A new round of negotiations between the EU and the United States for the conclusion of a second ‘Open Sky’ agreement will take place in Brussels, from 23 to 25 March. The talks are “to try and finally obtain an agreement”, said Spain’s Transport Minister José Blanco Lopez at the end of the Council of Transport Ministers meeting in Brussels on 11 March. The minister claims that “very significant” progress was made during the latest rounds of negotiation - particularly in terms of the environment, security, safety, competition and working conditions - estimating that “the agreement is fast approaching” and that “we should not let slip the opportunity to conclude, as quickly as possible, such an important subject for all of our interests”. The idea would therefore be to reach a conclusion by the June Transport Council, by settling the remaining outstanding issues during the negotiations of 23-25 March.

The fact remains that there is still some way to go. The outstanding points are naturally the most sensitive ones, those which will offer airlines additional opportunities to position themselves in the respective markets. Not to mention ‘cabotage’ (the possibility of operating internal routes), which is of great concern to Americans, as they believe that Europeans have still not found a satisfactory solution to the possibility of greater investment in the capital of US airlines. At present, US legislation still forbids Europeans from acquiring more than 25% of voting stock in a US airline, whereas the latter may acquire 49.9% of shares in a European airline. Europeans want reciprocity at least and, if possible, a further reduction in the barriers preventing them from taking over airlines.

“CAUTIOUSLY OPTIMISTIC”

Is it realistic to expect concessions on such a sensitive point, especially with a US Congress which has shown itself to be one of the most uncooperative to date? Siim Kallas, the Commissioner for Transport, acknowledged during the press conference which followed the Council that the problems which still needed to be settled were “considerable”. He said he was “cautiously optimistic” with regard to the chances of reaching a swift conclusion. The issue is therefore one of knowing whether the EU could consider the progress made on other points to be sufficient in terms of advantages or whether it would prefer to settle for minor progress – or none at all – on the issue of investment. The commissioner was clear on this point : “I do not think that we can offset the absence of an agreement on investment with other aspects”. Apparently, member states said the same thing during the Transport Council, in which they were debriefed on the state of negotiations. Solutions must therefore be found, which might even be inspired by the EU-Canada ‘Open Sky’ agreement, which anticipates a gradual implementation of liberalisation measures between the two parties.

What is most complicated for Americans is that they find themselves in a situation whereby, except for a relaxation of the conditions surrounding night flights in Europe, they are not really buyers – since the “Open Sky I” agreement already fulfilled their main demands – but they must offer something sufficiently substantial in order to justify the fact that Europeans do not criticise this first agreement. Because we must not forget that the latter contains a suspension clause, anticipating that the EU or a member state may suspend the agreement, or part of it, if negotiations for an ‘Open Sky II’ are not concluded by November 2010. This is a real sword of Damocles, which several member states referred to during the Transport Council. “Even if there was no threat expressed,” said an expert to Europolitics.

US law still forbids Europeans from acquiring more than 25% of voting stock in a US airline.