Britain is unlikely to block a proposed European Union-US “open skies” pact in Brussels this week, even if efforts by London to seek last minute concessions fail.
Tony Blair, UK prime minister, will on Tuesday personally lobby President George W. Bush to try to persuade Washington to commit to greater liberalisation of transatlantic aviation services at a later date.
However, UK government officials admitted on Tuesday that, in spite of London’s unhappiness with proposals criticised by some British-based airlines for giving too much to the US, it will be difficult for the UK to block a deal when EU transport ministers meet on Thursday.
The open skies accord would enable any European or US airline to fly routes to any point in the other region. Most importantly it would open London’s Heathrow airport to full competition. The EU internal market would be open to US carriers but the US domestic market would remain closed to EU airlines.
British diplomats have been looking for firmer guarantees that the US will open its domestic market and lift foreign ownership restrictions by mid-2010 as part of second stage talks.
After intense pressure from British Airways and Virgin Atlantic, Mr Blair is likely to raise the issue with Mr Bush during a videoconference call. However, UK officials are not expecting the president to agree at this stage to commit to big changes.
They said today’s ex-change between Mr Blair and Mr Bush was part of a dialogue with the US administration and would not be “a-make-or-break” moment.
Instead, efforts by UK diplomats in Brussels to try to secure guarantees from the US will continue in the run-up to Thursday’s vote on the first stage agreement. Among other concessions they want is a short delay in the pact until the end of March 2008, the date when Heathrow Terminal 5 is due to open.
The proposed treaty has been hailed by John Byerly, the lead US negotiator, as “the most important air transport agreement in modern history” and, while European negotiators have been less fulsome in their praise, Jacques Barrot, European transport commissioner, has insisted that the deal is the best that can be reached, at least in the first stage.
Britain is isolated in its opposition to the deal. The UK transport department has unrivalled experience among European governments of aero-political negotiations with the US and there is a strong belief in the UK that Brussels has given away the one ace left in the European hand – open access to London Heathrow for US carriers – without gaining the holy grail of an open aviation area that would remove all barriers in the transatlantic market.
But there is little appetite among other EU member states to try to force the US to renegotiate even textual changes, given the long history of deadlock.
Germany, which backed London in rejecting a 2005 draft accord, has indicated its support. Lufthansa, its flag carrier, would gain because it has taken control of Swiss International Air Lines. The German EU presidency is keen that the open skies deal should receive political backing from the member states, so that it can be a centrepiece of the US-EU summit at the end of April as part of German chancellor Angela Merkel’s initiative to revitalise transatlantic economic ties.
The European Commission will today unveil an impact assessment showing that the UK would be the biggest winners in a deal. Prices for passengers would fall as competition grew and airline service companies would benefit.
Still, Gwyneth Dunwoody, the veteran Labour member of parliament and chairman of the House of Commons transport select committee, went for the jugular last week as she questioned Douglas Alexander, the UK transport secretary, over the merits of the draft treaty.
“When you negotiate with somebody and they walk away grinning hugely with various pockets full of gold, does it seem to you that this is an equal agreement or an unequal agreement?”
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