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Championing the liberalisation

Europe is showing a misplaced pride in the new wave of liberalisation in air transport. The ongoing and recently concluded air transport agreements with 3rd countries still carry a strong liberal footprint but have made only a modest attempt at protecting fair competition and EU social standards. If Europe is serious about maintaining high social standards and fair competition in aviation, it should quickly get its act together.

When in 2015 the European Commission presented its Aviation Strategy, it became clear that negotiating Air Transport Agreements (ATAs) would be high on the priority list. It was the first pillar of the Strategy and a list of third countries were picked for negotiations. The (now former) EU Transport Commissioner Bulc had a vision for the EU aviation sector to be “a world leader”, reaping the benefits of the booming Gulf and ASEAN markets. With an already fully liberalised European internal market, the only liberalisation still possible was through such ATAs with 3rd countries, even if they were not always eager to go as far as the EU Commission wanted them to.

The European Commission has traditionally favoured economic liberalisation and usually with a good reason. Liberalisation provided opportunities for business and consumers alike. An EU study found that the ATA with Morocco, signed in 2006, increased capacity by 150 percent and decreased ticket prices by 61 percent. But rarely has the Commission looked beyond these economic benefits of liberalisation in air transport. Rarely has the focus been on the downsides of this far-fetching liberalisation in the long-term. This tunnel vision has often inadvertently precluded the EU from incorporating appropriate safeguards in its Air Transport Agreements. And even though the Aviation Strategy pledged to correct that, 5 years on, there are no signs of a radical change. 

Instead, the recently signed EU-Qatar ATA shows a very modest level of ambition.

The case of Qatar is significant for two reasons. First, it is a country with documented abuse of workers, slave labour & epidemic of workers’ deaths. It would only seem logical that a strong Social Cause would be built in the agreement. And second, Qatar was a test case – whatever Social Clause was negotiated, it was likely for it to become the ‘template’. In the end, the social clause in itself is not something to be disappointed with. But it also gives little reasons to be proud of. While it clearly spells out that undermining social standards cannot be used to gain a competitive advantage, it also leaves a lot of the enforcement to the political will. 

If Europe is serious about maintaining high social standards and fair competition in aviation, it should quickly get its act together

Why this is a bad idea can be illustrated with the case of Ukraine. While the European Court of Human Rights (ECHR) acknowledged that Ukrainian law deprives pilots and cabin crew of the right to strike, the EU and Ukraine have concluded an agreement to gradually extend the internal aviation market to Ukraine. So, often the political will just ends with the will to liberalise. 

Now, the EU is negotiating with Oman and it will be no surprise if the same Social Clause from the EU-Qatar ATA finds its way into the EU-Oman agreement. The tone has clearly been set and it does not sound too good. 

At the same time, there are previous ATAs with little to no mention of social or fair competition clauses. Such is the case for the EU-Canada agreement, which entered into force in May 2019, failing to address social issues. The paradox is that there are much more progressive social protections included for all other industries by the recently concluded general Free Trade Agreement CETA with Canada. Such provisions promote cooperation with the ILO and, more importantly, establish an effective enforcement mechanism. But they don’t apply to air transport. European pilots are loudly demanding to have the Transport experts of the European Commission catch up with the more progressive attitude of their Trade counterparts. 

Only re-regulation can spare Europe’s reputable business from “cowboys” and good quality employment from social dumping.

Where the negotiations result in competition on routes between the EU and the 3rd country, e.g. Paris to Delhi, then adherence to ICAO and ILO standards should be an agreed minimum standard. When the granting access to the EU internal market with 5th freedom rights or greater, then full adherence to the safety, security, consumer and social EU standards & regulations should be both agreed and enforced. The same counts for situations in which ownership and control rules allow direct competition between EU carriers and 3rd country airlines. 

All successful business models need a stable and predictable regulated marketplace in which to trade. In aviation, safety standards and their effective implementation are also fundamental to the success of our industry. A true world leader in aviation would know that.