RESTRICTED
WORLD TRADE TCA/M/5
8September 1997
ORGANIZATION(97-3592)
Committee onTrade inCivil Aircraft
MINUTES OFTHE MEETING OFTHE COMMITTEE
HELD ON16JUNE 1997
Chairman: MrHidetaka Saeki (Japan)
1. TheCommittee onTrade inCivilAircraft (the"Committee") heldameeting on16June1997.
2. TheCommittee adopted thefollowing agenda:
A. Election ofVice-Chairperson
B. Consideration oftheStatus ofthe1979 Agreement onTrade inCivil Aircraft
C. Other Business
A. Election ofVice-Chairperson
3. TheChairman recalled thattheelection ofaVice-Chairperson wasnotresolved atthe
Committee 'slastmeeting inNovember 1996. TheChairman explained thattheneedforaVice-
Chairperson hasbecome more pressing sincehewillreturn toTokyo attheendofJune1997. Although
heexplained thathewaswilling tocontinue asChairman afterhistransfer toTokyo, theChairman
stated thataVice-Chairperson should beelected before hisdeparture. Anelected officer would then
beabletoactasChairperson should urgent matters arisewhile theChairman isinTokyo.
4. Having consulted informally withanumber ofdelegations, theChairman proposed tonominate
MsEvaRygh ofNorway asVice-Chairperson.
5. TheCommittee elected MsRygh asVice-Chairperson byacclamation.
B. Consideration oftheStatus ofthe1979Agreement onTrade inCivil Aircraft under theWTO
6. TheChairman recalled thatanumber ofproposals havebeenmade toadapt theAgreement
onTradeinCivilAircraft(the"Agreement")totheWTOstructure,allwithoutsuccess.First,aproposal
wascirculated inOctober 1994 (AIR/W/98) comprising twoelements: adraftprotocol oftechnical
amendments totheAircraft Agreement, andadraftdecision on,interalia,therelationship between
theamended Agreement andtheAgreement onSubsidies andCountervailing Measures. TheChairman
noted thatthetechnical changes proposed inthedraft protocol were, inprinciple, acceptable to
Signatories. Thiswasnotthecase, however, forthedraftdecision attached thereto.
7. TheChairman explained thatasecond proposal wascirculated inJune1996, intheform of
twodraftdecisions (TCA/W/2 andTCA/W/3). Thefirstdraftdecision provided fortechnical changes
totheAgreement. Thesecond draftdecision envisaged theapplication oftheUnderstanding onRules
andProceduresGoverningtheSettlementofDisputestoconsultationsanddisputesettlementproceedings
under theAgreement. Again, theChairman noted thattheproposed technical changes appeared to
havebeenuncontroversial, whereas agreement onthedraftdecision ontheapplication oftheDSU
proved elusive.TCA/M/5
Page2
8. TheChairman stated thatathirdproposal wascirculated bytheUnited States inJuly1996,
consisting intheamendment ofArticle 8.8oftheAgreement. According totheUnited States, the
proposalwouldallowcertainamendmentstotheAircraftAgreementwhilelargelypreservingthebalance
ofrights andobligations contained therein. Theproposal would alsoprovide forbinding dispute
settlement, albeit outside theDSU. TheChairman recalled thatanumber ofSignatories expressed
reservations concerning thisproposal.
9. TheChairman stated that,given thefailure ofthese initiatives toadapt theAircraft Agreement
totheWTO structure, significant legaluncertainty surrounds therelationship between theAgreement
andother WTO Agreements. Henoted thatsuchuncertainty seriously undermines theeffectiveness
oftheAgreement, andraises important systemic issues fortheWTO. Forthetimebeing, heconcluded
thatSignatories were notinaposition toresolve thismatter. Forthisreason, theChairman stated
hiscommitment toexplore allavailable options, including suspension ortermination oftheAgreement.
10. Therepresentative oftheEuropean Community expressed hisdelegation 'sgratitude forthe
Chairman'seffortstoresolvethedifficultiessurroundingtheAgreement.Hereiteratedthathisdelegation
wasready toaccept boththeOctober 1994 andtheJune1996 proposals intheirentirety.
11. Thedelegate oftheUnited States stated thathisdelegation wasgrateful fortheChairman 's
efforts toforward thedialogue concerning thestatus oftheAgreement. Headded thattheAgreement
hasbeenuseful inestablishing principles offairtrade inthecivilaircraft sector, andthattheUnited
States supports thecontinuation oftheAgreement. Hereiterated thattheprocess ofrectifying the
Agreement remained thefocus oftheUnited States 'interest, andinformed theCommittee thattheUnited
States would continue thedialogue inthisregard.
12. TheCommittee tooknoteofthese statements.
C. Other Business
13. Therepresentative oftheUnited States raised issues concerning Articles 3and4ofthe
Agreement. Withrespect toArticle 3,heexpressed theUnited States 'concern thatcertain certification
requirementsandspecificationsonoperatingproceduresestablishedbysomenationalaviationauthorities
maybebeing usedastrade barriers rather thanbased onlegitimate safety needs. Heindicated that
several examples ofthischaracter canbefound inregulations proposed bysome European aviation
authorities. First, some proposed regulations would forthefirsttimeestablish limits onthedistances
thatsmall two-engined business jetsarepermitted totravel fromanavailable airport when transversing
theNorth Atlantic. Second, certain proposed procedures appear unrelated tosafety andyetwould
prove expensive tocomply with. Suchprocedures could arguably result inpromoting thesaleofthree-
engined European business jets. Third, possible limits onpassenger seating inderivative models of
large passenger aircraft appear tobeunrelated tosafety considerations butwould affect commercial
saleability. Thedelegate stated thatUnited States aviation authorities werediscussing these matters
withtheircounterparts intherelevant countries, andexpressed thehopethatthese examples didnot
portend themisuse oftypecertification ofaircraft andaircraft operation rules astrade barriers.
14. Concerning Article 4oftheAgreement, thedelegate oftheUnited States expressed hiscountry 's
concern regarding continuing reports ofinducements being offered andunreasonable pressures being
brought onaircraft purchasers inconnection withseveral recent international aircraft competitions,
aswellascharges ofbribery andcorruption ofofficials inconnection withsome sales.
15. Therepresentative oftheUnited States indicated that,while thesematters werebeing discussed
bilaterally withsome ofthegovernments involved, thepossible nature andextent ofthese practicesTCA/M/5
Page3
compelled theUnited States tobring them totheimmediate attention oftheCommittee, andmay
eventually result inarequest foraspecial meeting orresort toother remedies.
16. Thedelegate oftheEuropean Community tooknoteoftheUnited States 'comments regarding
Article 3oftheAgreement, andreserved hisdelegation 'srighttorevert tothismatter ifnecessary.
17. TheCommittee tooknoteofthestatements bytheUnited States andtheEuropean Community.
18. Themeeting wasadjourned.