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WORLD TRADE
ORGANIZATION (WTO) AND ICAO LISTEN TO
TIACA'S CASE FOR AIR CARGO
LIBERALIZATION
 The
World Trade Organization (WTO) and the
International Civil Aviation Organization
(ICAO) have both invited The International
Air Cargo Association (TIACA) to give its
views on liberalizing access to the air
cargo market and how such a move will
benefit global trade.
On October
1st, 2007, Ulrich Ogiermann, Vice Chairman
of TIACA and President & CEO of
Cargolux Airlines, addressed a seminar on
air transport services organised by the
European Commission at the WTO
headquarters in Geneva, Switzerland for an
audience of government authorities from
the 150 countries that are members of the
WTO. The WTO membership is currently in
the process of reviewing the Annex to the
General Agreement on Trade & Services
(GATS) that allows WTO members to
negotiate access to their trading
partners' markets on a multilateral
basis.
In its
invitation to TIACA, the EU and WTO
stated: "We consider it valuable for air
cargo operators to be able to share their
experience in doing business abroad in
order to assist WTO members in
understanding the degree of market
openness and the barriers to market access
that exist in the global market for air
cargo transport
services."
In his
address to WTO delegates, Mr Ogiermann
said the current bilateral system is far
from perfect, stating that the need to
obtain explicit approval by governments
for every operation was a lengthy process
and not necessarily compatible with the
economic requirements of trading countries
or carriers' business flows. The current
practice, he added, is mainly driven by
passenger traffic considerations and is
often influenced by 'national' carriers.
He called
for an urgent overhaul of a system that
dates back to The Chicago Convention in
1944, a time when regulations were mainly
driven by the desire to control
competition in a post war environment.
Today, he added, the principles of the
Convention with regards to entry, price
and capacity were 'out of place and
time'.
TIACA's
Vice Chairman said the bilateral system
works for developing markets, pointing to
China's success in striking a 'difficult
balance' since 2000 between opening up
market entry points and protecting fragile
local airlines. Subsequently, the Chinese
market has gained significant
momentum.
However,
developed markets require evolved versions
of this bilateral regulatory system.
Examples of this already exist between
trading blocs around the world as well as
in the US domestic market - liberalized in
the late 1970s - the intra-EU market since
the 1990s and the first phase of 'open
skies' between the US and EU set for
2008.
Rapid
change, he said, must come by separating
cargo from the bilateral agreements;
regional trading blocs must encourage
multilateral agreements between their
members. Mr Ogiermann called for a clear
vision for leveraging the bilateral
system, stating that governments and trade
organizations must seize the
momentum.
TIACA's
position on cargo liberalisation is
underpinned by the value of air cargo
services as a job creator and economic
growth engine. The industry is a key
intermediate service for many other kinds
of trade worldwide and a vital part of the
production process of pre-manufactured and
manufactured goods. Today, 30% of world
trade by value &endash; 2% in volume terms
&endash; worth US$2.5 trillion per annum
is carried by air.
Air cargo
has a vital macroeconomic impact and is an
enabler of globalization. It is essential
to the economic viability of developing
nations. Ulrich Ogiermann stated:
"Airfreight is gaining in importance but
is currently too restricted by a bilateral
system designed for passenger traffic
demands. Including air transport services
into GATS will not improve market access
for cargo carriers. We need more decisive
action. Full liberalisation is not a wish,
it is a must," he added.
TIACA's
presentation to WTO member countries comes
just days after its latest working paper
was submitted to ICAO's Economic
Commission stating 'The case for
liberalizing access to the air cargo
market'. The paper was presented jointly
by the Airports Council International, the
International Federation of Freight
Forwarders' Associations and TIACA.
Jack
Boisen, Chairman of TIACA and Vice
President Cargo of Continental Airlines,
said: "The world's largest trading nations
and industry regulators are increasingly
starting to recognise air cargo's pivotal
role in the global economy and we believe
this is best served by fully liberalized
market access, a step already taken by
several States. Along with ACI and FIATA,
TIACA strongly believes that the air cargo
marketplace should be unrestricted as to
the ability of air carriers to move cargo
in any international marketplace between
two points anywhere in the
world."
The joint
paper states: "Equally, such
liberalization for all-cargo rights should
not in any way restrict the ability of
combination carriers to obtain similar
agreement rights for both passenger and
cargo service. In its entirety, the air
cargo industry is enabling rapid
integration of the world economy, bringing
efficiencies to complex production
processes by moving intermediate goods to
regions which add the highest value at the
lowest cost. Air cargo carries high value
finished goods quickly from manufacturer
to consumer, cutting inventory costs and
driving high levels of customer
satisfaction.
"The
future of our industry depends to a large
extent on governments recognizing that
market forces should continue to drive
innovation. Excessive regulation has a
high cost, creating inefficiencies in a
global supply chain and thereby reducing
the positive economic impact of air cargo
on the economy."
MEDIA
CONTACT:
Jamie
Roche
T: +44 (0)
1753 621 666
E:
jamie@jamierochepr.co.uk
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