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Open Skies Discussions

DW staff / AFP (nda)February 7, 2007

The United States and European Union Tuesday revived talks on an "open skies" deal to deregulate transatlantic air traffic, two months after Washington threw a large spanner in the works.

A agreement between the EU and US could generate tens of thousands of jobsImage: AP

US Transportation Secretary Mary Peters and EU Transport Commissioner Jacques Barrot sat down for a new round after Peters, in early December, scrapped proposals to offer foreign investors a greater say in US airlines.

The US step cast doubt over a 2005 agreement to liberalize lucrative airline routes between the United States and Europe. But both sides had said they remained committed to new dialogue.

"The prize if we are successful is a historic agreement that will set the model for the rest of the world to follow," Barrot said in a statement.

Employment benefits on both sides of the Atlantic

The EU estimates that an agreement would generate more than 25 million extra passengers over the next five years, and create 80,000 new jobs in the EU and United States combined.

Inauguration of the European Maritime Safety Agency (EMSA)
Jacques Barrot says there is no time to wasteImage: European Community

"Time is not on our side. Now is not the time to delay or to shy away from hard decisions and hard choices," Barrot said at the two-day talks joined by German Transport Minister Wolfgang Tiefensee, representing the EU's presidency.

The meeting was also discussing an EU push to reduce the environmental impact of aircraft emissions, a controversial subject for a US administration that has refused to ratify the Kyoto pact against global warming.

EU: Agreement must include environmental responsibilities

Barrot wants to include the aviation industry in the EU's emissions trading scheme. In a speech in Brussels Monday, he said the industry "has made excellent progress in minimizing the noise and emissions it produces."

Flugzeug mit Kondensstreifen
Any "open skies" deal should also be a "clean skies" dealImage: Bilderbox

"But we must ensure that aviation goes further to play its full and fair part in meeting the global environmental challenges we face," the commissioner told the International Aviation Club of Washington.

On open skies, Peters has said the decision to withdraw plans for a greater foreign role in the business operations of US airlines was taken after protests from the industry and from Congress. But Peters has also stressed: "Nobody doubts the benefits to travelers, airlines and our economy of making it easier to fly to and from Europe."

In November 2005, Brussels and Washington hammered out the outlines of a pact to allow freer competition by US and EU airlines, opening the prospect of cheaper tickets and more choice for passengers.

As part of the deal, the US government offered to allow foreign investors a bigger role in the marketing, routing and fleet structures of US airlines.

Voting rights row proves a sticking point

Northwest Airlines in Detroit Pleite
The US wants to maintain majority rights in its airlinesImage: AP

But in a lingering sore point for the EU, the United States wanted to limit foreign voting rights in its airlines to 25 percent of the capital. The EU has a higher ceiling of 49 percent.

The two sides have been trying to forge a comprehensive agreement to replace a patchwork of bilateral deals secured by the US government with individual EU states. Those deals were ruled illegal by the EU's top court.

The US government backed down after an outcry from US airline unions and from some carriers, who saw no benefit from the EU deal to their key goal of winning more landing rights at London's Heathrow airport, Europe's busiest.

And with the Democrats now back in control of Congress, political opposition is also hardening.

James Oberstar, the Democratic chairman of the House of Representatives transportation committee, has warned Peters against surrendering to EU demands in the latest negotiations.

Oberstar "is all in favor of an open skies deal between the United States and the EU," committee spokesman Jim Berard told AFP. "But chairman Oberstar is not willing to make that sacrifice of our domestic control over domestic airlines," he stressed.