RESTRICTEDWORLD TRADE
ORGANIZATIONTCA/M/13
11 January 2002
(02-0132)
Committee on Trade in Civil Aircraft
MINUTES OF THE MEETING
HELD ON 21 NOVEMBER 2001
Chairperson:  Mr. Didier Chambovey
1. The Committee on Trade in Civil Aircraft (the "Committee") held a meeting on
21 November 2001.
2. Prior to the adoption of the agenda, the Chairperson indicated that he had been informed that,
due to the interpreters' heavy workload, interpretation would not be available for the meeting.  He
assured Signatories that this was an isolated instance and would not be a regular occurrence.
3. As well, the Committee considered a request by the delegation of Hungary to participate as an
observer.  Pursuant to the procedures adopted by the Committee on the participation of observers
(AIR/M/1, p. 12), which provide that representatives of Members that are not a Signatory to the
Agreement may follow the Committee procedures in an observer capacity, the Committee agreed to
this request.
4. The Committee adopted the following agenda:
A. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON TRADE
IN CIVIL AIRCRAFT UNDER THE WTO ..............................................................................2
B. CHAIR'S REPORT ON THE ADOPTION OF THE PROTOCOL AMENDING THE
ANNEX TO THE AGREEMENT ON TR ADE IN CIVI L AIRCRA FT ...................................3
C. TREATMENT OF AIRCRAFT GR OUND MAINTENANCE SIMULATORS.......................4
D. END-USE CUSTOMS ADMINISTRATION ............................................................................5
1. Updating Information Regarding Civil/Military Identification for Customs
Purposes....................................................................................................................... ..............5
2. Military vs. Non-Mi litary Definition.......................................................................................5
E. STATISTICAL REPORTIN G OF TRADE  DATA ...................................................................5
F. MATTERS RELATING TO ARTICLE 3..................................................................................8
1. Status of implementation of ICAO stage 4 aircraft noise standards as it affects
current regulations on the operation  of stage 3 compliant aircraft......................................8
2. Meaning of certain language in proposed legislation establishing a European
Aviation Safety Agency (Articles 9 and 10) ............................................................................8
G. MATTERS RELATING TO ARTICLE 4..................................................................................9
H. MATTERS RELATING TO ARTICLE 6: US GOVERNMENT SUPPORT TO ITS
LARGE CIVIL AIRCR AFT INDUS TRY................................................................................10TCA/M/13
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I. DATE OF NEXT RE GULAR MEETING ...............................................................................11
J. ADOPTION OF ANNU AL REPO RT......................................................................................11
A. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON TRADE IN CIVIL
AIRCRAFT UNDER THE WTO
5. 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 the
utility of continuing to revert to this item in the Committee.  The Chairperson thus asked Signatories
whether there had been any new developments.
6. The delegate of the United States stated that his delegation had had some discussions with
other Signatories on this item, but that they had not made enough progress to report back any
movement to the Committee.  Nevertheless, the United States remained highly supportive of
rectifying the full Agreement as soon as practicable and preserving the balance of rights and
obligations among the parties.  The delegate further expressed the hope of holding bilateral meetings
before the end of the year and stated that this question would play a prominent role in these meetings.The United States promised to report back to the Committee any progress made and to seek the
assistance of the Chairperson if it believed that doing so would move the matter along.
7. The representative of the European Communitie s wished to echo the words of his American
colleague. It was also the on-going intention of the European Communities to find a solution to this
issue.  He wanted to go a little bit further in to substance by raising one point which the European
Communities believed might be the easiest to resolve: the question of applicability of the DSU to the
Agreement.  He recalled that the Committee could take a simple decision on this.  His delegation
believed that such a decision to apply or to use the WTO's DSU for conflicts or any matters raised
under the Agreement could be done without prejudging some of the more difficult legal issues, like
the "later-in-time" issue or the question of primacy in the relationship between the Agreement onSubsidies and Countervailing Measures and the Aircraft Agreement .  He further clarified that in case
the Committee ever had a more detailed question to resolve, it could create a forum which would
clearly be the one which could consider and possibl y decide on the questions to which he had earlier
alluded .  He again asked delegations to think collectively about this particular item to see whether and
where immediate progress could be made.
8. The delegate of the United States wished to add that his delegation considered the adoption of
the DSU as a separate matter and that, in its view, it would be perhaps "putting the cart before the
horse" to consider that question before having rectified the Agreement.  He recalled that there were
also some other issues relating to adopting the DSU:  who would sit on panels and whether non-
parties to the Agreement could be involved.  In his view, it was already a first step that the rectified
text applied DSU-type procedures within the Committee to any disputes or differences.  He concluded
that this was a matter worth considering at the appropriate time.
9. The Chairperson noted that interested delegations were speaking to each other and they were
going to get together soon.  He thought this was encouraging and he urged delegations to continue
with a view to finding a solution to this problem that had been on the table for quite a long time and
which was obviously an issue to which the Committee would have to revert at its next meeting.
10. The Committee took note of the statements made.TCA/M/13
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B. CHAIR'S REPORT ON THE ADOPTION OF THE PROTOCOL AMENDING THE
ANNEX TO THE  AGREEMENT ON TRADE IN CIVIL AIRCRAFT
11. The Chairperson recalled that, at the 6 June 2001 meeting of the Committee, the Committee
had adopted ad referendum  the Protocol 2001 Amending the Annex to the Agreement on Trade in
Civil Aircraft  (the " Protocol 2001 ") and the Product Coverage Annex with the revisions as they
appeared in document TCA/W/5/Rev.4.  This had been subject to: first, the absence of objections
from any Signatory concerning the language proposed to be included in paragraph 6 of the Protocol;
and, second, a satisfactory outcome to the consultations that the Chair would conduct with interested
parties concerning the treatment of aircraft ground maintenance simulators.  The Chairperson recalled
that he had undertaken to report back to Signatories on this matter.  In his communication in
document TCA/5, he had indicated that the consultations he had held with interested parties had been
constructive and that progress had been made towards a convergence of Signatories’ views, inparticular, relating to the treatment of aircraft ground maintenance simulators.  He had also indicated
to Signatories in document TCA/5 that one Signatory had informed him, in July 2001, that it still
required more time before it could indicate whether it was in a position to confirm the  ad referendum
adoption of the Protocol 2001 .  This Signatory had stated that it expected to be in a position to inform
the Chairperson of its position in September 2001, and the Chairperson had undertaken to report toSignatories once again upon being informed of this  Signatory’s position.  The Chairperson indicated
that since then he had not, however, received any indication from the Signatory concerned and he
therefore invited the Signatory concerned to enlighten the Committee on its position.
12. The representative of the European Commun ities affirmed that the European Communities
could confirm its ad referendum  adoption of the Protocol 2001 .
13. The Chairperson noted that the decision of the Committee to adopt the Protocol 20011 could
therefore be confirmed.  The Committee could formally open the procedures for acceptance of the
Protocol.  The Committee was, at the same time, agreeing to the Decision2 on aircraft ground
maintenance simulators.  He understood that the adoption of both the Protocol 2001  and the Decision
was with effect from 6 June 2001.
14. The delegate of Canada stated that her delegation wanted the record of the meeting to reflect
clearly the relationship between the two decisions, the one on the adoption of the Protocol 2001  and
the other on aircraft ground maintenance simulators.  She stated that since the Chairperson had
indicated that one was conditional upon the other, her delegation could also agree to the adoption of
the Protocol 2001  as long as the Decision with respect to the aircraft ground maintenance simulators
was also adopted concurrently.
15. The Chairperson stated his understanding that the Protocol 2001  and the Decision were
adopted concurrently, with effect from 6 June 2001.
16. The Chairperson noted that the current text of the Protocol 2001 , as it had been adopted
ad referendum , still contained an envisaged date of acceptance of 31 October 2001, which had since
passed.  Considering that the Protocol had not yet been accepted by all Signatories, and that the terms
of paragraph 2 of the Protocol gave authority to the Committee to decide on the date of acceptance,the Chairperson proposed that the Signatories adopt the decision to extend the date of acceptance of
the Protocol 2001  indefinitely. 3
17. The Committee so agreed.
                                                     
1 Circulated as document TCA/4.
2 Circulated as document TCA/6.
3 Circulated as document TCA/7.TCA/M/13
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18. The representative of Japan wondered about the date of entry into force for the Protocol 2001 .
Footnote 2 of document TCA/W/5/Rev.4, relating to paragraph 3 of the Protocol 2001 , indicated that
the Protocol would enter into force, for those Signatories that have accepted it, on 1 January 2002.
The delegate asked what date the Committee should be adopting for this entry into force, explaining
that his delegation would appreciate some time to discuss this with the Diet.
19. The Chairperson replied that he could understand Japan's concerns.  He had two points to
make in this regard.   First, he recalled that the latest version of the Harmonized System would enter
into force on 1 January 2002 and that this was, as he understood, also the reason why this date had
been retained in the Protocol 2001 .  Second, he believed that paragraph 3 contained a kind of in-built
flexibility for Signatories because it provided that this Protocol would enter into force “for those
Signatories which have accepted it” on 1 January 2002.  For each other Signatory, it would enter into
force on the day following the date of its acceptance.  The Chairperson hoped that the explanation hehad provided would give Japan the necessary comf ort and clarification.  In his view, Japan would
have enough time to go through all its domestic acceptance procedures.  He realized that sometimes
domestic procedures were very cumbersome.  This was the case for other countries as well, including
his own, Switzerland.
20. The delegate of Japan thanked the Chairperson for the clarification.  He understood the
situation and asked for the opportunity to confirm this date in paragraph 3 of the Protocol 2001 , and
the associated procedures, with his capital.  His delegation subsequently confirmed that the date was
acceptable.
21. The Committee took note of the statements made.
C. TREATMENT OF AIRCRAFT GROUND MAINTENANCE SIMULATORS
22. 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 theDecision 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 "Signatories shall confirm with the Committee their
interim application."
4  He therefore invited Signatories to confirm, or inform the Committee of steps
taken towards, interim duty-free treatment of aircraft ground maintenance simulators.
23. The delegate of Canada asked for an update since the last meeting specifically from the
European Communities as to the steps that it had taken to apply interim duty-free treatment for
aircraft ground maintenance simulators.  She recalled that at that time, the European Communities had
indicated that it was in the process of putting in place its legal instruments to be able to adopt the
Protocol 2001  on an interim basis.  Now that the Committee had adopted the Protocol, she wondered
whether it could give an indication as to whether it would be in a position to apply duty-free treatmentto those items, including aircraft ground maintenance simulators, as of 1 January 2002.
24. The delegate from the European Communities explained that all products other than the
aircraft ground maintenance simulators had been incorporated into the European Union tariff which
would enter into force on 1 January 2002 as part of the normal HS update.  It was the view of the
European Communities that whenever tariffs were updated, all tariff commitments had to be taken
                                                     
4 TCA/6.TCA/M/13
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into account.  With respect to aircraft ground ma intenance simulators, the European Communities had
decided to introduce an autonomous measure in order to be able to implement this on 1 January 2002.
This process was going ahead.  The European Communities expected the EC Council to adopt the
necessary legal instruments so that this tariff concession could be applied as an autonomous measure
from 1 January 2002, which, his delegation observed, should make Canada very happy.
25. The delegate from Canada thanked the European  Communities, both for the statement and for
the introduction of a special measure with respect to aircraft ground maintenance simulators.  She
emphasized that Canada was extremely happy and appreciative that this would be effective as of
1 January 2002.  She recalled that Canada had not been able to attend the meeting in June 2001 and
wished to indicate that Canada had already implemented the 1996 HS update and provided duty-free
treatment for those products covered by the Agreement, including aircraft ground maintenance
simulators.  Canada would also be effecting changes to its tariff which would be effective from1 January 2002, in conformity with the Protocol 2001  that had been adopted at this meeting of the
Committee.
26. The Committee took note of the statements made.
D. END-USE CUSTOMS ADMINISTRATION
1. Updating Information Regarding Civil/Military Identification for Customs Purposes
27. The Chairperson noted that no further information had been received from Signatories since
the last regular meeting of the Committee.  He urged those Signatories that had not yet done so to
update this information as quickly as possible.
2. Military vs. Non-Military Definition
28. The Chairperson recalled that Canada had made a proposal concerning the definition of civil
aircraft for the purposes of the Agreement.  Canada’s proposal had been circulated in document
TCA/W/4. He reminded Signatories that they had agreed at the last meeting on 6 June 2001 to revert
to this item at this November meeting.
29. The delegate of Canada stated that Signatories were aware of what Canada had tried to
achieve in putting forward this proposal in December 1999.  Canada recalled that there had been some
discussion within the Committee, as the Chairperson had noted, and that some questions and
comments had been raised in that context.  The delegate explained that the main purpose of Canada’s
proposal was to come up with a definition of civil aircraft that reflected the basic design and
manufacture of the aircraft and which would be independent of the user.  She informed the Committee
that Canada was working with another delegation on language to try to address concerns expressed by
other Signatories.  As they hoped to produce a revised definition in advance of the Committee's
June 2002 meeting, she suggested that Signatories wait until Canada had concluded thoseconsultations.  The Committee could then revert to this item at its next meeting.
30. The Committee took note of the statements made and agreed
 to revert to this matter at the
next meeting.
E. STATISTICAL REPORTING OF TRADE DATA
31. The Chairperson recalled that at the meeting held on 15 November 2000, Signatories had
agreed to endeavour to communicate by 1 May 2001 trade statistics for the most recent annual period.
So far, notifications had been received from Canada, the European Communities, Japan, SwitzerlandTCA/M/13
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and the United States.  The Committee had agreed to discuss ways to circulate this information among
Signatories.
32. The delegate of the United States recalled that one of the issues had been whether Signatories
would continue the submission of these statistics and whether it was helpful.  He noted that the
statistical reporting from several other Signatories had been useful and helpful.  He did not, of course,know what the other Signatories’ views were.  He recognized that there was a rather bulky aspect to
this statistical reporting and there was perhaps a burden on the Secretariat in disseminating these
documents.  If other Signatories agreed, the United States wished to continue this process at least until
the next meeting, reporting on 2001 data, and wished to see if there was some electronic marker that
the Signatories might provide so that this information can be accessed directly without the need to
provide a paper copy.  The Committee could then assess again at the June 2002 meeting whether it
would be worthwhile to continue.  He urged all Sign atories that had not yet provided this information
to do so.
33. The delegate of Canada apologized for the late presentation of their statistics which were due
in May, and which Canada had provided in August.  She explained that this was due to some technical
difficulties that Canada had had in putting together the statistics and the tables.  Canada had
implemented the duty-free treatment for goods by introducing two end-use tariff items and alsoprovided duty-free treatment for certain goods classified in chapter 88.  She highlighted the fact that
the statistics that Canada had provided were not a true and full reflection of imports under the
Agreement for a few reasons.  This, Canada believed, was not unlike other Signatories that had
supplied data.  Canada wanted to highlight three particular points because it considered that they were
important and relevant when Signatories would be reviewing the trade statistics that Canada hadprovided.  First, although Canada had an end-use provision which provided for duty-free treatment,
the goods themselves could enter under other duty-free provisions in Canada's tariffs and did not have
to go through the hoops of satisfying an end-use provision because there existed a corresponding tariff
item under which the goods could enter.  Secondly, in the end-use tariff items that Canada had
introduced, Canada did not make a distinction between civil or military – but provided duty-freetreatment to all these products, whether for civil or military use.  Thirdly, for most of the goods under
the Agreement that were classified in chapter 88, there was no distinction between civil and military.
34. The delegate of Canada further indicated that Canada had been reviewing the statistics that
had been provided to date and considered that it would be useful to provide them at least for another
year so that all Signatories had a better idea of the trends in the import data.  In that respect, Canada
supported the proposal put forward by the United States that Signatories continue this practice for
another year and that it be reviewed again in June 2002.  The representative said that it was hard totell at the moment what the relevance of this practice was, but Canada urged other Signatories to
provide the data which might help the Committee in its assessment.
35. The delegate of the European Communities thought there was some truth in what Canada had
said and he believed that the European Communities' own statistics were also perhaps not 100 per
cent accurate, given the fact that there was also the question of business confidentiality.  There wereonly very few operators involved in trade in a certain product, he explained.  In addition, the whole
question of military versus civil led, in his view, to some blurring of the statistics.  The European
Communities could nevertheless agree with the proposal made by the delegate from the United States
that Signatories try to look at this further and come back to this issue at a later date.   He added that he
saw no harm in looking further at the question whether this reporting could be done in electronicform, simply by pulling out the necessary statistics without having to print endless pages.
36. The Chairperson considered the proposal that had been made to diminish the paperwork a
very interesting and environmentally friendly proposal.  He stated that one of the possible ways to
deal with this might be for Signatories to transm it this data electronically to the Secretariat (forTCA/M/13
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example, by way of e-mail).  He mentioned there mi ght also be a possibility to post the information
on the WTO web-site, which might mean that all information would be available to all WTO
Members.  Signatories could then be informed of the availability of this information by way of a one-
page communication by the Secretariat saying, for instance, that the United States had delivered its
statistical reporting and that such information had been posted at a certain address on the WTO web-site.  The Chairperson emphasized that this was just a suggestion and certainly the Secretariat would
have to examine whether this was feasible and what kind of arrangement was possible in this
connection, including with respect to access to the information.  Another possibility was the electronic
document dissemination facility of the WTO.  In this case, a "W" document might have restricted
circulation.
37. The delegate of Canada indicated that Canada was prepared to be fully transparent on this
matter and that transparency was something that Canada took to heart.  She wondered whether the
Secretariat could clarify whether the trade statistics that, for instance, Canada had provided as a "W"
document were on the DDF system?  She wanted to know whether it was correct that any Member
could access that document and whether, at a later po int in time, it would become derestricted.  If this
went on the WTO web-site, would it be accessible to all Members?  Was there really any need to
restrict access to Signatories?
38. Regarding the posting of documents in the WTO document dissemination facility, the
representative of the Secretariat stated that all TCA documents were "restricted", which meant that
they could be accessed by all Members to the WTO as well as observers to the Committee providedthat they had the password.  This was normally the case for all Members and observers.  If there was a
need, the Secretariat could provide a note to Signatories on this matter.
39. The delegate of Canada stated for the record that Canada did not mind whether the documents
went out to all Members or whether they would only go to Signatories, and did not need a note from
the Secretariat on this issue.  She added that if other Signatories had certain concerns and wanted it
restricted then Canada would deal with that at th at particular time, but in general, Canada was in
support of any transparency that could be given.
40. The Chairperson stated his understanding that there was only one restriction to access to the
WTO web-site, which was the password for Members.  He thought that once one had this password,
one could access all documents, at least all WTO multilateral documents, and he assumed that this
was also the case for TCA documents.  The question that arose in this connection was that if the DDF
were to be used, the Signatories would probably have to accept that the information posted on the
web-site would be accessible to all WTO Members, as a matter of principle.  The Chairperson asked
whether delegations could already give an indication as to how they felt about this, since this mighthelp the Secretariat in the examination that it would undertake.
41. The delegate of the European Communities stated that he understood that the Committee
would have to revert to this issue in any case at  the next meeting.  Upon very quickly reviewing the
European Communities' own submission, he saw it was extremely detailed.  The European
Communities would have to look at the confidentiality requirement a bit more closely before it couldprovide a clear indication of what it considered the rules on circulation and accessibility of those
documents should be.  His delegation promised that they would go back and look at the issue and
continue the dialogue informally with the Secretariat so that he would have a better basis to discuss
these issues at the next meeting.
42. The Chairperson proposed that the Committee agree to revert to this item at its next meeting
and try to work out some practical arrangements for the circulation and exchange of statistical
reporting among Signatories.  He requested that Signatories look into the matter, especially in
connection with any confidentiality requirements that they might have to observe.  In light of theTCA/M/13
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discussion, there did not appear to be a need for a specific note from the Secretariat on this item at this
time.
43. The Committee so agreed.
F. MATTERS RELATING TO ARTICLE 3
1. Status of implementation of ICAO stage 4 aircraft noise standards as it affects current
regulations on the operation of stage 3 compliant aircraft
44. The delegate of the United States noted that he had reported at the last meeting on the status
of this issue and that this was a follow-up to the United States having raised, at several past meetings,
the matter of regulation of hush-kitted aircraft by the European Union.  He thought it was appropriate
to report on the arbitration procedure that the United States had initiated in March 2000 in ICAO and,
subsequently, the efforts within ICAO to come up with a new noise standard.  He was pleased to
report that ICAO -- of which many of the Signator ies were members -- had resolved unanimously on a
new noise standard called “stage 4”.  It had more restrictive requirements on aircraft noise, lowering
the noise level by 8 decibels.  He stated that the implementation of that standard by the various parties
was also an opportunity to resolve the differences the United States and the European Communities
may have had on the European Union’s implementation of stage-3 noise standards.  The United States
understood that the European Union would soon be proposing internal legislation which might repealthe hush kit regulation -- with which the United St ates had problems -- and that it would be replaced
with new regulations implementing the stage-4 standards.  The delegate added that, of course, the
United States had to reserve judgement on this matter until it had seen that legislation but that it was
pleased that ICAO had adopted a "balanced approach" for dealing with noise.  The United States
welcomed statements by European Commission representatives that they foresaw replacing thecurrent hushkit regulation, with which the United States had problems, with new regulations.
45. The representative of the European Communities sa id that he was also willing -- in the spirit
of transparency -- briefly to provide his view on where they were on this issue.  He said it was correct
that the arbitration procedure to which the American delegate had referred was well underway and
had proceeded well in ICAO.  He added that the second consideration meeting had only just takenplace on 25 October.  He further confirmed that the European Communities and the United States had
an agreement in principle including a number of different issues; one element which had been
mentioned was the possible repeal of existing European  legislation.  He wished to clarify that this was
only one part of a much more complex and broad solution they were looking at, and that they hung
together as one package.  The European Communities, like the United States, was hopeful and
confident that they would find an overall solution to this issue.
46. The Committee took note of the statements made.
2. Meaning of certain language in proposed legislation establishing a European Aviation
Safety Agency (Articles 9 and 10)
47. The delegate of the United States welcomed the proposals from the European Communities to
come up with a unified system for certification for aircraft.  He had noted in prior interventions in
previous meetings the problems that the United States had had with certification of United Statesaircraft.  He had noted specifically the differential treatment of the Boeing 737 new version by certain
Joint Airworthiness Authority members, in cases where the recommendation of the JAA had not been
accepted by all parties in allowing the certification of that aircraft at full-seat capacity. He recalled
that there had been problems in that area but he was hopeful that the establishment of a European
Aviation Safety Agency (EASA) would be beneficial in this regard.  He further noted that, inreviewing the draft legislation, by which the European Parliament and the Council establishedTCA/M/13
Page 9
common rules in the field of civil aviation and created a EASA, and which had been adopted by the
Transportation Council, there appeared to be certain language that raised some questions in the mind
of the United States.  He referred, in particular, to language in Articles 9 and 10. In one provision, he
noted, the text talked about how the EASA could invalidate Member States’ agreements with third
countries that would somehow give an unfair advant age to third countries. He further noted that in
Article 10 -- a provision that dealt with emergency exceptions -- and part 2 of the overall rules of the
EASA, mention was made of the need not to distor t competition.  He stated that the United States
welcomed the EASA, but that they were somewhat concerned by this language.  The United States
had raised this matter here because of that concern.  Their understanding was that the European
Commission was working to redress these and other concerns in this proposed legislation and that
some progress had been made. He encouraged continued attention to this matter and said that he
wanted to use this opportunity to seek assurances that the final version of this legislation would be infull conformity with Article 3 of the Aircraft Agreement, which called for non-discrimination
amongst Signatories and provided that certification of aircraft and certification procedures and
specifications shall not be used as a barrier to trade.
48. The representative of the European Communities was, in the spirit of transparency, willing to
respond to the points raised.  He stated that in the first part of their intervention, the United States'
delegation had noted previous concerns raised.  The delegate from the European Communities wanted
to note again that the European Communities did not share those concerns relating to individual
certifications of certain aircraft.  He further added that the legislation which had been alluded to was
still only draft legislation that was before the Eu ropean Parliament and could still be amended.  He
said that he had taken full note during the meeting, and on previous occasions, of the concerns whichhad been raised.  However, he believed that, on substance, the cited provisions in the draft EASA
regulation did not aim at discriminating against the Un ited States, or, for that matter, against any other
non-EU country.  He explained that the basic ai m of this provision was to avoid distortion of
competition between the Member States of the Community, for example, by using the freedoms
offered by the internal market without any reciprocity offered.  He repeated that he had taken note ofthe interventions made and stressed once again that the intention was certainly not to create legislation
which would not be in conformity with the cited Article of the Aircraft Agreement, which he
recognized was a non-discriminatory provision.
49. The delegate of the United States thanked the delegate of the European Communities for this
explanation of the meaning of the language.  He hoped that the language could be clarified as a
conventional reading of these words, to the United States, implied that the safety legislation could
possibly be used for trade purposes or competition policy purposes. He welcomed the assurance fromthe delegate of the European Communities that it was not the case.
50. The Committee took note of the statements made.
G. MATTERS RELATING TO ARTICLE 4
51. The delegate of the United States stated that the discussion of possible inducements pursuant
to Article 4 had been on the Committee's agenda several times in the past and had been a matter of
discussion where allegations or questions had been raised concerning possible linkages to government
actions of the sale of aircraft.  He wished to remind the Signatories that, in the view of the
United States, it was not consistent with the Agreement for the governments of countries offering
aircraft products for sale or lease to be offering linkages (of either the positive or the negative kind) to
promote the sale of those aircraft.  He noted that in this regard, the United States wanted to enquire --and this without making a specific allegation or implying that it was doing so -- with regard to
mention that had been made in the press concerni ng the launching of the Soyuz rocket at Kourou,
which the press linked to the sale of European-origin aircraft to a third party.  The United States
wanted to know if there was any light that the European Communities wanted to shed on thatTCA/M/13
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allegation since the news service was a news service native to a country of the European Union and
reporting on a visit of government officials from that country.  The delegate from the United States
clarified that he had specifically put this as a question to the European Communities, and that he did
not want it to be misunderstood as an allegation of inducements.
52. The delegate of the European Communities took note of the question put forward by the
United States delegate, but added that he thought that every one had to live with press reports once in
a while.  He stated that he was not in a position to verify any of this, but he was sure that the European
Communities would not use such tactics and neither would any of the other players involved.  He
gave one example to show how difficult it was to deal with these issues: he thought there had been
similar press reports about other players in this field using former ambassadors to certain countries to
bring home the message that it was well-taken if certain other companies bought certain other aircraft.
He added that, if necessary, he could give further evidence of similar things in the press and hebelieved that, for the time being, nobody really wanted to use this Committee for a verification
exercise as to what had happened or had not happened as reported in the press.  He was not aware of
the truth or non-truth of anything that had been quoted so far and he suggested that it be left at that.
53. The delegate of the United States thanked the representative of the European Communities for
that response. However, he wanted to know whether the delegate of the European Communities, in his
personal  capacity, was unaware of any truths or falsehoods of the allegation that there had been an
offer to launch the Soyuz rocket from Kourou, depending on approval by all the parties linked to the
purchase of certain aircraft being manufactured in the European Union, or whether he was saying that
the European Commission officially  was not aware thereof.
54. The delegate of the European Communities clarif ied that first of all, this matter involved an
agency which was not congruent to the EU Member States or the European Communities as such, and
that therefore he was only partly, or not at all, competent to speak on what these people did.
Secondly, he added, the European Commission officially  was not aware of any inducement in this
case.
55. The Committee took note of the statements made.
H. MATTERS RELATING TO ARTICLE 6: US GOVERNMENT SUPPORT TO ITS LARGE
CIVIL AIRCRAFT INDUSTRY
56. The representative of the European Communities stated that it had a number of innocent
questions also concerning things which they had either read in official publications or in the press, and
on which he wanted to give the United States' delegate the chance to comment. He believed the
Committee had, on an earlier occasion, talked about the relocation of the headquarters of a large
company within the United States.  He requested a response from the United States on a report whichsaid that the relocation of that company led to lo cal authorities granting subsidies equal to $64 million
in 20 years by way of different tax exemptions and a grant scheme.  In the view of the European
Communities, there were serious issues at stake here with regard to Articles 6 and 7 of the Agreement.
He asked the delegate of the United States to comment on whether he saw these direct production
subsidies as compatible with the cited provisions. He then quoted a press report which alluded to aninquiry being conducted by the United States Department of Justice against a large company that had
allegedly illegally charged the Air Force for $106 million worth of development costs related to large
aircraft.  The European Communities wanted to know , first, whether this investigation was proceeding
and what, if any, the outcome was; and, second, whether the United States Government intended to
recoup the costs involved.
57. The delegate of the United States replied that, with regard to the matter of the alleged subsidy
by a local government of the city of Chicago to the transfer of the headquarters of Boeing, he couldTCA/M/13
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not confirm the amount of money that might have been involved. He stated that he was aware that
there were some tax incentives of approximately $50 million in that area, but that there were no
production facilities being relocated there, and that this money was not related to the launch or
development or manufacture of any specific aircraft. He further explained that many local
governments and state governments of the United States offered incentives for the relocation of firmsto their area and that this was not much different in value or type than that which was offered by the
city of Chicago to other manufacturers or firms or other countries from the United States, and that it
was certainly not aircraft-specific. Moving on to the other matter raised by the European
Communities, he confirmed that the matter was under investigation and that he therefore could not go
into more detail since it was unknown to him where the investigation specifically stood.  He stated
that, if anything, the investigation illustrated the vigour of the United States Government in ensuring
that the money provided to United States companies was not in any way misallocated, but rather spenton the goods and services which the US Government had paid for.
58. The delegate of the European Communities replied that he was willing to provide an exact
quote with the exact figures to the United States delegation which might shed some more light on the
first issue.  He argued that these tax exemptio ns and grant schemes did have a direct impact on
production costs. In sum, he did not fully agree with some of the points which had been made by theUnited States delegate.  On the other issue, the European Communities said that it would follow this
closely and that it was looking forward to receivin g additional information resulting from this inquiry
in this Committee.
59. The delegate of the United States wished to remind the European Communities that Boeing
only devoted part of their enterprise to the manufacture of civil aircraft and, since it concerned the
movement of a headquarters, one had realistically to divide that money proportionally to those
benefits, if any, that were provided to civil aircraft.  It further appeared to the United States that part
of this money had been to offset the expenses of relocating the headquarters, which had been rather
significant.  If the headquarters had not been relo cated, this would never have accrued to Boeing.  The
United States delegate assumed that the argument that the city of Chicago might raise is that theywould accrue, in the future, benefits of employees and tax revenue in that area that would more than
offset whatever incentives they offered to compensate Boeing for its relocation expenses.
60. The Committee took note of the statements made.
I. DATE OF NEXT REGULAR MEETING
61. The Chairperson proposed that the date of the next regular meeting of the Committee was
5 June 2002.
62. The Committee so agreed
J. ADOPTION OF ANNUAL REPORT
63. 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 WTO, the Committee reported annually
to the General Council, and that this year, because the General Council had met before the regular full
meeting of the Committee, the Chairperson had submitted a brief report to the General Council on hisown responsibility.  He further noted that that brief report, which had been sent to Signatories by fax
on 26 September 2001, contained information concerning the activities of the Committee since the
adoption of its 2000 Annual Report, but that, of co urse, the brief report did not replace the Annual
Report of the Committee.TCA/M/13
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64. The Committee adopted the annual report5, as amended.
65. The meeting was adjourned.
__________
                                                     
5 Circulated as document WT/L/434.