Proposal for a Decision of the Council and the representatives of the Governments of the Member States of the European Union, meeting within the Council on the signature and provisional application of the Protocol to Amend the Air Transport Agreement between the European Community and its Member States, of the one part, and the United States of America, of the other part
Date: 2010-05-03
Institutions: European Commission
Subjects: EU Member State, United States, agreement (EU), air law, air space, air transport, signature of an agreement

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EUROPEAN COMMISSION 

Brussels, 3.5.2010 
COM(2010)209 final 

2010/0113 (NLE) 

Proposal for a 

Decision of the Council and the representatives of the Governments of the Member 
States of the European Union, meeting within the Council 

On the signature and provisional application of the Protocol to Amend the Air 
Transport Agreement between the European Community and its Member States, of the 
one part, and the United States of America, of the other part 

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EXPLANATORY MEMORANDUM 

1. 

Context of the proposal 

•  Grounds for and objectives of the proposal 

On  30  March  2008,  the  Air  Transport  Agreement  between  the  United  States  of 
America, of the one part, and the European Community and its Member States, of the 
other  part,  signed  on  25  and  30  April  2007  ("the  2007  EU-US  Air  Transport 
Agreement"), entered into provisional application. 

In  accordance  with  Article  21  of  the  2007  EU-US  Air  Transport  Agreement,  the 
Commission started second stage negotiations with the United States in May 2008. The 
Council reviewed the progress made in December 2009 and March 2010. After eight 
rounds  of  second  stage  negotiations,  agreement  was  reached  on  25  March  2010  on  a 
draft Protocol to Amend the 2007 EU-US Air Transport Agreement. 

The Protocol aims at: 

- launching a process towards additional foreign investment opportunities in the airline 
industry, 

-  further  opening  market  access,  including  further  access  by  EU  airlines  to  US 
Government-financed air transportation, and  

-  further  strengthening  the  regulatory  cooperation  in  all  fields  of  aviation  policy, 
particularly on addressing the environmental impact of aviation. 

•  General context 

The  2007  EU-US  Air  Transport  Agreement  represented  a  significant  change  in 
transatlantic aviation relations, providing broad new commercial freedoms for airlines 
and a comprehensive framework for regulatory cooperation with the United States on a 
wide  range  of  issues.  The  2007  EU-US  Air  Transport  Agreement  created  substantial 
benefits for airlines, airports and air transport users in Europe. 

However, the EU was seeking additional investment and market access opportunities. 
Therefore, Article 21 of the 2007 EU-US Air Transport Agreement established a non-
exhaustive list of 'items of priority interest' for the second stage negotiations, including 
additional investment and market access opportunities, as well as environmental issues. 

In accordance with Article 21 (1) of the 2007 EU-US Air Transport Agreement, second 
stage negotiations were launched in May 2008. Article 21 (3) of the 2007 EU-US Air 
Transport  Agreement  entitles  each  Party  to  suspend  certain  rights  if  no  second  stage 
agreement has been reached by 30 November 2010. 

After  eight  rounds  of  negotiations,  agreement  was  reached  on  the  draft  Protocol  to 
Amend the 2007 EU-US Air Transport Agreement ("the Protocol") on 25 March 2010.  

•  Existing provisions in the area of the proposal 

The Protocol amends the 2007 EU-US Air Transport Agreement.  

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•  Consistency with the other policies and objectives of the Union 

The conclusion of second stage negotiations with the United States has been a priority 
for the EU in its external aviation policy, as identified in Commission Communication 
"Developing the agenda for the Union's external aviation policy"1.  

The EU-US Summit on 3 November 2009 confirmed the political commitment of the 
Union to reach a second stage agreement in 2010 in the context of the overall objective 
of reducing barriers to trade, investment and economic activity.  

Due  to  its  strong  environmental  dimension,  the  Protocol  is  fully  consistent  with  the 
objective  of  the  Union  to  limit  the  climate  change  impact  of  international  aviation. 
Special attention is also given to the social dimension of the Agreement. 

2. 

Consultation of interested parties and impact assessment 

•  Consultation of interested parties 

Consultation methods, main sectors targeted and general profile of respondents 

Throughout the negotiating process, the Commission has consulted with stakeholders, 
in particular via regular meetings of the Consultative Forum comprising representatives 
of air carriers, airports, and labour organisations. 

Member States have been closely involved throughout the negotiating process via the 
Special Committee and expert meetings. 

Summary of responses and how they have been taken into account 

All  comments  from  stakeholders  and  individual  Member  States  were  duly  taken  into 
consideration in the preparation of the Union's negotiating position. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

The  Protocol  further  increases  the  benefits  for  consumers,  airlines,  labour,  and 
communities  in  the  Union.  The  economic  benefits  of  a  fully  Open  Aviation  Area 
between the EU and the United States have been estimated in a study by Booz Allen 
Hamilton on behalf of the Commission at several billion Euros per year.2 

A study undertaken by Ecorys on behalf of the Commission (DG TRADE)3 estimates 
that  further  regulatory  convergence  in  the  field  of  air  transport  could  significantly 

1 
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COM(2005) 79 final. 
Booz Allen Hamilton (2007), The economic impacts of an Open Aviation Area between the EU and the 
US, http://ec.europa.eu/transport/air/international_aviation/country_index/doc/final_report_us_bah.pdf  
Ecorys  (2009),  Non-Tariff  Measures  in  EU-US  Trade  and  Investment  –  An  Economic  Analysis. 
http://trade.ec.europa.eu/doclib/docs/2009/december/tradoc_145613.pdf  

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reduce  costs  for  the  industry.  The  same  study  concluded  that  the  second  stage 
negotiations have the potential to change the structure of the market in the EU and in 
the US, increasing profitability in the airline industry.  

The  inclusion  of  an  article  on  the  social  dimension  ensures  that  the  further  market 
opening  will  be  accompanied  by  high  labour  standards  and  that  labour-related  rights 
will not be undermined by the new opportunities created by the Protocol. 

The  Protocol  includes  firm  commitments  from  both  Parties  to  limit  or  reduce  the 
impact  of  international  aviation  on  the  environment.  An  enhanced  cooperation  on 
addressing  the  environmental  impacts  of  international  aviation  and  mitigating  the 
climate change impact will minimise any potential adverse environmental effects of the 
Protocol.  

3. 

Legal elements of the proposal 

•  Summary of the proposed action 

The  Protocol  amends  the  2007  EU-US  Air  Transport  Agreement  with  the  following 
provisions: 

- A legal obligation to reciprocally recognise the regulatory determinations of the other 
Party  with  regard  to  airline  fitness  and  citizenship  (New  Article  6  bis).  This  will 
significantly reduce the regulatory burden for airlines and regulatory authorities. 

-  An  enhanced  cooperation  to  limit  the  impact  of  international  aviation  on  the 
environment  (New  Article  15).  The  cooperation  on  addressing  the  environmental 
impacts of international aviation will include the areas of research and development, air 
traffic  management  innovation,  coordination  in  international  fora.  An  important 
element  in  that  respect  is  the  joint  work  to  ensure  consistency  among  the  respective 
regarding  aviation  emissions.  The  cooperation  on 
market-based  measures 
environmental  issues  will  also  increase  the  transparency  with  regard  to  noise-related 
operating  restrictions  at  airports  with  more  than  50,000  annual  movements  of  civil 
subsonic jet aeroplanes. 

- An explicit recognition of the importance of the social dimension and the benefits of 
high labour standards as well as an enhanced cooperation on the social effects of the 
agreement (New Article 17 bis). 

-  A  strengthened  role  of  the  Joint  Committee,  enabling  it  to  address  incompatible 
regulatory  approaches,  allow  for  reciprocal  recognition  of  decision-making,  and 
promote  cooperation  across  a  number  of  additional  fields,  including  air  traffic 
management, facilitation, safety and cooperation with other countries (New paragraphs 
in Article 18). 

- A process towards further market access and investment opportunities (New Article 
21).  Both  sides  commit  to  continuing  to  remove  market  access  barriers.  The  Joint 
Committee  will  regularly  review  progress  in  that  respect.  Both  sides  will  establish  a 
process  of  cooperation  in  the  Joint  Committee  towards  the  shared  goal  of  removing 
market  access  barriers.  Upon  legislative  change  that  would  give  the  Commission  a 
stronger role in monitoring the procedures for the introduction of noise-based operating 

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restrictions  at  EU  airports  with  more  than  50,000  annual  movements,  EU  airlines 
would  benefit  from  additional  seventh  freedom  rights  between  the  US  and  third 
countries,  and  market  access  barriers  to  the  US  for  third-country  airlines  owned  and 
controlled  by  EU  investors  would  be  removed.  Upon  legislative  change  in  the  US 
allowing majority EU ownership and control of US airlines, the EU will allow majority 
US ownership and control of EU airlines. If the EU has fulfilled the requirements with 
regard to the monitoring of noise-based operating restrictions, but there is no progress 
in  the  US  on  investment  liberalisation,  the  EU  will  have  the  right  to  freeze  the 
operations of US carriers, and vice versa.  

-  Further  access  of  EU  airlines  to  air  transport  funded  by  the  US  Government  (New 
Annex 3) that is restricted currently to US airlines ("Fly America"). EU airlines will be 
able to sell air transportation to contractors of the US Government on any route, with 
exception of transport financed by the US Department of Defence.  

The  Protocol  is  accompanied  by  a  Memorandum  of  Consultations  that  includes 
additional  new  elements,  in  order  to  further  enhance  the  existing  cooperation  in  the 
areas  of  aviation  security,  competition  policy,  and  the  joint  efforts  to  address  the 
environmental impact of international aviation. 

•  Legal basis 

Article 207 (5), in conjunction with Article 218 paragraphs (2) and (5) of the Treaty on 
functioning of the European Union. 

•  Subsidiarity principle 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the 
exclusive competence of the Union. 

The  objectives  of  the  proposal  cannot  be sufficiently  achieved  by  the  Member  States 
for the following reasons. 

The  2007  EU-US  Air  Transport  Agreement  has  established  a  harmonised  regulatory 
framework for air transport between the Union and the United States. An amendment 
of an international treaty at Union level can only be done at Union level. Furthermore, 
the objectives of the Protocol can only be achieved at Union level because they involve 
a number of areas of exclusive Union competence. 

Union  action  will  better  achieve  the  objectives  of  the  proposal  for  the  following 
reasons. 

An  amendment  of  an  international  treaty  at  Union  level  can  only  be  done  at  Union 
level. Furthermore, the objectives of the Protocol can only be achieved at Union level 
because they involve a number of areas of exclusive Union competence.  

The proposal therefore complies with the subsidiarity principle. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reasons. 

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The Protocol will reduce the regulatory burden and costs for airlines. It will not impose 
any new obligations on industry.  

Member  States  will  continue  to  carry  out  the  traditional  administrative  tasks  they 
execute  in  the  context  of  international  air transport,  but  under  common  rules  applied 
uniformly.  

Member  States  will  continue  to  carry  out  their  administrative  tasks  with  regard  to 
noise-based operating restrictions at EU airports. The EU and its Member States do not 
enter  into  obligations  with  regard  to  noise-based  operating  restrictions  that  would  go 
beyond the requirements of the Noise Directive (2002/30/EC) 

•   

•  Choice of instruments 

Proposed instruments: international agreement 

Other means would not be adequate for the following reason. 

An international agreement can only be amended through an international agreement. 

4. 

Budgetary implication 

The proposal has no implication for the Union budget. 

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2010/0113 (NLE) 

Proposal for a 

Decision of the Council and the representatives of the Governments of the Member 
States of the European Union, meeting within the Council 

On the signature and provisional application of the Protocol to Amend the Air 
Transport Agreement between the United States of America, of the one part, and the 
European Community and its Member States, of the other part 

THE COUNCIL OF THE EUROPEAN UNION AND THE REPRESENTATIVES OF THE 
GOVERNMENTS OF THE MEMBER STATES MEETING WITHIN THE COUNCIL 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union  and  in  particular 
Article 207(5), in conjunction with Article 218 paragraphs (2) and (5) thereof, 

Having regard to the proposal from the Commission, 

Whereas 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

The Air Transport Agreement between the United States of America, of the one part, 
and the European Community and its Member States, of the other part, signed on 25 
and  30  April  2007  (the  "Air  Transport  Agreement")  included  an  obligation  on  both 
parties to enter into second stage negotiations. 

The  Commission  has  negotiated  on  behalf  of  the  Union  and  of  the  Member  States  a 
Protocol  to  amend  the  Air  Transport  Agreement  (hereinafter,  the  “Protocol”)  in 
accordance with Article 21 of that Agreement. 

The Protocol was initialled on 25 March 2010. 

The  Protocol  is  fully  consistent  with  EU  legislation,  particularly  with  the  EU 
Emissions Trading System. 

The  Protocol  negotiated  by  the  Commission  should  be  signed  and  applied 
provisionally by the Union and the Member States, subject to its possible conclusion at 
a later date. 

It is necessary to lay down procedural arrangements for deciding, if appropriate, how 
to  discontinue  the  provisional  application  of  the  Protocol  and  how  to  take  measures 
pursuant to Article 21(5) of the Air Transport Agreement as amended by the Protocol. 
It  is  also  necessary  to  lay  down  procedural  arrangements  for  the  suspension  of  the 
reciprocal  recognition  of  regulatory  determinations  with  regard  to  airline  fitness  and 
citizenship and for implementing certain provisions of the Agreement, including those 
concerning environment. 

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HAVE DECIDED AS FOLLOWS:  

Article 1 (Signature and provisional application) 

1. 

2. 

3. 

4. 

The  signing  of  the  Protocol  to  Amend  the  Air  Transport  Agreement  between  the 
United  States  of  America,  of  the  one  part,  and  the  European  Community  and  its 
Member States, of the other part, (hereinafter the 'Protocol'), is hereby approved on 
behalf of the Union, subject to a Council Decision concerning the conclusion of the 
Protocol. The text of the Protocol is attached to this Decision. 

The  President  of  the  Council  is  hereby  authorised  to  designate  the  person(s) 
empowered to sign the Protocol on behalf of the Union, subject to its conclusion. 

Pending its entry into force, the Protocol shall be applied on a provisional basis by 
the  Union  and  its  Member  States,  to  the  extent  permitted  under  national  law,  from 
the date of signature. 

A decision to discontinue the provisional application of the Protocol and give notice 
thereof  to  the  United  States  of  America  in  accordance  with  Article  9(2)  of  the 
Protocol, and a decision to withdraw such notice, shall be taken by the Council, on 
behalf  of  the  Union  and  of  the  Member  States,  acting  unanimously  in  accordance 
with the relevant Treaty provisions. 

Article 2 (Suspension of Reciprocal Recognition) 

A decision to suspend the reciprocal recognition of regulatory determinations with regard to 
airline  fitness  and  citizenship  and  to  inform  the  United  States  thereof  in  accordance  with 
Article 6 bis(2) of the Air Transport Agreement as amended by the Protocol, shall be taken by 
the  Council,  on  behalf  of  the  Union  and  of  the  Member  States,  acting  unanimously  in 
accordance with the relevant Treaty provisions. 

Article 3 (Joint Committee) 

1. 

2. 

3. 

The  Union  and  the  Member  States  shall  be  represented  in  the  Joint  Committee 
established  under  Article  18  of  the  Air  Transport  Agreement  as  amended  by  the 
Protocol by representatives of the Commission and of the Member States. 

The  position  to  be  taken  by  the  Union  and  its  Member  States  within  the  Joint 
Committee with respect to matters of exclusive competence of the Union that do not 
require  the  adoption  of  a  decision  having  legal  effect  shall  be  established  by  the 
Commission and shall be notified in advance to the Council and the Member States. 

For Joint Committee decisions concerning matters that fall within competence of the 
Union, the position to be taken by the Union and its Member States shall be adopted 
by  the  Council,  acting  by  qualified  majority  on  a  proposal  from  the  Commission, 

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4. 

5. 

unless the applicable voting procedures set down in the Treaty on the Functioning of 
the European Union provide otherwise. 

For  Joint  Committee  decisions  concerning  matters  that  fall  within  Member  States' 
competence,  the  position  to  be  taken  by  the  Union  and  its  Member  States  shall  be 
adopted by the Council, acting by unanimity, on a proposal from the Commission or 
from Member States, unless a Member State has informed the General Secretariat of 
the Council within one month of the adoption of that position that it can only consent 
to  the  decision  to  be  taken  by  the  Joint  Committee  with  the  agreement  of  its 
legislative bodies notably due to a parliamentary scrutiny reserve. 

The position of the Union and of the Member States within the Joint Committee shall 
be presented by the Commission, except in areas that fall exclusively within Member 
States'  competence,  in  which  case  it  shall  be  presented  by  the  Presidency  of  the 
Council or, if the Council so decides, by the Commission. 

Article 4 (Decisions in accordance with Article 21 of the Agreement) 

A decision not to allow airlines of the other Party to operate additional frequencies or enter 
new markets under the Air Transport Agreement and give notice thereof to the United States 
of America in accordance with Article 21(5) of the Air Transport Agreement as amended by 
the Protocol shall be taken by the Council, on behalf of the Union and of the Member States, 
acting unanimously in accordance with the relevant Treaty provisions.  

Article 5 (Information to the Commission) 

Member  States  shall  inform  the  Commission  immediately  of  any  requests  or  notifications 
made or received by them under Article 15 (Environment) of the Air Transport Agreement as 
amended by the Protocol. 

Done at Brussels, […] 

For the Council 
The President 
[…] 

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