-by-case, on the basis of evidence supplied by the Commission, when specific mandates are under discussion.

13.13 Finally, the Minister tells us that in preparing its Communications on specific countries the Commission has, except in one case — Ukraine, where the relevant report is understood to be still in preparation — circulated extracts from reports produced by consultants which set out in general terms the potential impacts of possible aviation agreements. She gives us copies of the executive summaries of the available reports which discuss impacts in terms of market analysis, legal issues, institutional structures and aviation policy issues.

Conclusion

13.14 We are grateful to the Minister for the information she gives us. If Community-level agreements can be negotiated in the terms suggested and without in the meantime compromising development of bilateral arrangements we can see their utility. We have no further questions and clear the documents.





42   See headnote. Back


 
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