RESTRICTED
WORLD TRADE TCA/M/2
17July1996
ORGANIZATION(96-2813)
Committee onTrade inCivil Aircraft
MINUTES OFTHE MEETING OFTHE COMMITTEE
HELD ON7JUNE 1996
Chairman: Mr.M.Abdel-Fattah (Egypt)
Page
A. Adoption ofAgenda 1
B. Consideration ofthestatus ofthe1979 Agreement onTrade in
Civil Aircraft under theWTO 1
C. Other business 4
A. Adoption ofAgenda
1. TheChairman noted thattheagenda forthismeeting wascontained inWTO/AIR/339. He
saidthathewished toraiseanitem, under "Other Business", which wastherenewal oftheChairman
andVice-Chairman oftheCommittee. TheCommittee adopted theagenda asamended.
B. Consideration ofthestatus ofthe1979Agreement onTrade inCivil Aircraft under theWTO
2. TheChairman summarized hisownviews onthesituation ofthe1979 Agreement onTrade
inCivil Aircraft ("the Aircraft Agreement"). Herecalled thatithadproved sofarverydifficult to
reach anagreement onthedraftprotocol andontheattached decision contained inAIR/W/98, intended
toadapt theAircraft Agreement totheWTO. Hesaidthat,while itseemed thatalldelegations agreed
ontheamendments contained inthedraftprotocol, concern hadbeenexpressed about theeffects of
theadoption oftheprotocol onthelegalrelationship between the"adapted" Aircraft Agreement and
other agreements annexed totheMarrakesh Agreement Establishing theWorld Trade Organization
("theWTO Agreements"). Oneparticular issuewasrelated tothefactthat,inapplication ofcustomary
rulesofinternational law,theadoption oftheprotocol would result intheAircraft Agreement becoming
alater-in-time agreement compared withtheother WTO Agreements. AsSignatories hadnotbeen
abletoagree onthetextofadecision which would address thatissue, ithadnotbeenpossible toadopt
thedraftprotocol contained inAIR/W/98. TheChairman alsorecalled that,during theprevious meeting
oftheCommittee, on17November 1995, hehadmade anadditional informal contribution totryto
bridge thedifferent positions regarding theabove-mentioned issue. Hehadalsourged thedelegations
concernedtoconsidercarefullyhisapproachortocome-upwithother,realisticandcompromise-oriented
proposals. Hehadalsoinformed delegations thathewould conduct informal consultations withall
interested delegations onhowtoresolve thedeadlock andthathemight callanother meeting ofthe
Committee atanappropriate timetoconsider theresults ofthose consultations. However, theinformal
consultations hehadcarried outhadthusfarremained fruitless.TCA/M/2
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3. Heemphasized thatthecurrent situation wasbecoming moreworrying astimepassed andcould
notbetolerated fortwomain reasons. Thefirstrelated tothefulfilment oftheirduties byparties to
anagreement. Hesaidthatpursuant toGATT practice andinternational lawprinciples andcustomary
rules, theresponsibility forensuring theproper functioning ofaWTO Agreement wasshared between
itschairman anditsmembers. AsChairman oftheCommittee, hisdutywastodohisbesttoensure
theproper functioning oftheAircraft Agreement. Asparties totheAircraft Agreement, Signatories
weresupposed toapply thatAgreement fullyandingoodfaithaslongastheyhadnotagreed otherwise.
Thepresent situation might beperceived asoneinwhich Signatories didnotfulfiltheirduties vis-à-vis
anAgreement which theyhadaccepted. Notonlyhadnosolution beenfound onhowtobreak the
deadlock, butitalsoseemed thattheAircraft Agreement wascurrently perceived asbeing nolonger
operational andthatmany Signatories appeared toberesigned tothefactthatthissituation might last.
4. Thesecond reason whythecurrent situation could notbetolerated wasofasystemic nature.
Thespirit, object andpurpose oftheMarrakesh Agreement Establishing theWorld Trade Organization
weretoimprove international disciplines applicable totrade, thuspromoting certainty forcommercial
operations. Thecurrent uncertainty astotheactual applicability ofcertain provisions oftheAircraft
Agreement and,more generally, astoitsenforceability wasatoddswithsuchobjectives. Moreover,
anon-operational agreement could setanegative precedent fortheWTO. Itcould givetheimpression
thatcertainWTOobligationscouldbedisregardedwithtotalindifference.Itmightevenhaveaspill-over
effect onother WTO Agreements. Such asituation wasdangerous fortheWTO, particularly atthis
stage ofitslife,andmight haveanegative impact ontheattitude ofbothcurrent andfuture Members
vis-à-vis theirobligations under theWTO Agreements.
5. TheChairman recalled alsothat,faced withsuchserious problems, hehadapproached the
representatives ofeachSignatory anddescribed hisunderstanding ofthelegalissues. Hesuggested
that,ifitwasnotpossible toamend theAircraft Agreement, itwasnonetheless hisdutyandthatof
Signatories toclarify thestatus oftheAgreement. Inhisview, iftheAircraft Agreement could not
beamended, there were onlytwoalternative courses inthecurrent context: either (i)suspend the
application oftheAircraft Agreement orterminate it,or(ii)tryingood faithtomake itwork asit
currently stood, byadopting those measures strictly necessary forittooperate intheWTO context,
without amending it.Termination orsuspension werematters forSignatories topropose anddecide
upon. Absent suchadecision, asChairman incharge ofensuring thefunctioning oftheAgreement,
hecould onlymake proposals which would enhance itsfunctioning. Given thathealsohadtotake
intoaccount thefactthat,while theremight beagreement onamending theAircraft Agreement, there
wasnoagreement oncertain legalconsequences ofsuchamendment, heintended tomake apersonal
suggestion. Hisproposal would allow theAgreement tooperate clearly andwithimproved legalcertainty
within theWTO context, while notaffecting thecurrent relationship between provisions oftheAircraft
Agreement andprovisions ofother WTO Agreements. Under thecircumstances, thiswas,inhisview,
theonlyworkable means ofmaking theAircraft Agreement operational.
6. Thedelegate oftheEuropean Communities saidthattheECagreed withmost oftheviews
expressed bytheChairman. Thepresent situation wasunfortunate andshould notcontinue. Ifthe
Chairman hadanysuggestion interms offinding acompromise between theopposing points ofview,
hisdelegation would beprepared tolookatitveryseriously.
7. Thedelegate oftheUnited States shared theChairman 'sconcern regarding theAgreement.
Although hisdelegation hadbeenconsidering several options tobreak thedeadlock, ithadnotbeen
successful asyet.Therefore, hisdelegation would alsobeveryinterested intheChairman 'ssuggestion
onhowtoimprove thecurrent situation.
8. Thedelegate ofCanada shared theconcern andfrustration expressed bytheChairman. His
preference wastoproceed withtechnical rectifications inorder tobring theAircraft Agreement intoTCA/M/2
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closer legalharmony withtheMarrakesh Agreement Establishing theWorld Trade Organization and,
ifpossible atthesame time, toimprove theAircraft Agreement. Oneissueofinterest toCanada was
anexpansion ofthescope ofcoverage oftheAgreement. Hisdelegation alsohoped thatawayforward
could befound from thecurrent situation before theendoftheyear.
9. Thedelegate ofJapan shared other delegations 'concern about thestatus andfunctioning of
theAircraft Agreement. Inorder tofindasolution, hisdelegation wasprepared tolookseriously at
theChairman 'sproposal.
10. TheChairman concluded fromtheinterventions ofdelegations thattermination orsuspension
wasnotconsidered bySignatories tobeanappropriate option. Heconsequently presented aninformal
proposal, thetextofwhich wascirculated todelegations. Theproposal wascomposed oftwoseparate
decisions:
(i) ThefirstdecisionrelatedtothemeaningofcertaininstitutionalprovisionsoftheAircraft
Agreement. Itwould formally confirm andclarify inwriting thelegaleffects onthe
Aircraft Agreement oftheentry intoforce oftheWTO Agreement andthetermination
ofGATT 1947. Inother words, itwould specify thatreferences toGATT andGATT
entities should nowbeunderstood asreferences respectively toGATT 1994 andto
thoseWTOentitieswhichhadreplacedthem.Itwouldalsoclarifythesituationresulting
from thelater-in-time status ofcertain WTO Agreements compared withcertain
provisions oftheAircraft Agreement. Thisdecision wasintended tobepurely a
confirmation oftheexisting legalsituation andspecified thatitwould notconstitute
anamendment totheAircraft Agreement. Bythesame token, italsospecified that
itdidnotrepresent thecompletion ofthenegotiations initiated pursuant toArticle 8.3
further totheDecision oftheCommittee of16July1992(AIR/M/32), nordiditmean
thatspecific multilateral rules hadbeenestablished within themeaning offootnotes
15and24oftheAgreement onSubsidies andCountervailing Measures annexed to
theMarrakesh Agreement Establishing theWorld Trade Organization.
(ii) Thesecond proposed decision consisted ofdeciding thattheWTO Understanding on
Rules andProcedures Governing theSettlement ofDisputes (the"DSU") would apply
totheAgreement onTrade inCivil Aircraft. Inthecurrent situation, different
interpretations might bedefended astothepossibility forapanel established under
theDSU toconsider provisions oftheAircraft Agreement. Even iftheapplication
oftheDSUcould betaken toconfirm theinterpretation according towhich adefendant
could invoke, including under thepresent circumstances, provisions oftheAircraft
Agreement inaproceeding under theDSU, suchadecision would notinpractice affect
thecurrent relationship between provisions oftheAircraft Agreement andprovisions
ofotherWTO Agreements. Inotherwords, provisions oftheAircraft Agreement might
beinvoked inapanel proceeding under theDSU, buttheirlegalimpact remained subject
totheircompatibility withother, later-in-time, WTO Agreements relating tothesame
subject-matter.
11. TheChairman thensuggested thatdelegations examine these textscarefully andreport tohim
rapidly. Ifnecessary, hecould holdinformal consultations. Hisintention was,ifpossible, toconvene
another meeting oftheCommittee with15days. Thepurpose ofthismeeting would betotakeadecision
onthese matters.
12. TheCommittee tooknoteofthestatements andagreed tothiscourse ofaction.TCA/M/2
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C. Other business
15. TheChairman saidthathehadbeenrecently informed thatMr.Latrille wasnolonger ina
position tofulfilhisobligations asVice-Chairman oftheCommittee. Healsosaidthathewould himself
soonleave Geneva. Asaresult, theCommittee would havetoelectnewofficers. Hehadalready
started consultations onthismatter andhewould continue them untiltheendofJune, sothatanew
Chairman andanewVice-Chairman could begin theirtermofoffice atthemeeting following thenext
meeting.
16. TheCommittee tooknoteofthestatements andagreed tothiscourse ofaction.