RESTRICTEDWORLD TRADE
ORGANIZATIONTCA/M/15
27 March 2003
(03-1755)
Committee on Trade in Civil Aircraft
MINUTES OF THE MEETING
HELD ON 13 NOVEMBER 2002
Chairperson:  Mr. Didier Chambovey
1. The Committee on Trade in Civil Aircraft (the "Committee") held a meeting on
13 November 2002.
2. Prior to the adoption of the agenda, the Chairperson noted that at the request of the European
Communities, and the United States four items had been put on the agenda under "Other Business".
The Chairperson raised one additional issue under "Other Business" relatin g to the requests for
information which he had received from the Chairman of the Special Session of the Committee onTrade and Development and the Chairman of the Working Group on Trade and Transfer of
Technology.
3. The Committee adopted the following agenda:
A. C ONSIDERATION OF THE STATUS OF THE 1979 A GREEMENT ON TRADE IN CIVIL
AIRCRAFT UNDER THE WTO ......................................................................................................2
B. E ND-USE CUSTOMS ADMINISTRATION .......................................................................................3
1. Updating Information Regarding Civil or Military Identification for Customs
Purposes....................................................................................................................... ..............3
2. Military vs. Non-Mi litary Definition.......................................................................................3
C. S TATISTICAL REPORTING OF TRADE DATA................................................................................4
D. T REATMENT OF AIRCRAFT GROUND MAINTENANCE SIMULATORS ...........................................4
E. D ERESTRICTION OF DOCUMENTS ................................................................................................5
F. C ONVENTION ON INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT AND THE
PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT ...................................................9
G. O THER BUSINESS ......................................................................................................................10
1. Matters Relating  to Article 4.4 .............................................................................................. 10
2. Article 4: Procurement of Commercial Aircraft by the US Armed Forces.......................103. EU Support for the A 400 M..................................................................................................1 2
4. Matters Relating to Article 4 and 6, Government Support for Airbus..............................12
5. Requests for Information ..................................................................................................... ..16
H. D
ATE OF NEXT REGULAR MEETING .........................................................................................17
I. A DOPTION OF ANNUAL REPORT ...............................................................................................17TCA/M/15
Page 2
A. CONSIDERATION OF THE STATUS OF THE 1979 A GREEMENT ON TRADE IN CIVIL AIRCRAFT
UNDER THE WTO
4. The Chairperson recalled that in April 1999 he had sent to Signatories a draft protocol
concerning technical rectifications needed to br ing the Aircraft Agreement into the WTO framework.
Since then, certain Signatories had remained unable to adopt this draft protocol but had indicated theutility of continuing to revert to this item in the Committee. The Chair urged all Signatories to
approach this issue in a realistic and constructive spirit and expressed his hope that there had been
some convergence of Signatories' views in this area. The Chairperson thus asked Signatories whether
there had been any new developments.
5. The delegate of the United States recalled that at the last meeting he reported on bilateral
consultations that his delegation had had particularly with the European Union concerning some
concerns of both delegations about the proposed rectification of the Agreement.  The delegate of theUnited States recalled that his delegation had noted that the European Union had specific concerns
with respect to Articles 6.1 and 8.8. He recalled that such concerns had been discussed and that his
delegation was interested in hearing concerns of othe r signatories as well.  He stated that following
that meeting, his delegation was under the impression that the European Union might propose
bilaterally, be it formally or informally, improved wording which would address whatever concernsthey had with regard to Articles 6.1 and 8.8 as they had been proposed by the Chair.  The delegate of
the United States noted that his delegation had not received any proposals from the European
Communities or from any other Signatory but remained willing to discuss the matter.
6. In addition, he recalled that his delegation still had concerns about the later in time issue and
the relationship between the rectified Agreement on Trade in Civil Aircraft to the rest of the WTO.The delegate of the US indicated that his delegation felt that these concerns could be addressed in
language similar to the language that was inserted in the Protocol (2001) Amending the Annex to the
Agreement on Trade in Civil Aircraft.  The United States delegate finally noted that his delegation
still felt it was important to update and rectify the Agreement.
7. The delegate of the European Communities confirmed that, as the record of earlier meetings
showed, that the main points of concern to his delegation were Articles 6.1 and 8.8 of the
Chairperson's proposal. The delegate of the European Communities underlined that his delegation
remained interested in finding a solution to this problem but that there were no new developments to
report since the last meeting of the Committee.  He indicated that his delegation would continue
discussions with the United States in the near fu ture. He stated that he would inform the Committee
on any progress which would be made.
8. On the later in time issue, he pointed out that the Committee had been able to get over this
point when adopting the Protocol (2001). This, in his view, was an encouraging sign for some of the
other outstanding problems before the Committee.
9. The Chairperson encouraged the Signatories to continue the dialogue. The Chairperson
indicated that he would be willing to conduct consultations whenever the Signatories would request
his assistance.
10. The Committee took note of the statements made and agreed  to revert to the matter at the next
meeting.TCA/M/15
Page 3
B. END-USE CUSTOMS ADMINISTRATION
1. Updating Information Regarding Civil or Military Identification for Customs Purposes
11. The Chairperson noted that no new information had been received from Signatories since the
last regular meeting of the Committee.
2. Military vs. Non-Military Definition
12. The Chairperson recalled that Canada made a proposal concerning the definition of a civil
aircraft for the purposes of the Agreement.  Canada's proposal was circulated in document TCA/W/4.
He reminded Signatories that they had agreed at the last meeting on 5 June 2002 to revert to this item
at the November meeting.
13. The delegate of Canada recalled that at the last meeting, he had tried to bring the Committee
up-to-date on what his delegation had in mind but without any specific wording. He informed the
Committee that after further mainly internal discussions, his delegation developed a revised wording,
a copy of which he distributed to Signatories. He added that his delegation was not making a formalproposal. He stated that his delegation nevertheless felt an obligation to bring the Committee up-to-
date on his delegations's thinking.  He indicated that the paper that was made available was a
reflection of the state of his delegation's thinking on the issue. He expressed the hope that reading the
revised wording that his delegation had developed would lead to a fruitful discussion with more
delegations so that when the time is right to consider a formal proposal and perhaps even a change tothe Agreement, Signatories would be well advanced in their thinking and the Committee would be
able to make good progress. The delegate of Canada considered that this was not the appropriate
occasion to go into the specifics of the proposal, but instead simply provided his delegation's wording
and asked everybody to consider it as a basis for further discussions.
14. The delegate from Canada added that the underlined wording on the second page of his
delegation's paper represented what could possibly be new wording for the definition of civil aircraft.
He clarified that his delegation's paper included an amended Article 1.1 and Article 1.2 with the
underlined words being new words or changes to the Agreement.  He added that the paper also
included developments considered by the Committee over the last period of time, including a previous
suggestion to include ground maintenance simulators and their parts and components as one of theitems covered by the Agreement.
15. The delegate of the United States considered that  this constituted a step in the right direction.
Her delegation found very useful the fact that the Canadian paper not only incorporated a definition
that covered finished products but also products that are in the works, be it in the design phase, in the
testing phase, or in the evaluation phase.  She considered that this was a good beginning, and statedthat her delegation would to continue to look at this and work with any other Signatories in discussing
the Canadian proposal.
16. The delegate from the European Communities reit erated his delegation's vivid interest in the
proposals. He stated that his delegation was grateful to the delegation of Canada for bringing the issue
forward and promised that his delegation would study the proposal with the necessary diligence.
17. The delegate of the United States added that in his view the Committee had skipped very
quickly over updating information regarding civil/military, as in his view it was part of the same item
and both were interrelated.  He considered that the broadening of the definition of civil aircraft was
one aspect of the problem, which the Committee just discussed. The first sub-item had earlier come
up in regard to potential Signatories' concerns over classification of products and the possibility of
avoidance of proper duty by classifying something as a civil aircraft under this Agreement when itTCA/M/15
Page 4
was actually a product imported for use otherwise.  He recalled that there had been some seeking of
information from the Committee, and that in part that was why the issue had been put on the agenda
in the first place.  He stated that his delegation ha d not received enquiries recently, but that in the past
it had received several enquiries on how customs entities classify such products and whether a
particular product should be a civil aircraft or something else when it looks very much like it.  He
suggested that the Committee should remain open to enquiries from observers and potentialSignatories if they have problems with the customs administration of the Agreement.  He added that
as part of Signatories' assistance to developing economies that might be interested in becoming
Signatories, and in line with one of the requests made in a letter to the Chairperson, the Committee
and the Secretariat should remain available to provide such expertise advice.
18. The Committee took note of the statements made and agreed
 to revert to this matter at the
next meeting.
C. STATISTICAL REPORTING OF TRADE DATA
19. The Chairperson recalled that at the 5 June 2002 meeting of the Committee, Signatories
indicated that they considered it useful to continue this process of reporting of trade statistics and that
such reporting should be done electronically. The Chair indicated that since the last meeting, 2001
trade statistics from the United States and Switzerland were circulated as TCA/TSC/W/15 and 16
respectively.  He further recalled that at the 21 November 2001 meeting and the 5 June 2002 meeting,the Committee discussed ways to circulate this information among Signatories in electronic form. On
the basis of the Committee's discussions at these meetings and after consultations with the Secretariat,
the Chair proposed that the Committee would agree that Signatories in the future would provide the
relevant trade statistics to the Secretariat in electronic form and that the information provided would
then be put on the WTO Members' website by the Secretariat.  The Secretariat would then circulate awritten notice of receipt of trade statistics which would inform Signatories of where such information
could be found on the WTO Members' website.
20. At the request of the delegate of Canada, the Chairperson clarified that what would be posted
on the website was the notification that was due by Sign atories.  He stated that there would be a list of
titles of notification and that one would be able to open the document, very much like what exists interms of notification to the WTO in general to the WTO.
21. The delegate of the United States recalled that his delegation supported the proposal to make
the trade data available electronically both for efficiency and in order to save trees.  He stated that his
delegation would also make the data available on his government's website. He noted that there were
certainly important advantages to having a central location for all data which was something thatcould only be organized by the WTO Secretariat, and he reiterated his delegation's support for the
proposal.
22. The delegate of Canada stated that his delegati on shared the views of the United States in this
respect and reiterated his delegation's support for the proposal.
23. The Committee took note of the statements made and agreed  on the proposed procedures.
D. TREATMENT OF AIRCRAFT GROUND MAINTENANCE SIMULATORS
24. The Chairperson recalled that at its 15 November 2000 meeting, the Committee adopted a
decision "urging Signatories to apply immediately, on an interim basis, duty-free treatment to the
goods of the proposed product coverage Annex outlined in WTO document TCA/W/5/Rev.3,
including aircraft ground maintenance simulators".  The Committee further decided that "Signatories
shall inform the Committee on steps they have taken relating to such interim application".  In theTCA/M/15
Page 5
decision to be adopted upon confirmation of the ad referendum  adoption of the Protocol (2001) , the
Committee "recommends that Signatories will apply, as decided during the meeting of
15 November 2000, on an interim basis, duty-free treatment for aircraft ground maintenance
simulators classified under HS 9023.00" and that "Signatories shall confirm with the Committee their
interim application."
25. The Chairperson therefore invited Signatories to  confirm, or inform the Committee of steps
taken towards, interim duty-free treatment of aircraft ground maintenance simulators.  He recalled that
such information had already been received at previous meetings, and wondered whether there were
any additional updates that Signatories wanted to communicate to the Committee ?
26. The delegate of Canada stated that in his view, the item had been dealt with successfully.  He
recalled that at the last meeting the European Communities had confirmed that they had taken the
necessary legal steps to implement the treatment of ground maintenance simulators that the
Committee had agreed to on an interim basis. He was therefore not sure why this item was still on theagenda.
27. The Chairperson noted that although the impression  could be that there were only four or five
Signatories to the Agreement, there were in fact more Signatories, and the Committee had not
received information from all of the Signatories on this matter.  He added, in his capacity as a
delegate from Switzerland that he was in a position to  confirm that by the end of the year Switzerland
would have undertaken all the procedural and legal steps domestically and that the decision would
thus be fully implemented as of 1 January 2003 in Switzerland.  The Chairperson concluded that
nevertheless Canada's point was quite valid and that the Committee perhaps did not need to revert to
this issue at the next meeting.
28. The delegate from the United States suggested that, as some Signatories had not yet
responded to the Committee's request for information,  the Chair send a letter before the next meeting
requesting Signatories to confirm or state their treatment of ground maintenance simulators.  He
recalled that when this matter initially had surfac ed a couple of years ago, his delegation had at that
time already indicated that it provided zero duty treatment to ground maintenance simulators.  His
delegation had not reconfirmed that in the meantime but would be happy to do that in writing if theChair felt that the Committee had not yet received a full set of responses, or if Canada, who made the
proposal, felt some concern that it might not have received full responses.
29. On the basis of this suggestion, the Chairperson proposed that he would write to Signatories
and request information from all Signatories on the steps they had undertaken to implement the
interim decision. He indicated that those Signatorie s who already indicated that they had implemented
the decision, or informed the Committee on the steps taken to do so, were on record, and would not be
required to confirm it in writing once again.
30. The Committee so agreed.
E. DERESTRICTION OF DOCUMENTS
31. The Chairperson noted that procedures generally applicable to WTO bodies concerning
derestriction did not apply to the Committee, nor had the Committee recently adopted any specific
procedures regulating derestriction. He recalled that at the moment, as provided in documentAIR/W/16 of 9 December 1980 on the derestriction of documents, documents in the AIR/M/- and
AIR/W/- and AIR/Spec/- series were never derestricted.
32. He further noted that Signatories were undoubtedly aware of the decision by the General
Council concerning procedures for the circulation and derestriction of WTO documents datedTCA/M/15
Page 6
14 May 2002, in which the General Council emphasized the importance of greater transparency, and
adopted as the starting-point that all WTO documents shall be unrestricted. (see document WT/L/452
abrogating WT/L/160/Rev. 1). He further drew the Si gnatories' attention to the fact that the other
plurilateral Committee presiding over an Agreement in Annex 4 of the WTO Agreement, the
Committee on Government Procurement, recently adopted a decision on the circulation and
derestriction of documents, dated 8 October 2002, along the lines of the procedures on circulation andderestriction adopted by the General Council.
33. The Chairperson recalled that at the Committee's meeting of 5 June 2002, the Committee
requested the Secretariat to prepare a draft text for consideration at the November meeting of the
Committee on the basis of the derestriction procedur es adopted by the General Council as laid down
in document WT/L/452.  He noted that such proposal was circulated to Signatories in advance of the
meeting, and was also available at the back of the room. The Chairperson indicated that the draft
prepared was very similar to the Procedures adopted by the Committee on Government Procurement,leaving out what was not applicable to the Trade in Civil Aircraft Agreement. He then invited
Signatories to give any views on this proposed decision on procedures for the circulation and
derestriction of documents.
34. The delegate from the United States stated that his delegation had some comments on the
draft decision. First, he noted that the decision adopted by the Committee on Government
Procurement included a paragraph dealing with the transparency of accession documents. His
delegation was wondering whether such documents were addressed in the current wording of the text
proposed to the Committee or whether some additional wording to address accession documents that
the Committee might get would need to be inserted.  He indicated that so far accessions had been
fairly simple, but that one could not exclude the possibility that in the future there could be some giveand take on that matter and he was wondering whether the accession documents, if there were any,
would be covered by the decision and transparency would be ensured.
35. The Chairperson explained that the reason why this paragraph had been dropped, was
precisely because indeed the accession procedure had been very straightforward, as there was no need
to negotiate a schedule of commitments as in the case for accession to the Government ofProcurement Agreement.  He considered that the existence of a schedule of commitments in different
sectors may have been one of the reasons why in Committee on Government Procurement arrived at
the conclusion that a special provision on the derestriction of such documents was necessary.  The
Chairperson was of the view that, should the Committee want to reach this kind of complexity as in
the Government Procurement Committee, it would ha ve to find a slot under the current proposal to
deal with accession related documents.  He considered that if the document would be submitted by an
acceding country, it should be treated as under 2(a) in the current proposal.  He acknowledged that
this was a situation not contemplated in the proposed decision as it concerned a submission of a
country that would not yet be a Signatory to the Agreement, but in his view could be treated under
2(a) as in the current proposal.  The Chairperson considered that, in his view, there was no need to
have a specific paragraph on accession but wondered whether the Committee would want to refine the
current decision to take this matter into consideration.
36. The delegate from the United States noted that paragraph 2(a) applied to documents submitted
by Signatories and that if Members were in the process of acceding to the Committee they would not
yet be a Signatory, and hence in his view, such Members would not be in a position to restrict the
document.  He considered that a model existed already in the government procurement area and that it
would be easier to copy that model into this Agreement as well.
37. The Chairperson agreed that this was one way of solving this problem, and clarified that his
earlier comments would have implied refining 2(a) to take this issue into consideration.TCA/M/15
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38. The delegate from the European Communities  pointed out that what the Committee was
discussing concerned the acceding countries rather than any of the Signatories present in the room.
His view was that often there might be simultaneous accessions and that there could thus be one big
accession package where the acceding country might feel rather strongly that everything should be
kept restricted at some stage before the final deal would be cut on all of these issues.  He therefore
sympathized with the US proposal  for the parall elism which the US was seeking on other issues even
if normally speaking there might be a lot less to re strict in the context of acceding to the Agreement
on Trade in Civil Aircraft.  He considered that it would look awkward if some of these things would
be on the table for everybody from the beginning, especially in larger accessions.  He therefore felt
that it would be a good idea to follow the example found elsewhere.
39. The Chairperson recalled that the approach taken by the Committee on Government
Procurement was that such documents relating to any accession shall be restricted and shall be
automatically derestricted upon the Committee's decision on the accession of the WTO Memberconcerned.  He explained that this implied that the document would be considered to be restricted
during the period of negotiations which he considered to be quite natural and normal due to the
confidentiality requirements during the negotiating phase, but that, upon accession, the document
would then automatically become derestricted.  As  this seemed to be the approach the Committee
wanted to take, the Chairperson made the following proposal of wording for a new paragraph (d) onthe second page of the draft proposal:  "documents relating to any accession in the sense of Article 9
of the Agreement shall be restricted and shall be automatically derestricted upon the accession of the
Signatory concerned".  He clarified that this wording applied, mutatis mutandis , the approach taken
by the Committee on Government Procurement. The Chairperson then invited further comments on
the proposed decision.
40. The delegate from the United States stated that his delegation wanted to raise first a very
small issue and then a somewhat larger one.  The small one was in paragraph 5, which provided that
the Committee may at an appropriate time review the procedures adopted.  His delegation felt that it
would be appropriate to change that to "will review" as, in his delegation's view, the commitment to
review was not a very strong commitment asking the Committee to do anything. The delegate fromthe United States considered that if there would be changes in operational procedures, the proper verb
would be "will".
41. The Chairperson noted that there was no opposition  to the proposal by the United States to
change the word "may" in paragraph 5, second line to "will ", and concluded that this amendment was
acceptable to Signatories.
42. The delegate from the United States stated his delegation wished to raise one last item which
concerned paragraph number four which provided a grandfathering of restricted documents in line
with the General Council decision in this respect.  He noted, however, that this was the first time the
Committee addressed derestriction, and there was thus no partial derestriction in this Committee as
there had been in other Committees in 1997.  Grandfathering all documents prior to the adoption of
the proposed derestriction decision would thus cover a lot more documents in this Committee and be
far more conservative than needed.  The delegate from the United States considered that what wasdiscussed in this Committee were important trade matters and such issues had been discussed in an
open fashion.  He emphasized that the documents he had seen coming out of this Committee over
many years working with the Committee seemed to be  useful things, if not always to the Committee
reaching solutions, perhaps to historians and the general public which wanted to understand the work
and the purpose of the Agreement.  He therefore proposed that the numeric item four be struck in itsentirety and that therefore everything would be derestricted from day one of the Committee going
back to 1980 when the Agreement went into effect.TCA/M/15
Page 8
43. The delegate from the European Communities recalled that his delegation had on numerous
occasions pleaded for maximum transparency. He therefore stated that his delegation would not have
a problem with this proposal, but he did want to know from the Secretariat whether it was true that
none of the derestriction rules that applied elsewhere applied in this Committee as he was not aware
what exactly was done in the General Council last time when such a decision was taken.
44. The Chairperson confirmed that the rules on derestriction adopted by the General Council did
not apply to documents of the Committee on Trade in Civil Aircraft which had always remained
restricted.
45. The delegate from Canada asked for clarification as to why such a paragraph four had been
inserted.
46. The Chairperson stated that this was done because a similar paragraph appeared both in the
General Council's decision and in the decision of the Committee on Government Procurement. He
clarified that this decision had been modelled after these two other decisions.  The Chairpersonexplained that the decision of the General Council only applied for the future and implied a certain
grandfathering of previously restricted documents. He confirmed what the delegate from the
United States had said, that the General Council adopted a first decision on derestriction in 1997
already, which was revised in 2002.  In light of the United States proposal, the Chair asked whether
Signatories could agree with this proposal that the decision of the Committee would applyretroactively since the entry into function of the Committee.
47. The delegate from the European Communities reca lled that a similar path was taken by the
ITA Committee where retroactively the documents had been derestricted.
48. The delegate from Canada stated that Canada was also a strong supporter for increased
transparency in the WTO and that his delegation thus did not have any objection to going back in
time.
49. The Chairperson concluded that Signatories agreed on the principle and on the proposal made
by the United States to apply this decision retroactively 22 years back.  He considered that the best
way to deal with this and to reflect this would be to delete paragraph four of the proposed decision. As
none of the Signatories wished to raise any other matter pertaining to this draft proposal onderestriction, the Chairperson suggested that the Committee adopt the decision with the agreed
changes ad referendum  adding that the Secretariat would issue a revision as quickly as possible. If
Signatories had some difficulty with this revised decision, they would have the possibility to react to
the Secretariat until 30 November 2002.
50. The delegate from  the United States noted that paragraph 2(a) provided that the document
"may remain restricted for a further period of 30 days". In his view, it might be better drafting to say
the document "will remain restricted" or "shall  remain restricted" as he considered that that was what
was intended in the fourth line of this paragraph. He considered that, if a Signatory objected to the
derestriction, it was not a discretionary manner at that point, but rather the document should then
remain restricted for a further period and in that respect he considered that perhaps "shall" was a
better word than "may".
51. The Chairperson explained that this language had been copied from the General Council's
decisions and he considered that it should be assumed that the General Council had used the most
appropriate language here but that of course the Committee was not obliged to adopt exactly the same
formulation as the General Council.  In his view , the proposed change from "may" to "shall" would
not create a logical problem as the articulation of the paragraph was already a bit complicated to say
the least.TCA/M/15
Page 9
52. The delegate from the European Communities wondered whether it would be wise to change
language adopted by the General Council. He was afraid that he lawyers would have lots of questions
on why the Committee did this and preferred to avoid changing a text here which was negotiated line
by line over a month ago in the General Council.
53. The delegate from the United States agreed with the Chairperson that this Committee was an
independent body and could formulate its own wording. Nevertheless, he stated that his delegation
could accept reverting to the original wo rding keeping in mind the comments made.
54. The Chairperson concluded the discussion on this item by reminding the Committee on the
way forward.  The Committee would adopt the decision ad referendum  and the Secretariat would be
issuing a revised version. Members would have until 30 November 2002 to react to the new version.
He stated that if by the deadline nobody had made any objections, the decision would enter into force.
55. The Committee so agreed.
F. CONVENTION ON INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT AND THE PROTOCOL ON
MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT
56. The Chairperson recalled that this item was put on the agenda at the request of the
United States.
57. The delegate from the United States stated that his delegation wanted to bring to the attention
of the Signatories the Convention on International Interests in Mobile Equipment and the Protocol on
Matters Specific to Aircraft Equipment, referred to simply as the Cape Town Convention. He
explained that this Convention related directly to the Agreement on Trade in Civil Aircraft in that the
Agreement was specifically designed to achieve maximum freedom of world trade in civil aircraft and
underlined the importance of the civil aircraft sector to Signatories' mutual economic and trade
interests.
58. The delegate from the United States informed Signatories that a white paper was available at
the back of the room.  The white paper was developed by the aviation working group which is a non-
profit organization comprised of Members from the US, the EU, Canada, Brazil and Singapore.  She
added that this aviation working group was also made up of industry members that consult with the
governments routinely. She explained that the Cape  Town Convention and the protocol which is co-
sponsored by ICAO, as well as UNIDROIT, based in Rome, was specifically designed to facilitate
asset based financing of aircrafts and engines for civil aircrafts.  She stated that this convention
accomplished that by bringing together all the different legal systems around the world in a manner by
which they reflect internationally recognized transaction practices and that by doing this it reduced the
risks and promoted more favourable credit terms than would otherwise be the case.  In her view, itcould therefore contribute significantly to meeting the financing demands for the increased need of
more aircrafts and engines world-wide.  She further stated that it also addressed bankruptcy rules by
making a uniform bankruptcy procedure of insolvency in a situation where such rights are at greater
risk.  The Convention also established the internati onal registry system that would record such rights
and interests and therefore a person or an airline could quickly research who had owned an aircraft
over the last years thus reducing the costs and time associated with that kind of due diligence.  She
considered that there were a lot of economic benefits that could be derived from implementing theCape Town Convention, such as, for the governments, to reduce risk and debts to governments who
provide credit in the form of sovereign guarantees, it  also could lead to reduced risks to governments
who provide export credit financing and could support and enhance privatization;  for the airlines, this
would  reduce financing costs and enhance access to funding;  for aircraft manufactures and suppliers
the benefit could consist of higher sales and output;  for aviation investors, there would hopefully beincreased returns and higher valuations of investments;  for the public at large, the passengers andTCA/M/15
Page 10
other users would benefit from reduced prices and increased levels of service.  She emphasized that
one key feature of the treaty was the guarantee of autonomy, as it provided that parties and States
could tailor their transactions and ratifications so as to derive the advantages that they deemed
appropriate.
59. The delegate from the United States recalled that in November last year, there was a
diplomatic conference that was held in South Africa, during which 56 States including most majoraviation States signed the Final Act and that so far 24 States had signed the legal text.  She added that
many countries around the world had commenced formal ratification proceedings.  Her delegation
brought this to the attention of the Committee, as it thought that this was a beneficial treaty and she
urged other countries to look at this carefully as well as developing countries that could benefit
greatly from it.
60. The delegate from the European Communities st ated that his delegation shared the view of
the United States that the Convention and the Prot ocol promote the export of aeronautic products,
reduce airline financing costs, facilitate the acquisition of newer safer aircrafts and also help
developing countries to attract private capital.  He added that the European Communities was working
hard on making progress towards ratification and that the Commission was in the process of preparing
a proposal for a Council decision with a view to signature and conclusion of the Convention and
protocol.  With regard to the ratification process, his delegation was interested to find out what thestate of play was in other Signatories.
61. The Committee took note of the statements made.
G. OTHER BUSINESS
1. Matters Relating to Article 4.4
62. The Chairperson noted that this item had been placed on the agenda at the request of the
European Communities.
63. The delegate from the European Communities recalled that the issue of inducements under
Articles 4.1 and 4.4 had been on the agenda of the Committee a number of times. He wanted to raise
some points on a couple of recent procurement issues.  He mentioned the case of Chinese Taipei, a
case raised on several occasions in the press. His delegation requested the United States to providesome explanation about the compatibility of some of  the measures reported  with Articles 4 and 4.1 in
particular.
64. The delegate from the United States recalled that in addition to the obligation to refrain from
providing inducements, Article 4 also provides that business opportunities be given to suppliers from
Signatories on a no less favourable basis.  His delegation was aware of the fundamental obligations ofArticle 4 of the Agreement, i.e. to avoid unreasonable pressure and inducements and to encourage
purchase decisions based on competitive price quality and delivery.  He stated that the United States
had fully honoured these obligations and would continue to do so.
65. The Committee took note of the statements made.
2. Article 4: Procurement of Commercial Aircraft by the US Armed Forces
66. The Chairperson recalled that this item had been placed on the agenda at the request of the
European Communities.TCA/M/15
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67. The delegate from the European Communities referred to the minutes of the previous meeting
during which his delegation had raised the particular item of the purchase of 100 767 tanker aircraft
by the US Airforce.  His delegation wanted to hear from the United States what the current state of the
matter was.
68. The delegate of the United States recalled that, at the previous meeting, his delegation had
raised some concerns about this item being on the agenda because it concerned a military product not
covered by the Agreement.  He considered that if  the European Communities wanted to raise this item
as a broadening of the Agreement to include military aircrafts, his view was that this was not the
appropriate agenda item for that purpose.  He noted, however, that it was the view of his delegation
that Signatories are allowed to put items they are interested in on the agenda, and that the Committee
certainly discussed this matter at the previous meeting. He recalled that during the previous meeting
he had also noted that his delegation also had some questions concerning the A 400M programme,
which it was considering putting on the agenda, if the European Communities considered that thematter raised under that agenda item was covered by the Agreement. He noted that as this matter had
been put on the agenda again, the European Communities appeared to consider the A400M some kind
of civil aircraft item which could be also discussed at the meeting. He noted that his delegations had
queried the European Communities on that issue.
69. The delegate from the United States stated that although the European Communities did not
respond to the questions posed, his delegation would nonetheless respond to the question of the
European Communities on the status of the procurement of much-needed tanker aircraft for the armed
forces, which in his view were definitely military aircraft. He noted that there was no report of any
final contract and that the public reports indicated that the amount of the lease or purchase price,
whatever it turned out to be, would be far less than the projected costs as they appeared in earlierpress articles that had been cited by the European Communities at the last meeting.  He recalled that
his delegation had noted during the last meeting that non-US suppliers had been considered in the
procurement, even though this matter was not really a matter covered by the Civil Aircraft
Agreement.  He noted that there had been open procurement and recalled that discussions concerning
military aircraft and rights of parties to provide them were covered under other fora, under bilateralMOU's  between the military offices and defence departments, as well as in NATO and under other
treaty obligations.
70. The delegate of Canada noted that the issue discussed was obviously closely related to its
proposal or its ideas to amend the definition of civil aircraft.  He considered that it was an illustration
of some of the problems that may occur under the current arrangement. It was his understanding that,under the current arrangement,  if military entities purchased the aircraft, these would be deemed to be
military purchases.
71. The delegate of the European Communities thanked both delegations for their explanations,
which, in his view, rightly pointed out that the question of end-use versus design might be looked at
differently if one were to work on the definition.  He also thanked the United States for providing
some further information on the issue in spite of it s argument that the matter was not covered by the
Agreement. He responded to the matter raised by the United States by stating that it was much tooearly to discuss the A 400 M issue in light of the stage of the project.  He added that he found it more
difficult to see how a cross-subsidy effect would be possible between the development of a civil
aircraft with low wings and the research and development for a military turbo prop aircraft with high
wings.
72. The Committee took note of the statements made.TCA/M/15
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3. EU Support for the A 400 M
73. The Chairperson noted that the item was placed on the agenda by the United States.
74. The delegate from the United States noted that the European Communities already responded
in part to his delegation's question as the European Communities apparently felt it was premature to
discuss this aircraft as nothing had yet been decided, and since it concerned a high wing aircraft,
which is more military oriented than presumably a low wing aircraft.  Nevertheless, he noted thatthere had been reports that the A 400 M would in fact soon be offered initially to civilian buyers as a
transport aircraft. He noted that this would imply that any support for that aircraft could amount
immediately to civilian support.  His delegation considered that there could be a dual use of this
aircraft and it was wondering whether the European Communities cared to comment on that.
75. He further stated that, with regard to Article 4, he was not aware that there had been open
procurement for either the design of the A 400 M or the manufacture, or the consideration of
alternative aircrafts from other suppliers. He wondered if the European Communities would care toshed light on whether or not the A 400 M was following the Article 4 procurement requirements,
which the European Communities seemed to suggest should be applied to US airforce procurement of
military tanker aircraft.
76. The delegate from the European Communities thanked the delegate from the united States  for
the more specific questions, some of them which he wo uld transmit to his authorities.  In his view, the
only response he could immediately give was the one he had given, i.e. that the project was in a phase
where there were still many uncertainties.
77. The Committee took note of the statements made.
4. Matters Relating to Article 4 and 6, Government Support for Airbus
78. The Chairperson recalled that this item was put on the agenda at the request of the
United States.
79. The delegate from the United States first raised some questions with regard to Article 6 and
recalled that it had been the custom in the Comm ittee for some years for parties to informally notify
the Committee of any major support activities related to Article 6.  He noted that in the past there had
been such reporting by the European Communitie s. He wondered whether the European Communities
wanted to update its notification to the Committee in light of the fact that there were some new reports
of European Member States providing support specifically to the Airbus 380 programme.
80. The delegate from the European Communities first made the procedural point that his
delegation had responded to the questions from the United States on the alleged subsidies in depth and
at length during bilateral consultations in January.  He invited the United States to discuss any furtherquestions it may have at the forthcoming bilateral consultations. On the substance, he noted that the
United States delegation had posed similar questions in the context of the SCM Agreement. His
delegation's reply to these questions here was consistent with the answers given in that context, which
was that it concerned repayable advances which do not constitute a subsidy.
81. The delegate from the United States confirmed that there had been some discussions
concerning support for the A 380 programme during bilateral consultations, but he felt that in the
context of a multilateral agreement such as the Agreement on Trade in Civil Aircraft, it wasimportant, as was customary in the past, to notify the Committee of major supporting activities of
civil aircraft industries.  With regard to the comments of the European Communities on the SCM
Agreement, he noted that his delegation was not raising the question within the Civil AircraftTCA/M/15
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Agreement whether there were subsidies involved or not, although he understood that the European
Communities might be sensitive to that matter.  He simply wanted to note that information had been
shared on the matter on earlier occasions as well as bilaterally and that there had been certain press
reports involving Italy, which made his delegation wonder whether the European Communities
wanted to update the Committee on any of those developments. He recalled that his delegation had
also raised questions with regard to infrastructure support, and had noticed that considerableinfrastructure support was given in Hamburg, Nantes, Toulouse and Broughton (?) for plants and
equipment and various infrastructure that seemed to be related to the A 380 and his delegation was
wondering whether the European Communities could confirm that that support was so related.
82. He finally noted that his delegation had noticed that in the European Communities' sixth-
framework programme there seemed to be a large mention of aeronautics and aircraft and he
wondered if any of those monies could be related to the development of specific civil aircraft
programmes.
83. The delegate from the European Communities stated that he had taken very good note of the
various specific questions which had been put forward and added that after the meeting he was hoping
to actually get all these points lined up in order to transmit them and he considered that these would
make good substance for the further bilateral consultations ahead. He also took note of the point made
relating to the introduction of some more details in the multilateral debate, and indicated that hewould refer that request back to his authorities.
84. The delegate from Canada noted that Canada would also be interested in hearing more about
that particular issue from the European Communities, if possible, and he urged the European
Communities to bring forward any additional informa tion that it can to the Committee in addition to
what was discussed bilaterally between the European Communities and the United States.
85. The delegate from the United States then reverted to the Article 4 side of the agenda item, and
indicated that his delegation wished to raise questions under Article 4 with regard to some specific
competitions, and in particular wondered whether in the recently announced Aeroflot competition, the
European Communities took any action that could be considered a quid pro quo  or inducement to that
transaction or that could give the appearance that it might be an inducement.
86. The delegate from the European Communities responded that EU Member States did not
engage in inducement.
87. The delegate from the United States stated that his delegation appreciated such confirmation
of obligations, but nevertheless he wanted to note a few items with regard to the Aeroflot competition.
First, he noted that Russia was not a signatory to the Agreement on Trade in Civil Aircraft, and he didnot want to insinuate that it had to comply with any of the obligations of the Agreement. He did note,
however, that there was a witness of the signing of the agreement on 2 July by President Chirac and
Russian President Putin and that, according to public press reports, the French Government had
announced that it would support a long-standing Russian desire to launch the Sojuz rocket from
Korou, French Guyana.  He indicated that the title of one Agence France Press report was “France
backs Russia using Korou launch site if they buy Airbus jets”.
88. He then noted that subsequently efforts were made to in fact launch the Sojuz from Korou and
he was wondering whether the European Communities could clarify who would be paying for the
undoubtedly large charges involved. Further, he noted that in his public statement, the Russian
President indicated that the decision regarding the purchase of airbus aircraft had been made due to
the support of, and he quoted, “the President of France, and also because the French side offered a
cooperation programme between the Russian and European producers”.  In his view, this was not justa buy and sell deal, but rather there was a programme to follow which would deal with placement ofTCA/M/15
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orders with Russian aircraft production plants .  He wondered whether the European Communities
cared to comment on the appearance of that situation.
89. The delegate from the United States further raised the Kaliningrad issue and referred to
concerns about Russian aircraft not meeting stage 3 ICAO noise standards that would make such
aircraft inoperable in the European Union.  He noted that the Russian Government requested an
exemption from these noise restrictions that had been  in effect for the United States and the European
Union since 1 January 2000 and, added that, as a matter  of fact, the European Union had even stricter
standards restricting aircraft that met the ICAO noise standards through hush-kits.  He stated that in an
unprecedented move the European Communities nevertheless allowed Member States to decide on a
case-by-case basis which airports would allow more noisy Russian airplanes, which did not meet the
ICAO standards, to land.  His delegation was concerned that all of those actions gave the appearance
that they could be linked to the upgrade of Aeroflot’s fleet and he thus invited the European
Communities to provide further clarification in that regard.
90. The delegate from the European Communities stated that he did not have any knowledge of
the particular cases which had been referred to, but he  wanted to make two things clear. First of all, he
was grateful that the word used was “appearances” because he considered that press reports did not
always draw the line between commercial cons iderations of a deal and inducement under the
Agreement. He indicated that the diligent work obv iously done could probably be repeated by his
delegation and his delegation would have a lot of things which it could put to the Committee about
what had been in the papers on various deals in the last couple of months.  He would refrain form
doing so, but rather referred to the words previously used by the delegate from the United States that
"the press is the press and government actions are government actions". He emphasised that the
European Union and its Member States adhere to the spirit and the letter of the Agreement andArticle 4 in particular.
91. The delegate from the United States stated that his delegation appreciated the response from
the European Communities clarifying that it would live up to its obligations and questioning the
accuracy of press articles, although he noted that in the past the European Communities had referred
to articles in the press by saying that "where there is smoke, there must be some fire".
92. He then turned to one other subject totally unrelated to the previous discussion of Article 4
obligations. He noted that as a result of the Czech Republic’s accession process to become an EU
member it had lowered tariffs on products from the European Union to zero, but that its MFN rates
still remained higher.  He added that with regard to imports of civil aircraft and most major aircraft
parts, the Czech Republic’s MFN tariff rate was 4.8 per cent while with respect to its imports from theEuropean Communities its tariff was zero. In his view, that had created a significant competitive cost
advantage for civil aerospace products exported from the European Union into the Czech Republic.
He further clarified that to correct the tariff differential and to level the playing field for its airlines,
the Czech Republic had issued annual tariff waivers for the past two years.  He stated that airlines and
other aerospace importing companies would thus be free to choose products based on technical and
commercial merits rather than on the MFN 4.8 per cent tariff rate or on an EU rate of zero.  He was
wondering whether the European Communities had any position on the continuation of those waivers.
93. The delegate from the European Communities stated that his mandate only covered the
European Communities, and that the question here concerned  a waiver which the Czech authorities
had obviously granted in the past, and which was outside of his field of competence.
94. The delegate from the United States noted that every year as part of the EU accession process
the European Communities issued progress reports on the accession candidates’ harmonization efforts
as a roadmap as to what to focus on in going forward.  He stated that in the 2002 report on the Czech
Republic, which was issued on 8 October 2002, the European Communities openly admonished theTCA/M/15
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Czech Republic for the tariff waiver.  He then quoted from the report which could be found on the
Europa website which read on page 121:  “The Czech Republic has unilaterally applied a suspension
of MFN tariffs levied on imports of 12 civil aircraft products despite the Commission’s strong
opposition.  This exceptional measure introduced in 2000 and due to end in 2001 was prolonged until
December 2002.  The Czech Republic will need to ensure that this tariff suspension will not be
prolonged beyond 2002.” He added that it was ironic that on the same page and throughout the reportthe European Communities praised the Czech Republic for action to harmonize their laws, policies
and regulations with the EU and the WTO, OECD and other multilateral agreements.
95. The delegate from the United States asked how this statement could be compatible with the
obligations of the European Communities under Article 4 of the Agreement where purchasers of civil
aircraft should be free to select suppliers on the ba sis of commercial and technological factors. He was
of the view that all Signatories agreed to avoid attaching any inducements of any kind to the sale or
purchase of aircraft, positive or negative, which would create discrimination against other suppliers,which was what those tariffs evidently would do, and he emphasised again that the whole thrust of the
Agreement on Trade in Civil Aircraft was to remove barriers to trade in civil aircraft.
96. The delegate from the European Communities explained that he was not personally
negotiating enlargement with the Czech Republic and stated that if the delegate from the United States
had given him some advance notice on his request for information he would have been in a betterposition to look into the details of what he had been claiming.  He added that in any case, accession to
the Community was a highly complex operation. Without further commenting on the particular case,
he clarified that it happened quite often that future partners were requested to do this or not do that in
order to avoid problems at a later stage in the accession process, which also explained the particular
point raised by the United States.  In any case, he failed to see how that matter was relevant toArticle 4, but wanted to assure his colleague from the United States that he would make his views
known to the people who were actually dea ling with the particular case in question.
97. The delegate from the United States appreciated the response from the delegate from the
European Communities but  stated that his delegation could not accept the explanation from the
delegate from the European Communities as adequate.  He then moved on to a different matter of amore personal nature. He had been informed that the delegate from the European Communities would
be leaving Geneva and would no longer be attending further Aircraft Committees. He wanted to
express his appreciation for working jointly with the delegate from the European Communities over
several years where progress was made on a number of items and during which they had engaged in
vigorous debate at the direction of their capitals.  The delegate from the United States stated that heheld his colleague from the European Communities in very high esteem as a fine representative of the
views of the European Communities.
98. The Chairperson added that that was a feeling sh ared by all of the delegates in the Committee.
He then reverted to a request made by Canada with regard to questions and information with regard to
issues relative to Article 6 which had been discussed under that agenda item.  He recalled that the
European Communities promised to provide information to the United States which might be of
interest to others in the Committee, given that the issue was brought up within the Committee.  He
considered that any information which was given to the United States should also be shared with other
Members of the Committee.  He indicated that one way of enabling the debate to take place within the
Committee and of enabling information to be transmitted to all of the Members of the Committee,
would be to come back to the issue at the next formal meeting next year.  He clarified that the
Committee would then only be looking at issues concerning Article 6 under that agenda item.
99. The delegate from the European Communities stat ed that his delegation had said what it had
to say on the particular item under discussion.  He indicated that in any case he would prefer to see
this as a request from Canada, to refer to this at the next meeting, rather than a Chairperson's proposal.TCA/M/15
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100. The Chairperson clarified that Canada asked to have more information, and that he was
making a suggestion in order to respond to Canada’s request.
101. The delegate from the European Communities state that his delegation never rejected a point
on the agenda, but that he had made some substantive points which, in his view, led to the conclusion
that there would not be that much to discuss at the next meeting.
102. The Chairperson concluded that all delegations would have the possibility of asking for an
item to be put on the agenda, and that asking for the item to be on the agenda of the next meeting was
one way of obtaining more information on these matters.
103. The Committee took note of the statements made.
5. Requests for Information
104. The Chairperson explained that he had receiv ed two letters from the Chairmen of the
Committee on Trade and Development and the Working Group on Trade and Transfer of Technology,
copies of which were available in the room.
105. The first letter was from H.E. Ambassador Smith, the Chairman of the Special Session of the
Committee on Trade and Development.  Ambassador Smith requested information on any discussions
or other developments relating to special and differential treatment that had taken place in the
Committee on Trade in Civil Aircraft and its subsidiary bodies, in the form of a report before
30 November 2002.
106. The Chairperson stated that, in response to this request, he intended to send a letter to the
Chairman reporting that the Committee was not currently engaged in any activities or discussions in
that regard, as the plurilateral Agreement on Trade in Civil Aircraft did not contain any special and
differential treatment provisions.  He added that copies of his response would be provided to
Signatories.
107. The second letter was from H.E. Ambassador Stefan Johannesson, Chairman of the Working
Group on Trade and Transfer of Technology.  Ambassador Johannesson's letter noted that the
Working Group was examining the relationship between trade and transfer of technology, as well as
any possible recommendations on steps that might be taken within the mandate of the WTO to
increase flows of technology to developing countries.  The Working Group decided at a meeting heldon 10 October 2002 to request information from other WTO bodies regarding any work that they may
have done in this regard, or that they plan to carry out in relation to trade and transfer of technology.
108. The Chairperson clarified that Ambassador Johannesson requested that he inform him of any
discussion, submissions and/or other developments relating to trade and technology transfer that may
have taken place in the Committee or its subsidiary bodies, by 20 November 2002, in order that hecould report the response at the meeting of the Working Group on 28 November.
109. In response to this request, the Chairperson intended to send a letter to the
Ambassador Johannesson informing him that there had been no discussions, submissions, or other
developments in the Committee or its subsidiary bodies relating to trade and technology transfer.  He
added that copies of his response would be provided to Signatories.
110. The delegate from the United States stated with regard to the first response that, although the
Chairperson was quite correct that there were no special and differential provisions in the Agreement
per se , he noted that Article 9.1.3 on accession was permissive in that it allowed the terms of
accession to be agreed between the government and the Signatories and that, therefore, perhaps hisTCA/M/15
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letter could include that Signatories had the possibility of providing special and differential treatment
that would be justified to acceding Signatories.
111. On the question of transfer of technology, he c onsidered that the only thing that was related
was that technical assistance had been discussed in relation to the discussion of end-use certification
and dual use, where there may be problems with customs administration for new Signatories and
potential Signatories.
112. The Chairperson clarified that the request was a request for information on developments and
actions taken by the Committee, in other words, whether there had been a kind of a collective decision
or a structured debate in the Committee on these issues.  He considered that the points made by the
delegate from the United States were certainly va lid and related to the matter at issue, but that it
remained to be seen whether this could really be characterized as an action undertaken, or a
development in the Committee, or a structured debate.  He did not believe that the points raised by the
United States delegate met the standard and that was the reason for the response as he had suggested.
113. The delegate from the European Communities stated that, although he did not have any strong
feelings about this,  the whole point of the exercise was to demonstrate that some of these issues could
crop up in other Committees. He therefore considered that the delegate from the United States had
made some useful points and that one way to get around the Chairperson's point was to say (a) on the
very specific question of actions taken, that nothing had happened; and (b) that attention be drawn tothe fact that some items which were discussed were relevant to what was going on in technology
transfer, for example. That way he felt they would have a complete picture which they then could use
or not.
114. The Chairperson clarified that although there was clearly a connection to the question of
technology transfer, he considered that it would be difficult to consider the fact that technical
assistance was provided with regard to the questio n of differentiating between aircrafts for customs
purposes as really an incentive to technology transfer.
115. He therefore concluded that he would try to find a way to mention some features of the
Agreement and the activities which might be of some relevance to the requests made to him but that,
basically, the answer to the precise questions that had been put to him would not be very substantive.
He indicated that this was a report on his own behalf, but that he would try to take the various points
made into consideration in preparing the responses.
H. DATE OF NEXT REGULAR MEETING
116. The Chairperson proposed that the date of the next regular meeting be Wednesday,
4 June 2003.
117. The Committee so agreed.
I. ADOPTION OF ANNUAL REPORT
118. The Chairperson recalled that under Article 8.2 of the Agreement on Trade in Civil Aircraft
and Article IV.8 of the Marrakesh Agreement Establishing the World Trade Organization, the
Committee reported annually to the General Council.
119. The Committee adjourned in order for Signatories to consider the revised draft Annual
Report.TCA/M/15
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120. Following the adjournment, the Chairperson introduced the revised draft Annual Report.  A
number of changes were proposed to paragraphs 2, 3, 6 and 7 of the draft revised Annual Report.
121. The Committee adopted the annual report, as amended.
122. The meeting was adjourned.
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