Select Committee on European Union Thirty-Sixth Report

CHAPTER 3: The mandate for negotiations with the usa

The Committee's Concerns

13. The Committee wished to ensure that the objective of this negotiation was an internal market in aviation incorporating the US on one hand, and the European Union (EU) on the other.

14. In our Report, we listed a number of issues that would have to be met in order to constitute an Open Aviation Area: mutual reduction of restraints on ownership and control of airlines; cabotage; the abandonment of specific policies by the US government such as the "Fly America" policy and the Civil Reserve Air Fleet (CRAF) which limited access for both passenger and all-cargo services. Answers given by officials in the course of this evidence session confirm that the mandate to negotiate an Open Aviation Agreement with the US is designed to cover these points (QQ7, 10, 13, 14, 15, 16 and 17).

"Open Skies"

15. We feared that because eleven EU Member States[5] had concluded "Open Skies" bilateral agreements with the United States, pressure would be put on the remaining Member States, particularly the United Kingdom, to conclude an "Open Skies" agreement as a first stage towards full liberalisation.

16. Were the UK to agree to adopt this particular course of action, negotiations might never proceed to subsequent stages designed to bring about a truly liberalised market in aviation. We had good reasons for this concern (see para 25). In our Report we had considered the position of the United States (Chapter 4) and had noted that the US Administration's response to the ECJ judgments had been to offer to negotiate a revision of the restrictive nationality clause with EU Member States that had "Open Skies" air service agreements (ASAs) with the US. They had not approached the other EU Member States, including the UK. In addition, we knew that an EU/US negotiation would be a difficult and lengthy process. In our conclusions, we stated

"that while the United States Government would not object to entering full negotiations for an open aviation area, the difficulties in the way of a successful negotiation within the next two or three years will be considerable and should not be under estimated" (para 91).

17. Full liberalisation would require legislative change in both the US and the EU in addition to overcoming political or economic reservations on both sides of the Atlantic.

Linkage between phases

18. In the questions put to the Minister therefore, we sought reassurance that the objective was a fully liberalised market and not a partly liberalised market under the US "Open Skies" model. We acknowledged that the course of such a negotiation would be difficult and probably phased.[6] It would be important that a failsafe mechanism existed to link the phases in such a way as to make sure that the Commission achieved its mandated objective. This linkage is developed in Chapter 4.

Can Member States continue to support existing bilateral ASAs during an EU/US negotiation?

19. If negotiations with the US break down, it will still be important for EU Member States to continue to support existing bilateral air service agreements. The Department for Transport's supplementary evidence[7] sets this out clearly.

"The safeguard, should talks fail, comes in Article 4 of the draft Regulation[8]. So long as the Commission is actively negotiating with the US, Article 4(4) applies if a Member conducts bilateral talks with the US. The Member State may not apply provisionally, or conclude, a bilateral agreement (with the US) without going through the Community procedure set out in Article 4(3). If on the other hand, the talks have failed, so by definition, the Commission is not actively negotiating with the US, a Member State which concluded a deal with the US would be subject to either Article 4(1) or Article 4(2). If the new deal included the so-called Community clauses, the Member State would be free to conclude the agreement without reference to Brussels, under Article 4(1). If it did not include the so-called Community clauses, the Member State would be free under Article 4(2) to apply the agreement provisionally, though it would have to go through the Community procedure under Article 4(3) before formally concluding the agreement".

5   All EU Member States except Greece, Ireland, Spain and the UK Back

6   Mr John Byerly, who will lead the US negotiating team, stated in a press conference in Brussels on 20 June 2003 that a first agreement on the least controversial points might be concluded before looking to pursue talks in other areas-European Voice 2786 - 21 June, 2003 Back

7   See Appendix 3. Back

8   Printed at Appendix 4. Back

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