15^th TRANSPORTATION WORKING GROUP
Santiago de Chile, April 19 - 23,1999

TPT/WG/15/CT/SC/4.7

Third Meeting of Steering Committee on
More Competitive Transportation Industry (including Infrastructure)

 Report on Air Services

USA

REPORT BY THE UNITED STATES TO THE TRANSPORTATION WORKING
GROUP ON IMPLEMENTATION OF HIGH-PRIORITY RECOMMENDATIONS
OF THE APEC AIR SERVICES GROUP

Introduction

Responding to the instructions of the second APEC Transportation Ministers’ meeting, the APEC Air Services Group (ASG) has analyzed and prioritized eight options for more competitive air services with fair and equitable opportunity for all member economies. After meeting twice in Singapore, October 14-16, 1997 and February 25-26, 1998, the ASG completed the Report on the Options. The ASG discussed the importance of a mechanism to monitor and report on the progress of implementation of the options and stated that the Transportation Working Group (TPT-WG) should determine the mechanism to be followed.

At its 13^th meeting, the TPT-WG endorsed the ASG’s Report, and invited member economies to provide voluntary progress reports on implementation of the ASG’s Recommendations.

The United States strongly believes that the momentum created by the ASG’s work should be maintained, and that interested economies should initiate action to demonstrate their desire to move forward in their commitment to aviation liberalization in the APEC region. Since the ASG prioritized the options, we believe that particular attention should be given to those categorized as high or high/medium priority, and the United States is pleased to present this report on the implementation of the ASG’s recommendations in our bilateral relationships.

Progress on implementation of high-priority options

Of the eight options, the ASG categorized four as either high-priority or high/medium priority:

Option 3, Doing Business Matters

Option 4, Air Freight

Option 5, Multiple Airline Designation

Option 7, Airlines’ Cooperative Arrangements

U.S. open-skies agreements with eight APEC economies contain provisions on the four high-priority options that substantially conform to the ASG recommendations.

Many of our other bilateral agreements are also consistent with the recommendations, especially in doing business matters. Multiple airline designation is also widely accepted. Air freight provisions generally follow the same pattern as for combination services. Several agreements provide for airlines’ cooperative arrangements including code sharing, although some do not allow third-country code sharing.

The Attachment summarizes the status of our bilateral arrangements in these areas.

Since the ASG adopted its recommendations, the United States and several of our APEC partners have negotiated bilateral agreements that do not achieve complete open skies, yet still liberalize the market significantly in one or more of the priority areas. (Improvements on multiple designation, air freight and airlines’ cooperative arrangements with Mexico and Russia.) We will continue our efforts to negotiate more competitive arrangements. For example, the United States and Australia are in the process of negotiating a new, liberal all-cargo agreement.

Conclusion

It is our hope that the progress reports presented at this meeting of the Transportation Working Group will stimulate interest in creating a positive action plan and a renewed commitment to implementation of the ASG’s recommendations among all APEC economies, focusing initially on the four high-priority options. The United States stands ready to discuss future steps with interested APEC members.

IMPLEMENTATION OF THE APEC AIR SERVICES GROUP’S HIGH-PRIORITY RECOMMENDATIONS IN U.S. BILATERAL ARRANGEMENTS

X = Agreement substantially conforms to ASG recommendation.
P = Agreement partially conforms to ASG recommendation.

* Open skies agreement.
** Open skies agreement initialed.
*** Currently engaged in negotiation for liberal agreement.