Select Committee on European Union Thirty-Sixth Report

CHAPTER 2: the "horizontal mandate"

The Horizontal Mandate

7. The immediate issue triggered by the European Court of Justice judgments of 5 November 2002 was the requirement to bring all EU Member State air service agreements (ASAs) into conformity with Community law. This meant that it would no longer be possible for Member States to limit designation to their own national airlines in bilateral air service agreements. The existing designation would have to change to allow Member States to designate any Community airline. This is known as the Community clause. The "horizontal" mandate was agreed. It is so called because "it is a restrictive mandate. It only applies to Community designation and one or two other issues but it is horizontal because it gives the Commission the right to go off and talk to any third country about those issues. It is not specific to any particular third country….." (Q21).

8. The Committee was nervous about how a mandate to implement the Community clause might operate. We feared, for example, that were the UK Government to negotiate to update an existing ASA with a third party, and other EU Member States did not do so similarly, the latter might enjoy a temporary commercial advantage until such time as they had amended their own ASAs to bring them into line with the ECJ judgments. For this reason, in our Report we recommended that the Commission be responsible for achieving agreement with the US because this would allow for all EU bilateral ASAs with the US to be implemented at the same time (para 51).

9. The witnesses dealt with these concerns in Questions 22 and 23 and argued that the Committee's worries, while understandable in principle, were unlikely, in practice, to have the baleful consequences implied in the Committee's line of questioning.

How the Council's mandates differ from our recommendations

10. In our Report, we recommended that the Council give the Commission two mandates: under one mandate the Commission would negotiate a fully liberalised aviation agreement with the United States; and under the other, the Commission would help Member States fulfil the obligations of the ECJ judgments, by implementing the Community clause with regard to ownership. The two mandates that have emerged from the Luxembourg Council include the requirement to negotiate a Community clause with the US within the overall negotiation to achieve an open aviation area with the US (Q26).

Position of bilateral ASAs during a period of negotiation

11. We assume that within the EU/US mandate the Commission will move first to reach agreement on the Community clause. But even if it does so, we are left with a need for Member States to continue to be able to negotiate with the United States during the, presumably lengthy, period in which the Commission negotiates the rest of the liberalisation mandate. The Committee asked how this might be achieved. In reply, the Department said "our expectation is that the current arrangements under Bermuda, which is not "Open Skies", are expected to remain in place until an agreement is sorted out by the Commission".

12. Mr Smethers, Head of Multi-lateral Division Aviation Group, Department for Transport, added "under the agreement arrived at in Council, we are free to continue to negotiating with the States but before we could come to any agreement we would have to go through a Community procedure and get consent. It is fairly clear that we could make minor modifications to Bermuda to update it, we could add the odd provision here and there and that would be acceptable. If we try to do a major bilateral agreement with the US, the Commission would almost certainly hold that it undermined the Community-level negotiations and that we accept as a general position."

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