Commissie verheugd over akkoord inzake bestrijding gesubsidieerde luchtvaart uit derde landen (en)
The European Parliament today supported the Council agreement to fill the legal vacuum to react against unfair competition from subsidised third country competitors in the airline sector. This Regulation will address subsidies and also unfair pricing practices by third country competitors resulting from non-commercial advantages granted by their authorities. Loyola de Palacio, European Commission vice-president in charge of Transport and Energy welcomed strongly this agreement. "This is a very important agreement for our airlines which will be put on an equal footing with their competitors in the future: the new instrument gives possibilities to react against very unfair practices." she said. "In the European Union, our airlines have to 'play it by the book' while it can happen that third country competitors on international routes in the air transport market are not always subject to similar fair trade rules. These new rules, when adopted, will fill the legal gap". The new regulation will enter into force 20 days after its publication, which should take place in the coming weeks.
In trade in air transport services, unlike in the trade in goods, the European Union is to date deprived of any means of counter-action against unfair trade. Bilateral air transport agreements have hardly any provisions on unfair practices and no disciplines have yet been agreed multilaterally. This final agreement is a step forward the definitive adoption of a regulation to fill this legal vacuum and provide the Community with an instrument enabling it to react to distortions of trade in the future.
The regulation proposes to allow the imposition of duties on those air carriers from third countries benefiting from subsidies. The duties will be calculated on the basis of the amount of aid granted to those airlines but will not be higher than necessary to remedy the damage caused to Community carriers. If the third country carriers are state-controlled, duties can also be imposed to offset any unfair pricing practices resulting from other non-commercial advantages granted by governments. Cases will be examined on the basis of complaints which show that damage has been caused to Community airlines.
Background:
Fair trade rules in the air transport sector
As the Commission underlined in its Communication on the repercussions of the attacks in the United States on the air industry(1), there are to date no arrangements at Community level for measures to counteract unfair pricing in air transport. The Community has adopted instruments to deal with subsidies(2) in the field of manufactured goods. It has also adopted instruments to deal with unfair pricing practices in maritime transport(3).
For the time being, under the World Trade Organisation and more particularly the General Agreement on Trade in Services, there are no agreed rules to redress trade distorting effects of subsidies to the international air transport industry and no rules have been agreed under WTO concerning unfair pricing practices of state-controlled air carriers. Therefore, multilateral trade instruments do not allow for adequate protection in this area.
However, some third countries have introduced instruments to deal with such situations. For instance, in the United States, since 2000, the Secretary of Transportation is allowed to take action to eliminate "an activity of a government of a foreign country or another foreign entity, including a foreign carrier" when this is considered an "anticompetitive practice against an air carrier" (U.S.C. Section 41310)
Procedure foreseen by the draft regulation:
Application of the regulation will be set in motion by a complaint from the air transport industry (e.g. an airline) or on the initiative of the European Commission. Following this complaint, the Commission will publish an opinion in the Official Journal and begin its enquiry. An out-of-court settlement may be found at any time with the third country in question, particularly as that country will be asked to submit its comments before the enquiry is continued. According to the terms of the agreement, this Regulation shall not preclude the prior application of and any special provisions in air services agreements between member States and third countries, or the application of any special provisions in agreements between the Community and third countries.
At the end of the inquiry there are three possible options:
- adoption of provisional measures of a maximum duration of six months;
- no action taken in the matter in the absence of sufficient proof demonstrating a link between the action of the third country government and the damage;
- adoption of definitive measures. These measures may be reviewed in the light of new factors.
All these decisions will be adopted by the Commission with the assistance of an Advisory committee representing the Member States and operating on the basis of the committee procedure.
The regulation also provides that before measures are taken to rectify the damage all the various interests must be taken into account in order to establish whether these measures are in the general interest of the European Union and its policies as a whole.
(1)Communication from the Commission of 10 October 2001 on the repercussions of the terrorist attacks in the United States on the air transport industry (COM 2001, 574 final).
(2)Council Regulation (EEC) No 2026/97 of 6 October 1997 on protection against subsidised imports from countries not members of the European Community (OJ L 288, 21.10.1997).
(3)Council Regulation (EEC) No 4057/86 of 22 December 1986 on unfair pricing practices in maritime transport (OJ L 378, 31.12.1986).