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AIRLINE VIEWS ON THE PROPOSED GATS TOURISM ANNEX

AIRLINE VIEWS ON THE PROPOSED GATS TOURISM ANNEX SYMPOSIUM ON TOURISM SERVICES WTO/OMC Geneva, 22-23 February 2001 Richard Smithies Director, Policy Analysis Government & Industry Affairs - IATA AIR TRANSPORT & GATS TODAY Annex on Air Transport Services

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AIRLINE VIEWS ON THE PROPOSED GATS TOURISM ANNEX

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  1. AIRLINE VIEWS ON THE PROPOSED GATS TOURISM ANNEX SYMPOSIUM ON TOURISM SERVICES WTO/OMC Geneva, 22-23 February 2001 Richard Smithies Director, Policy Analysis Government & Industry Affairs - IATA

  2. AIR TRANSPORT & GATS TODAY • Annex on Air Transport Services • excludes traffic rights and all services directly related to their operation • but covers CRS, Marketing & Selling, Maintenance & Repair of aircraft • CTS to review developments & coverage every 5 years • Bilateral system of Agreements • basis for exclusion • States can control liberalisation process • maintain principles of reciprocity and fair and equal opportunity to compete • offer procedures for handling disputes

  3. INDUSTRY VIEWS ON THE GATS • GATS is not the vehicle for fundamental reform • ICAO is best-qualified international agency • to take account of AT particular characteristics • Handle air transport on a sectoral basis • Review offers opportunity to clarify • scope and coverage of services directly related to the operation of air traffic rights • Belief that a hybrid system can de developed • permit multilateral & bilateral arrangements to co-exist • depending on regional preferences and needs

  4. BASIS FOR THE TOURISM ANNEX • Tourism & Travel Related Services(Cat. 9) • covers hotels & catering • travel agencies & tour operator services • tourist guide services • other services • Tourism Satellite Account system adds • air, sea, rail & road passenger transport • certain financial services • navigational aids • tourism information services

  5. WHY INCLUDE AIR TRANSPORT IN A TOURISM ANNEX? • WTO-Tourism & UNCTAD meetings • neither body has direct responsibility for air transport • only sources for this argument • Arguments include: • need to focus on tourism sector as a whole • anti-competitive practices in network services • developing countries at the mercy of abuses of a dominant position

  6. WHAT ARE THE CONSEQUENCES? • Air transport in a Tourism Annex • Would destroy Air Transport Annex • take out 2 of 3 services covered • Split GATS coverage of air transport • passenger and freight • remove common services • Marketing & Selling only service covered • Need to re-examine GATS legal framework

  7. AIRLINE INDUSTRY CHANGES • Consequences of liberalisation • more competition • airline restructuring • Changes include: • development of hubs, • alliances & commercial arrangements • revenue management systems • evolving distribution systems • growing reliance on e-commerce • Changes are limited by: • airport & airspace congestion • environmental considerations • foreign ownership restrictions

  8. LIBERALISATION & COMPETITION LAW • Competition authorities • under liberalisation they assume a more important role • airlines comply with relevant competition laws • Antitrust immunity / exemptions needed • for airlines to agree on standards & interline fares • to maintain a coherent multilateral framework • Global network of services • taken for granted • ensures service to every country

  9. DISPUTE SETTLEMENT • GATS Air Transport Annex • GATS dispute settlement procedures can only be invoked • where commitments have been made • when multilateral & bilateral mechanism have been exhausted • Bilateral air service agreements • contain articles relating to: • anti-competitive practices • dispute resolution • CRS practices - two considerations: • existing regulations or codes of conduct • some commitments for CRS exist under the GATS

  10. CONCLUSIONS • A Tourism Annex is an important undertaking • include all interested parties in the drafting process • If the proposed Tourism Annex is put in place, • it should not include any part of air transport • IATA supports the review of the GATS Air Transport Annex • conducted by the Council for Trade in Services • in informed & transparent manner

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