Ministers feel US proposal falls short of expectations

The Financial Times is reporting that the European Union on Friday rejected a US proposal for a transatlantic open skies agreement, apparently because the offer does not provide better access on the part of European carriers into the US market.

US negotiators are willing to continue discussions, but they continue to insist that they cannot improve their offer without changes to US laws that would be difficult to get through Congress in this election year.

"We are missing a great opportunity to open access to markets for the benefit of consumers, carriers, workers and airports on both sides of the Atlantic," said Transporation Secretary Norman Mineta.

This round of negotiations began last year, and the goal was to implement changes that would liberalize the two largest aviation markets in the world. Two of the most important items on the table were the lifting of ownership restrictions that currently prevent transatlantic mergers, and access for European and US carriers to each others' markets.

Due to the legislative roadblocks, however, EU officials feel that the best offer the US could put forth would still fall well short of their expections. There had been some talk that EU ministers would strike an interim deal, but it appears that without any progress on access to the US market, this will not be the case.

Loyola de Palacio, EU transport commissioner in charge of the negotiations,  stated that while there had been some progress on the issue of market access, "...this is considered not enough." She also made it clear that in the absence of any progress, US carriers could not expect to be granted any additional rights to establish new routes within EU cities.

The strongest opposition to a quick settlement of the issues has been the United Kingdom; they have repeatedly warned EU member states that there should be no rush to make a deal.

The EU's tough stance on these issues is a reflection of strong lobbying efforts on the part of members of the EU aviation industry, based on fears that any quick deal that did not require the US to improve its offer would have put them at a strong disadvantage to their US counterparts.

FMI: www.ft.com