Asia-Pacific may not quite be readying itself to lead the world towards liberalisation, but the multilateral open skies deal, signed towards the close of the year by five nations within APEC (the Asia-Pacific Economic Co-operation organisation), may still prove interesting for a couple of reasons.
First, it is encouraging that such deals are being signed at all within Asia-Pacific. Liberalisation has not always been so quick to catch hold in the region, but this latest deal (together with the Australia-New Zealand open skies pact signed at virtually the same time) suggests that the impetus is continuing to build.
Second, the nature of the deals that are being struck in the region may well have much broader influence on the course of world liberalisation - helping to affect the balance between US and European visions for the next step "beyond open skies".
Admittedly, the consequence of the APEC multilateral is more symbolic than practical for the five signatories - Brunei, Chile, New Zealand, Singapore and the USA. Most of these already have bilateral open-skies agreements with a number of other signatories and some with all of them. Those which did not, such as Singapore and Chile, are not going to see direct flights as a result of this new agreement. But negotiators have argued that this is only the first step and that in future they hope it will become a basis on which to build a broader consensus.
It transpires that Australia and Japan were also observers at the talks that led up to the signing - staged ahead of November's APEC summit meeting in Brunei. Although the two observer nations declined to add their names to the deal, the fact that they were present speaks volumes about how difficult it now is for anyone to ignore the move towards liberalisation. Neither of those two countries has exactly been in the vanguard of liberal bilateral agreements. However, Australia is now getting started, calling for an end to the bilateral system, and signing its first open-skies deal with New Zealand (albeit after a decade of talks). Japan too has now deregulated at home and begun to edge towards new accords abroad.
A measure of enlightened self-interest among other nations in the region may also help to propel the cause. Singapore, for example, is keen to send its flagship companies out into the wider world. For Singapore Airlines that has already meant buying into two foreign carriers (Virgin Atlantic and Air New Zealand), as well as making a bid for rights to fly across the North Atlantic. Reform of nationality restrictions may be essential if it is to progress further down this track.
At the very least, the APEC multilateral would seem to give Asia-Pacific the potential nucleus for an open skies area. That alone is progress. It is also worth remembering that APEC leaders have set for themselves the official goal of free trade between developed members by 2010 and with the emerging economies a decade later. Whether the goals are met is quite another issue, but, egged on by the USA, the group is formally committed to a broad free-trade agenda.
It is true, as stressed by Association of Asia Pacific Airlines director general Richard Stirland, that signing up for open skies, even on a multilateral basis, is not at all the same thing as genuine liberalisation. To achieve that, he argues, nations will have to tackle the thorny issue of nationality and ownership rules - a subject on which even the US free-trade evangelists have been conspicuously silent. Arguably, the APEC deal does no more than bundle together existing bilaterals, creating a club which others may join only if they first sign up to US open skies.
Yet even on this reduced view, the deal may still prove significant. It marks a first major play by Washington to move beyond existing open skies policy, leaving the agreements largely unchanged, but bundling bilaterals into multilaterals. In contrast, the European vision of liberalisation, as it made clear a year ago with proposals for the Transatlantic Common Aviation Area, is a more ambitious project with new international structures and supra-national authorities, not dissimilar, perhaps, to its work in creating a European currency.
Which of these approaches gains ascendancy is likely to be a matter of practical politics, and perhaps the APEC deal should be seen as an early play by the multilateralists to set their ball in motion.
Source: Airline Business
