APPENDIX 3 How the texts agreed at Transport
Council on 5 June meet UK negotiating objectives
1. "Aim for a comprehensive and generally
liberal agreement with the US on a Transatlantic Open Aviation
Area, with safeguards should the talks fail or the Commission
return with an inadequate deal."
The Commission's US mandate envisages an ambitious,
comprehensive and fully liberalised agreement between the EU and
the US. In particular the mandate aims to break down the restrictive
ownership and control provisions customary in such agreements,
thereby providing for the free flow of capital and management
expertise throughout the Area, as well as allowing carriers licensed
in the EU or the US to operate freely within the Area.
The safeguard should the talks fail comes in Article
4 of the draft Regulation. So long as the Commission is actively
negotiating with the US, Article 4(4) applies if a Member State
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 safeguard against the Commission returning with
an inadequate deal is contained in the US mandate itself.
2. "Allow Member States to negotiate in
parallel with the Commission, whether it be with the US or with
other countries, using standard clauses where appropriate, subject
to a reasonable level of oversight by the Commission"
Article 1 of the draft Regulation states explicitly
that Member States may enter into bilateral negotiations with
third countries, provided that they include the so-called Community
clauses in such negotiations and comply with a notification procedure.
Article 4 of the draft Regulation sets out the arrangements for
oversight by the Commission, which we regard as a workable and
fair balance. The degree of oversight is greatest in cases where
the Commission is actively involved in negotiations with the same
third country. Where the Commission is not actively involved,
Community procedures come into play only if the Member State in
question does not succeed in negotiating the so-called Community
3. "Allow Member States to continue managing
and improving existing bilaterals"
This is implicit in (2) above. Where the Community
procedure set out in Article 4(2) applies, it is clear that "managing"
an existing bilateral, or securing a modest increase in traffic
rights to reflect changing commercial circumstances, are less
likely to be held "to harm the object and purpose of the
Community Common Transport Policy" than striking a radical
4. "As far as possible prevent one Member
State benefiting from not acting properly, and ensure non-discriminatory
treatment for all EU airlines"
This is also dealt with in the draft Regulation.
The notification procedure set out in Article 1, the provision
for the Commission to participate in bilateral negotiations as
an observer (also in Article 1), and the reporting procedures
set out in Article 4(1), will all improve the transparency of
Member States' negotiating objectives and outcomes. This transparency
will be further enhanced by discussions in the Advisory Committee
of Member States assisting the Commission under Article 3(3),
and in the Special Committee of Member State representatives assisting
the Commission under the horizontal mandate.
Non-discriminatory treatment for all EU airlines
is provided for in the draft Regulation, by Article 2 which requires
Member States to include all interested EU carriers in the preparation
and conduct of bilateral negotiations; by Article 3, which prevents
a Member State negotiating a reduction in the number of airlines
it may designate under a bilateral (eg moving from dual or multiple
designation to single designation); by Article 5 which requires
Member States to ensure a fair distribution of limited traffic
rights among eligible Community carriers; and by Article 6 which
makes provision for the publication of each Member State's procedures
in respect of Articles 2 and 5.
5. "Recognise that third countries will
have legitimate safety concerns about Community designation"
This is dealt with in a draft Declaration agreed
by Member States, which is for use with third countries to assuage
any safety concerns they might have. This Declaration reads as
"Where a Member State designates under one
of its bilateral air services with a third country a Community
air carrier licensed by another Member State, it is understood
(a) in the event that the third country concerned
raises concerns or requests in relation to the maintenance and
administration of safety standards and requirements in respect
of that Community air carrier, the Member State responsible for
licensing the carrier and for its effective regulatory control
shall directly, or at the request of the designating Member State,
respond fully and expeditiously to such concerns or requests;
(b) where the Member State responsible for licensing
the carrier fails to respond fully and expeditiously, the designating
Member State may react immediately by placing conditions on or
suspending the designation of that air carrier. That Member State
shall forthwith inform the Commission and the other Member States
of the measures taken and the reasons therefor."
6. "Provide a suitable institutional framework
and balance of powers for Member States and the Commission to
co-operate in liberalising air transport services between Europe
and the rest of the world"
We believe that the package of measures agreed at
the Council, taken as a whole, meets this objective. It is consistent
with the ECJ's finding that Member States may continue to negotiate
bilaterally with third countries provided they do not maintain
or introduce certain clauses which are incompatible with Community
law. The package of measures hands responsibility to the Commission
to negotiate a liberalised agreement with the US; enables both
the Commission and Member States to negotiate with other third
countries on a standard Community designation clause, and other
clauses in areas of exclusive Community competence; whilst allowing
Member States to continue negotiating, particularly on traffic
rights, with third countries, subject to a reasonable level of
oversight in Brussels.