4 Aviation agreements
| (27453)
8656/06
COM(06) 169
| Draft Decision on the signature and provisional application of the air transport agreement between the European Community and its Member States and the United States of America
Draft Decision on the conclusion of the air transport agreement between the European Community and its Member States and the United States of America
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| Legal base | Articles 80 and 300 EC; consultation; QMV
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| Document originated | 21 April 2006
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| Deposited in Parliament | 3 May 2006
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| Department | Transport |
| Basis of consideration | EM of 31 May 2006
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| Previous Committee Report | None
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| To be discussed in Council | Possibly October 2006
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
4.1 Since 1987 a single market for air services in the Community
has been progressively established. Community legislation has
extended the scope of this single market beyond purely economic
matters to embrace the areas of safety, security, air traffic
management, social harmonisation and the environment. The Community
has the competence to conclude air services agreements with third
countries and to require meanwhile revision of bilateral air services
agreements to eliminate provisions discriminatory against other
Member States.
The document
4.2 These draft Decisions would authorise the signature, provisional
application and conclusion of an aviation agreement between the
Community and the Member States on the one hand and the United
States of America on the other.
4.3 The agreement would:
- remove most of the operating
restrictions in existing bilateral agreements so that any Community
airline could operate between any point in the Community and any
point in the US;
- allow traffic to be carried to or from third
countries via the other party;
- allow all-cargo flights to operate on routes
from the other party to or from any third country;
- impose no restrictions on frequency or capacity;
- impose no requirement to seek Government approval
of tariffs or fares;
- remove current illegalities in the bilateral
agreements between Member States and the US, which prevent airlines
from other Member States from operating to the US;
- eliminate many other restrictions and controls
currently contained in bilateral agreements;
- protect consumers from anti-competitive behaviour;
- provide for either side to be able to request
consultations to discuss consumer protection issues;
- apply up-to-date provisions on safety and security;
and
- allow the Community and Member States to take
measures to protect the environment from the impacts of aviation.
4.4 The agreement includes wording about suspension
of its application to Gibraltar airport.[14]
4.5 The Commission believes that the proposed agreement
would enhance opportunities for Community airlines in the US,
make it easier for new entrants to enter the market, and provide
new opportunities for shippers and the tourist industry. However,
to gain true open access to the US domestic aviation market by
allowing Community airlines to carry traffic within the US or
to acquire majority ownership of a US airline would require changes
in law that remain extremely politically sensitive in the US.
But the agreement is envisaged as being the first phase of a longer
process towards an open aviation area of the Community and US
and has a provision about a shared goal for future negotiations
on further market liberalisation.
4.6 Current US law requires that for an airline to
be licensed as a US carrier it must be under "the actual
control" of US citizens. The agreement is based on the understanding
that future interpretation of "actual control" would
afford "to the nationals of member States who have invested
in an airline of the United States the possibility to exercise
a commensurate degree of influence over the commercial operations
of such airline". The Commission presented this proposal
for signature, provisional application and conclusion of the agreement
in the expectation that the US Department of Transportation (DOT)
was about to issue its final proposals on how it would in the
future interpret US law on the control of US air carriers, which
would have enabled a decision on the agreement to have been made
at the June 2006 Transport Council. However the DOT published
in May 2006 a supplementary Notice of Provisional Rule Making,
which is open for consultation for 60 days. This means that the
Final Rule is now unlikely to be published until the Summer 2006
at the earliest. Member States and the Commission will then need,
after consultation with interested parties, to take a view on
the DOT's revised policies. Consequently the earliest opportunity
to take a decision on the proposed agreement would be the October
2006 Transport Council.
The Government's view
4.7 The Parliamentary Under-Secretary of State, Department
of Transport (Gillian Merron) tells us that the Government supports
in principle securing a fully liberal air transport agreement
between the Community and US, based on a reciprocal opening of
market access. She notes that successive Governments have sought
bilaterally for over 20 years to open up market access on balanced
terms.
4.8 The Minister says the Government accepts that
at present a full opening of the US domestic market is unlikely
to form part of a first-stage agreement and that the proposed
agreement would therefore necessarily be the first step in a longer
process. Nevertheless, it will reserve judgement on whether the
package as a whole represents a sufficiently balanced and beneficial
agreement until has seen the final version of the US rule on airline
ownership and has been able to consider the full package with
Community partners.
Conclusion
4.9 We too accept that a first-stage agreement
is all that is likely to be attainable at the moment. And we note
with approval the caution with which the Government is considering
the agreement, particularly in relation to value of whatever Final
Rule emerges from the US Department of Transportation.
4.10 However, before considering the document
further we should like to hear from the Government as to its conclusions
following issue of the Final Rule and its consideration of the
package with Community partners. In particular we should like
confirmation that:
- UK airlines will be, if
not better off, at least no worse off than under the present bilateral
arrangements; and
- the agreement is based on truly reciprocal
benefits.
4.11 Meanwhile the document remains uncleared.
4.12 Finally, we note the proposed suspension
of the application of the agreement with the US to Gibraltar airport.
We presume that until the agreement is applied to Gibraltar airport
the existing bilateral arrangements between the UK and the US
will continue in operation for Gibraltar airport. But we continue
to be concerned at the failure to properly include Gibraltar in
Community legislation on aviation matters.
14 "… application of this Agreement to Gibraltar
airport is understood to be without prejudice to the respective
legal positions of the Kingdom of Spain and the United Kingdom
with regard to the dispute over sovereignty over the territory
in which the airport is situated; application of this Agreement
to Gibraltar airport shall be suspended until the arrangements
in the Joint Declaration made by the Foreign Ministers of the
Kingdom of Spain and the United Kingdom on December 2 1987 enter
into operation." Back
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