Select Committee on European Communities Thirty-Second Report



  93.    Whilst the proposals would not provide the Commission with a mandate to negotiate bilateral agreements with third countries on behalf of the Member States, most witnesses accepted that the proposals would have the effect of increasing, at least de facto, the Commission's competence to act on such issues. They regarded the proposals as being inextricably linked to other proposals by the Commission to take over responsibility for negotiating air services agreements on behalf of the Member States (Q 221).

  94.    DG VII confirmed that the Commission felt that "the time is right to develop an external Community policy in the field of aviation and we are trying to achieve that objective by a combination of legislative proposals and court action". DG IV thought that the Member States feared that once the Commission had "effective and efficient powers to scrutinise forms of co-operation between airlines on the international scene between the Community and third countries" it "would interfere with their existing bilateral agreements". While acknowledging that this was a real concern they argued that block exemptions provided in the second of the proposed Regulations [on revenue sharing and capacity co-ordination] would "take most of the sting out of that argument". It was not DG IV's intention "to scrutinise each and every of the many hundreds of bilateral agreements which exist" (QQ 338-40).

  95.    Ms Jackson felt that "exclusive competence to apply the Treaty's competition rules to air services to and from third countries should be linked to the competence to negotiate the relevant air services agreements" (Q 359). Lufthansa echoed this view but stated that they were in favour of the Commission being granted authority to negotiate bilaterals with third countries "provided that the agreements are properly structured and serve the interests of the Community"(Q 152). The CAA referred to the possibility of there remaining in place transitional restrictions on the number of permitted airlines, frequencies and capacities. In this event it would be necessary to put in place a means for making choices between which carriers from the different Member States should be allowed to operate (p 5). Ms Jackson pointed out however, that there was disagreement between the Member States about the type or model of such a mandate (Q 389).

  96.    Delta Airlines thought that if the Commission was given a mandate by the Council to negotiate bilateral agreements with third countries it could "see a danger that negotiations could become very long and drawn out and inflexible unless the European Union authorities or the Commission negotiators had very clear mandates and very clear guidelines" (Q 48).

A Phased Approach?

  97.    In the context of the liberalisation of air services the Commission has been mandated by the Council of Ministers to undertake aviation negotiations with Switzerland and ten central and eastern European countries, which could in due course lead to an extension of the common market in aviation. It also has a mandate to hold limited exploratory talks on "soft" rights with the United States but has no authority to negotiate "full" traffic rights on issues concerning market access, capacity or fares[29] (p 92).

  98.    Lufthansa favoured a step-by-step approach, arguing that carriers would need time to adapt to changes in their regulatory framework. It was the airline's view that the Commission should be required to "demonstrate the added value of Community negotiations". The experience gained from any negotiations should be evaluated before including more third countries. For the Council of Ministers to agree a mandate to open negotiations on full traffic rights with the United States would appear to be a first priority (QQ 152-3).

  99.    British Midland favoured giving the Commission more responsibility within "geographical Europe and North Africa" as a first stage. Only when the Commission's abilities in this area had been tested would it be appropriate to approach the wider issue of handling relations with other third countries (Q 41).

  100.    The CAA thought that a phased approach was not only desirable but inevitable if the Commission was to have any prospect of achieving its long term objectives. It was unlikely that the Commission would wish to extend its sphere of influence beyond a relatively small number of the most important aviation countries, in particular the United States. A fully liberalised internal European market would provide the best basis for any EU-wide bilateral agreement with a third country (pp 4-5). It was the DETR's view that a series of inter-regional agreements would be more likely than a series of agreements with individual third countries (p 92).

29   The distinction between soft and hard (or full) rights is not well defined. The issues discussed in these limited exploratory talks between the Commission and the United States Department of Justice include: ownership and control restrictions, competition rules, computer reservation systems, code sharing, dispute settlement, aircraft leasing, environmental clauses, transition measures, slot rules, and safety and security issues.  Back

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