IP/06/760
Brussels, 9 June 2006
Single market for air transport between EU
and Singapore
European Commission Vice-President Jacques Barrot, Austrian
Vice-Chancellor Hubert Gorbach and the Minister of State for Finance and
Transport of Singapore, Mrs. Lim Hwee Hua signed an EU-Singapore aviation
agreement today which will allow European airlines to fly between Singapore and
any EU Member State. Singapore is the first country in Asia to sign such a
“horizontal” aviation agreement with the European
Community.
“The agreement recognises that airlines in the EU are not any
longer national airlines but Community airlines. This is an important step in
our external aviation policy and particularly in our aviation relations with the
Asia/Pacific region,” said Vice-President Jacques Barrot during the
ceremony.
The agreement removes nationality restrictions in bilateral air services
agreements between EU Member States and Singapore and therefore allows any EU
airline to operate flights between any EU Member State where it is established
and Singapore. It demonstrates that there is an external dimension of the single
market for air transport.
Air transport is crucial for the relations between the two regions, as
Singapore is one of the most important international air transport markets.
About 3 million passengers are carried annually on flights between the EU and
Singapore, thereby linking people, cultures and businesses.
Similar aviation agreements have already been signed with Chile, Ukraine,
Georgia, and several Balkan countries. The European Commission has successfully
negotiated similar agreements with 23 countries in total, including Australia,
New Zealand, Malaysia, Morocco, and Lebanon. The signature of more agreements
with countries from all continents will follow in the coming months.
A “horizontal” agreement does not replace the bilateral
agreements in place between the EU Member States and Singapore but brings them
in line with EU law, by removing the nationality restrictions contained in
bilateral air services agreements. Such nationality restrictions have been found
incompatible with EU law by the European Court of Justice in the “open
skies” judgements of 5 November 2002.
Background Memo
State of play of external aviation relations
Air transport plays a vital role in the European economy and for
international trade. The creation of a single air transport market in the EU has
created substantial benefits for consumers and improved the competitiveness of
the EU air transport industry. The EU air transport industry generates
€120 billion annual revenues, employs 3 million people and accounts for
more than 30% of worldwide air transport. However, until recently, air transport
relations with third countries did not appropriately reflect the achievements of
the EU air transport market.
Following the European Commission’s
Communication on external aviation relations presented in March
2005[1], a comprehensive agenda
was set by EU Transport Ministers in June 2005 for developing this important
field of activity. This roadmap for the EU’s external aviation policy is
being implemented through close cooperation between the 25 Member States and the
European Commission, with extensive consultation of stakeholders.
The
three pillars of the external aviation agenda aim at:
- Ensuring legal certainty of existing bilateral air services agreements
between EU Member States and third countries. This guarantees the necessary
continuity of air services and creates a stable operating environment for
the EU airline industry.
- Developing a Common Aviation Area with the EU’s neighbouring
countries by 2010;
- Negotiating comprehensive air transport agreements on EU level with
certain third countries. Such agreements will go far beyond the scope of
traditional air services agreements. The aim of such agreements is to create new
economic opportunities for the European air transport industry and to ensure
fair competition in a level playing field through a process of regulatory
convergence.
I. Legal certainty of existing bilateral
agreements
Traditionally, air services agreements have restricted the right to
operate flights between two countries to the national airlines of both
countries. Such nationality restrictions have been found incompatible with EC
law. Since the establishment of a common aviation market in the EU, all EU
airlines are entitled to have non-discriminatory market access. Therefore, it is
necessary to remove the nationality restrictions in bilateral agreements in
order to allow all EU airlines non-discriminatory market access to third
countries.
During the past 18 months, the European Commission and EU
Member States have brought more than 400 bilateral air services agreements
into legal conformity with European Community law. A total of 62 countries
in all continents have recognised the EU common market in their air services
agreements, allowing European air carriers to operate flights between any EU
Member State and these countries. They have done so either in bilateral
negotiations with EU Member States – e.g. United Arab Emirates, Dominican
Republic and Senegal – or in so-called horizontal negotiations with the
European Commission. 23 countries, including Chile, Australia, New Zealand,
Singapore, Malaysia, Morocco, Georgia, and Ukraine, have corrected all their
bilateral agreements with EU Member States in a Horizontal Agreement with the
European Community. More horizontal negotiations are currently under way with
countries in different geographic regions.
II. The wider European Common Aviation
Area
The EU has made substantial progress in developing a wider Common
Aviation Area by 2010.
1. European Common Aviation
Area
In December 2004, the Council of Ministers authorised the
European Commission to start negotiations with eight South-East European
partners (Albania, Bosnia and Hercegovina, Bulgaria, Croatia, the Former
Yugoslav Republic of Macedonia, Romania, Serbia and Montenegro and the U.N.
Mission in Kosovo) on a “European Common Aviation Area”
(ECAA) agreement. The objective was to integrate the EU’s neighbours in
South-East Europe in the EU's internal aviation market, with open market access
and full application of the EC aviation law.
The negotiations
opened on 31 March 2005 with a multilateral high-level meeting, at which all
negotiating parties expressed support for reaching an ECAA Agreement as quickly
as possible. In order to give the ECAA partners time to prepare for the full
application of EC aviation law, the EU developed a country-specific gradual
approach: Once ECAA partners have fully implemented EC aviation law, ECAA
airlines will have open access to the EU market. The transitional arrangements
were negotiated in October and November 2005 with each ECAA partner
individually. After only nine months of negotiations, the text of the ECAA
agreement was agreed between all parties in December 2005.
The ECAA
creates an integrated aviation market of 35 countries and more than 500
million people. The European airline industry has welcomed the new market
opportunities created by the ECAA. The ECAA Agreement will
extend the application of the complete EC aviation law to ECAA partners,
including issues such as economic regulation, aviation security, airport
security, air traffic management, environmental protection, passenger protection
and competition rules. In consequence, the Agreement will lead to
equally high standards in term of safety and security across
Europe.
Since air transport is crucial for linking people, countries
and economies, the ECAA Agreement provides an additional impetus to the economic
and political integration of Europe. (For further information on the ECAA
Agreement see Annex 1)
2. Morocco
The Council of Ministers
authorised the European Commission in December 2004 to negotiate a
Euro-Mediterranean Aviation Agreement with Morocco. After five rounds of
negotiations, the Agreement was initialled at the Euromed Transport Minister
Conference in Marrakech on 14 December 2005.
The aviation agreement with
Morocco is an unprecedented example of what can be achieved in air transport
negotiations between the EU and a third country. The agreement sets a
benchmark for future agreements in the neighbouring region of the EU. The
agreement provides for a very high degree of regulatory convergence.
Morocco will implement most parts of EU aviation legislation. The EU’s
internal air transport market will be gradually opened for Moroccan carriers in
accordance with the degree of regulatory convergence.
The first phase
starts on a provisional basis from the date of signature of the EU-Morocco
Agreement. From the beginning, all EU airlines will have the right to operate
without any restrictions between any point in Europe and any point in
Morocco. Moroccan airlines will have the same rights, however, subject to a
satisfactory evaluation of Moroccan regulatory standards, notably on aspects of
aviation safety.
The second phase will start once Morocco has
satisfactorily implemented the relevant EU aviation law. Moroccan
carriers will have access to intra-EU routes. EU air carriers will have the
right to continue cargo flights and – with some restrictions - passenger
flights beyond Morocco.
Safeguard clauses in the agreement with Morocco
ensure that appropriate measures can be taken in case Morocco should not comply
with the relevant EU legislation. (For further information on the EU-Morocco Air
Transport Agreement see Annex 2.)
3. Ukraine
Negotiations
with Ukraine would be an excellent opportunity to extend the Common Aviation
Area to the East. Therefore, the European Commission proposed in November
2005 to open aviation negotiations with Ukraine. Ukraine is, next to the Russian
Federation, the largest neighbour of the enlarged EU and a clear priority in the
context of the European Neighbourhood Policy. On the occasion of the signature
of the horizontal air services agreement between the EU and Ukraine in December
2005, President Yushchenko confirmed that Ukraine is ready to conclude a full
aviation agreement with the EU and to implement EU aviation rules and
regulations.
As in the case of Morocco, the agreement would seek
the maximum possible level of regulatory convergence, as well as
appropriate safeguard measures. Since Ukrainian standards still have to improve
significantly in several areas (such as safety, competition, economic
regulation), Ukraine would need to comply with the relevant EU standards before
opening the EU market to Ukrainian air carriers. The European Commission
provides assistance to the Ukrainian aviation authorities in the form of
aviation seminars etc. in order to promote the swift implementation of EU
standards in Ukraine.
4. The Russian Federation
Against
normal international practice, Russia obliges air carriers to pay high sums for
the overflight of Russian territory. These overflight payments create a cost
burden of around €300 million per year for EU airlines when flying between
Europe and the Far East. Therefore, the European Commission has undertaken
significant efforts to reduce these payments. A solution to the Siberian
overflight problem is sought in the framework of Russia’s accession to
WTO. Following the political pressure, Russia finally agreed to put an end to
the current system of overflight payments in 2014.
In order to improve
the EU’s negotiating position, the Council of Ministers formally
authorised the European Commission in March 2006 to negotiate an agreement with
Russia on Siberian overflight payments. The negotiations aim at adopting
commonly agreed principles regarding the phasing out of the overflight
payments during a transition period and the framework for overflights from
2014 on, including an increase in overflight rights for EU airlines which is
vital for their commercial operations to the Far East.
III. Comprehensive air transport agreements
In comprehensive air transport agreements on a Community level, the EU
can establish a coherent framework for air transport. Such agreements always
follow a double agenda: A market opening creating new economic
opportunities for the EU air transport industry and related industries (e.g.
tourism), and a process of regulatory convergence aimed at establishing a
level playing field and fair competition. Various economic studies have
demonstrated that such agreements would create economic benefits for the EU in
relations with certain key partner countries.
1. Negotiations with
the United States
The European Commission was authorised in June 2003
to open ambitious air transport negotiations with the United States. An EU-US
agreement will establish an open market with a level playing field for two
thirds of the global air traffic. The objective is to create an Open
Aviation Area with unlimited market access including the US domestic market,
open investment opportunities and a high degree of regulatory
convergence.
More than €8 billion economic benefits per year are
estimated. Furthermore, the agreement will ensure a level playing field for EU
and US airlines by introducing trans-Atlantic co-operation on issues such as
aviation security and state aid.
The EU Transport Ministers expressed
their unanimous support for the draft agreement in December 2005, and
will assess the situation in light of changes in the US policy concerning
foreign control of US airlines. The US Government has proposed a rulemaking that
could improve the possibilities for foreign nationals to control US
airlines. Once the US Government has decided on new rules, the EU will
assess these rules and subsequently take a decision on the first phase
agreement.
2. Other key partners for EU air transport
negotiations
The European Commission has proposed in 2005 to open air
transport negotiations with some other third countries. Such negotiations would
always aim at creating new market opportunities and ensuring a level
playing field. Agreements with these countries on a Community level would
ensure a consistent framework with equal opportunities for the EU air transport
industry.
a) Australia, New Zealand and Chile all share the
EU’s market-driven and consumer-oriented approach to aviation policy and
are among the most advanced nations with regard to the regulatory framework
for aviation and market liberalisation. They are key drivers of aviation
liberalisation in their respective regions. This should allow for swift
negotiations with positive results for the EU side. More importantly,
negotiations with these countries could set benchmarks for air transport
agreements worldwide. Agreements with these countries could go beyond the
EU-US agreement in terms of open market access and regulatory convergence,
including cooperation on competition issues and mutual recognition in a number
of critical areas. This would facilitate air services between the EU and these
countries and reduce the regulatory burden for EU air carriers. Furthermore, it
would create equal opportunities for all EU airlines in relations with
these countries.
b) China’s aviation market is
characterised by a very rapid growth in air traffic and a trend towards gradual
market opening. In this strategically vital market for EU air carriers,
EU negotiations would provide for an opportunity to ensure fair competition and
a level playing field. Negotiations would aim in the first phase primarily at a
process of regulatory convergence and solving “doing business”
problems for EU airlines. The process of gradual market opening would be
subject to a satisfactory degree of regulatory convergence.
c)
India has agreed to launch a broad dialogue with the EU in the sector of
civil aviation, including closer co-operation in air transport technology,
regulation and infrastructure at the recent EU-India Summit. An EU-India
Aviation Summit will take place in November 2006 in Delhi.
[1] COM(2005)79 on
Developing the agenda for the Community’s external aviation policy
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