RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/129
15 October 1999
(99-4434)
Council for Trade in Services
RECENT TRADE-RELATED ACTIVITIES OF INTERNATIONAL
INTERGOVERNMENTAL ORGANIZATIONS
IN THE FIELD OF AIR TRANSPORT
Note by the Secretariat
1. This note has been prepared at the request of the Council for Trade in Services.  It contains
information on the trade-related activities of international intergovernmental organizations (universal
and regional) in the field of air transport.  It is not to be regarded as exhaustive.  For instance, it doesnot deal with non-directly trade-related matters such as the legislative activities of the ICAO
(International Civil Aviation Organization) in the field of safety, noise, or air navigation systems or
with the certification activities of the Joint Aviation Authorities (JAA).  It could later on be
complemented in those areas if Members wish so.  It does not deal with the activities of
non-governmental organization such as IATA (Int ernational Air Transport Association) or ACI
(Airport Council International).  It contains information only on developments that have occurred
since the issuance of document S/C/W/59 dated 5 November 1998, which for various reasons were
not reflected there but have occurred since the entry into force of the Air Transport Annex.  The
activities of each organization are presented as far as possible according to the structure of document
S/C/W/59 and references to the relevant paragraphs of this document are made whenever a given
question or subsector is evoked for the first time.
2. It will deal first with the universal organizatio ns (I) and then with the activities of regional
organizations (II).
I. RECENT TRADE-RELATED ACTIVITIES OF UNIVERSAL ORGANIZATIONS IN
THE FIELD OF AIR TRANSPORT
A. I
NTERNATIONAL CIVIL AVIATION ORGANIZATION (ICAO)
1. Overall monitoring of economic and regulatory issues in the air transport sector
3. Since the publications mentioned in documen t S/C/W/59, ICAO has published "The world of
civil aviation 1997–2000" (ICAO circular 273-AT/113) and is about to publish the 1998-2001 edition
of this document.  A notable part of the informat ion contained in the present document is drawn from
this ICAO document.  ICAO also published the 1998 annual report of its Council and the document
"Civil aviation statistics of the world 1997".  ICAO has also revised and updated its basic documenton "Policy and guidance material on the regulation of international transport"
1, but this new document
is not yet published.
                                                     
1 ICAO document 9587, alluded to in document S/C/W/ 59 in footnote 17 to paragraph 74, footnote 28
to paragraph 96 and footnote 29 to paragrap h 108, text available at the Secretariat.S/C/W/129
Page 2
4. Aside from those general publications, ICAO also provides to its Members on ad hoc  basis or
in the framework of technical cooperation, regulatory and economic analysis on specific issues.  The
table contained in Annex 8 which analyses in a detailed and harmonized manner the features of recent
regional agreements in the field of air transport, is an example of this type of work.
2. Computer Reservation services (CRS)2
5. The number of countries having indicated that they were following the1996 ICAO CRS code3
or that their regulation is consistent or compatible with it has moved up from the nine mentioned in
document S/C/W/59 (paragraph 27) to 31 (of which 28 WTO Members), representing 55% of the
international scheduled traffic.  The list of those countries appears in Annex 1.
3. Leasing4
6. Article 83 bis of the Convention on International Civil Aviation (Chicago Convention) entered
into force on 20 June 1997.  This amendment to the Chicago Convention is designed to facilitateleasing operations and oversight of their safety.  It allows, in cases where an aircraft is operated
pursuant to an agreement for the lease, charter or interchange of the aircraft by an operator, the
transfer of all or part of the functions and duties of the State of registry (regarding the "rules of the
air" - ie:  ensuring the respect of the rules and regulations relating to the flight and manoeuvre of
aircraft - the aircraft radio equipment licences, the certificates of air worthiness and the licences ofpersonnel) to the State where this operator has its principal place of business or if this operator has no
such place of business to the state where it has its permanent residence.  This transfer requires an
agreement between the two states concerned.  As of 31 March 1999, 109 Members of ICAO (of which
68 WTO Members) had ratified the protocol relating to that amendment of the Chicago Convention.
The text of this amendment and the list of States having ratified the protocol relating to it can befound in Annex 2.
7. ICAO also produced a detailed study on aircraft leasing (EC2/82,LE 4/55-99/54 dated
14 May 1999).  The purpose of this study was to provide information and analysis on aircraft leasing
in order to assist States through inter alia  a checklist of factors which should be considered in
formulating transparent and consistent policies on aircraft leasing.  It focuses on regulatory and
economic issues as well as on safety concerns.  It includes guidelines on the implementation of
Article 83 bis as well as a model transfer agreement.
4. Slot allocation
5
8. ICAO is undertaking a study of slot allocation that will assess alternatives as well as possible
improvements to the existing system.
5. Airport service6
9. ICAO is organizing from 19 to 28 June 2000 a conference entitled "Air transport
infrastructure for the 21st Century".  The main items on the agenda are the economic situation of
airports, air navigation services providers and their financial relationship with air carriers and users
(ownership and control, financial and organizational structure), funding issues, the role of the State,
                                                     
2 See paragraphs 17 to 30, 39 and 51 to 55 of document S/C/W/59.
3 ICAO Council resolution of 25 June 1996 (text available at the Secretariat).
4 See paragraph 65 of document S/C/W/59.
5 See paragraph 120 to 125 of document S/C/W/59.
6 See paragraphs 126 to 136 of document S/C/W/59.S/C/W/129
Page 3
regulatory mechanisms, possible improvements to ICAO "policy statements"7 in that matter with a
particular focus on airport charging principles and air navigation services charging principles.  This
conference will also address the question of slots allocation and its implications for market access.
6. Ground handling8
10. On 25 February 1999, the Air Naviga tion Commission of ICAO decided9  that a study should
be undertaken by ICAO on the safety aspects of ground handling arrangements, whose results would
be reported to the ICAO Council in due time.
B.  UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD)
11. UNCTAD organized on 21-23 June 1999 an expert meeting on air transport services under
the aegis of its Commission on Trade in Goods, Services and Commodities.  The object of this group
was directly related to the preparation of the review of the GATS Air Transport Annex as its title was
"Clarifying issues to define the elements of the positive agenda of developing countries as regardsboth to the GATS and specific sectors of interest to them".  This meeting, which included government
officials and airline experts (mainly from developing countries), examined a detailed report prepared
by the UNCTAD Secretariat.
10
12. The "agreed conclusions and recommendations" of that meeting, which are not binding, are
reproduced in Annex 3.  They suggest that GATS si gnatories review their co mmitments in the three
sectors explicitly covered by the Agreement (CRS, maintenance, selling and marketing) with a view
to identifying the possible benefits of further commitments.  They suggest also that additional work
should be undertaken with regard to classification11  of air transport services in order to clarify the
scope of existing obligations and that options for extending the actual coverage of the Annex should
be considered notably, but not only, in terms of related services.
13. They suggest in particular to study an option by which landing rights12  would be included in
the scope of GATS, but where no commitment would be made under mode 1 and an MFN exemption
systematically taken to cover bilateral agreements and where modes 2, 3 and 4 would be negotiated
classically.  It suggests also to address in this context the question of the definition of ownership and
control13 and to take advantage of the work recently done by ICAO on this subject in order to enlarge
that definition.
14. These conclusions suggest also that transitional preferential mechanisms in favour of
developing countries inspired by those developed by ICAO14  should be studied and considered, to
evaluate how Article IV of the GATS could concretely be applied to the sector of air transport.  They
recommend also to consider using an approach simila r to the reference paper in telecoms to deal with
regulatory issues specific to the air transport sector.  They recognize that the process of regional
integration in the field of air transport can constitute a first step or an alternative to the multilateralliberalization of the sector and that the conseque nces of Article V of the GATS should be studied.
                                                     
7 ICAO document 9082/5 "Statements by the Council to the Contracting States on charges for airports
and air navigation services", see paragraphs 128 to 130 and Annex 4 of document S/C/W/59.
8 See paragraphs 64 and 134 to 136 of document S/C/W/59.
9 ICAO document C-WP/1105 dated 3 March 1999, document available at the Secretariat.
10 UNCTAD document TD/B/COM.1/EM.9/2 dated 16 Ap ril "Air transport services:  the positive
agenda for developing countries" , available at the Secretariat.
11 See paragraphs 17 to 23, 31 to 34, 37 to 40 and 60 to 69 of document S/C/W/59.
12 See paragraphs 73 to 95 of document S/C/W/59.
13 See paragraph 94 and ICAO resolution ATRP/9-4 in Annex 2 of document S/C/W/59.
14 That is ICAO Resolution ATRP/9-3, appearing in Annex 2 of document S/C/W/59.S/C/W/129
Page 4
II. REGIONAL ORGANIZATIONS OR AGREEMENTS
A. OECD
15. In addition to the work already mentioned in document S/C/W/5915, OECD produced in
April 1999 an extensive study on "Regulatory reform in international air cargo".16  On the basis of this
study OECD has organized on 5-6 July 1999 a work shop including government officials as well as
airline experts coming from combi-carriers, all-cargo carriers and express carriers of OECD
Members.  The chairman's summary of this workshop is reproduced in Annex 4.  Aside from a
general description of the economic characteristics and trends of the air cargo industry, one may retain
in particular from this summary the following points:
(a) Participants agreed that pricing had been substantially liberalized and did not
constitute a major issue.  However, ownership and control questions were considered
to be obstacles to new entries and competition in the sector, and were an area where
additional investigation may be fruitful.  The wet leasing of aircraft was still
considered as important and should not be ignored in a continuing review of theregulatory frameworks.  In respect of multimodal transport operation
17, participants
found that there were still significant barriers to the licensing of such activities,principally because separate licences are required for each transport mode.  Someconcerns were expressed that these barriers create undue constraints for the provision
of services combining air transport with trucking, shipping and rail services.
Participants considered however that an intermodal licence was not appropriate.
(b) Customs procedures and documentation was considered to be a serious regulatory
barrier.  Participants noted that actions such as the Express Guidelines, established
recently by the World Customs Organisation and incorporated into the draft revised
Kyoto Convention, and consideration of the possibility of including a facilitation
package in the next round of WTO negotiations represented a significant step
forward.  Ground handling services (as one of a range of “doing business” activities)
was identified as a crucial element in the provision of quality services.
(c) Participants noted the existing market access regulations and the still predominant
bilateral system in the air cargo sector.  While questions were raised as to whether
this regime was still sustainable because of its potential drawbacks on the effective
and efficient provision of air cargo services, there was general agreement that
regulatory improvements, whether gained through bilateral or multilateral
arrangements, were preferable to a standstill.  It was observed that the growing
prevalence of regional “open sky” agreements would eventually reach a critical massthat would force change.
16. The chairman's summary also notes a consensus on the idea that the regulatory structure of
the sector may need review in order to improve services and respond to newly emerging commercial
practices.  Any changes resulting from this review should apply to all industry players
(combi-carriers, all-cargo carriers and express carriers).  The ultimate objective should be to develop amultilateral regime.  Concerns were expressed that combi-carriers would not benefit from this process
so much as all-cargo and integrated services, since they would continue to be constrained by
                                                     
15 See footnotes 20 and 21 to paragraph 79 on air services agreement in general and footnote 34 to
paragraph 125 on slot allocation.
16 OECD document DSTI/DOT(99)1 dated 6 April 1999, available at the Secretariat.  This document
will be published in a book form in the coming months.
17 See paragraph 61 of document S/C/W/59.S/C/W/129
Page 5
restrictions on routes and frequencies concerning passenger traffic, and would only benefit from the
abolition of restrictions on prices and - within the limits of the frequencies allowed for passenger
traffic - on capacities.
17. In that context OECD was seen by the particip ants of the workshop as setting the stage for
like minded countries to go ahead with their refo rm of the air cargo regime, possibly to prepare
groundwork for an initiative in the WTO framework and to address multilaterally questions that may
in the end remain outside the scope of GATS.
18. Hence the participants in the workshop recommended that the Secretary General of the OECD
should examine how the OECD could provide mome ntum to the ongoing discussions on regulatory
reform in international air cargo transport.  OECD  should study how to extend liberalization in scale
and scope, in particular in respect to market access, including ownership and ancillary services,
determining which aspects of facilitation should be pursued as a matter of priority.  It should developan outline of draft arrangements to achieve the above on a multilateral basis and considering in which
forum such ideas can best be advanced.  The follow up of these recommendations is still pending
before the relevant organs of the OECD.
B. APEC
19. The APEC Air Services Group (ASG), one of the subsidiary bodies of APEC, while
"recognizing that in the foreseeable future the bila teral system offered the best prospects for further
development of more competitive air services while allowing fair and equitable opportunities for all
APEC economies", identified in October 1995 eight options for more competitive air services.  Those
options have been endorsed in June 1997 by the second APEC Transportation Ministerial Meeting.
This ministerial meeting mandated the air services group to prioritise the options and to prepare, on aconsensus basis, a recommendation on the options to be developed and on how they should be
implemented.  The ASG has done so and has assigned high, medium or low priority to each of the
options during two meetings held in October 1997 and February 1998.  These priorities appear in a
document entitled "Guiding principles for developi ng and implementing options for competitive air
services with fair and equitable opportunities" which is reproduced in Annex 5.
18  One may note in
particular the following points:
(a) Doing business matters:  Under this heading the ASG includes access to Computer
Reservation Systems, currency conversion and remittances of earnings (which fall
partially under selling and marketing in the sense of the GATS Air Transport
Annex19), employment of non–national personnel and ground handling arrangements.
In all these areas the ASG recommends that restrictions and discriminatory practices
should be minimized and finally removed, whether in bilateral agreements or indomestic laws and by-laws, using as guidance the model clauses developed by the
ICAO air transport panel.
20  This recommendation has been granted high priority.
(b) Ownership and control:  The ASG, stating that most APEC Members use the
traditional criterion according to which national airlines should be substantially
owned and effectively controlled by thei r own nationals, recommends to relax this
criterion on a case-by-case basis when considering designation made by partners
under bilateral air services arrangements, using as a guide or an option the ICAO air
                                                     
18 This document as well as the reports by individual APEC Members on the implementation of these
recommendations can be found at the following website address: htpp://www.apectptwg.org.au.
19 See paragraphs 31 to 36, 40 and 46 to 50 of document S/C/W/59.
20 See Annex 2 of document S/C/W/59.S/C/W/129
Page 6
transport panel regulation formulation.  This recommendation was given medium
priority.
(c) Landing rights in general:
- Market access:  The ASG recommends, with medium priority, that APEC
economies should aim to progressively achieve more liberalised market accessunder their bilateral air services arrangements, while ensuring fair and
equitable opportunity for the economies involved.
- Tariffs:  The ASG recommends the adoption of a double-disapproval regime
as well as the elimination of formal filing requirements or by default the
institution of electronic filing.  This recommendation was given medium
priority
- Designation:  The ASG recommends, with high priority, that its Members
adopt as appropriate, multiple designation in their bilateral air services
agreements as a way to increase competition and choice for the consumer.
- Cooperative arrangements:  The ASG r ecommends, with high priority, that
APEC Members facilitate cooperative arrangements between airlines such as
code sharing, including third country code share and code share over domesticsectors, joint operation and blocked space arrangements where it can be
shown to produce benefits to consumers and airlines and where fair
competition and equitable opportunity for the economies involved can be
ensured.
(d) Freight services:  The ASG recommends that APEC economies progressively remove
restrictions on the operation of airfreight services while ensuring fair and equitable
opportunity for the economies involved.  It suggests as one of the means to achieve
that goal to include, where appropriate provisions for additional flexibility and
capacity for air freight services in air services arrangements between APEC
economies.  It also stresses the importance for air freight services of adequatephysical infrastructure, flexibility in intermodal operations and implementation of
business-friendly procedures.  This recommendation is given high priority for the
doing business aspects and medium for the market access aspects.
(e) Charter services:  The ASG recommends, with medium priority, that APEC
economies allow and facilitate the operation of both passenger and freight charter
services which supplement or complement scheduled services having regard to the
principle of reciprocity, as appropriate.
C.  EUROPEAN CIVIL AVIATION CONFERENCE (ECAC)21
(a) Computer Reservation Services:  The ECAC has begun a process of review of its
existing CRS code.  The proposals for revision include:  making provision for
inclusion (on an optional basis) of railway services;  inclusion of information
                                                     
21 ECAC Members are:  Albania, Armenia, Austria, Belgium, Bulgaria, Croatia, Cyprus,
Czech Republic, Denmark, Estonia, Finland, France, Ge rmany, Greece, Hungary, Iceland, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, Moldova, Monaco, Netherlands, Norway, Poland, Portugal, Romania,Slovak Republic, Slovenia, Spain, Sweden, Switzerland, The former Yugoslav Republic of Macedonia, Turkey,
United Kingdom
.S/C/W/129
Page 7
systems;  imposing direct obligations on subscribers, both with respect to the
provision of accurate and comprehensive information and the avoidance of
unnecessary "passive" bookings;  and strengthening the data protection provisions.
(b) Leasing:  On 3 July 1997 ECAC, after considering a very detailed study, adopted
resolution ECAC /21-1 on leasing of aircra ft, which has non-binding status.  The text
of this resolution can be found in Annex 6.  This resolution, considering the economic
benefits and growing importance of leasing as well as the safety concerns raised by
that practice and the need for harmonizing the conditions applicable to those
operations, recognizes the right of ECAC Members to apply different rules to leases
between air carriers registered by them of aircraft in their national register or within
the European economic area.  It foresees that in order to ensure safety, liability
standards and compliance with any economic conditions, all leasing arrangementsshould receive prior approval.  It details the type of information required to grant that
approval.  For all leases (wet and dry), it foresees the transfer of all or part of the
functions and duties of the state of registry to the authorities of the lessee.  In
addition, for wet lease, it foresees additional safety and procedural conditions
including an anticircumvention clause.  It also recommends prompt communications
between aeronautical authorities concerned and the information of consumers a soon
as practicable and in any case before boarding.
(c) Code-sharing
22:  An ECAC Recommendation on Consumer Information/Protection
Needs in connection with Code-Shared Air Services was adopted on 26 June 1996.
The Recommendation addressed the information needs of the consumer through allphases of a journey beginning from the time that a first enquiry is made to a travel
agency or airline ticket office.  The Recommendation targets not only airlines but also
information data providers, including computer reservation system providers, as well
as travel agencies and airport authorities.  Monitoring of progress made in
implementing the Recommendation is part of the on-going work programme ofECAC.
(d) Non-scheduled flights
23:  ECAC, basing itself on a detailed study, completed in
September 1998 a review of its 1956 Multilateral Agreement on Commercial Rights
of Non -Scheduled Air transport in Europe24 which liberalized almost completely the
charter activities between those countries.  This review concluded that half of the
ECAC Member states adhered to the terms of the Agreement, that although the 1956
Agreement had been superseded in many instances for EC Member states by ECRegulation 2408/92 it still applied to areas not subject to this regulation and notably
to relations with third parties, and that no inconsistency with the EU Regulation had
been found.
D. A
RAB CIVIL AVIATION COMMISSION (ACAC)25
(a) Computer Reservation Services:  On 5 May 1999, the ACAC adopted a CRS Code
(Resolution 3-GA/9).  Its Members are invited either to include an appropriate text in
                                                     
22 See document S/C/W/59, paragraph 104 and ICAO Recommendations ATRP/9-3 and ATRP/9-6 in
Annex 2 of that document.
23 See document S/C/W/59, paragraph 112.
24 Respectively documents ECA 7695 dated 30 April 1956 and ECAC LEGTF/9 - report dated
18 September 1998.  Available at the Secretariat.
25 ACAC has 16 Members:  Bahrain, Egypt, Iraq, Jordan, Lebanon, Libya, Morocco, Oman, Palestine,
Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen.S/C/W/129
Page 8
the relevant bilateral agreements or to adopt any other appropriate course of action to
implement this code in accordance with thei r national regulations.  The text of this
resolution is not yet available in any of the WTO languages, therefore its provisions
cannot be summed up in the present paper.
(b) Landing rights:  A working group of th e Arab Civil Aviation Commission produced
in December 1998 a six-year program for progressively exchanging freedoms of the
air, beginning with air cargo and non-scheduled flights in 1999 and including a
dispute settlement mechanism.  This report26 is to be considered successively by the
Executive Council of ACAC, and by its General Assembly before being transmitted
for final decision to the Council of Arab Transport Ministers.
E. LATIN AMERICAN CIVIL AVIATION COMMISSION (LACAC)27
20. At its XIIth General Assembly, held on 5- 8 November 1996, LACAC adopted a non-binding
resolution "on criteria and directives for air transport policy matters" (A12-1) covering nearly all
aspects of air transport.  The text of this resolution appears in Annex 7.  Among various provisions
one may note in particular the following points:
(a) Computer Reservation Services:  Resolution A12-1 recommends the use of a standard
clause in bilateral or multilateral agreements and calls for adherence to the ICAO
code.
(b) Sales and commercial aspect28:  Resolution A12-1 recognizes the right of air carriers
to bring and maintain their own employees of any nationality subject to compliance
with the legislation of the host state.  It recognizes also the right of carriers to convert
and remit abroad (in any other country) without any restrictions the excess localearnings registered after local expenditures.  It recommends that airport charges
established in strong currencies obey the principle of non-discrimination established
by Article 15 of the Chicago Convention.  This resolution also formulates the wish
that ICAO continues to assign high priority to the commercial aspects of air transport
while developing continuous and efficient cooperation with the World TradeOrganization in particular as well as with other United Nations organizations which
participate in commercial aspects affecting international transport.
(c) Ownership and control:  Resolution A12-1 recommends that the concept of "Air
carriers ownership and control" should be re-analysed within ICAO in order to take
into account the regional and subregional community of interest and to ensure that the
nationality of the carrier designated is controlled by the legislation of the country that
made the designation.
(d) Landing rights:  Resolution A 12-1, while stating the attachment of LACAC to
bilateralism as an adequate means to reach agreement that guarantees real and
effective participation of the parties, considers that the process of integration and
economic cooperation of the Latin American region is a starting point for
                                                     
26 Document available at the Secretariat.
27 LACAC has 20 Members:  Argentina, Bolivia , Brazil, Colombia, Costa Rica, Cuba, Chile,
Dominican Republic, Ecuador, El Salvador, Guatemal a, Honduras, Jamaica, Mexico, Nicaragua, Panama,
Paraguay, Peru, Uruguay and Venezuela.
28 See paragraphs 31 to 36, 40 and 46 to 50 of document S/C/W/59.S/C/W/129
Page 9
multilateralism and calls the attention of its Members to the Andean group
experience.29
(e) Ground handling:  LACAC Resolution A12-1 considers that air carriers should be
permitted to choose freely among different alternatives of ground handling and to
combine or change their options, the only legitimate limitations being those related tosafety, protection or the fact that the level of activity of the airport does not reach the
minimum necessary to sustain economically several providers.  Prices of those
services should be based, according to the resolution, on costs and
non-discrimination.
F. C
OMMON MARKET FOR EASTERN AND SOUTHERN AFRICA (COMESA)30
21. COMESA began preparatory work on the phased li beralization of air transport with the first
phase in 1999 to be marked by the authorizati on of intra-COMESA scheduled passenger services
which do not exceed two daily flights, multiple de signation and elimination of capacity restrictions.
G. ECONOMIC AND MONETARY COMMUNITY OF CENTRAL AFRICA (EMCCA)31
22. In June 1998, EMCCA made a proposal for a sub-regional agreement on liberalization and
cooperation.  The proposal included a two-year program for progressively exchanging freedoms of the
air beginning with non-scheduled cargo flights.
H. OTHER REGIONAL ORGANIZATIONS OR REGIONAL AIR SERVICES AGREEMENTS
23. Recent years have seen a multiplication of regional initiatives aimed at the establishment of
common aviation markets based on liberalization of traffic rights.  Those agreements which were
sometimes drafted by preexisting regional organizations and sometimes were the results of sui generis
decisions are listed below with their Members.  Their provisions have been analysed in a detailed andcomparative manner in a table drawn by ICAO and which is contained in Annex 8.
(a) Andean Pact
Decision 297 of the Commission of the Cartagena Agreement formally established an “open
skies” air transport regime in June 1991 for Member States of the Andean Pact (Bolivia, Colombia,
Ecuador, Peru, Venezuela).
32
(b) Caribbean Community (CARICOM)
The Multilateral Agreement Concerning the Operation of Air Services Within the Caribbean
Community was concluded on 6 July 1996 by 14 Caribbean States (Antigua and Barbuda, Bahamas,
Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, Saint Kitts and Nevis, Saint
Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago).
                                                     
29 On this experience, see below point H a) and first column of the table contained in Annex 8.
30 COMESA has 22 Members:  Angola, Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya,
Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda, Seychelles, Somalia, Sudan,Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
31 EMCCA has six Members: Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea
and Gabon.
32 This agreement is anterior to the entry into force of the Air Transport Annex but is mentioned here
because it is quoted as a model by the Latin American Commission of civil Aviation (LACAC).S/C/W/129
Page 10
(c) Fortaleza Agreement
The Agreement on Sub-regional Air Services between Argentina, Bolivia, Brazil, Chile,
Paraguay and Uruguay was concluded on 19 December 1997, in Fortaleza, Brazil.
(d) Banjul Accord
This Memorandum of Understanding was concluded on 4 April 1997 to implement the
Yamoussoukro Declaration for six African States (C ape Verde, Ghana, Guinea Bissau, Sierra Leone,
Nigeria and the Gambia).
(e) CLMV Agreement
This agreement was concluded 14 January 1998 by Cambodia, Lao People’s Democratic
Republic, Myanmar and Viet Nam for sub-regional air transport cooperation.S/C/W/129
Page 11
ANNEX 1
LIST OF STATES FOLLOWING THE ICAO CRS CODE OR HAVING
REGULATIONS/OPERATIONS COMPATIBLE/ CONSISTENT WITH IT
(source:  ICAO)
As of 14 September 1999, 31 States either follow the ICAO CRS Code or have
regulations/operations which are compatible/consistent with it:
Antigua and Barbuda
AustriaBelgium
Botswana
Cameroon (invokes 12 c) dev.  country
exemption
CanadaCuba
Denmark
Ecuador (invokes 12 c) dev.  country
exemption)
EritreaFiji
Finland
France
Germany
GreeceGuatemalaIreland
ItalyJordan
Kuwait
Luxembourg
Netherlands, Kingdom of
PortugalRomania
Russian Federation (except for Art.  6g),
sub-paragraph i):  no time limit on subscriber
contracts)
Slovak RepublicSpain
Sweden
Thailand
United Kingdom
United StatesS/C/W/129
Page 12
ANNEX 2
ARTICLE 83 BIS OF THE CHICAGO CONVENTION AND
LIST OF STATES WHICH HAVE RATIFIED THE PROTOCOL
RELATING TO ARTICLE 83 BIS
ARTICLE 83 BIS, AN AMENDMENT TO THE
CONVENTION ON INTERNATIONAL CIVIL AVIATION
(In force 20 June 1997)
Transfer of certain functions and duties
a) Notwithstanding the provisions of Articles 12, 30, 31 and 32(a), when an aircraft
registered in a Contracting State is operated pursuant to an agreement for the lease, charter or
interchange of the aircraft or any similar arrangement by an operator who has his principal place of
business or, if he has no such place of business, his permanent residence in another Contracting State,the State of registry may, by agreement with such other State, transfer to it all or part of its functions
and duties as State of registry in respect of that aircraft under Articles 12, 30, 31 and 32(a).  The State
of registry shall be relieved of responsibility in respect of the functions and duties transferred.
b) The transfer shall not have effect in respect of other Contracting States before either
the agreement between States in which it is embodied has been registered with the Council and made
public pursuant to Article 83 or the existence and scope of the agreement have been directly
communicated to the authorities of the other Contracting State or States concerned by a State party to
the agreement.
c) The provisions of paragraphs (a) and (b) above shall also be applicable to cases
covered by Article 77.
STATES WHICH HAVE RATIFIED
THE PROTOCOL RELATING TO ARTICLE 83 BIS
(Status as of 31 March 1999)
Antigua and Barbuda 17 October 1988
Argentina 12 August 1987
Australia 2 December 1994
Austria 25 April 1983
Bahrain 7 February 1990
Bangladesh 2 September 1988Barbados 5 October 1981
Belarus 24 July 1996
Belgium 23 September 1983
Belize 24 September 1997
Bosnia and Herzegovina 9 May 1997Brazil 30 October 1990
Bulgaria 7 July 1981
Burkina Faso 15 June 1992
Burundi 10 October 1991Canada 23 October 1985
Chile 28 June 1982
China 23 July 1997
Colombia 19 December 1995
Croatia 6 May 1994
Cuba 17 May 1984Cyprus 5 July 1989
Czech Republic 15 April 1993
Denmark 22 December 1983
Ecuador 20 June 1991
Egypt 11 September 1981El Salvador 8 April 1998
Eritrea 27 May 1994
Estonia 21 August 1992
Ethiopia 25 June 1981S/C/W/129
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Fiji 21 September 1992
Finland 18 December 1991
France 27 August 1982
Germany 19 October 1983
Ghana 15 July 1997Greece 25 September 1984
Grenada 8 November 1990
Guatemala 26 April 1983
Guinea 1 October 1998
Guyana 2 May 1988
Haiti 21 September 1984
Hungary 27 May 1981Iceland 9 May 1990
India 5 August 1994
Indonesia 29 July 1987
Iran, Islamic Republic of 17 June 1994
Iraq 4 March 1982Ireland 29 March 1990
Israel 25 February 1983
Italy 29 November 1985
Japan 26 June 1998
Jordan 30 June 1993Kenya 13 October 1982
Kuwait 24 May 1995
Lebanon 14 April 1983
Libyan Arab Jamahiriya 28 October 1996
Luxembourg 1 October 1986Malawi 13 December 1990
Maldives 30 October 1997
Mali 11 January 1984
Marshall Islands 6 April 1994
Mauritius 6 August 1990
Mexico 20 June 1990
Monaco 9 May 1991Morocco 29 January 1987
Nauru 28 July 1994
Nepal 9 June 1997
Netherlands 5 November 1981
New Zealand 17 March 1993Niger 8 April 1988
Norway 20 September 1995Oman 11 March 1981
Pakistan 27 May 1987
Panama 3 August 1982
Papua New Guinea 5 October 1992
Philippines 31 January 1984Portugal 3 March 1998
Qatar 8 March 1990
Republic of Korea 23 April 1981
Republic of Moldova 20 June 1997
Romania 29 August 1996
Russian Federation 3 February 1988
Samoa 9 July 1998San Marino 3 February 1995
Saudi Arabia 25 June 1991
Seychelles 23 September 1983
Singapore 7 May 1991
Slovakia 20 March 1995South Africa 21 September 1998
Spain 11 July 1983
Sweden 13 July 1987
Switzerland 21 February 1985
Tajikistan 23 July 1996The former Yugoslav
Republic of Macedonia 23 March 1998
Togo 24 April 1987
Trinidad and Tobago 31 January 1991
Turkey 13 November 1992Turkmenistan 14 April 1993
Tunisia 29 April 1985
Uganda 10 March 1982
Ukraine 11 August 1995
United Arab Emirates 18 February 1987
United Kingdom 16 March 1981
United States 15 February 1982Uruguay 7 January 1982
Uzbekistan 24 February 1994
Vanuatu 31 January 1989
Viet Nam, Socialist
Republic of 7 February 1996Zambia 28 January 1993S/C/W/129
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ANNEX 3
AGREED CONCLUSIONS AND RECOMMENDATIONS OF THE UNCTAD EXPERT
MEETING ON AIR TRANSPORT SERVICES HELD ON 21-23 JUNE 1999
TRADE AND DEVELOPMENT BOARD 23 June 1999
Commission on Trade in Goods and Services, and Commodities
Expert Meeting on Air Transport Services:  Clarifying issues to Define the Elements of the Positive
Agenda of Developing Countries as regards both the GATS and Specific Sector Negotiations of
Interest to Them
Geneva, 21-23 June 1999
Agreed conclusions and recommendations on agenda item 3
The Expert Meeting reached the following conclusions on issues which should be taken into account
in building the positive agenda for developing countries in the air transport sector:
Progressive liberalization under current arrangements
1. The current Annex on Air Transport in the GATS rules out its application to traffic rights and
services related to traffic rights.  The Annex does, however, list three services related to air transportto which the rules of the GATS do apply.  Commitments so far in these three sectors are limited.
2. With a view to identifying possible benefits from further commitments in the areas already
listed in para.  3 of the Annex, GATS signatories are urged to review their commitments and to
consider the options for including these sectors in their packages of offers and requests.
3. In a number of other areas, the application of the GATS may be unclear.  There is a need to
clarify the coverage under the existing wording by considering a more detailed classification of the air
transport sector, including related activities.  The coverage of the agreement can then be tested more
easily.
4. Options for extending the coverage of items similar to those now listed in para.  3 of the
Annex could then also be considered.
5. This work, involving cooperation among IATA, ICAO and WTO, should include the
comparison of the sectoral classifications now used in the GATS with those in common use in the
industry.
Considering ways of extending the coverage
6. Options for the inclusion of air transport in the GATS should continue to be explored in order
to understand more completely the role that the GATS  can play in resolving the issues outlined above.
In order to have an impact on the debate on air transport in the WTO Council for Trade in Services,
participants must have an appreciation of the options and their implications.
7. Under the GATS, WTO members may claim exemptions from MFN for some parts of the
sector.  Commitments on market access and national treatment apply only to those parts of the sectorthat are bound in each country s schedules.
8. In preparing for the review of the Annex, members might wish to explore, among others, the
following options:S/C/W/129
Page 15
(a) It may be the case that a large number of economies wish to exclude, in particular,
mode 1 (that is, supply across a national border, which means that the airline provides
the service from its home base).  If so, the current Annex could be amended to:
(i)  specify that the exemption applies only to this mode;  and
(ii) make clear which elements of the activity are included (related only to traffic
rights, but to be defined more precisely as a consequence of the work done on the
definition of the sector);
(b) Mode 2, which refers to consumption abroad, may be less controversial, but its scope
has to be tested in the negotiation process;
(c) Mode 3, which refers to commercial presence, is increasingly common.  Coverage of
this mode by the GATS adds to the adjustment options of airlines based in developed
economies and adds to the modes of participation by developing economies.  There is
evidence that rules on establishment that are applied in the bilateral system arebecoming more flexible and more open.  Scheduling this mode of delivery would
recognize this fact and provide the benefits of the GATS, in terms of MFN, market
access and national treatment;
(d) Commitments with respect to the movement of persons under mode 4 would also be
relevant;
(e) This approach to treatment of air transp ort would have to consider the consistency
between the GATS approach to defining national identity and that applied in the
bilateral air transport system.  Dealing with competition policy issues also requiresthe identification of the home base of the airline, since it will be important to be able
to identify a jurisdiction in which to take a complaint.  The flexibility already evident
in the definition of carrier identity in the bilateral agreements indicates that this issue
need not be a significant constraint.
9. Members may also wish to consider inclusion under paragraph 3 of the Annex of additional
specific air transport services and activities as well as reducing the list of specific services, activitiesand/or traffic rights under paragraph 2 of the Annex taking into account the results of work set out in
paragraphs 2 to 5 above.
Treatment of developing countries
10. In recognition of the concern expressed by developing countries on the need to improve their
participation in air transport markets on a level playing field, a number of suggestions have been
developed by ICAO, IATA and specialised regional  organizations and member States for mechanisms
to achieve that goal.  These are transitional measures.  It is recommended that these mechanisms be
studied and considered.  The specialized agencies and organizations responsible for air transportshould be invited to take part in the development and management of these options.
11. The ICAO secretariat has developed a number of recommendations for mechanisms in which
this support could be provided.  These refer to the terms of market access, the application of criteria
on ownership and control, processes of slot allocation, and doing business matters.  Theserecommendations should be re-examined.  Implementation of these options is a matter for individual
economies.S/C/W/129
Page 16
12. There are in addition important contributions to  capacity-building, for example, with respect
to competition policy, standards (including those related to environmental issues, such as noise and
industry doing-business standards) and human resource development.  It is recommended that
cooperation for these purposes can be pursued in a number of modes, including under the auspices of
ICAO and IATA where relevant.
13. Consideration of the application of the GATS to air transport should also examine its
implications for special provision for developing country participation.  Article IV obliges members
to facilitate the increasing participation of developing countries in world trade in services through
negotiated specific commitments, such as those relating to access to technology on a commercial basis
and improvement of access to distribution channels and to information networks.  It would be useful
to evaluate how Article IV has worked in general and its possible application to the air transportsector.
14. Article XXV also refers to the scope for the WTO Council for Trade in Services to provide
technical assistance from the WTO secretariat.  This will be valuable in the context of making choices
about documenting commitments if and when the air transport exemption is removed.
Dealing with competition policy and other regulatory issues
15. It is important to deal with competition policy problems and with the application of domestic
regulation which can lead to demands for conflict resolution.  Difficulties have been experienced inconflict resolution in the bilateral system.  Conflicts could arise from commercial decisions by airlines
or by government practices which have a direct effect on access, for example, or which have an
indirect effect, for example, as a result of sanctioning some form of airline behaviour in the
marketplace.  While a multilateral consensus on competition policy issues is being pursued, other
options for arrangements which are specific to air transport could be pursued while safeguarding theindustry cooperation needed to set standards and maintain interlining world-wide so as to preserve the
integrity of the global network.
16. GATS has provisions which can be used to deal with competition and regulatory issues.
Various article s are relevant, but especially those on domestic regulation (VI), monopolies and
exclusive service suppliers (VIII), business practices (IX), safeguard measures (X) and subsidies
(XV).  These provisions however can only be invoke d by States and in situations where States are
involved, be it directly through their action (subsidies, safeguards, domestic regulation) or indirectly
through their jurisdiction over services suppliers, monopolies or exclusive services suppliers.   These
provisions, furthermore, have generally not been tested or developed, and further attention could be
given to ways of strengthening the contribution of the GATS through these articles.
17. The Reference Paper on Basic Telecommunications can also be examined as a model for how
competition policy issues in particular could be dealt with in air transport.  This paper refers to
competitive safeguards (eg anti-competitive cross-subs idies, denial of access to services), rules on
interconnection (in air transport, access to infrastructure), treatment of universal service obligations,
transparency, rules on the allocation of scarce resources such as frequencies (in the air transport case,landing slots or gates) and the value of having regulators who are independent of service providers.
Similar work on other transport modes should also be examined.
18. An important suggestion by ICAO, based on its earlier work, was for States to use a safeguard
mechanism on anti-competitive practices, including a dispute settlement and conciliation processwhich could also be applied at enterprise level.
19. ICAO can work with the WTO on clarifying various regulatory practices.S/C/W/129
Page 17
20. States are invited to implement expeditiously their National Communication Navigation
Surveillance and Air Traffic Management Systems (CNS/ATM), which have been included in their
regional air navigation plans, so as to alleviate airport and airspace congestion and to facilitate reform
of regulatory policy.
The regional route to reform
21. The number of active regional arrangements is increasing.   There are at least 11 such
arrangements in various stages of development.
22. A regional approach to reform has a number of advantages, such as developing cooperation
among participants, competition within the region, the development of service to subregions, theconsolidation and restructuring of airlines, greater efficiency within the region, contribution to
competitiveness on routes outside the region and so on.  A regional approach can also affect market
access.
23. The GATS provisions in Article V apply to regional arrangements only when they are part of
a larger structure which has substantial sectoral coverage.  Developing countries do have some
flexibility in the application of regional arrangements, but it may not be sufficient to support
arrangements which apply to one sector.  Some of the existing air transport arrangements are part of
larger economic integration arrangements which are covered by Article V.  In such cases the
application of the GATS to air transport would impose disciplines on these arrangements.
24. There is not yet sufficient information to make a judgement about the effects of these
arrangements.  It is recommended that further work be completed on the costs and benefits of the
regional approach to reform.  Regional arrangements can be characterized by their rules (eg
transparency, accession, terms of market access for non-members, human resource development, etc),and the links between these rules and economic outcomes can be analysed.  The results could be used
to design some principles for this route to reform in the absence of GATS rules, or to facilitate the
reporting of such arrangements to the WTO Council for Trade in Services if GATS does apply.
Preparation for negotiations
25. UNCTAD in collaboration with ICAO, its regional agencies and other relevant international
and regional bodies should work with developing countries on the development of these options and
the construction of the positive agenda.S/C/W/129
Page 18
ANNEX 4
CHAIRMAN'S SUMMARY OF THE OECD WORKSHOP ON REGULATORY REFORM
IN INTERNATIONAL AIR CARGO
(Paris, 5-6 July 1999)
1. Discussions on Regulatory Reform in International Air Cargo Transportation took place in
Paris on 5-6th July 1999.  Participants agreed that an open international air cargo market would be
beneficial to both users and providers of air cargo transport services and that continued efforts shouldbe made to achieve this goal.
2. Participants in the workshop were air transport policy makers from OECD Member countries,
representatives of the air cargo industry, air shippers, and international governmental and non-
governmental organisations involved in air transportation.  Mr.  Hans de Jong (Netherlands) chaired
the meeting, assisted by Mr.  F.  Bachelet (France) Mr.  J.  Kerr (Australia) and Mr.  J.  Shane (United
States).
3. The Workshop provided a timely opportunity to review the functioning of the air cargo
market and its surrounding web of regulatory measures in view of the forthcoming GATS 2000
discussions.  The Workshop participants also note d that the OECD Secretariat report (Regulatory
Reform in International Air Cargo Transportation) was very comprehensive.
4. The Delegation of Japan noted that there was no clear mandate for this report nor for any
further work that may be recommended at the end of this meeting.  This point was recognised by other
Delegations, and there was a clear understanding that this was an informal meeting and that any
recommendations for further work that may be arrived at would eventually have to be considered by
the relevant bodies of the Organisation.
5. Participants discussed the structure, performance and long-term outlook of the air cargo
industry.  They drew upon OECD economies’ experience of the existing legal, economic and
technical regulations as they apply to air cargo transportation, and examined their effects on
performance.  Delegates also explored governmental policy options to improve economic
performance and to enhance consumer benefits through further reform efforts.
A. T
HE AIR CARGO INDUSTRY :  CURRENT SITUATION AND LONG TERM OUTLOOK
6. Participants agreed that the air cargo industry is now more akin to logistical services, driven
more by the needs of shippers and cargo owners than those of the service providers and a need to be
able to move with the market.  This implied that service providers face increased demand for
door-to-door transportation services which ensure timely delivery.
7. Participants stressed that air cargo transportation was an integral part of the transport chain
and should therefore not be viewed in isolation.  While the differentiation between the types of aircargo service providers (combined carriers, all-cargo and integrated carriers) was appropriate in
general discussion of the industry, all competed for the same market and were all similarly affected by
access issues, including access to the principal airports.
8. However, it was pointed out that the three categories of service providers operated under
different regulatory mechanisms.  Any regulatory  reform should take into account the need toS/C/W/129
Page 19
establish a regime which enables all categories of service providers to respond to the needs of the
market, which is increasingly driven by shippers and cargo owners.
9. Traffic forecasts highlighted that air cargo carried in dedicated aircraft was growing faster
than that carried in combined cargo/passenger airc raft.  The growth in the total air cargo market is
expected to be around 5 to 7%, with the highest growth likely to be in Latin America and to a lesserdegree in the Pacific, Asia and Europe/North America.
10. The trend towards alliances in the aviation sector was at least in part attributed to the lack of
freedom for carriers to provide services of their choice to meet the needs of their customers.  This was
one area of regulation which would benefit from attention in order to facilitate the provision of
seamless, one-stop, door-to-door services.  Participants noted the usefulness of eventual convergence
of competition policy in this area.
11. In addressing multimodal transport issues, shippers voiced the need for carriers to be able to
provide a broad choice of transport services designed to meet their needs, and without encumbrance
from unnecessary regulations.
B. L
EGAL , ECONOMIC AND TECHNICAL REGULATIONS APPLIED TO AIR CARGO SERVICE
PROVIDERS
12. The meeting reviewed inter alia  the effects of market/infrastructure access, pricing, and
customs/documentation issues and safety aspect s on performance and competition in the sector.
13. There was agreement that pricing had been substantially liberalised, and therefore did not
constitute a major issue.  However, ownership and control questions were considered to be obstacles
to new entries and competition in the sector, and was an area where additional investigation may be
fruitful.
14. The wet leasing of aircraft was still considered as important and should not be ignored in a
continuing review of the regulatory frameworks.
15. In respect of multimodal transport operations, th ere were still significant barriers to the
licensing of such activities, principally because separate licences are required for each transport mode.
Some concerns were expressed that these barriers create undue constraints for the provision ofservices combining air transport with trucking, shippi ng and rail services.  Participants considered that
a intermodal licence was not appropriate.
16. Customs procedures and documentation was considered to be a serious regulatory barrier.
Participants noted that actions such as the Express Guidelines, established recently by the World
Customs Organisation and incorporated into the draft revised Kyoto Convention, and consideration of
the possibility of including a facilitation package in the next round of WTO negotiations represented a
significant step forward.
17. Ground handling services (as one of a range of “doing business” activities) was identified as a
crucial element to the provision of quality services.  One Delegation noted that in various
investigations on barriers to the provision of ground handling services no arguments had ever been
found to support those restrictions, and this appeared to be one area which could be addressed by the
OECD.
18. Safety, security and environmental standards are clearly issues which were the province of
ICAO and duplication of work on these aspects has to  be avoided.  Participants strongly supported
ICAO to further strengthen its successful work in these areas.S/C/W/129
Page 20
19. Participants noted the existing market access regulations and the still predominant bilateral
system in the air cargo sector.  While questions were raised as to whether this regime was still
sustainable because of its potential drawbacks on the effective and efficient provision of air cargo
services, there was general agreement that regulatory improvements, whether gained through bilateral
or multilateral arrangements were preferable to a standstill.  It was observed that the growingprevalence of regional “open sky” agreements would eventually reach a critical mass that would force
change.
20. While some concerns were expressed regarding the differentiation of regulatory frameworks
for the three types of service providers, a number of delegations noted that recent reviews of aviation
policy had resulted in simple and effective differ entiated policies to cover all-cargo, combined and
integrated operations.
C. A 
POSSIBLE WAY FORWARD FOR GOVERNMENT POLICIES
21. Participants took note of the web of legal, economic and technical regulations applied to air
service providers described in the OECD Secretariat report on Regulatory Reform in International Air
Cargo Transportation.  Participants encouraged the OECD to draw on the findings of this report to
better inform the policy debate on the impact of regulatory, structural and technical change in the air
cargo industry.
22. Given the specificities of air cargo transportation there was agreement that the international
regulatory framework for air cargo transportation, at present closely linked with passenger
transportation, may need a review in order to see how best to arrange matters in order to make it better
for service providers to effectively respond to newly emerging commercial practices.  Participants
reiterated that any change resulting from the review  had to apply to all industry players.  The ultimate
objective should be to develop a regime which would be multilateral in scope.
23. It was noted that while combination carrier operations are predominant in all OECD Member
countries, only certain countries also operate strong all-cargo and integrated services.  Therefore,
participants were concerned that all-cargo and integrated services would be the only or major
beneficiaries from any regulatory reform process, and combi aircraft (both belly cargo and main deck)would not benefit appropriately.  However, it was noted that capacity liberalisation would also benefit
combination carriers.  There was broad agreement that any regulatory reform process would have to
be beneficial to all participants in the logistical chain.
24. It was noted that these investigations, of which the most important one is the one related to
market access, had not necessarily to end up with the recommendation /elaboration of a total package
but, as long as there was a clear commitment for further development, could be undertaken step by
step.
25. The Japanese Delegation expressed its view that, in addition to the discussion as in this
document, serious concern has to be raised over the possibility of adverse effects including oligopoly
resulting from liberalisation as described in the OECD Secretariat report when liberalisation is
promoted without safeguards under the constraints of  infrastructure.  This view was shared by some
of the participants.
26. Special attention was devoted upon the division of labour among the institutions dealing with
air transport.  It was stressed that ICAO’s expertise in the area of setting safety, security and
environmental standards should be fully recognised.
27. The OECD’s involvement in air cargo was referred to as setting the stage for like-minded
countries to go ahead with their reform of the ai r cargo regime.  Moreover, the OECD’s work couldS/C/W/129
Page 21
prepare the groundwork for an initiative in the WTO framework.  At the same time participants noted
that GATS will most likely leave certain questions affecting traffic rights and certain services directly
related to the exercise of traffic rights unanswered.  These questions may need work within the
OECD.
28. In conclusion, the Workshop on Regulatory Reform in International Air Cargo Transportation
recommended to the Secretary General to examine how the OECD, while safeguarding existing
liberalisation, could provide momentum to the ongoing discussions on regulatory reform in
international air cargo transportation through:
• Studying how to expand liberalisation in scale and scope in particular in
respect to market access, including ownership, and ancillary services.
• Determining which aspects of facilitation should be pursued as a matter of
priority.
• Looking at appropriate competition regimes.
• Considering an outline of draft arrangements to achieve the above on a
multilateral basis.
• Considering in which forum such ideas can best be advanced.
29. Participants in the Workshop agreed to inform  their governments about the outcome of the
meeting and invited the Secretary-General to pres ent such work, in the not too distant future, to
another workshop for consideration by governments, industry and transport users.S/C/W/129
Page 22
ANNEX 5
APEC AIR SERVICES GROUP ON GUIDING PRINCIPLES FOR DEVELOPING
AND IMPLEMENTING OPTIONS FOR COMPETITIVE AIR SERVICES
WITH FAIR AND EQUITABLE OPPORTUNITY
The ASG recognised that when proceeding with th e discussion on options to be developed and
how they should be implemented, fundamental guiding principles addressed in the Bogor
Declaration, Osaka Action Agenda and other relevant documents should be kept in mind .
Prioritisation of Options
The eight options were prioritised under three categories, i.e.  high, medium and low priority, based
on the ease of implementation for each of the options.
Recommendations on Options
The ASG reached consensus on the following prioritisation and recommendations for the eight
options:
Option 1:  Air carrier ownership and control
Recognising that cross-border investments can pr omote economic cooperation and competition and
benefit both carriers and consumers, the ASG:
(A) noted the results of the January 1998 survey on APEC economies’ policy and practices on
ownership and control of their designated air carr iers at Attachment I.  The survey showed that
most economies required national airlines to be substantially owned and effectively controlled by
their own nationals, and that with regard to thei r bilateral partners, the substantial ownership and
effective control clause was prevalent in most bilateral air services agreements;  and
(B) noted the recommendation by the ICAO Air Transport Regulation Panel in June 1997:
That States wishing to accept broadened criteria for air carrier use of market access in the
bilateral or multilateral air services agreements agree to authorise market access for adesignated air carrier which :
(a) has its principal place of business and permanent residence in the  territory of the designating
State ;  and
(b) has and maintains a strong link to the designating State.
(C) recommended that APEC economies give cons ideration to relaxing the ownership and
control requirements when considering designation made by partners under bilateral air services
arrangements on a case-by-case basis.  The ICAO Air Transport Regulation Panel’s formulationcould be used as a guide/option.
This recommendation is categorised as medium priority.
Option 2:  Tariffs
The ASG recommended that APEC economies support the removal or progressive easing of tariff
regulations through the bilateral air services arrangements where this promotes competitive pricing toS/C/W/129
Page 23
the benefit of consumers.  A double disapproval regime could be considered.  Consideration could
also be given to the elimination of formal filing requirements.  Where filing is required, electronic
filing could be considered.
This recommendation is categorised as medium priority.Option 3:  Doing Business Matters
The ASG recognised that the maintenance and development of competitive air services is often
dependent on minimising restrictions and discriminatory practices on "doing business", for example,
ground handling arrangements, currency conversion and remittance of earnings, employment of non-
national personnel, sale and marketing of air services products and access to computer reservationsystems.
The ASG recommended that APEC economies wo rk towards removing impediments to "doing
business" matters whether under bilateral agreements or in domestic laws and by-laws, using as
guidance the model clauses developed by the ICAO Air Transport Regulation Panel, or through othermeans.
This recommendation is categorised as high priority.Option 4:  Air Freight
Noting that the current framework of bilateral agreements has generally worked well to provide the
necessary capacity and route alternatives for the carriage of air freight;  and
recognising that the facilitation and enhancement of air freight services and related activities can
assist in:
promoting trade by APEC member economies;  andcomplementing broader efforts being made by APEC  member economies to better facilitate trade
within the region;
the ASG recommended that APEC economies progressively remove restrictions in the operations of
air freight services while ensuring fair and equitable opportunity for the economies involved.  One
means of doing so would be to include, where appropriate, provisions for additional flexibility and
capacity for air freight services in air services arrangements between APEC economies.
The ASG also reached general consensus that adequate physical infrastructure, flexibility in
intermodal operations and implementation of business-friendly procedures are important to the
development of air freight services.
The ASG agreed to categorise this recommendation as high/medium priority, as this option involves
elements on Doing Business Matters (Option prioritised as high) and Market Access (Option
prioritised as medium).
Option 5:  Multiple airline designation
Noting that the growth in the number of airlines  providing services within the region adds to
competition and provides greater choice for consumers, the ASG recommended that APEC economies
include, as appropriate, multiple airline designation in their bilateral air services agreements.S/C/W/129
Page 24
This recommendation is categorised as high priority.
Option 6:  Charter services
The ASG recommended that APEC economies allow and facilitate the operation of both passenger
and freight ad hoc charter services which supplement or complement scheduled services, having
regard to the principle of reciprocity, as appropriate.
This recommendation is categorised as medium priority.Option 7:  Airlines’ cooperative arrangements
The ASG recommended that APEC economies facilitate cooperative arrangements such as code-
sharing including third-country code-share and code-share over domestic sectors, joint operations and
block space arrangements, where it can be shown to be of benefit to consumers and airline(s), and
where there are no anti-competitive effects, and where fair and equitable opportunity for the
economies involved can be ensured.
This recommendation is categorised as high priority.Option 8:  Market access
The ASG reached general consensus to recommend that APEC economies take an approach to
progressively achieve more liberalised market access under their bilateral air services arrangements,
while ensuring fair and equitable opportunity for the economies involved.
This recommendation is categorised as medium priority.
Follow-up
The Air Services Group discussed the importance of having some mechanism to monitor and report
on the progress of implementation of the eight options across APEC economies.  The Group agreed
that such issues would be for the Transportation Working Group to decide.
(26 February 1998)S/C/W/129
Page 25
ANNEX 6
ECAC RECOMMENDATION ON LEASING OF AIRCRAFT
RECOMMENDATION ECAC/21-1
RECOGNIZING
that the leasing of aircraft is a common practice in the airline industry;
that a flexible approach to leasing can bring economic benefits to air carriers and consumers and help
air carriers to meet market needs better;
that the maintenance of satisfactory safety standards is the main priority;
that all Member States are bound by the provisions of the Chicago Convention and its relevantannexes, that some Member States are also bound by EC Council Regulation 2407/92 on the licensing
of air carriers which contains provisions on leasing and that the conditions which Member States
apply with regard to leases must be consistent w ith their national and international legal obligations;
that Member States have imposed various conditions and limitations on the use of leased aircraft;
that Member States consider that there is a need to harmonise policy on leasing to the highest possibledegree;
that the regulations and practices of Member States concerning leases should be transparent and
objective and contribute to an orderly development of civil aviation;
that, in the case of a wet lease, passengers and other users are entitled to expect an equivalent standard
of safety and service from th e lessor to that which the lessee would provide, and to be informed of theidentity of the actual air carrier which is operating the flight;
that, in the case of a dry lease, safety functions and duties of the State of Registry that can more
adequately be discharged by the State of the Operator should normally be transferred to the authorities
in the State of the lessee, and notes that Article 83 bis of the Convention, which provides for a transfer
where a lease exists, has not yet entered into force;that leases should not be used as a means to circumvent applicable laws, regulations or international
agreements;
that exchange of information between Member Stat es in matters concerning leasing is important, in
particular in developing a common approach with regard to safety and in the context of the work of
the JAA in developing a data base within the framework of the ECAC Action Programme for the
Safety Assessment of Foreign Aircraft (SAFA);
that work in progress in Europe is expected to lead to common rules applied in many Member States,which could form the basis for a uniform and more liberal leasing regime for airlines of these
countries,
THE CONFERENCE HAS ADOPTED THE FOLLOWING RECOMMENDATION  concerning
leases of aircraft between air carriers:
For the purposes of this recommendation a lease is understood to be a contractual arrangement
whereby a properly licensed air carrier gains commercial control of an entire aircraft without transfer
of ownership.
Member States may apply different rules to leases between air carriers licensed by them of aircraft on
their national register or of aircraft registered within the European Economic Area.
A dry lease is understood to be a lease of an aircraft where the aircraft is operated under the AOC of
the lessee.  It is normally a lease of an aircraft without crew, operated under the commercial control ofthe lessee and using the lessee's airline designator code and traffic rights.S/C/W/129
Page 26
A wet lease is understood to be a lease of an aircraft where the aircraft is operated under the AOC of
the lessor.  It is normally a lease of an aircraft with crew, operated under the commercial control of
the lessee and using the lessee's airline designator-code and traffic rights.
The provisions applying to wet leases are also intended to apply to leases with a partial crew
(sometimes known as damp leases) and short notice wet leases (sometimes known as sub-charters).
1. For the purpose of ensuring safety and liability standards and compliance with any applicable
economic conditions, all leasing arrangements entered into by air carriers should receive prior
approval from the appropriate authorities.
2. Before granting approval, authorities should obtain the following information:
— type of lease
— names of the parties to the agreement
— start date and duration of lease
— number and type of aircraft, registration mark(s) and country of registration, noise
certificate(s) where appropriate
— evidence of passenger and third party insurance
— name of air carrier under whose AOC the aircraft will be operated and maintained
— name of air carrier with commercial control of the aircraft.
Member States may also require additional information, for example concerning the reason for the
lease and the planned operations, to the extent that such information is necessary to ensure
compliance with their national rules and international obligations.
3. In the case of a dry lease, all or part of the functions and duties in respect of the leased aircraft
under Articles 12, 30, 31 and 32 (a) of the Chicago Convention should normally be transferred to theauthorities of the lessee in accordance with Article 83 bis.  For this purpose it is recommended that all
Member States ratify this Article as soon as possible to enable it to enter into force.
4. In the case of a wet lease, in addition to paragraphs 1 and 2:
a)  Before granting approval to an air carrier to lease in an aircraft, an aeronautical authority
shall be satisfied, if necessary by means of an audit, that the lessor meets safety standardsequivalent to those which its own airlines are required to meet under their AOC.
b) Furthermore, an air carrier shall only be permitted to wet lease in an aircraft of a type
not included in its own AOC if the authority considers that this will not affect the
maintenance of safety standards equivalent to those which the lessee is required to meet underits own AOC.
c) A lessor may not fulfil its obligations towards the lessee with capacity wet leased in
from a third carrier unless this has been approved by the aeronautical authority of the lessee.
d) Approval for the use of wet-leased aircraft should not be given for an unlimited
period of time.
e) The information listed in paragraph 2 should also be obtained before approval is
granted for short notice leases.  However, alte rnative arrangements for the prior approval of
such leases may be implemented by the appropriate aeronautical authorities.  Such alternative
arrangements might include, for example, the establishment of a list of air carriers approved
by its national aeronautical authorities from whom an air carrier may lease an aircraft at short
notice to meet an unforeseen need for a short period.S/C/W/129
Page 27
f) The use of wet-leased aircraft should not be used as a means to circumvent applicable
laws, regulations or international agreements.
g) Aeronautical authorities should respond promptly to requests from their counterparts
in other Member States for information about leases.
h) Consumers should be informed, as soon as practicable and in any event prior to
boarding, of the actual operator if a flight is to be operated with a wet-leased aircraft.
i) Member States may also, for safety and/or economic reasons, and where this is
compatible with national and international regula tions, choose to ensure that air carriers are
not excessively dependent on wet leased aircraft registered in another State.
5. Member States are also urged to co-operate in the provision of information concerning leases,
in particular in connection with the ECAC Action Programme for the Safety Assessment of Foreign
Aircraft (SAFA).S/C/W/129
Page 28
ANNEX 7
LACAC RESOLUTION A12-1 ON CRITERIA AND DIRECTIVES
FOR AIR TRANSPORT POLICY MATTERS
WHEREAS  the complexity of the civil aviation activity claims for the coordination of civil aviation,
economic and international relations policies inside each LACAC member State;
WHEREAS  to keep up with the exigencies of the so cio-economical and technological changes, the
need to consolidate a flexible position which permits the constant updating of directives and revision
in due time of its objectives;
WHEREAS  it is necessary to articulate a solid base of the essential elements of an air transport
policy, because, on the contrary, it is at risk that other multilateral organizations may do;
WHEREAS  it is of priority that the region counts with its own criteria for the establishment of a
commercial policy.
THE XII LACAC ASSEMBLY
RESOLVES  to promulgate the attached document as guidance of the LACAC member States on
criteria and directives in Air Transport Policy matters.
REQUESTS  the Executive Committee and its Subordinate Bodies that, depending on the evolution of
this activity, periodically revise and update these criteria.
ANNEX TO RESOLUTION A12-1
ON CRITERIA AND DIRECTIVES FOR AIR TRANSPORT POLICY MATTERS
CRITERIA FOR THE ESTABLISHMENT OF A LACAC
COMMERCIAL AIR TRANSPORT POLICY
I. PRESENT REGULATION
LACAC reaffirms the principles and objectives contained in the Chicago convention.
LACAC recognizes the benefit and importance of the International Air Services Transit Agreement
and invites member States which have not yet adhered to (to so as soon as possible in benefit of the
air transport world-wide system and its global application.
At the same time and notwithstanding if the State has or has not adhere to the Air Traffic Agreement.
LACAC recognizes what is stipulated in the bila teral agreements which may grant or not first and
second freedom rights to the designated airlines.
On the other band.  exhorts all ICAO member States which have adhered to said Agreement to
comply with the compromise assumed making no discrimination.S/C/W/129
Page 29
II. CONTENTS OF THE FUTURE REGULATION
OBJECTIVES
LACAC considers that air transport future regulation must safeguard the right of each member State
to guarantee the creation of enterprise which op erate within the international commercial contour.
It reaffirms that the principles contained in the Chicago Convention on sovereignty, non-
discriminatory measures, interdependence, harmonization and cooperation, as well as safe and orderly
development of international civil aviation and equal opportunities, constitute the appropriate frame
for future arrangements on market access.
Therefore, LACAC member States look forward to achieve, in their relations with other States, a
regulatory frame which will permit all carriers develop within an environment of righteous and even
competence, for which a prudent and equal handling of the capacity offered and of the tariff regime
could be necessary to avoid market distortions  and safeguard the users and operators rights.
OWNERSHIP AND CONTROL OF AIR CARRIERS
LACAC considers necessary that the concept "air carr iers ownership and control" must be re-analized
within ICAO, considering the regional and subreg ional "community of interests and that the
nationality of the carriers designated be controlled by the legislation of the country which made the
designation.
STRUCTURAL IMPEDIMENTS
LACAC recognizes the work of the IATA Schedule Coordination Conferences as a possible means to
solve temporarily the problem of schedule services slots in congested aerodromes and considers not
practicable to pretend world-wide regulation on this matter.
Accordingly, LACAC considers of first prior" achievement of effective progress in the establishment
of a legal and institutional frame which permits the use of the world-wide satellite navigation systems
in an equitable manner, assuring the universal and equal access and preserving States' sovereignty.
On the other hand, LACAC is contrary to the use of "subsidies' as a method of assistance of States
with their airline operators.
BROADER REGULATORY ENVIRONMENT
Laws on competence
LACAC ratifies its policy with respect to the application of unilateral measures which affect
international air transport and urges ICAO Contracting States to abstain taking.  measures of this
nature and not pretend to give extraterritorial nature to certain dispositions of their national law toavoid affecting sovereignty of States and reiterates that the extraterritorial application of national laws
on competence damages cooperative arrangements that many consider essential for the efficiency,
regularity and viability, of international air transport, due that certain categories of arrangements
benefit the users as well as the air carriers.  Therefore, when antimonopoly or competence legislation
are applied to said agreements, they should count with immunity and the necessary exemptions bemade in order to permit cooperation between air ca rriers, including coordination of tariffs, when it
results in benefit of the users and air carriers.
Otherwise, LACAC urges States to apply present ICAO directives in legislation on competence which
may extend beyond purely procedural matters.
LACAC considers that in order to achieve an adequate air transport capacity based on the
enhancements of airport infrastructure.  in profitable air traffic services (CNS/ATM) and appropriateS/C/W/129
Page 30
planning methods, it is necessary that a real and concrete technical cooperation exists and that
sufficient funds be available for the mentioned specific ends.
Environmental legislation
LACAC recognizes the role of ICAO as a world-wide forum for the elaboration of environmental
measures in international air transport and considers that the measures of environment protection to be
adopted should not be discriminatory for the air carriers of the States involved.
In the same manner, LACAC considers that the replacement of flight material should adjust to the
economical/financial limitations of air carriers and the States where they render their services.
Taxes
LACAC recognizes that the taxes and charges imposed to users constitute an increasing cost on the
airlines and consumers in detriment of the development of the air transport industry, specially if they
are not applied for the safe, economical and orderly development of the international air transport in a
uniform and universally accepted manner.
Commercial agreements and arrangements
LACAC recognizes that ICAO is and must continue being the world-wide forum for the elaboration
of rules and recommended practices on international air transport matters directed towards the
efficient and effective solution of International Civil Aviation problems.  Therefore, ICAO should
continue assigning high priority to the commercial aspects of air transport.
On this basis, LACAC considers that a conti nuous and efficient cooperation should exist between
ICAO and the World Trade Organization, in particular, as well as with other United Nations
organizations and others which participate in commercial aspects affecting international air transport.
Measures of preference for developing countries
LACAC considers that ICAO, with highest priority and the direct participation of its Contracting
States, using the measures it may deem pertinent and effective, should continue intensifying studies in
order that any future regulation of air transport may consider the actual possibilities of participation
and adaptation of each and every one of the States, specially developing countries, considering the
difficult economical and financial circumstances in which these expand.
COMMERCIAL ASPECTS
Ground Handling
LACAC recognizes the different alternatives of "ground handling" and considers air carriers should
be permitted to choose freely among them and combine or change their option, being the only
limitations those related with protection and-safety or when such a minimum level of aerodromeoperations exist not permitting competence among providers.  Besides, necessary measures should be
adopted to ensure fixation of reasonable prices based on costs and on a uniform non-discriminatory
fair play.
Currency conversion and remittance of earnings
LACAC recognizes the right of air carriers, if they  request so and with no restriction whatsoever, of
converting and remitting abroad the excess local earnings registered after local expenditures;  it also
states that air carriers have freedom of remitting their earnings to any other country, besides their
country of origin.
In the same manner, when States establish airport ch arges in strong currency", they should base their
measures on the orientating principles of ICAO, specially on the principle of non-discrimination of
rights presented in Article 15 of the Chicago Convention.S/C/W/129
Page 31
Non-national personnel
LACAC recognizes the right of air carriers to bring and maintain their own employees of any
nationality, subject to compliance of die legislation of the host State.
Sale and commercialization of air transport services
LACAC considers necessary that the air carriers c ount with flexibility and loyal competence in the
sale and commercialization of its services in territories other than their own, in places where they do
or do not effectively operate.
Computer Reservation System (CRS)
LACAC considers necessary to count with a "standard clause" for the CRSs with the purpose of using
it in the air transport bilateral agreements or in multilateral agreements.  On the other side, urgesStates to incorporate into their legislations the C ode of Conduct promulgated by ICAO on this respect.
III. PROCEDURES AND ST RUCTURE OF THE FUTURE REGULATION
LACAC confirms that the Contracting States of the Chicago Convention have different levels of
development.  For that reason, any action directed towards the regulation air transport must considerthis fact.  To this respect, it appreciates that market access must guarantee of the principles contained
in said Convention, which permits coexistence of markets organized in different ways.
On the other side, it considers that for the developing countries adjust and directly participate in the
future regulation arrangements, it is necessary to establish means to secure effective access of thesecountries to funding and advanced technology in reasonable economical and financial conditions.
Likewise, it reiterates that Bilateralism has permitted development of Air Transport and continues an
adequate means to reach agreements which guarantee States read and effective participation of the
Parties, defining among these.  flexible conditions which assure viability and growth of the airlines ofthe Region.
For LACAC, the progressive process of integratio n and economical cooperation in which the region is
found is the starting point towards Multilateralism, which will make possible increasing the levels of
flexibilization in this fundamental economical activity.  In this sense, it calls attention towards the
experience of the Andean Group, where five of its member States form part of the Commission, and
towards which we call attention of the international aeronautical community.
LACAC reaffirms that the development of the air transport industry of its member States constitutes a
key component for the socio-economic growth of the Region.  Therefore.  each State should assure
the necessary legal frame to permit strengthening of private enterprise, in benefit of their respective
populations.
It also reaffirms that any future regulation, i.e.  Security Network, Safeguards or mechanisms for
Controversies Solution, should offer guarantees which assure adjustment and equal opportunities for
the effective participation of airlines of the Region in international air transport and prevent the
formation of monopolies or oligopolies.S/C/W/129
Page 32
ANNEX 8
SELECTED PROVISIONS FROM REGIONAL AGREEMENTS AND
ARRANGEMENTS ON AIR SERVICES
(Source:  ICAO)
Andean Pact – 1991
(5 States)Caribbean Community
(CARICOM) – 1996
(14 States)Fortaleza Agreement –
1997
(6 States)Banjul Accord – 1997
(6 States)CLMV Agreement –
1998
(4 States)
Non-Scheduled Services
Permits unrestricted all-cargo
flights and inclusive tour
passenger charters within the
region which do not endanger
the economic stability ofexisting scheduled servicesNo provision No provision No provision No limitation subject to
permission procedures of
each country
Third and Fourth Freedoms
Yes Yes – when licensed and with
prior notification;  daytours/air taxis may be subject
to uplift/directional conditionsYes, but only on routes not
being served under bilateralagreementsYes, for two traffic points
in each StateNo limitation on 3rd/4th
freedom traffic rights;  nolimitations on eight
international airports for
origin, destination,
intermediate and beyond
points within region
Fifth and Sixth Freedoms
Fifth:  Yes
Sixth:  Not mentioned per seFifth:  To be exchanged on a
reciprocal and liberal basis
between members
Sixth:  Not mentionedCarriage of Fifth and Sixth
freedom traffic permitted
only with consent of States
concernedFifth:  Yes, unrestricted
where no 3rd and 4th
freedom operations;
limited to 20 per cent of
capacity with 3rd/4th;reciprocal for non-African
carriersFifth:  No limitation on
traffic
Sixth:  Implicitly
recognized from traffic
points description (see3rd/4th freedoms above)S/C/W/129
Page 33Andean Pact – 1991
(5 States)Caribbean Community
(CARICOM) – 1996
(14 States)Fortaleza Agreement –
1997
(6 States)Banjul Accord – 1997
(6 States)CLMV Agreement –
1998
(4 States)
Multiple Designation
Yes Yes, except where it would
lead to serious financial loss to
the existing air carriers
licensed by both StatesYes Maximum of two airlines
per StateYes
Tariffs
Country of origin Dual approval required by
States concerned, but tariffs tobe approved which meet
general criteriaCountry of origin;  tariffs
applied can be examined byCouncil of Aeronautical
AuthoritiesDouble approval;  tariffs
fixed on basis of price cappolicy based on operating
cost of designated airlinesDual disapproval for
sub-regional tariffs
Ownership and Control
Determined by national law
(legally constituted in Pact
country designating air carrier) Air carrier must be owned and
controlled by one or more
Member States or nationalsthereofNo specific provision Headquarters and major
operations in designating
State which should haveminority interest with vetoNo specific provision
Capacity
Accords the “free exercise of
rights of third, fourth and fifthfreedoms of the air”, but the
offer of non-scheduled flights
on scheduled service routes
may not endanger the
economic viability of
scheduled servicesA primary objective is the
provision, at a reasonable loadfactor, of capacity adequate to
meet the current and
reasonably anticipated
requirements for the carriage
of passengers, cargo and mail
on specified routes;
limitations are permitted onmultiple-designation, air taxi
operations Capacity must be adapted
to the respective trafficpotential.  States involved
to consider capacity
proposed by airlines to
avoid any excess capacity
not in accordance with
traffic potential (an
anti-competitive practice)taking into account airport
technical limitationsFive frequencies per week
per airline;  schedulesshould be harmonizedNo limitation on capacity
and frequencyS/C/W/129
Page 34
Andean Pact – 1991
(5 States)Caribbean Community
(CARICOM) – 1996
(14 States)Fortaleza Agreement –
1997
(6 States)Banjul Accord – 1997
(6 States)CLMV Agreement –
1998
(4 States)
Fair Competition
Competition rules of AndeanPact are applicable to air
transportAccords airlines fair and equal
opportunity to compete;
requires action to eliminate all
forms of discrimination or
unfair competitive practices;
no undue effect on airlineservices of other Member
StatesMembers to adopt measures
to eliminate all forms of
discrimination and unfair
competition practices;
establishes a national
standard for treatment ofairlines of other Member
StatesNo specific provision No specific provision
Other Agreements Among Parties
May not impose restrictions to
any facilities which Member
States have granted, or maygrant, through bilateral or
multilateral agreementsShall not affect any bilateral,
multilateral or other
contractual agreement orarrangementsMay not establish
restrictions on what is
established in air serviceagreements among Parties,
provisions of which are
applied subsidiarilyPrior consultation,
observer status for States
for bilateral negotiationswithin, outside of group;
States to reflect and
promote broader group
interest in such
negotiations.  In event ofinconsistencies,
Yamoussoukro
Declaration prevailsExisting bilateral air
services agreements
recognized;  progressiveimplementation;  any two
States may initiate
cooperative arrangements,
others join when ready
Non-party States
Permits non-scheduled cargo
flights between Pact andnon-Pact States;  fifth freedom
rights exchanged with non-Pact
States on basis of equity and
adequate compensationDoes not affect bilateral
agreements/arrangements oroperating licenses/similar
authorizations already in force
between a Member State and a
non-Member StateNo specific provision See “Other Agreements
among Parties,” aboveExisting bilateral air service
agreements recognizedS/C/W/129
Page 35Andean Pact – 1991
(5 States)Caribbean Community
(CARICOM) – 1996
(14 States)Fortaleza Agreement –
1997
(6 States)Banjul Accord – 1997
(6 States)CLMV Agreement –
1998
(4 States)
Inclusion of New Member States
Presumably requires State tojoin Andean PactOpen to State or Territory
which becomes part of
Caribbean CommunityOpen to other States of
South America;  requires
unanimous approval of
States Parties to the
Agreement No provision Open to other countries
subject to acceptance by all
member States (agreed in
1999)
Entry into Force
Decision 297 (June 1991) When eighth ratification was
deposited, 8 December 1998 30 days after third
ratification deposited Upon signature of three
StatesUpon signature, 14 January
1998
Amendment
Through Decision of Cartagena
CommissionRequires agreement,
ratification and deposit of all
Member States Aeronautical Authorities
can modify Appendices by
unanimous agreementNo provision All parties must accept
proposed amendments
__________