Wednesday, January 12, 2011

Discontent with U.S./EU Second Stage

Though the Second Stage Protocol to Amend the 2007 U.S./EU Air Transport Agreement, 2010 O.J. (L 223) 3, has been in provisional effect since last year, the instrument still has not received final ratification from the European Parliament.  In a draft report published by the Parliament's Committee on Transport and Tourism last month, concerns were raised with respect to the agreement's failure to include new market access opportunities for EU airlines, including the right to own and control subsidaries established in the United States.  See Eur. Parliament, Draft Report on the Draft Council Decision on the Conclusion of the [Second Stage Protocol], Doc. No. 2010/0112(NLE) (Dec. 16, 2010) (available here).  Additionally, the report called on the European Commission to establish a third round of negotiations with the U.S. to address, inter alia, additional market liberalization provisions.

Undoubtedly, one of the biggest challenges facing the Commission is overcoming U.S. inertia.  As it stands, the U.S./EU Agreement is essentially "perfect" from the perspective of the U.S. Open Skies policy.  See generally 1995 U.S International Air Transport Policy Statement, 60 Fed. Reg. 21,841 (May 3, 1995).  The U.S./EU accord establishes open gateways for both parties' carriers, removes archaic restrictions on pricing, capacity, and frequencies, and allows U.S. and EU airlines to pursue joint commercial ventures such as code-sharing and integrated alliances.  From a policy standpoint, this is all the U.S. has ever wanted out of the EU and now they have it.

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