Explanatory Memorandum to COM(2022)194 - Signing of the Comprehensive Air Transport Agreement with the Member States of ASEAN

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dossier COM(2022)194 - Signing of the Comprehensive Air Transport Agreement with the Member States of ASEAN.
source COM(2022)194 EN
date 06-05-2022


1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

The Comprehensive Air Transport Agreement between the Member States of the Association of Southeast Asian Nations, and the European Union and its Member States (EU-ASEAN CATA), has been negotiated by the Commission as authorised by Council decisions of 7 June 2016 and 26 May 2020.

Air services between the Union and ASEAN Member States operate at present based on bilateral agreements between Member States and individual ASEAN Member States.

In its Aviation Strategy for Europe, 1 the Commission highlighted that “by adopting an ambitious external aviation policy through the negotiation of comprehensive aviation agreements, with a clear focus on growth markets, the EU can contribute to improving market access and investment opportunities for European aviation in important overseas markets, increasing Europe's international connectivity and ensuring fair and transparent market conditions for EU airlines”. In order to untap these benefits, the Commission recommended to the Council to authorize the opening of negotiations of comprehensive EU-level air transport agreements with a number of countries and regions, including ASEAN. This Agreement aims in particular at:

- ensuring fair competition, non-discrimination, transparency and a level playing field for economic operators;

- gradual market opening in terms of access to routes and capacity;

- enhancing connectivity, thereby benefitting consumers and the economy.

The negotiators reached agreement on the draft text of the EU-ASEAN CATA on 2 June 2021. The Agreement will enter into force once all ASEAN Member States, all EU Member States and the Union have completed their respective ratification or approval processes. However, it may also enter into force for the Union and its Member States and all ASEAN Member States except Malaysia, if Malaysia is the only ASEAN Member State not having ratified it. In such case, the Agreement would enter into force also for Malaysia once the latter ratifies it.

• Consistency with existing policy provisions in the policy area

As mentioned above, the Agreement has been negotiated based on an authorization by the Council to open negotiations, following a recommendation presented by the Commission as a follow-up to its 2015 Aviation Strategy for Europe.

The Communication from the Commission on Sustainable and Smart Mobility Strategy – putting European transport on track for the future (COM(2020) 789 final) calls for turning the Union into the world’s connectivity hub. The Communication explains that, in order to achieve this objective, “ensuring undistorted international competition, reciprocity and a level playing field is essential”. The Communication continues with the announcement that “the Commission will also continue to promote the use of European technical, social, environmental and competition standards in […] relations with individual non-EU countries across transport modes” and “continue to deepen transport relations, including with key strategic partners […], and will further develop links with new international partners, such as high-growth and emerging economies”.

ASEAN Member States are among the fastest growing economies in the world, and represent together a market of over 650 million people. With 11.2 million passengers in 2019, ASEAN collectively is the 13th biggest aviation partner of the Union, with a strong potential to grow further. Current bilateral aviation agreements between Member States and individual ASEAN Member States provide for some mutual market access, which remain unequal from one country pair to another. Furthermore, those bilateral agreements lack adequate provisions on essential elements to avoid abuses of a liberalised marketplace, such as fair competition, transparency or social matters.

The EU-ASEAN CATA addresses, vis-à-vis ASEAN, the objective of the Sustainable and Smart Mobility Strategy of turning the Union into the world’s connectivity hub.

By facilitating the operation of direct EU-to-ASEAN connections, the EU-ASEAN CATA will help reduce the dependence on connecting flights through hubs in third countries. This will not only benefit Union carriers, but also reduce the environmental footprint of individual EU-ASEAN trips, by shortening flight routes and reducing the number of take-off and landing operations – in line with the objectives of the Sustainable and Smart Mobility Strategy and of the Communication from the Commission on the European Green Deal (COM(2019) 640 final).

• Consistency with other Union policies

Regulation (EU) 2019/712 on safeguarding competition in air transport ensures that any measures adopted on its basis respect international obligations, including those of this Agreement.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

Article 100(2) in conjunction with Article 218(5) of the Treaty on the Functioning of the European Union (TFEU).

• Subsidiarity (for non-exclusive competence)

The provisions of the Agreement will prevail over the relevant provisions of the existing arrangements made between Member States and individual ASEAN Member States. The Agreement creates simultaneously for all Union air carriers equal and uniform conditions for market access, and establishes new arrangements for regulatory co-operation and convergence between the Union and ASEAN Member States in fields essential for the safe, secure and efficient operation of air services. These arrangements can only be achieved at Union level.

Union action will better achieve the objectives of the proposal for the following reasons.

The Agreement will apply to the 27 Member States, therefore, the same rules will apply without discrimination and benefiting all Union air carriers regardless of their nationality. It includes comprehensive provisions on subsidies, anticompetitive practices and transparency and robust mechanisms to enforce them, thereby contributing to a level playing field for air services between the Union and ASEAN Member States, and between the Union and other destinations, operated via ASEAN Member States.

The Agreement further secures for all Union air carriers access to commercial opportunities, such as the ones relating to ground-handling, code-sharing, inter-modality and the possibility to freely establish prices. It also includes provisions on social matters in line with those included in Union international trade agreements, committing the Parties to improve the social and labour policies as per their international commitments, notably those made in the context of the International Labour Organization (ILO). Last but not least, it sets up a framework for cooperation between the Union and ASEAN Member States in minimising the impact of aviation on the environment, and particularly in addressing the greenhouse gas emissions associated with aviation.

Air carriers will be able to operate passenger and cargo services freely from any point in the Union to ASEAN Member States, within the single regulatory framework of the Agreement, which is currently not the case. Air carriers will also be able to operate unlimited all-cargo services to points beyond, and passenger and combination services to points beyond subject to frequency limitations.

The removal of market access restrictions between the Union and ASEAN Member States will not only attract new entrants to the market and create opportunities to operate to underserved airports, but will also facilitate consolidation between Union air carriers.

• Proportionality

Not applicable.

• Choice of the instrument

International agreement.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

Not applicable.

• Stakeholder consultations

Stakeholders from the entire aviation value chain and social partners, including notably trade unions, have been consulted during the negotiations. Comments made in this process have been taken into account.

• Collection and use of expertise

Not applicable.

• Impact assessment

Not applicable.

• Regulatory fitness and simplification

Not applicable.

• Fundamental rights

Not applicable.

4. BUDGETARY IMPLICATIONS

The proposal has no implication for the budget of the Union.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

Not applicable.

• Explanatory documents (for directives)

Not applicable.

• Detailed explanation of the specific provisions of the proposal

Article 1 authorises the signature of the Agreement on behalf of the Union, subject to its conclusion.

Article 2 requires the Council Secretariat General to establish the instrument of full powers to sign the Agreement, subject to its conclusion, for the person or persons indicated by the Commission.

Article 3 approves two statements, to be made on behalf of the Union on the occasion of the signature of the Agreement, regarding the expedient entry into force of the Agreement and the intention of the Parties to maintain close discussions and coordination on responses to unexpected crisis events with the objective of mitigating any disruptive effects on air services, respectively.

Article 4 provides for the entry into force of the proposed Decision.