Liberalization of Trade in Air Transport Services

in The Journal of World Investment & Trade
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The Journal of World Investment & Trade

Law • Economics • Politics


Rigas Doganis, The Airline Business ill the 21st Century, Routledge, London, 2001, at p. 5. 2 The Eight Freedom traffic rights derive from the Convention on International Civil Aviation, signed at Chicago on 7 December 1944, as amended. See ICAO Doc 7300/8, 8th edition, 2000, hereinafter cited as the Chicago Convention.

I The 1994 Worldwide Air Transport Conference considered a Secretariat proposal for liberalization of market access which included essential elements of full market access (unrestricted routes, operational and traffic rights between parties, optional so-called Seventh Freedom Right and cabotage) and possible means of full or progressive introduction, together with associated safeguards and dispute resolution. After extensive discussions, the Conference concluded that there was no global commitment to full market access at this stage of air transport development and that each State would make its own choice as to the degree and pace of liberalization, on a case- by-case basis and in light of its particular needs and objectives, using bilateral, regional and/or global avenues according to circumstances. In response to the recommendation of the 4th Worldwide Air Transport Conference, ICAO developed some guidance for States on participation measures for regulatory liberalization, including guidance on market access. 4 Britannica Book of the Year, Encyclopedia Britannica Inc., Chicago, 2002, at p. 188. World's Airlines React to War tvith Cuts, The Air Letter, No. 15,21)5, Monday, 24 March 2003. See also Airline Bookings Plunge Amid War Fears, The Air Letter, No. 15,203, Thursday, 20 March 2003. 6 Available at: <

Within the EU, there was a development affecting a common EU policy with third countries. In November 2U02, the European Court ofJustice ruled on a case brought in 1998 by the European Commission against eight Member States which had concluded or amended bilateral air services agreements (seven of them open skies agreements) with the United States. The judgment affirmed the ability of the Member States to enter into bilateral agreements with third countries to the extent that these do not affect Community rules on air transport but found that some of the provisions in these bilateral agreements infringed the Community's exclusive external competence as regards air fares and computer reservation systems. The Court also found that the clause regarding ownership and control of airlines infringed Community law on freedom of establishment. Following the Court judgment, the Commission requested the Council to urgently issue a mandate for the Commission to open negotiations for a Community-wide air services agreement with the United States as well as similar agreements with Japan and the Russian Federation.

I In 2001, Africa's economy achieved a 3.7 percent GDP increase. The aggregate economy of the region with the largest share of the world economy, the Asia-Pacific, grew at some 3.6 percent in 2001, above the world average. Europe achieved an average GDP growth of 1.9 percent, almost one-half the growth rate of the previous year. The Ventral and Eastern European economies grew around 3 percent. The countries of the Commonwealth of Independent States showed a significant GDP growth, averaging about 6.2 percent, but about 2 percent lower than the previous year. The Latin America and the Caribbean region was adversely affected both by the slowdown in the global economy and by the financial crisis in Argentina. As a result, the region's Gnp growth slowed down to 0.7 percent, about 3 percentage points lower than the previous year. Linked to the fall in oil prices, the Middle East region's economy grew only by about 4.5 percent, down almost 1 percentage point from the previous year. See Annual Report of the Council 2001, ICAO Doc. 9786, Chapter I.

'' Id. Between 1992 and 2001, the reported number of commercial air transport aircraft in service increased by about 39 percent, from 14,919 to 20,771 (excluding aircraft with a maximum take-off mass of less than 9,000 kg). Within these totals, turbojet aircraft numbers increased by about 35 percent, from 12,008 to 16,229. In 2001, 990 jet aircraft were ordered (compared with 1,553 in 2000) and 1,219 aircraft were delivered (compared with 1,009 in 2000). The backlog of unfilled orders at the end of 2001 was 3,799 aircraft compared with 3,649 at the end of 2000. The financial commitment in terms of jet aircraft orders placed with the major aircraft manufacturers in 2001 is estimated to be about USS 69 billion. The number of turboprop and piston aircraft ordered in 2001 was 89, and 109 aircraft were delivered during the year. 10 1992 United Nations Conference on Environment and Development (Rio Summit). rr See P.W. Birnie and A. Boyle, Basic Dow/Ilfllts 011 International Law and the Etivironment, Clarendon Press, Oxford, U.K., 1995, at p. 6.

12 See Purpose for a Resolution or the Council of European Communities on a Community Programme of Policy and Action in relation to the Environment and Sustainable Developruent, a document released in 1992 which quotes the 1972 endorsement. Brussels, 30 March 1992, Doc. Conn(92) 23 final, Vol. u, at p. 19.

13 Chicago Convention, supra, footnote 2, Article 44(a), (d), (e) and (f). 14 See Anthony Aust, Modern Treaty Law and Practice, Cambridge University Press, Cambridge, U.K., 2000, at p. 22. �5 Convention on the Law of Treaties between States and International Organizations or between International Organizations, done at Vienna, Austria, 21 March 1986.

�" See the Aegean Sea Coittitietital Shel�case, where the International Court ofJustice considered the terms of a joint communique issued by the Greek and Turkish Prime Ministers and concluded that it was not a treaty, since the intention to bind oneself to a treaty must be gathered from the terms of the instrument itself and the circumstances of its conclusion, not from what the parties might claim after the fact of adopting a joint statement or declaration. See Aust, suyra, footnote 14, at p. 17.

�� Article 83bis allows a State of Registry of an aircraft leased, chartered or interchanged and operated from another Contracting State to transfer the functions and duties from the State of Registry to the other State by agreement.

r" UNFI�A and Norman Myers, Population, Resources and the bll'i">1l1l1ellt: The Critical Challenges, United Nations Population Fund, New York, 1991, at p. 5.


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