Wednesday, October 7, 2009

U.S./EC Second Stage Talks Resume

The United States and the European Community resume their aviation negotiations today as part of the ongoing process for a "second stage" agreement to their landmark 2007 bilateral.  See Josh Mitchell, U.S., EU to Resume Open-Skies Talks, Wall St. J., Oct. 6, 2009 (available here); See also 2007 U.S./EC Air Transport Agreement, art. 21, 2007 O.J. (L 134) 4 (outlining the agenda and timetable for the second stage).

According to the news report, priority topics for this round of negotiations include night flight restrictions at EU airports which adversely affect the business operations of cargo carriers like FedEx and UPS and loosening U.S. foreign ownership and control rules for airlines.  As the story rightly notes, easing either restriction would require a change in U.S. and EC law.  While the article mentions the 2009 FAA Reauthorization Act's provision which would sunset antitrust immunity for international alliances, there's no direct indication that the alliance system is up for discussion.

There's probably very little hope that the current U.S. political climate will allow the seeds of authentic airline liberalization to germinate.  With protectionist Democrats holding power in Congress and answering to the call of labor, current U.S. foreign ownership and cabotage restrictions are likely to remain.  Thus, there will be little incentive then for the EC to concede to any U.S. demands.  Time is running out for advancements to be made, however.  Under the timetable established by the first agreement, both sides will soon begin reviewing their progress.  See 2007 U.S./EC Air Transport Agreement, supra, art. 21(2)-(3).  If no agreement is reached by November 2010, both sides may give notice that they are suspending some or all of the rights granted under the 2007 Agreement.  Id.  Any suspension of rights would take effect at the start of the March 2012 IATA traffic season.

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