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Europe Daily Bulletin No. 11447
SECTORAL POLICIES / (ae) transport

Commission seeks ambitious mandate for talks with Gulf airlines

Brussels, 07/12/2015 (Agence Europe) - One of the major points in the new European aviation strategy, presented by the European Commission on Monday 7 December, is for an “ambitious” negotiating mandate to be granted with a view to concluding agreements with third countries, in particular the Gulf states.

As a preparatory document had already stated (see EUROPE 11438), the Commission is hoping that the member states will give it an overall mandate to negotiate with China, the Association of South-East Asian Nations (ASEAN), Turkey, Saudi Arabia, Bahrain, the United Arab Emirates, Kuwait, Qatar, Oman, Mexico and Armenia - this last country falling within EU neighbourhood policy.

The exact detail of the mandate now has to be determined. “There is no standard mandate that applies to all negotiations”, said a source close to the matter, indicating additionally that exchanges have been taking place between the EU and the various parties for several years already. According to Transport Commissioner Violeta Bulc, while the content will be specified by the member states, the mandates will focus on clauses on: market access, fair competition, trade and investment possibilities, passenger rights, working conditions, air traffic management (ATM) and exit conditions. A further internal source says that the negotiating mandate will also include environmental protection, dispute settlement and convergence of security and safety regulations.

The Commission sent its draft mandate to the member states on the same day and will hold a briefing at the Transport Council on Thursday 10 December. If the timetable announced is to be believed, the Commission hopes to be provided with authorisation as early as the end of this year. This stage will not in any way be a precedent, as the EU has already in the past concluded agreements of this kind with the United States, Canada, Israel, Georgia, Jordan, Moldova and the Western Balkans.

The new strategy comes at a time of tense international competition and the issue of tax and social dumping by some third countries provides part of the backdrop. “There have been allegations of subsidies around the Gulf states but, for the moment, there is no binding international legal framework governing competition practice in aviation”, said a source close to the matter. The Commission notes Regulation 868/2004 on unfair subsidies and pricing practices is probably not able to deal with the specific features of the air sector. It says in its strategy that it wants to build this point into the negotiations, and is planning to present a legislative proposal sometime in 2016. At the same time, the Commission is looking to step up the level of exchanges with the International Civil Aviation Organisation (ICAO) in order to make progress in this area.

Remaining with the international chapter, the Commission plans to open bilateral negotiations on air safety with the frontline Chinese and Japanese industries, with a view to reducing the transaction costs of exporting equipment while ensuring the highest level of safety and harmonising international production standards. The Commission hopes to be granted authorisation in the course of next year. It also wants to open discussions with India in 2016-2017.

A further important point in the external chapter of the strategy is the Commission's intention to publish interpretive guidelines on the regulation (1008/2008) which frames the operation of air services and, in particular, the matter of ownership and control of European airlines. Currently, foreign investors can acquire up to 49% of an airline's shares so that the company remains legally under European control. However, a number of investigations in train at the moment indicate that legal clarification is required.

In 2005, the Commission drafted a roadmap, “Developing the agenda for the Community's external aviation policy”, that followed on from the “Open skies” ruling of the Court of Justice of the EU in November 2002. That ruling gave the EU greater powers in negotiations on international air services. (Original version in French by Pascal Hansens)

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