R 292143Z JAN 10
FM SECSTATE WASHDC
TO EU MEMBER STATES COLLECTIVE
AMEMBASSY OSLO 
AMEMBASSY REYKJAVIK 
INFO EU INTEREST COLLECTIVE
USEU BRUSSELS
DEPT OF COMMERCE WASHINGTON DC
TRANSPORTATION DEPT WASHINGTON DC 0000

UNCLAS STATE 009584 
 
 
E.O. 12958: N/A 
TAGS: EAIR EUN KTIA IC NO
SUBJECT: U.S.-EU SECOND STAGE AIR TRANSPORT NEGOTIATIONS 
 
This is an action request for all Embassies to EU Member 
States, Oslo, and Reykjavik.  See paragraph 2. 
 
¶1.  Summary.  The seventh -- and possibly decisive -- round 
of second stage U.S.-EU air transport negotiations will take 
place in Madrid February 15-17.  The November 3, 2009 U.S.-EU 
Summit Declaration calls for a second stage agreement by the 
end of 2010.  To meet this timetable, both sides must take a 
realistic and pragmatic approach. 
 
¶2.  Action Request.  Posts are requested to approach host 
government Transportation Ministry officials at an 
appropriately high level, and, drawing on the points provided 
in paragraph 8 below, urge that the European side take a 
realistic and pragmatic approach in the negotiations in order 
to reach a second stage agreement, including benefits for 
both sides, by the end of 2010.  Posts may also approach 
Foreign Ministry or other host government officials, if it 
would be constructive. 
 
 
Background 
 
¶3.  In March 2007, after three-and-a-half years and eleven 
formal rounds of negotiations, U.S. and EU negotiators 
initialed the text of a comprehensive, first-stage Air 
Transport Agreement.  The Agreement was signed in April 2007 
and has been provisionally applied since March 30, 2008.  The 
Agreement replaces 16 existing bilateral Open Skies 
agreements and five more restrictive aviation agreements 
between the United States and Member States, and establishes 
an "Open Skies-Plus" framework applicable to the United 
States and all 27 EU Member States.  Norway and Iceland are 
joining the Agreement on the European side. 
 
¶4.  The Agreement contains all the essential elements of an 
Open Skies agreement and elements beyond those in traditional 
Open Skies accords.  The Agreement includes a binding 
commitment to undertake negotiation of a second stage 
agreement, and identifies these items of priority interest to 
one or both of the parties to be included on the agenda: 
further liberalization of traffic rights; additional foreign 
investment opportunities; effect of environmental measures 
and infrastructure constraints on the exercise of traffic 
rights; further access to government-financed air 
transportation; and provision of aircraft with crew. 
 
¶5.  Second stage negotiations began in May 2008, and six 
rounds have taken place.  The negotiations have been 
constructive, and significant progress has been made across a 
range of important issues, including security, regulatory 
cooperation, and the role of the Joint Committee established 
by the Agreement.  Further work remains to be done on other 
key areas, including market access, investment, environmental 
constraints, cooperation on environmental issues, and the 
social (labor) dimension.  Representatives of Norway and 
Iceland participate in the negotiations as observers on the 
European delegation. 
 
¶6.  At the November 3, 2009 U.S.-EU Summit President Obama 
and his EU counterparts called for a second stage air 
transport agreement by the end of 2010 which includes 
benefits for both sides.  EU leaders at the summit included 
President of the European Commission Jose Manuel Barroso, 
Commissioner Benita Ferrero-Waldner, Swedish Prime Minister 
Fredrik Reinfeldt and Foreign Minister Carl Bild, 
representing the EU Presidency, and High Representative 
Javier Solana. 
 
¶7.  The seventh -- and potentially decisive -- round of the 
second stage negotiations will take place in Madrid February 
15-17.  To reach agreement within the timetable the leaders 
have set, both sides must now take a very realistic and 
pragmatic approach to developing nuanced agreement language 
necessary to bridge the gap between the U.S. and EU 
positions. 
 
¶8.  Begin points. 
 
-- At the November 3, 2009 U.S.-EU Summit President Obama and 
his EU counterparts called for a second stage U.S.-EU air 
transport agreement by the end of 2010 which includes 
benefits for both sides. 
 
-- Spain has said that among its top objectives during its 
Presidency is achieving agreements with the United States, 
including a second stage air transport agreement. 
 
-- Spain is hosting the seventh round of U.S.-EU second stage 
air transport negotiations in Madrid February 15-17. 
 
-- Significant progress has been made in past rounds on a 
broad range of subjects.  The United States has undertaken a 
thorough analysis of the remaining issues and is convinced 
that compromise by both sides will be required if we are to 
reach a second stage agreement by the end of 2010. 
 
-- Both sides must be realistic about what is achievable, in 
the time available, tempering ambition with pragmatism. 
 
-- The United States recognizes that our principal request -- 
fundamental change in the way decisions are made on 
noise-related operational restrictions at EU airports -- 
presents difficult policy and legal challenges for Member 
States. 
 
-- We hope that European participants understand that a 
commitment to change U.S. law on ownership and control of 
U.S. carriers is not achievable within the timeframe set by 
our leaders for achieving a second stage agreement. 
 
End points. 
 
¶9.  Department appreciates Posts' assistance. 
 
 
CLINTON