The European Commission's draft negotiating mandate, being considered by European Union transport ministers at their 19 June meeting, envisages pursuing a full open skies agreement with the US, higher reciprocal ownership limits, and a raft of safeguards to prevent anti-competitive behaviour.
If it is awarded, the EU will be seeking a more open and comprehensive agreement than the US proposal which has been initialled by nine European states, including six EU members.
Draft provisions include:
* Free market access for all US and EU carriers, including fourth and fifth freedoms; cabotage and fifth freedom rights within the EU and in the US; and seventh freedom and beyond rights.
* The limits on foreign ownership to rise to 49 per cent in both the EU and US.
* Mutually agreed criteria to cover economic fitness, aircraft leasing, computer reservations systems, codesharing, slot allocation, state aids, US antitrust laws and Chapter 11 protection for airlines.
* A disputes mechanism.
* A transitional period.
* A guarantee that any liberal bilaterals already in place will be protected.
Many of these provisions are not included in the nine-nation open skies initiative because the US is unwilling to concede them. 'Sovereignty is about the ability to exercise power, and in this case the member states are at their most powerful acting together,' says EU transport commissioner Neil Kinnock.
But he faces two hurdles in realising his goal: certain EU states oppose transferring 'sovereignty' to Brussels, while the US will want to protect its home market.
Source: Airline Business
