David Learmount/LONDON

Trade wars rarely end in a clear victory. In the first skirmish of the hushkit war, the USA has beaten back Europe, but the European Commission(EC) looks like a foe which has retreated to regroup rather than to lick its wounds.

At issue is an EC regulation requiring all Chapter III hushkitted aircraft to have a "prior history" of making flights to Europe if they are to be allowed to operate to the continent after 1 April, 2002, the date set by the International Civil Aviation Organisation (ICAO) for the phasing out of all Chapter II aircraft.

Also according to this rule, hushkitted aircraft would have to have been registered in the European Union (EU) before the EC's original cut-off date of 1 April this year, or - if third-country aircraft - to have operated into an EU airport at least once between 1 April, 1995 and the same date.

Any aircraft fulfilling either of these criteria, and subsequently hushkitted, would then be allowed to go on flying in Europe after the 2002 deadline.

The EC admits that the ruling's aim was to minimise the number of noisy aircraft qualifying for European operation in the future, and points out that while 150-200 European aircraft could do so, as many as 2,000 aircraft flying in the USA might reach the required standard.

Whether environmentally inspired or not, Brussels' move was seen as a red rag to a bull across the Atlantic, where it seemed to threaten the future of hushkit manufacture and the resale value of aircraft.

The latter fear was reinforced by an EC rider, saying that huskitted aircraft operating in the EU after April 2002 would have to be on the same register as on 1 April, 1999.

Chapter IV introduction

The earliest introduction of Chapter IV would be in 2005 and would - the EC says - probably apply only to new aircraft, allowing hushkitted Chapter III aircraft to carry on flying.

In response to the European rule, the US hushkit industry, backed by the US Government, has mounted a determined onslaught on what it regards as a negation of the Chapter III procedures agreed at ICAO and, as such, a blatant infringement of trade rules.

The EU's response has been to approve the regulation, but to push back the cut-off date to 4 May next year, effectively allowing an extra 12 months for aircraft to establish a "prior history" of European operation. Ireland-based Ryanair, which intends to use 20 of its Boeing 737-200s well beyond ICAO's 1 April, 2002, deadline, is in the process of fitting Nordam hushkits to bring them up to Chapter III standards.

The apparent calm at the moment should not be interpreted as a truce. Mark Atwood of Washington DC-based lawyers Sher and Blackwell says the USA - which will ban Chapter II aircraft from 1 January, 2000 - regards the hushkits issue as a fully fledged trade dispute that it intends to fight with every weapon at its disposal. Sher and Blackwell represents hushkit manufacturers DuganAir, Burbank Aeronautical and the ABS Partnership.

Sher and Blackwell says that EC delay in finalising a decision is as bad as implementing it, because customers are being deterred from placing orders for fear of what Europe might do. "As far as my clients are concerned, the worst of all possible worlds is to keep moving the rule back a year," he says.

Environmental high ground

Sher and Blackwell's clients had stands at the Paris air show, says Atwood, and orders were placed or interest shown from around the world except Europe. This, as far as the US industry is concerned, is evidence of the European trade restriction's effectiveness.

Comparing Europe and the US' cases, it is apparent that the EC has carefully positioned its battle lines on the environmental moral high ground and is using as its weaponry the procedures and small print in numerous rulemaking processes. Meanwhile, the USA has drawn up powerful artillery in the form of the ICAO Chapter III agreement and the concept of respect for international treaties like the ICAO Chicago Convention.

To establish its environmental high ground, the EC laments that the standards for Chapter III were drawn up in 1977 and alleges that "between 1992 and 1998 the USA blocked all progress on the noise issue within the ICAO Committee on Aviation Environmental Protection." Atwood says the EC was aiming for "a Chapter three-and-a-half, which does not exist".

The EC volleys back using the small print. When the ICAO drew up the Chapter III standard, the EC says, it was intended to be a noise measure to certificate new aircraft types, not the "recertification of aircraft already in operation". Sher and Blackwell says this assertion is wrong. The EC says, however, that the USA uses noise measurements and procedures in certificating hushkits as Chapter III which differ from those required by ICAO and some equipment requires additional restrictions such as maximum payload and restricted aircraft flap settings to comply.

If the USA wins the argument, most of the damage to possible trade prospects in and around Europe will have been done. The EC, however, would be castigated by the European environmental lobby for "climbing down". Also, the USA has stalled ICAO Chapter IV negotiations, so the powerful European environmental lobby would have gained two more weapons to use against air transport. As a final act of retaliation, the USA may yet revoke the Aerospatiale/British Aerospace Concorde's rights to fly to its airports because of its own noise regulations.

Source: Flight International