Friday, February 19, 2010

No Second Stage Agreement Yet

The latest round of second stage talks between the United States and European Community which began in Madrid on Monday failed to produce concrete results.  See Doug Cameron & Carolyn Henson, EU, US Fall Short on New Open-Skies Deal, Dow Jones Newswire, Feb. 18, 2010 (available here).  Though both sides cite "progress" being made this week, time may be running out. 

By the timeline established by their 2007 Air Tansport Agreement, both parties have the right to suspend some (or all) of the rights granted under it if no second stage accord is struck by this November.  See U.S./EC Air Transport Agreement, art. 21(3), 2007 O.J. (L 134) 4.  The suspension won't come into effect immediately, however.  Any notice of suspension "shall take effect no sooner than the start of the International Air Transport Association (IATA) traffic season that commences no less than 12 months after the date on which the notice of suspension was given." Id.  Since the IATA traffic seasons begins in October and March of each year, a November 2010 suspension notice could not take effect until March 2012.  That would leave 17 months for negotiations to continue before any traffic rights are impaired.  Would that provide enough time for both sides to finalize an agreement before an air services trade war begins?

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