RESTRICTEDWORLD TRADE
ORGANIZATIONTCA/M/14
29 July 2002
(02-4065)
Committee on Trade in Civil Aircraft
MINUTES OF THE MEETING
HELD ON 5 JUNE 2002
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 noted that at the request of the European
Communities, one item had already been put on the agenda under "Other Business".
3. The representative of the United States stated that this item under "Other Business" referred to
the procurement of aircraft by the United States Armed Forces and in his view, it therefore concerned
procurement of military aircraft, a matter not covered by the Agreement.
4. The delegate of the European Communities explained that his delegation had put this item on
the agenda under "Other Business" in order to obtain  further information on this issue, and that its
relevance under the Agreement was precisely a question it would have liked to address.
5. The Committee took note of the statements made and adopted the following agenda:
A. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON TRADE
IN CIVIL AIRCRAFT UNDER THE WTO ..............................................................................2
B. END-USE CUSTOMS ADMINISTRATION .........................................................................................2
1. Updating Information Regarding Civil or Military Identification for Customs
Purposes....................................................................................................................... ..............2
2. Military vs. Non-Mi litary Definition.......................................................................................3
C. STATISTICAL REPORTIN G OF TRADE  DATA ...................................................................4
D. TREATMENT OF AIRCRAFT GROUN D MAINTENANCE SI MULATORS.......................5
E. DERESTRICTION OF  DOCUMENTS .....................................................................................5
F. OTHER BU SINESS ............................................................................................................... ....6
1. Matter relating to Article 4: Procurement of commercial aircraft by the United
States armed forces............................................................................................................ .......6
G. DATE OF THE NEXT REGULAR MEETING ......................................................................................8TCA/M/14
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A. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON TRADE IN CIVIL
AIRCRAFT UNDER THE WTO
6. 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 Signatorieswhether there had been any new developments.
7. The delegate of the United States stated that the United States had met with the European
Communities following the last meeting of the Committe e to discuss this issue.  He noted that there
existed a general agreement that it would be useful to rectify or update the Agreement to correctly
reference the WTO Agreements.  He added that they had explored mechanisms by which this might
be done, but that they had failed to resolve some of the differences on what might be appropriate
language in this area.  The representative of the United States added that his delegation had someconcerns of its own, particularly regarding the later in time issue and that it had called on the
European Communities to identify more precisely what the European Communities' issues were in
respect of Articles 6.1 and 8.8 so that they might be addressed by the other Signatories as well.  The
representative of the United States concluded that his delegation thus remained highly supportive of
rectifying the Agreement and would continue work in this regard.
8. The representative of the European Communitie s wished to confirm his delegation's interest
in finding a solution to this issue.  He added that he was not in a position, at this stage, to put any
proposals before the Committee.  However, he emphasised that if there were new developments
before the next meeting of the Committee, he would of course inform the Committee in order to share
the ongoing process with a larger number of delegations.
9. The representative of Canada stated that Canada shared the desire of the European
Communities and the United States to update the Agreement.  He considered that it was regrettable
that it had taken so long to bring the Agreement into line with the WTO and added that this problem
had detracted somewhat from attracting new Members to the Agreement and that it had put in
question to a certain extent the usefulness of the Committee.  The delegate of Canada encouraged the
Chairperson to assist in this process, if he could.
10. The Chairperson welcomed the serious dialogue which had started between the interested
Signatories. He expressed his hope that this dialog ue would bear fruit in the not too distant future.
The Chairperson suggested that it might be preferable to further discuss this matter in the Committee
on the basis of concrete proposals from Signatories rather than discussing questions which deal with
the principle and the main areas of contention.  He 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.
11. The Committee took note of the statements made.
B. END-USE CUSTOMS ADMINISTRATION
1. Updating Information Regarding Civil or Military Identification for Customs Purposes.
12. The Chairperson noted that no new information had been received from Signatories since the
last regular meeting of the Committee.TCA/M/14
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2. Military vs. Non-Military Definition
13. The Chairperson recalled that Canada made a proposal concerning the definition of a civil
aircraft for the purposes of the Agreement.  Canada's proposal has been circulated in document
TCA/W/4.  He reminded Signatories that they had agreed at the last meeting on 21 November 2001 to
revert to this item at this June meeting.
14. The delegate of Canada stated that, as Signatories were aware, his delegation had put forward
a proposal for revising the definition of civil aircraft in the Agreement.  He recalled that the purpose
of the Canadian proposal was to have a positive definition of civil aircraft rather than the definition
which currently existed in the Agreement, and which defined a civil aircraft as being everything but
military aircraft.  In his view, such a positive definition of civil aircraft would constitute an
improvement to the Agreement  The representative of Canada stated that his delegation is working
together with some other delegations on this matter.  He regretted not being able at this point to put on
the table a revised definition but stated that his delegation would continue its discussions, and heinvited other delegations that were interested in  working on this matter to join in that effort
15. The representative of the European Communities agreed with the state of play presented by
the Chairperson and the delegate from Canada.  He stated that his delegation was increasingly
interested in this matter.  He added that the item his delegation had requested to be put on the agenda
under "other business" showed that the borderlines which are created by the definitions might notalways be in the best interest of the functioni ng of the Agreement.  He requested the Canadian
delegation to clarify how it intended to bring this matter forward and to indicate which elements were
being discussed at this stage.  He took note of the invitation to all interested parties to contribute to the
process and added that his delegation could actually do so in the near future.
16. The delegate of Canada clarified that at this point his delegation was preparing some revised
wording that could constitute a definition of civil aircraft that would be based on the basic design of
the plane, rather than the end-user or the purchaser.  He indicated that, since there were a number of
factors to consider in coming up with such a defi nition, such wording would have to be discussed with
a wide range of interested parties in Canada as well as with other interested delegations.  The delegate
of Canada was hoping to come back to this matter at the next meeting with something more concrete.
17. The representative of Japan welcomed the discussion about refining further the definition
between military and non-military aircraft.  He noted that in his mind this issue was closely related to
the previous agenda item concerning the status of the Agreement under the WTO.  His delegation was
of the view that the question of a definition of civil aircraft should ultimately be dealt with as an
amendment to the current Agreement.
18. The delegate of the United States expressed his delegation's willingness to examine any
proposals for a definition with an open mind.  He added however that a negative definition should not
necessarily be narrower than a positive definition.  He stated that in his view a very short negative
definition may cover more things than a positive li st which would attempt to envisage all possible
things to be covered.  He emphasised that his delegation would review any suggestions in a positive
spirit, both in the context of this item and with respect to the issue of updating the Agreement overall.
He noted that the United States had already provided a dual-use paper which illustrated that, forcustoms duty purposes, the United States did not distinguish between military and non-military dual-
use aircraft depending on the purchaser but basically on the certification, i.e. whether the aircraft is
certified by the FAA, or another certifying authority  recognized by the FAA.  He was therefore of the
view that the United States had already in effect broadened the scope of application of the duty free
requirement and had avoided that distinction.  He stat ed that he would be interested to hear from other
Signatories how they treat dual-use products, or where they drew the line between military and
civilian aircraft.  He was of the view that this was an issue that Signatories would need to look at since
this issue had been brought to his delegation's attention as a possible problem for new Signatories whoTCA/M/14
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feel that the dual-use items might be improperly brought in as aircraft items and who query how this
question was dealt with by Signatories.
19. 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
20. The Chairperson recalled that at the meeting on 21 November 2001 Signatories had agreed to
continue this system of statistical reporting of trade data, at least until this meeting of the Committee,
but that they had also agreed to review this practice at this meeting of June 2002.  The Chairperson
noted that as far as the statistical reporting for 2001 was concerned, data had been received thus far
only from Canada (TCA/TSC/W/14).
21. He further recalled that at the meeting of 21 November 2001, the Committee had discussed
ways to circulate this information among Signatories in electronic form, and the Committee had
agreed to revert to this issue, particularly to the item of circulation and exchange of statistical
reporting among Signatories.  He noted that at that time the question of confidentiality had been raised
in that respect. He added that the question of conf identiality would also need to be discussed in the
context of de-restriction of Committee documents, an item also on the agenda of the Committee.
22. The Chairperson requested the Signatories to first express their views on the question of
principle of whether it was considered useful to continue the practice of providing statistical reportingon trade data concerning civil aircraft.  The Chairperson indicated that depending on the answer to
that question, Signatories could then express their views on other matters concerning the modalities of
exchange of information and ways of processing confidential information.
23. The representative of the United States informed the Committee that his delegation had
prepared its data for 2001, and that he had this information with him.  He recalled that at the previous
meeting, the United States had suggested that such information only be submitted electronically.  He
added that the United States was in support of continuing the process and that his delegation would
like to see a mechanism for doing this electronically.  As far as public access to this information was
concerned, the delegate of the United States explained that his delegation's data was already in the
public domain and therefore he did not see why it would have to be submitted and circulated as arestricted document in this Committee.
24. The representative of Canada shared the desire of the United States to move towards, or at
least explore, a system using electronic means to supply the statistics and to access them.  She further
stated that her delegation supported the continued collection of such data, which Canada considered to
be an important part of the functioning of the Committee.
25. The delegate of the European Communities stated that his delegation would be happy to
continue the exercise, and did not have any problems concerning the confidentiality of the data
provided.  He was of the view that it would suffice to circulate a notice saying that the data was
available electronically and to provide the reference of the web-site or wherever the information could
be found. He indicated that other Committees had adopted similar practices.
26. The Chairperson concluded that Signatories considered it useful to continue the practice of
reporting trade data on civil aircraft, and that they considered that it could best be done electronically.
He noted that a very concrete suggestion was made by the European Communities, namely to provide
the information in electronic form, to post the information somewhere on the web-site of the WTO
and to notify through traditional means, by paper, to the other Members that the information was
available, specifying where it could be found on the WTO web-site.TCA/M/14
Page 5
27. The delegate of Canada wished to make one additional point in this respect.  She suggested
that in order to have more contributions from Signatories, the Secretariat put out a note asking for
delegations to submit their information by a certain date so that delegations would be reminded to put
in their submissions.  She explained that this practice was common, for example, in the Committee on
Anti-Dumping Practices or in the Committee on Subsidies and Countervailing Measures.  She
indicated that she would leave it up to the Secretariat to come up with some informal reminder for thesubmission of trade statistics, in the form of a W document or otherwise.  The delegate of Canada
further fully agreed with the suggestion by the European Communities concerning the way of
circulating the trade data among Signatories.
28. The Chairperson considered this latest proposal by Canada worth exploring further.  He
concluded that the Committee considered it useful to continue the statistical reporting of trade data
and that such reporting should be done electronically.  The Chairperson requested the Secretariat to
come up with some proposals in this regard especially in connection with the proposal that was madeby the European Communities.  The Chairperson suggested that the question of confidentiality be
dealt with under the agenda item concerning de-restriction of documents.
29. The Committee so agreed.
D. TREATMENT OF AIRCRAFT GROUND MAINTENANCE SIMULATORS.
30. The Chairperson recalled that at its meeting on 15 November 2000, the Committee adopted a
decision urging Signatories to apply immediately,  on an interim basis, duty-free treatment to the
goods of the proposed products covered in the Annex outlined in WTO document TCA/W/5/Rev.3,
including aircraft ground maintenance simulators.  The Committee further decided that Signatories
should inform the Committee on steps they had taken relating to such interim applications.  In the
Decision adopted upon confirmation of the ad referendum  adoption of the Protocol (2001) , the
Committee "recommends that Signatories will apply, as decided during the meeting held on
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."1.  He therefore invited Signatories to confirm, or inform the Committee of steps
taken towards, interim duty-free treatment of aircraft ground maintenance simulators.
31. The delegate of Canada stated that this had been an initiative of Canada from some time ago
and that he understood from the last meeting that the European Communities was in the process of
adopting the necessary legal instruments so that the tariff concession could be applied from
1 January 2002.  He requested the European Communities to confirm whether such had happened in
the meantime.
32. The delegate of the European Communities confirmed that duty-free treatment had been
introduced as of 1 January 2002.
33. The Committee took note of the statements made.
E. DERESTRICTION OF DOCUMENTS
34. The Chairperson recalled that procedures generally applicable to WTO bodies concerning de-
restriction did not apply to the Committee, nor had the Committee recently adopted any specific
procedures regulating de-restriction.  He noted that, as provided in document AIR/W/16 of9 December 1980 on de-restriction of documents, that documents in the series AIR/M/- and AIR/W/-
and AIR/SPEC/- were never de-restricted.  He further drew the Signatories’ attention to the fact that
the Committee of the other plurilateral Agreement, the Agreement on Government Procurement had
                                                     
1 TCA/6TCA/M/14
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adopted a decision on de-restriction of documents dated 24 February 1997 along the lines of the
procedures on circulation and de-restriction adopted by the General Council at that time.  The
Chairperson then referred to the recent decision by the General Council concerning procedures for the
circulation and de-restriction of WTO documents, dated 14 May 2002, in which the General Council
emphasized the importance of greater transparency and adopted as a starting-point that all WTO
documents shall be unrestricted.  Pointing to the general emphasis on and the existing need of greatertransparency, the Chairperson then invited the Signatories to give their views on the topic of de-
restriction and on ways to enhance transparency in the Committee.
35. The delegate of the United States stated that his delegation had long been a proponent of
increased transparency through de-restriction of documents under the General Agreement.  He added
that the United States supported it no less in this Agreement and he was wondering whether other
Signatories would support the proposal that the Secretariat prepare a de-restriction procedure based on
the General Council decision of 14 May 2002 (document WT/L/452) changing what is necessary tochange for this Committee and its documents.
36. The representative of the European Communities stated that his delegation endorsed that
proposal and agreed with the points made by the United States.
37. The delegate from Canada also supported the proposal from the United States delegate.
38. In light of the existing consensus on this matter, the Chairperson requested the Secretariat to
prepare a draft text for consideration at the next meeting of the Committee on the basis of the de-
restriction procedures adopted by the General Council as laid down in document WT/L/452.
39. The Committee so agreed.
F. OTHER BUSINESS
1. Matter relating to Article 4: Procurement of commercial aircraft by the United States
armed forces
40. The delegate from the European Communities explained the reasons why his delegation had
requested that this matter be taken under consideration at the meeting of the Committee.  He stated
that US Congress passed a Bill about 5 months ago, called  the Defence Appropriation Bill HR3338
which was signed into law on 10 January 2002, and that in that Bill, Section 8159 allowed for thelease of 100 aircraft B767 “in commercial configuration” during 10 years by the United States Air
Force.  He added that he realized that the contracts to finish this deal had not been signed yet but that
nevertheless he wanted to raise a number of concerns relating to this matter.
41. He first stated that his delegation was concerned that as the law specified a manufacturer of
the aircraft to be leased, this eliminated any possibility for competition.  Secondly, he was concernedthat there could be an overpayment in the value of the lease mentioned, at least based on the
information which his delegation had obtained thus far, and that this could actually give rise to a
substantial subsidy – up to 11 billion $ or 60% of the contract.  He considered that this subsidy could
benefit Boeing’s civilian B767 programme and cause adverse effects to competing programmes.  He
further noted that as the law specified the manufacturer of the aircraft to be leased, his delegation's
concern was that the Bill could violate Article 4.2, which is the prohibition of discrimination; Article
4.3, which is the same for procurement; and Article 4.4, which is the prohibition of inducement.  Hefurther added that in case the eventual lease price be established above what his delegation, supported
by numerous reports, considered to be the market price, his delegation considered that this could also
violate Article 6.2 concerning government support resulting in subsidizing the production of the
civilian B767.  He therefore requested information from the United States as to the current state ofTCA/M/14
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play of this undertaking. He added that he would also welcome comments from the United States on
the concerns expressed by his delegation overall.
42. The delegate from the United States explained that he did not consider that this was a matter
covered by the Agreement.  He stated that since the aircraft in question were being procured by the
Armed Forces, they were therefore military aircraft and thus not the subject of the Agreement on
Trade in Civil Aircraft.  He considered that the procurement of such aircraft was therefore not amatter relating to Article 4 of the Agreement as was mentioned in the Agenda.
43. He explained that the background to this all was the need for tanker aircraft for the Armed
Forces caused by the war on terrorism which has increased the use of the Armed Forces and the Air
Force in particular.  He stated that there was an urgent defence need for making sure that the US
Armed Forces had the adequate tanker aircraft.  He clarified that in order to respond to the increased
needs of the Armed Forces, Congress had enacted an experimental programme which named one
source of general tanker aircraft.  He emphasised that these aircraft were not civil aircraft, althoughthey were commercial, in the sense that they c ould be commercially sold or commercially sold as
military tankers to other countries with which the United States has military trade relationships.  He
presumed that in the EU as well there are manufacturers of military goods that also sell these on a
commercial basis.  In sum, he stated that it was a commercial transaction, and that his understanding
of the law and the legislative history and of the actions so far of the Air Force was that its intentionwas to buy tanker aircraft and that it was not its plan to purchase what the European Communities
would seem to describe as civil aircraft to then convert them to tankers themselves.  He further
clarified that no contracts had been signed yet, and that it was therefore in any case premature at this
stage to be discussing this matter under Article 4 or any other provisions of the Agreement.
44. He then raised an issue for the European Communities under Article 4 concerning the
A400M, which was a “transport aircraft” which he understood would be offered for civilian sale as
well.  Under the definition as applied by the Signatories including the European Communities, he
thought that this aircraft could be regarded as a civil aircraft under the Agreement.  He was therefore
wondering whether the European Communities would be willing to reply to questions in that area if
he were to raise such questions.
45. The delegate of the European Communities thanked the representative of the United States for
the answers provided. He wanted to make two or three small remarks nevertheless.  First he
acknowledged that no contracts had been signed yet but  stated that in his view, due to the language of
the law, competition had been excluded by identifying the source of procurement.  He added that by
contrast some European countries had selected 767 tankers, demonstrating that the EuropeanCommunities did apply a non-discriminatory approach to these procurements.
46. He then addressed the question whether it was appropriate in this Committee to talk about
Article 4 in this context of the procurement by the Air Force.  He stated that first of all, it was clear
that the text of the law said that the aircraft was to be delivered in commercial configuration, and that
in his view, at the time of delivery it would therefore still be a civil aircraft.  He considered that he did
not really know where the borderline ran when it came to the operation of the aircraft at a later stage.
47. The delegate of the European Communities stated that even if it were a military aircraft,
under Article 6.2 the consequences would also be covered by the Agreement.  He clarified that if
subsidization of the production of the B767 tanker s would result in allowing the manufacturer to
benefit from reduced costs in the production of civil B767’s, that would still be pertinent to Article 6.2
and that is why he considered that his delegation's concerns were not without foundation.
48. As a final point he stated that he would be willing to take any questions the United States had
on this or related matters.  He added that he would not be able to provide any detailed answer at thisTCA/M/14
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stage but that he of course did not want to stop the United States delegate from raising an issue with
his delegation.
49. The delegate of the United States thereupon wondered whether according to the European
Communities all A 400M aircraft were to be considered as civil aircraft and covered by this
Agreement, since the manufacturer had indicated that they would be sold civilly, or in a civil version ?
It was not clear to him either whether the European Communities considered Articles 4.4 and 6.1 ofthe Agreement relevant in this respect in light of the fact that the manufacturer chosen was a European
manufacturer and that there was no open request for bidding, or that no alternative manufacturers
were considered to design or to develop new designs for that transport aircraft.
50. He further stated that no contract had been signed yet, and therefore he considered that one
could not jump to any conclusions as to whether there could be a subsidy involved when there was no
agreement on what would be purchased.  He further explained that it could be that more legislation
would be required to authorize a purchase and therefore he explained it was not even certain at thispoint who the supplier would be as other suppliers were being talked to, including European suppliers,
for this and future aircraft.  He explained that the United States was interested in competition on both
the civil and military side and that there was certainly no intent of the United States Government to
provide subsidies to military production or to civil production through the procurement of military
equipment.  He considered that the situation presented was unique in the sense that there had beendiscussions of leasing these aircraft instead of buying, and that in leasing a product because of the
time value of money, the total amount to be paid could exceed that of purchasing.  He summarized his
delegation's position by saying that first and foremost this was a military aircraft because it would be
procured by a military entity, that had been notified to the Committee as such, and that the question of
whether it could be sold commercially to other parties as military aircraft or not was irrelevant.  In hisview, sales and competition of military products were covered in other agreements and fora, such as
bilateral memorandums of understanding or NATO.
51. The Committee took note of the statements made.
G. DATE OF THE NEXT REGULAR MEETING
52. The Chairperson proposed that the date of the next meeting was 13 November 2002.
53. The Committee so agreed.
54. The meeting was adjourned.
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