EUs De Palacio says any US-UK bilateral 'Open Skies' pact will be short-lived
European Union Transportation Commissioner Loyola de Palacio said if the US and the UK manage to come to an agreement on a bilateral "open skies" pact, the deal will be overruled by a European court later this year.
"The agreement can be signed with a clear short life," de Palacio told reporters here ahead of the US-EU summit between European President Romano Prodi and President George Bush at the White House.
A potential US-UK "open skies" accord would liberalise transatlantic passenger and cargo air services between the two countries, allowing US carriers unlimited flight access into UK airports and UK airlines unlimited access to US airports.
The two governments tried and failed to reach an "open skies" agreement in late January, with negotiations breaking down at the last minute when the UK government withdrew its team from the planned round of talks that could have led to the signing of an accord.
FedEx Corp chairman, president, and chief executive officer Fred Smith, meanwhile, met UK Transport Minister John Spellar yesterday in London to urge the UK to step up efforts to sign a bilateral pact with the Bush administration.
Even if the two sides hammer out a pact, the EU said the deal would be prohibited under EU law, which bars member nations from negotiating deals that give preferential treatment to any one member of the 15-nation economic bloc.
Philippe Leger, advocate general of the European Court of Justice, gave a sealed legal analysis in late January to the EU which presents the court with arguments for reviewing whether or not EU member countries, or the EU as a whole, have the right to negotiate bilateral "open skies" treaties.
A ruling is expected sometime between May and September on whether or not the EU will take over the mandate for negotiating bilateral "open skies" accords.
"It's clear that this clause (allowing) nationality exclusion is going to be overruled," de Palacio said.
De Palacio hopes to begin negotiations for a US-EU "open skies" agreement that would remove the long-standing special treatment the airline industry receives.
"I hope to negotiate an agreement for the European market with the US market," she said, adding "we'd like to make the air sector a more normal sector" that doesn't receive unwarranted special treatment.
Recognizing that such negotiations "shall be quite difficult" and could take years to finalize, she suggested a scaled-back deal between the two trading blocs that would remove or reduce current limitations on foreign ownership of US national carriers.
"Maybe the (best) way is a step-by-step approach," she said of the incremental model.
Asked if she had received any assurances that the US would be interested in negotiating a deal or shown a willingness to compromise with the EU on the ownership clause that was a stumbling block to the US-UK accord, she said only that there was not an explicit unwillingness to discuss the matter.
"They have not said they are not willing to do that," she said.
Despite the lack of enthusiasm from the US side, de Palacio expressed confidence that a US-EU "open skies" accord is inevitable.
"I'm sure this will happen," she said, adding "I don't know when."
But she said the court ruling will force the US to come to the table.
"The (Bush) administration is well aware that the court outcome shall mean that in any case there is a negotiation to be made," she said.
Under the terms of the 1977 Bermuda II agreement between the US and the UK, only two US airlines — American and United Airlines — are permitted to fly into London's Heathrow airport while only two UK carriers — British Airways and Virgin Atlantic — are allowed to offer services between Heathrow and the US.
