Both Sides Reaffirm Commitment To Deal

Trade officials of the European Union and the US will resume talks next month before the World Trade Organization, aimed at relaxing regulation of lucrative trans-Atlantic airline routes.

"Both sides reaffirmed their commitment to the goal of concluding an EU-US agreement that would open access to markets and maximize benefits for consumers, airlines, labor and communities on both sides of the Atlantic," EU representatives told Forbes this week. "To that effect ... the two delegations agreed to identify areas where improvements might be made."

Sixty percent of global air traffic runs between the US and Europe. The "open skies" agreement being sought by both sides could result in lower prices for consumers.

The EU has been frustrated by US laws limiting foreign ownership in US carriers to 25 percent. Officials have publicly expressed their disappointment in the Bush administration for failing to win congressional support for reform.

The current regulations prevent European airlines from combining to serve routes, and limit flights out of their home countries. The rules also block new low-cost carriers from competing with former state-owned air airlines on trans-Atlantic routes.

As has been the case in many other free-trade debates, labor unions in the US have protested the open skies initiative, expressing concerns over possible lost jobs.

Critics have also included US airlines worried about increased competition, and politicians afraid foreign investors will come to control US carriers.

FMI: www.wto.org, www.eu.int