Select Committee on European Scrutiny Seventeenth Report


1 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, on the one hand, and the United States of America, on the other hand

Draft Decision on the conclusion of the air transport agreement between the European Community and its Member States, on the one hand, and the United States of America, on the other hand

Legal baseArticles 80 and 300 EC; consultation; QMV
DepartmentTransport
Basis of considerationMinister's letter of 11 April 2007
Previous Committee ReportHC 34-xxxi (2005-06), para 4 (14 June 2006), HC 34-xxxvi (2005-06), para 8 (19 July 2006) and HC 41-xv (2006-07), para 1 (21 March 2007)
Discussed in Council22 March 2007
Committee's assessmentPolitically important
Committee's decisionFor debate in European Standing Committee (decision reported on 21 March 2007)

Background

1.1 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.

1.2 The draft Decisions in this document 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. It would be a first-stage agreement — a step towards the Community's ambition, shared by the Government, of an open aviation area of the Community and the US.

1.3 On 21 March 2007 we considered information from the Government about a revised agreement recently concluded with the US authorities, which was to be considered by the Transport Council the next day. We also took into account an opinion on the revised agreement which we had received from the Transport Committee under Standing Order No. 143 (11). In reporting this development we said that:

  • the original agreement presented by the Commission with the draft Decisions was, without a previously hoped for change to the regulations governing ownership of US airlines, clearly unacceptable;
  • equally clearly the revised agreement was, as the Government implied and the Transport Committee made explicit, not a great improvement;
  • we thought that a decision on whether to accept this first-stage agreement depended crucially on whether there was a reasonable prospect of a more beneficial second-stage agreement;
  • some, including the Transport Committee, held strongly there was not such a prospect and we hoped and expected that the Government would give considerable weight to this view in deciding its approach to the Transport Council discussion;
  • in the circumstances we were sure the House would have wished for more time to consider this matter, both in the light of the documents presented by the Commission and of the final outcome of the Transport Committee's inquiry;
  • nevertheless, even though a "political decision" proposed for the Transport Council on 22 March 2007 might effectively settle the terms of the new agreement, we recommended that the matter be debated in European Standing Committee before the EU/US Summit on 30 April 2007, at which it was hoped the agreement might be signed;
  • however, we accepted that the Government was unable to reveal its negotiating position before the Transport Council discussions, understood that it might just judge it in the best interest of the UK to concur in the "political decision" and agreed that it could, in accordance with paragraph (3) (b) of the Scrutiny Reserve Resolution of 17 November 1998, and if appropriate, so concur.[1]

The Minister's letter

1.4 The Secretary of State for Transport (Douglas Alexander) writes now about the outcome of the Transport Council consideration of this matter on 22 March 2007. First the Minister says that, as expected, the Commission and Presidency commended the revised stage one agreement for Council approval and that it agreed unanimously to approve the agreement, with a view to its signature at the EU/US Summit in Washington on 30 April 2007. (He encloses with his letter a copy of the text of the final agreement the Government expects to be presented for signature.) The Minister continues that the Council also:

  • reiterated its ultimate objective of a fully liberalised open aviation area covering the Community and the US;
  • asked the Commission to secure agreement of the US to put back the date of provisional application of the agreement to 30 March 2008 in order to give airlines and airports more time to prepare;
  • underlined the importance of reaching a second stage agreement and called on the Commission to engage robustly with the US Government so as to secure this goal as quickly as possible; and
  • agreed on a mechanism whereby, if no second stage agreement has been reached within 12 months of the start of the review of progress towards such an agreement provided for in the present agreement, the Community will automatically give notice of the suspension of new traffic rights to the US — such rights to be determined by each Member State in relation to its own territory — unless the Council decides by unanimity not to do so.

1.5 The Minister gives the Government view that this first stage agreement will bring an end to the restrictions on routes, frequencies and fares governing aviation between the UK and the US that stretch back over 60 years and will also end the legal uncertainty surrounding UK-US aviation relations. He adds that:

    "I am very much aware of the need for further progress towards our ultimate goal of a fully liberalised open aviation area. I am pleased that we secured at the Council a clear political commitment that this remains our goal, together with a detailed timetable for second stage negotiations and the unconstrained ability to take sanctions against the US if meaningful progress has not been made within that timetable."

1.6 The Minister reminds us that he told the Transport Committee that he would not concur at the Transport Council in a deal that was not in the UK's best interests[2] and goes on to say:

    "Taking into account the further commitments and safeguards reflected in the Council conclusions, and bearing in mind the benefits this agreement would bring for UK interests, I took the view that this stage one deal satisfied that test. This agreement will sweep away outdated and illegal restrictions which stand at odds with our policy of air services liberalisation. It should deliver real benefits for UK consumers through increased competition and better services. It provides an open, deregulated transatlantic market place in which UK carriers — both existing and new — will be well placed to compete. It sets out a clear process for delivering our ultimate goal of a fully liberalised EU-US open aviation area. And I believe it will provide a real impetus to further deregulation and modernisation of the international aviation industry around the globe."

Conclusion

1.7 We are grateful to the Minister for this account of the outcome of the Transport Council consideration of this matter and of the Government's view of this outcome. This will be relevant to the debate in European Standing Committee we have recommended and we understand the account is being drawn to the attention of Members of the Committee.


1   See headnote. Back

2   See oral evidence given on 13 March 2007, to be published as HC 395-i. Back


 
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