50 Air services agreements
| (a)
(31582)
9435/1/10
+ ADDs 1-2
COM(10) 208
(b)
(31639)
9296/10
+ ADDs 1-2
COM(10) 209
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Draft Council Decision, and decision of the representatives of the Governments of the Member States of the European Union, meeting within the Council, on the conclusion of the protocol to amend the Air Transport Agreement between the European Community and its Member States, of the one part, and the United States of America, of the other part
Draft Council Decision, and decision of the representatives of the Governments of the Member States of the European Union, meeting within the Council, on the signature and provisional application of the protocol to amend the Air Transport Agreement between the European Community and its Member States, of the one part, and the United States of America, of the other part
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| Legal base | Articles 100(2) and 218 TFEU; consent; QMV
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| Document originated | (a) 4 May 2010
(b) 3 May 2010
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| Deposited in Parliament | 25 May 2010
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| Department | Transport
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| Basis of consideration | EM and Minister's letter of 22 June 2010
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| Previous Committee Report | None
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| Discussion in Council | 24 June 2010
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
50.1 On 30 March 2008 the 2007 EU-US Air Transport Agreement entered
into provisional application. The agreement was a significant
change to transatlantic aviation relations, providing broad new
commercial freedoms for airlines and a comprehensive framework
for regulatory cooperation with the US on a wide range of issues,
including the opening of transatlantic markets and associated
commercial freedoms, safety, security, competition, environmental
protection, customs and taxation issues, pricing and subsidies.
It set up a Joint Committee with the aim of increasing cooperation
between the US and EU on a range of regulatory issues.
50.2 The agreement provided for a second stage of
negotiations to consider agreement on a range of further matters.
Those negotiations began in May 2008 and after eight rounds closed
in March 2010.
The documents
50.3 The negotiators have reached agreement on a
draft protocol to amend the original Air Transport Agreement.
These draft Council Decisions would authorise respectively the
signature and provisional application by the EU of that protocol
and the conclusion of the protocol. They also clarify how certain
decisions or actions under the protocol would be taken by the
EU side in accordance with the EU treaties.
50.4 The draft protocol:
- focuses mainly on the areas
identified for further negotiation in the original Agreement,
including the expansion of opportunities for market access and
for investment in airlines;
- significantly strengthens cooperation
on actions to combat the environmental impacts of aviation (together
with the associated Joint Statement on Environmental Cooperation);
- includes some further relaxation of the so-called
"Fly America" policy that would allow those employed
on US Government civilian contracts to book on EU carriers;
- enhances the remit of the Joint Committee with
a view to enhancing the compatibility of the different regulatory
systems; and
- introduces new provisions on reciprocal recognition
of certain regulatory decisions and on labour standards.
The Government's view
50.5 The Minister of State, Department for Transport
(Mr Theresa Villiers) says that the Government and the UK aviation
industry strongly supported the negotiation of a second stage
agreement with the aim of securing further market opening, and
in particular relaxing the existing tight limits on foreign investment
in airlines. She comments that:
- whilst the draft protocol does
not go as far in this area as it would have wished, the Government
recognises that relaxation of the restrictions cannot be achieved
without legislative change in the US;
- during the second stage negotiations it became
clear that internal political opposition within the US to relaxing
controls on foreign ownership had, if anything, hardened and that
there was no prospect of securing the necessary changes to US
law in the near term;
- therefore the EU has focused on the construction
of an agreement that would encourage the US to change its foreign
ownership rules in the longer term and on a general recognition
that relaxation of foreign ownership and control requirements
should be an end-goal; and
- these objectives have largely been attained in
the negotiations — the draft protocol establishes a shared
goal of further removing barriers to market access and investment,
envisages an end state where each Party permits majority ownership
and control of its airlines by nationals of the other party and
sets out further commercial benefits that may be drawn down once
the necessary changes to the internal laws and regulations of
each Party have been implemented.
50.6 The Minister also tells us that:
- in a revised environment article
the Parties recognise the importance of protecting the environment
and undertake to work together to reduce the impacts of aviation;
- notably, the article provides
a mechanism for ensuring consistency between market-based measures
— this would provide a means of working out how any future
American emissions trading system could be joined-up with the
EU scheme for aviation;
- the associated Joint Statement
on Environmental Cooperation affirms the commitment of both sides
to work together, both bilaterally and in international fora,
in this field — it recognises the importance of the "2
degree Celcius" goal, confirms the commitment to new work
on setting a global aircraft standards on carbon dioxide, noise
and air quality and sets out the areas of technical cooperation
between the EU and US for matters such as air traffic control,
bio-fuels and aerospace technology;
- while the "Fly America" policy still
leaves valuable traffic by US government employees and defence-related
contractors out of the reach of EU airlines, the inclusion of
some further relaxation of the civilian contractor "Fly America"
traffic is considered a valuable benefit by UK airlines; and
- other amendments made through the draft protocol
will help increase the cooperation between, and therefore the
mutual compatibility of, the regulatory regimes on either side
of the Atlantic in areas such as competition, security, consumer
protection, and air traffic management — something that
the aviation industry has strongly advocated.
50.7 The Minister concludes, in her Explanatory Memorandum,
that:
- there appears to be little
further to be gained from seeking to prolong the negotiations
at this stage;
- the option to withdraw new traffic rights gained
under the first stage agreement has been considered, but the Government
considers this would be against the interests of UK consumers,
airlines and airports and it can discern little or no support
amongst UK interests for that course of action; and
- in light of the progress made, the Government
considers that the draft protocol represents a worthwhile improvement
of the current agreement, incorporating both a clear direction
of travel and incentives towards further change — it would
enable the UK aviation industry and consumers to continue to profit
from the significant benefits available under the original agreement,
whilst delivering worthwhile additional benefits and maintaining
the pressure for further liberalisation.
50.8 In her letter the Minister says that:
- these documents only emerged
after the Dissolution of the last Parliament and would be considered
by the Council before the we (and the Lords' European Union Committee)
would be in place and able to scrutinise them;
- the Government takes its scrutiny obligations
very seriously and would not lightly agree to a measure before
completion of scrutiny; and
- given, however, the substantial support that
exists for early signature, the Government feels that the UK should
join other Member States in supporting the draft protocol and
approving its signature at the Transport Council of 24 June 2010.
Conclusion
50.9 We note the Government's assessment that
at the moment more could not be achieved to improve the present
EU-US Air Transport Agreement but that, nevertheless, the amending
draft protocol brings sufficient benefit to justify supporting
these draft Decisions. We have no questions to raise about this
assessment and the draft Decisions and clear the documents. We
also note and understand the Government's support in Council for
the draft Decisions before completion of scrutiny.
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