July 24, 2006
Open Skies Agreement
United States statutes forbid foreign ownership of more than 49 percent of the stock of a domestic airline and of more than 25 percent of the "controlling stock" (voting control). Moreover, the statute forbids foreign owners from "any semblance of control" activity in an airline. The Bush administration, while not lifting the stock ownership limits, wants to lift the operational control limits over commercial activities. The administration hopes to attach more foreign investment into domestic airlines, which are struggling, and to use the concession to get concessions on United States investments in other industries in other countries. Congress is refusing to go along and has sent clear signals, in riders to bills, that it will not support the administration's position.
Congress and the Executive are following recent tradition in which Congress is protectionist and the Executive is facilitating international trade and investment.
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