The opening moves have been made in the negotiations between Europe and the USA on creating a comprehensive open skies pact between the two blocs.
Liberalisation negotiations between the USA and Europe begin in earnest in early December, although preliminary talks in Washington in September and October have already started a debate over just how ambitious the agenda should be.
While the European Commission (EC) insist that its side favours a comprehensive agreement, the USA is, at least on the strength of past indications, focused on an incremental approach that may exclude issues of cross-border ownership and access to the US domestic market.
These different agendas are likely to form the starting point for the more substantive talks in Brussels in December. These negotiations will take place against the looming spectre of US presidential elections, now just a year away. Campaigning is already well under way in a highly politicised Congress, which would need to give its approval to any radical changes.
In Brussels, the scheduled reshuffle of EC commissioners in summer 2004 may see a change of portfolio for such driving forces as the strong-willed transport commissioner Loyola de Palacio.
The chief US negotiator, the State Department's John Byerly, insists that Washington is willing to address tough issues. 'We'd like to move as quickly as we can to a comprehensive agreement,' he says. 'If we can do that through steps, great. If we can do it in one big agreement that both sides find meets their critical needs and desires, that's good too.'
Addressing the widely held suspicion that the USA really only wants more access to London Heathrow, he says: 'The goal is not to have a mini-deal that would allow one or two frequencies over three or four years and a marathon of talks to occur. We want to do something that significantly opens the markets, and that includes the UK.' If an opening of Heathrow was to be offered as part of a so-called 'early harvest' or interim pact, the USA would still 'have to look at the slot restrictions at Heathrow and actual use of those rights'.
But Byerly, a veteran negotiator who holds the title of deputy assistant secretary of state for transportation affairs, adds: 'I want to be clear we're not making commitments up front that were going to pursue amendments of our long-standing legislation.' That raises the question of how the USA will react to the European Union's most likely immediate demands: ownership changes and market access by means of cabotage. Ownership needs a legislative solution, while market access is more contentious. 'One reason that full-bore cabotage is problematic is that it would involve full access to the US domestic market, which is huge, by a foreign carrier that operates under foreign law, under foreign safety and security oversight, under foreign environmental law, foreign labour law, subject to foreign taxation' says Byerly. 'That raises fundamental issues of the equality of the playing field.'However, Andrew Cahn, director of industry and government affairs at British Airways, was upbeat on the talks. 'Were quite positive,' he says, noting the progress made in establishing a number of working parties to look at some of the main issues of debate.
Source: Airline Business