RESTRICTEDWORLD TRADE
ORGANIZATIONTCA/M/10
1 August 2000
(00-3150)
Committee on Trade in Civil Aircraft
MINUTES OF THE MEETING
HELD ON 14 JUNE 2000
Chairperson:  Mr. Didier Chambovey (Switzerland)
1. The Committee on Trade in Civil Aircraft (the "Committee") held a meeting on 14 June 2000.
2. Prior to the adoption of the agenda, the Committee considered a request by the delegation of
Saudi Arabia to participate as an observer.  Pursuant to the procedures adopted by the Committee on
the participation of observers (AIR/M/1, page 12), the Committee agreed to this request.
3. The Committee adopted the following agenda:
Page
A. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON TRADE IN CIVIL
AIRCRAFT UNDER THE WTO ...................................................................................................... 1
B. UPDATE OF HS HEADINGS IN THE PRODUCT COVERAGE ANNEX AND EXTENSION OF
PRODUCT COVERAGE OF THE AGREEMENT ............................................................................... 3
C. " END-USE" CUSTOMS ADMINISTRATION .................................................................................... 8
1. Updating Information regarding Civil/Military Identification for
Customs Purposes .......................................................................................................... 8
2. Military vs. Non-Mi litary Definition............................................................................. 9
D. UNITED STATES LEGISLATION "AIR 21"................................................................................... 10
E. E UROPEAN COMMUNITY REGULATION ON AIRCRAFT ENGINE NOISE ................................... 12
F. B ELGIAN AIRCRAFT INDUSTRY SUPPORTS ............................................................................. 13
G. C ERTIFICATION OF LARGE CIVIL AIRCRAFT ........................................................................... 14
H. O THER BUSINESS .................................................................................................................... 15
1. Matters under Article 3 ............................................................................................... 15
2. Matters under Article 6 ............................................................................................... 15
I. DATE OF NEXT REGULAR MEETING .......................................................................................... 16
A. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON TRADE IN CIVIL AIRCRAFT
UNDER THE WTO
4. The Chairperson noted that the status of the Aircraft Agreement under the WTO was a
recurrent issue in the Committee.  Due to the fail ure to introduce the Aircraft Agreement into theTCA/M/10
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WTO framework, there remained significant uncerta inty surrounding the legal status and operational
effectiveness of the Aircraft Agreement.  On 29 April 1999, the Chairperson had sent signatories a
draft Protocol concerning technical rectifications needed to bring the Aircraft Agreement into the
WTO framework.  At the last meeting of the Committee in December 1999, the Committee had still
not been in a position to agree to adopt this draft protocol.  The Chairperson therefore asked againwhether Signatories were now in a position to agree to adopt the April 1999 draft Protocol of
technical rectifications to transpose the Agr eement on Trade in Civil Aircraft into the WTO
framework.  This would be on the understanding that this was a neutral transposition that did not
change the existing relationship of the Aircraft Agreement with the other WTO Agreements,
including the Agreement on Subsidies and Countervailing Measures.  The Chairperson underlined that
it would be useful for the Signatories' understanding and for himself and the Secretariat to know the
reasons behind Signatories' answers to his question.  This might help work towards a consensusamong the Signatories.  Recalling the French proverb that "silence gives consent", he asked whether
the silence prevailing in the room indica ted Signatories' consent to his proposal?
5. The delegate of the United States stated there was at least some mild reservation with regard
to this draft Protocol and confirmed that some of the issues that the United States had raised at the last
meeting remained to be discussed.  He recalled that the European Communities had raised questionswith respect to recitations 26 and 37 of the draft Protocol and he wondered if they had any additional
remarks with regard to those provisions.
6. The representative of the European Communities recalled that they had some questions and
had asked for further clarifications on some of the points, in particular, paragraphs 26 and 37 of the
draft Protocol.  He regretted that he could not report any bilateral progress in the meantime, which hadbeen one of the ideas flagged by the Chairperson in the last meeting.  In order to avoid repetition of
discussions which had already occurred, he could only state that his delegation was still not in a
position to make progress on this issue.
7. The delegate of Japan stated that his delegation was aware that the United States and the
European Communities had spoken and that they had some difficulties to resolve this issue bilaterally,
and his delegation was waiting until this issue could be fully discussed.  The fact that Japan had not
been very active in this discussion so far did not necessarily mean that they could accept whatever
arose from the EC-US bilateral consultations.  Tokyo had some technical questions as to the
relationship between the Subsidies Agreement and the Aircraft Agreement in respect of this draft.
Japan would have to come back to this once the European Communities and the United States had
decided bilaterally on resolving their issues.
8. The representative of Canada said that Canada supported the efforts to bring the Aircraft
Agreement into the WTO framework.  They felt that this would be an advantage in trying to attract
new Signatories to the Agreement and expanding its parameters to other Members, which would be a
benefit to all.  As one of the few plurilateral agreements, it would be nice to bring it into the
framework of the WTO, and later on make it into a full-fledged agreement as others were.  However,
they could not ignore the issue that her colleague from Japan had raised with respect to the SubsidiesAgreement that had been highlighted in previous meetings.  So, her delegation was not able to sign on
to the Protocol as it now stood.
9. The Chairperson underlined that this draft Protocol was in order to transpose a neutral aspect
of the Aircraft Agreement into the WTO context without changing the relationship of agreements. It
was important for the Committee to know of problems which arose for Signatories and also to beinformed of the reasons for which Signatories could not adopt the draft Protocol at this meeting.  He
would appreciate finding this out in greater detail, but it was up to the Signatories to determine the
content of the discussions.  He concluded that it was impossible today to adopt this Protocol and
questioned whether this item should remain on the agenda.  As Chairperson, he was always availableTCA/M/10
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to carry out informal consultations in order to tr y to reach mutually satisfactory conclusions.  He
asked for Signatories' advice on the prospects of succeeding and the possibility of holding such
consultations.
10. The representative of the United States said that his government supported rectifications of
the Agreement at the earliest possible time and encouraged the Chairperson to hold consultations
either formally or informally.  His delegation did not want to discourage any parties from making
detailed questions or comments.  The fact that they had not had consultations on this matter with the
European Communities should not discourage a full discussion of this item and if the Governments of
Canada or Japan had specific comments or questions, he encouraged them to raise them and perhaps
to enter into a discussion.  However, he thought the Committee had to recognize -- as the Chairperson
had -- that the Committee would not be able to reach a conclusion today.
11. The representative of the European Communities stated that his delegation had also been
supportive at the last meeting concerning any efforts of the Chair, although at the last meeting
Signatories had said they would try to achieve progress bilaterally.  His delegation would be happy to
accept the Chairperson's offer.
12. The delegate of Japan wanted to reiterate that they were supportive of any efforts of the
Chairperson on this important issue, and that they would be happy to share their concerns.
13. The Chairperson stated that he believed this item should remain on the agenda at the next
meeting.  He would provide his good offices, but he needed some tangible signals from Signatories
that there were prospects to reach an agreement before embarking on informal consultations or before
undertaking an effort with the view to bridge any gaps in position. Once a signal was given, he would
be ready to hold those consultations at the earliest possible date.
14. The Committee took note of the statements made.
B. UPDATE OF HS HEADINGS IN THE PRODUCT COVERAGE ANNEX AND EXTENSION OF PRODUCT
COVERAGE OF THE AGREEMENT
15. The Chairperson recalled that the Secretariat had circulated the draft revised protocol and
product coverage annex in document TCA/W/5 and Corr. 1 for review and comments by Signatories.
This draft revised protocol and product coverage annex addressed two issues: first, the updating of the
HS headings in the product coverage annex; second, the extension of the product coverage of the
Agreement.  It had been drawn up on the basis of the views expressed by Signatories at the meeting of
the Technical Sub-Committee on 16 December 1999 and of the instructions given by the Committee
at its meeting of 17 December 1999.  Signatories had been encouraged to submit comments on the
draft text, including any other items for possible inclusion in the product coverage annex, by
1 May 2000.  However, no written comments had been received by that date.  To date, only onedelegation, Japan, had submitted written comments.  Japan's comments had been circulated as
document TCA/W/6.  The Chairperson reminded Signatories that the draft revised protocol and
product coverage annex was intended eventually to replace the existing 1986 Protocol currently
annexed to the Agreement on Trade in Civil Aircraft.  Once Signatories had agreed upon the updating
of the HS headings and upon expanding the product coverage of the Agreement through the inclusionof any additional items in the product coverage annex, the Committee would then be in a position to
adopt the new protocol a nd product coverage annex.
16. The Chairperson suggested that, since only one written proposal had been made -- by Japan --
he believed that the Committee could deal with this issue without going through the product coverage
list line-by-line.  However, this depended on the degree of detail and the number of proposals orissues that Signatories intended to raise at the meeting.TCA/M/10
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17. The delegate of Japan stated that, as the delegation that had submitted written comments, his
intention was not to go line by line, but rather to table their suggestions for further thought by the
Committee.
18. The delegate of the European Communities stated that he had questions relating to three or
four items only, along with a general comment.
19. The delegate of the United States said they had similar clustered concerns, and did not see a
need to go line by line.  He had some questions and comments that he could raise, but would be
interested in Japan's introduction, since they were the only party to have submitted detailed written
comments.
20. The Chairperson proposed that that those delegations who had made written proposals and
others who had suggestions would present their proposals first.  The Committee could then discuss
these to see whether they were acceptable to the Signatories, with a view to finalizing the document.The Chairperson invited the delegation of Japan to introduce its proposals.
21. The delegate of Japan wished to apologize for the late timing of their comment and was aware
that many Signatories might not have had the time to go through it in detail.  Therefore, it was not his
intention not to go through the comments in detail, nor were they  expecting detailed response from
the Signatories at this meeting.  Their intention was to table some ideas for further reflection, but ofcourse any comments were welcome.  Their comments broadly fell into three categories. The first was
correcting punctuation errors.  Some of these might be simply typographical errors in the draft
distributed as TCA/W/5 and others might be typographical errors which went unchecked into the
current annex when the Committee had adopted the current text in 1986.  The second dealt with
brushing up the draft language now on the table.  They wished to suggest some wording which, intheir view, reflected more accurately the relevant HS.  Thirdly, there were suggestions for possible
amendments of the current annex which up to now had not been the subject of discussion.  These were
fairly technical amendments that clarified the coverage of the relevant items.  They were aware that,
strictly speaking, some of the suggestions might have fitted better in the last amendment, but
nonetheless the Committee might wish to make use of this opportunity to rectify the discrepancies.
22. Referring to Japan's written comments in document TCA/W/6 concerning the draft in
TCA/W/5 and Corr. 1, the delegate of Japan first noted several technical and punctuation errors, and
then proceeded to item 8471.41, where Japan proposed adding the word "other" to "digital automatic
data processing machines" to reflect more accurately the current wording of the HS.  Likewise, on
item 8471.49, they proposed to add the word "other" to reflect the wording used in the current HS.  In
item 8471.50, they thought that the word "subheading" might not be necessary.  There were
punctuation errors in items 8479.89, 8501.31, 8501.33, 8501.40 and 8501.51.  In lines 8502.31 and8502.39, they suggested the following: "other electric generating sets of wind powered" and "other
electric generating sets other than those of wind powered", which was the precise wording of the HS.
There were punctuation errors in lines 8511.50 and 8518.21.  In line 8521.10, they suggested adding
the words "whether or not incorporating a video t uner".  In line 8525.40, they suggested adding: "Still
image video cameras and other video camera recorders".  He explained that, in Japan's view, thesestill image video cameras and other video camera recorders had always been at least notionally
included in the former 8521.10 when the new HS had been incorporated in 1986.  He thought it might
be more appropriate if they could explicitly confirm that these were still in the annex. With respect to
lines 8543.89, 9025.11, 9025.19, and 9025.80, Japan proposed a more accurate HS description.
Finally, in line 9030.83, there was a punctuation error.  Japan also had comments on the draftprotocol, but he would stop here for the time being.TCA/M/10
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23. The Chairperson stated that the Committee could revert to the draft protocol after it had
examined the proposals on the product coverage annex.  He thanked the delegation of Japan for the
meticulous work it had carried out.  He opened the floor for other comments.
24. The representative of the European Communities had a number of comments.  The first one
was rather basic and could have been raised at an earlier stage.  His delegation wondered whether all
the references to the Customs Cooperation Council Nomenclature (revised) were necessary, as none
of the Signatories was applying that nomenclature an d all were now on the HS system.  If that was the
case, all references to CCCN could be taken out.  Th is could perhaps be verified with the help of the
Secretariat. Second, his delegation also had a number of suggested editorial changes, which he would
submit to the Secretariat.  Third, he had a number of comments on the document TCA/W/5,
concerning three headings.  The first one was heading 8471 -- in 8471.30, there were "automatic data
processing machines" and units thereof, and "portable digital automatic data processing machinesweighing not more than 10 kg". His delegation questioned how much of these "portable" items the
Committee wished to include; if things can be easily removed from the aircraft, it made control of the
application of the rules very difficult.  There might be a need for a small "discussion de principe"
about this point.  The second point he wished to make related to line 8502.31.  Here, they were still
not clear, in referring to electric generating sets and rotary converters, whether wind-poweredappliances really had a place in the Agreement.  They needed some enlightenment whether anybody
used these sorts of products before they included this.  His last comment related to item 8543 and
specifically to 8543.89 and .90.  That dealt with machines and apparatus having functions not
specified or included elsewhere in that chapter, and the others were flight recorders for use in an
aircraft.  The comment here was that the Agreemen t initially covered flight recorders, but the WTO
transposition appeared to go further by covering not only flight recorders but also including all types
of product classified in 8543.89, not specifically mentioned in the heading.  He queried whether this
way of classifying things was correct.
25. By way of preliminary reaction to Japan's paper, his basic comment was that unfortunately
some of the issues proposed raised a number of issues which they had not been able to resolve in theshort time available.  They needed more time.  He could already state that they were not clear whether
all the items which had been added should be included.  With respect to "still image video cameras"
under item 8525.40, he observed that this was a large category of products and asked whether it was
necessary to qualify what was actually in use in the civil aircraft sector.  There was also the question
of the inclusion of "portable" items, which he had raised earlier.  In short, some of the changes
seemed to make a lot of sense while others needed some more discussion, and his delegation wished
to revert to this issue at some later stage, after they had time to examine this in depth.
26. The delegate of the United States referred to HS numbers 9030.83 and 9030.89.  On review,
they thought that they should also add 9030.82 into th e listing of instruments and apparatus.  This was
an HS number that had been created in 1996, so was not reflected in the current Annex.  If it wasn't
listed as an exclusion, then the Committee would actually be adding it to the Annex. They wished to
have a further opportunity to examine this.
27. The representative of Canada wished to comment briefly on the paper presented by Japan,
which her delegation was still examining.  She noted that a number of the changes proposed by Japan
dealt with how to characterize the nomenclature that  was associated with the particular subheading so
that it could be read on its own, while in other cases one had to read it in context.  Perhaps the
Committee had to look at the whole Annex in this respect and make sure that a consistent approachwas taken as to whether to pick up the exact wording from the HS.  She drew attention, for instance,
to line 8502.39, where the Secretariat draft referred to "other generating sets".  Japan was suggesting
"other generating sets other than those of wind-powered".  This was something on which the
Committee would need to focus.  This brought up a secondary issue: as with heading 8502, was there
merit in including just the heading without itemiz ing all the subheadings since the whole heading hadTCA/M/10
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been included.  That was not true in other cases, for instance 8471, where a number of subheadings
were listed but a few key ones were not. With respect to the EC's comment about the inclusion of
certain goods and whether or not they are indeed used for civil aircraft, she pointed out that the
Committee might consider erring on the side of being more inclusive, given that there was an
overriding criterion that needed to be applied to the product coverage in any case.  Her delegationlooked forward to the paper that the European Co mmunities stated that it would be distributing, and
would give it careful consideration.
28. The Chairperson stated that he had not expected to have quite so many technical comments at
this meeting in addition to the written proposals that had been submitted by Japan.  He believed that
the Committee needed a summary document gathering together all the proposed amendments, so that
it could do some really productive work.
29. The delegate of the European Communities clarified that he would not be circulating written
comments, but rather would submit editorial suggestions to the Secretariat.
30. The Chairperson suggested that the Committee should agree on a deadline by which all
proposed amendments should be communicated to the S ecretariat so that the Secretariat would be in a
position to elaborate a consolidated document with  all the proposed amendments.  The Technical Sub-
Committee could undertake to review this document the day before the Committee's next regularmeeting, which was scheduled for 15 November 2000.  The Chairperson proposed that the deadline
for all written comments could be 30 September 2000.  On this basis, the Secretariat would prepare a
revised version of the draft protocol highlighting the proposals by the Signatories so that there would
be a clear basis for discussion indicating the changes proposed by Signatories.  The Technical Sub-
Committee could convene on 14 November 2000 and the Chairperson hoped that it would be able atthis meeting to arrive at a document which was acceptable for all Signatories.  This document would
then be submitted for adoption to the regular meeting of the Committee the day after. Along with the
revised draft, he suggested that the Secretariat could also circulate an explanatory note concerning the
adoption and acceptance of the Revised Protocol and Product Coverage Annex.
31. The delegate of the European Communities suggested that an earlier deadline, such as
31 July 2000, would be more appropriate in order to allow time for consideration of the proposals
prior to the November meeting.
32. The Chairperson thanked the delegate of the European Communities for this suggestion and
proposed that the deadline for the submission of all proposals should be 31 July 2000.
33. The delegate of Japan wished to clarify the procedures to be followed with respect to the draft
protocol, as opposed to the product coverage annex, before the Committee agreed on the deadline. He
asked whether delegations should also submit by this deadline any comments with respect to the draftprotocol, or whether the Secretariat would pr oduce another draft for Signatories' comments?
34. The Chairperson stated that he would turn to the draft Protocol immediately after the issue of
product coverage.  If Signatories agreed, the proposals on product coverage would be submitted to the
Secretariat by 31 July 2000.  On this basis, the Secretariat would prepare a new draft that would be
circulated to the Signatories as early as possible in the fall.
35. The delegate of the United States thought this was an acceptable procedure, but noted that
some of the issues -- specifically whether, in the nomenclature, to describe the specific aircraft item or
to stick with the Harmonized System -- raised some policy questions that might not be resolved in the
comments to be received and might require some general discussion and change the entire approach.
He was not sure how this would work out.  Perh aps the Technical Sub-Committee could resolve some
issues in its half-a-day or day of meetings, but if it could not, there might be a need for some timeTCA/M/10
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lapse between that and the meeting of the Committ ee to get further instructions on how to resolve
some differences in general approach.  There were also concerns as to whether other provisions of the
Agreement had to be changed and how this fitted into rectification. Because the Committee was
updating the Annex, how would the Committee need to update some of the other provisions of the
Agreement to comport?  His delegation would proceed and meet these deadlines, but not to theexclusion of making other comments at a later point if necessary.  Many of these changes to the
Harmonized System had taken place years ago, and pr esumably the Signatories were applying these
changes and using successor nomenclature where appropriate, certainly the United States was, and
was encouraging those Signatories to continue to do that so that duty-free treatment was in fact
accorded to all the items to which the Committee agreed in 1986.
36. The Chairperson thanked the delegate of the United States for raising an important issue.
Certain proposals that had been made were not only of a purely technical nature, but some of them
would entail some policy decisions which the Technical Sub-Committee might not be able to make.
Depending on how serious those difficulties were, the Committee might not be in a position to finalize
its work at the next meeting.  If Members were ready today to embark on a discussion on those policy
issues, he suggested that they should start the discussion in order to expedite this, or at least to agree
on a certain number of criteria and principles that should be applied in the transposition.  Hisunderstanding was that, first, the Committee had to transpose the Annex to the changes in the HS
which should be a technical exercise, and second, the possibility was open to add new items in order
to extend the coverage of the Annex.  This had also been agreed.  He believed the Committee should
work on the basis of those criteria.  He asked whether Signatories thought there should be a meeting
or informal discussions dealing with the draft protocol a couple of weeks before the next regularCommittee meeting.
37. The delegate of the United States recalled that the Technical Sub-Committee had spent many
days during the technical exercise for the 1986 Protocol getting into detailed nomenclature issues in
determining answers to some of the questions that had come up today (in particular, whether there
were aircraft components in a particular item that was being suggested and how to refer to it and how
to deal with ex-out items). The Technical Sub-Committee could try to resolve those issues, and then
report to the Committee if it could.  If there were a broader policy problem, it could report that as
well.  Perhaps it could separate these matters.  He thought Signatories were coming to the realization
today that there were some technical issues that would have to be resolved.
38. The Chairperson proposed that, as the delegate of the United States had suggested, the purely
technical matters should be separated from issues that were more policy-based and suggested that the
Committee could adopt the "greatest common denominator" approach.  The Technical Sub-Committee could try to reach the maximum level of consensus. If there were proposals on a number
of items which were not acceptable to all Signatories, those proposals could be set aside for further
consideration.  However, an agreement could be reached on those proposals for which there was a
broad consensus.
39. The delegate of the European Communities requested clarification of the Chairperson's
proposed approach.  He thought that the important thing was that if there was a substantive problem,
the experts would have to look at it.  His dele gation had thought that the work here was almost
completed and had a couple of really minor comments, and there was no major policy problem.  He
had heard at least one delegation say that there may be more fundamental points, and it was important
that they hear as soon as possible what those might be.  Otherwise, all of the technical work would be
unsuccessful because Signatories could find at the e nd that they did not agree on the basic approach.
He was not sure that a formula was needed to look at these changes, although he agreed that any
additions might only be put into the document if there was consensus.TCA/M/10
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40. The Chairperson clarified that he was sugge sting that the Committee should endeavour to
reach the largest possible consensus on as many items as possible, but that it might well be that in
certain circumstances, it would not be able to agree on a change.  If there were a fundamental
problem, this should not block the technical work.  So, the Signatories could agree on those proposals
for which there was a broad consensus and leave other proposals for further consideration.
41. The representative of Japan thought he could generally agree with this approach, but wanted
to clarify whether the Chairperson intended that the Technical Sub-Committee might at the beginning
of its meeting determine the scope of the discussion to see whether there would be a consensus on the
items.
42. The Chairperson clarified that he did not see the need for a formal decision at the beginning
of the Technical Sub-Committee meeting, but that hi s aim was to arrive at a clean document by the
end of the next meeting of the Technical Sub-Co mmittee, and his intention was to adopt the new
product coverage annex at the next regular meeting of the Committee.
43. The delegate of the United States appreciated the Chairperson's suggested approach to try to
get a satisfactory conclusion at the earliest possible time and preferably at the next meeting.
However, he took note that several of the delegations had raised some broader issues that might not
enable the Committee to achieve that result or only allow it to achieve a more minimal result where itmight not be able to expand the coverage and just make the changes of concordance.  Therefore, he
did not think it could be decided exactly what would be achieved at that next meeting.  Signatories
could decide to launch into the work with a productive spirit and see if they could overcome obstacles
and resolve any differences and achieve what could be achieved.
44. The Chairperson had a similar understanding of the exercise.  Perhaps the level of ambition
would have to be lowered and Signatories would have to prepare for this.  Turning to the draft
Protocol itself, the Chairperson invited comments on the revisions proposed in the Secretariat draft
(TCA/W/5 and Corr. 1).  He noted that some dates would have to be agreed on concerning the
entering into force and the ratification or acceptance of the revised draft.  Some of these dates
depended on domestic constitutional procedures for acceptance of those amendments in each of theSignatories.  He asked Signatories to figure out what those dates should be so as to allow them to
carry out all the procedures they would have to carry out in implementing the Protocol.  On the
assumption that the Committee would adopt the Protocol at the next regular meeting on 15 November
2000, the last line of the Protocol would refer to 15 November 2000.  Based on this assumption, he
suggested that, using the deadlines that had been set for the 1986 Protocol as an example, the date for
paragraph 2 of the draft Protocol could be 31 October 2001, recalling that that paragraph also stated
"or at a later date to be decided by the Committee on Trade and Civil Aircraft".  He further suggestedthat paragraph 3 could read "this Protocol shall enter into force for those signatories who have
accepted it on the 1 January 2002". He did not wish to open up a discussion on those dates now, as
there was some homework to do for each Signatory, but this could be a working hypothesis, and the
Committee would revert to this at its next meeting if so agreed.
45. The Committee so agreed.
C. "END-USE" CUSTOMS ADMINISTRATION
1. Updating Information regarding Civil/Military Identification for Customs Purposes
46. The Chairperson recalled that at its November 1998 meeting, the Committee had accepted the
proposal by the Chairperson that the factual inform ation regarding civil/military identification for
customs purposes contained in document TSC/W/ 49 should be updated.  At the December 1999
meeting,  Signatories were urged to send the updated information to the Secretariat by 31 MarchTCA/M/10
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2000.  To date, Bulgaria, Canada, the European Communities, Japan and the United States had
provided the requisite information.  The Chairperson urged other Signatories to submit the updated
information to the Secretariat by 1 October 2000 in order that it may be circulated in good time for
discussion at the next meeting.
2. Military vs. Non-Military Definition
47. The Chairperson recalled that Canada had made a proposal concerning the definition of civil
aircraft for the purposes of the Agreement.  Canada's proposal had been circulated in document
TCA/W/4.  He also recalled that at the December 1999 meeting of the Committee, the United States
had observed that its approach paralleled this prop osal by Canada.  The United States approach was
set out in document TSC/W/5.  He noted that there were two general issues concerning this proposal
by Canada:  first, the substance of the definition of civil aircraft that Canada was proposing; second,
the modalities of any adoption by the Committee of such a proposal in the event that there were noobjections to the proposal by Signatories.  He proposed that the Committee deal with these two issues
separately.  Therefore, he opened the floor to co mments from delegations first with respect to the
substance of Canada's proposal.
48. The delegate of Canada stated that this issue had arisen because of the fact that Article 1.2
defined civil aircraft as all aircraft other than military aircraft.  It seemed that over time -- and
possibly as early as even before this Agreement came into being -- there had been an agreement that
military aircraft would be defined in terms of the end-user.  Canada's proposal was instead to
distinguish between "military" and "civil" aircraft base d on the initial certification.  In looking at the
documents provided by other delegations -- particularly the United States and the European
Communities -- it seemed that many of their internal provisions were in line with Canada's proposal interms of tariffs.  It was initial certification as opposed to the buyer which determined whether the
products received duty-free treatment.  Canada was wondering whether or not they should be adopting
a similar process with respect to the whole Agreement, one example being procurement.  Canada
wondered how other authorities were treating procurement.  Canada thus wondered whether
procurement of civil aircraft was governed by the initial certification as opposed to the buyer andwelcomed the views of other delegations on this.
49. The representative of Japan asked whether he was correct in understanding that the Canadian
proposal also included "parts" of civil aircraft.
50. The delegate of Canada clarified that her delegation understood their proposal to deal with
"parts" and to everything else to which the Aircraft Agreement applied.  Wherever the term "civil
aircraft" appeared in the Agreement, Canada suggested  that it be interpreted as set out in its proposal
in TCA/W/4.
51. The representative of the United States stated that, as correctly noted by the Canadian
delegation, the United States had in place a system similar to the proposal based on initial
certification.  However, he noted some possible problems in terms of having identical application of
the Agreement by all parties which would have to be addressed if this were a general rule.  For
example, in the current definition of military ve rsus non-military each Signatory had been required to
provide a list of their military entities, so Signatories had some certainty as to which entities procuring
these items would be considered military.  Therefore, the products that they procured were military.
If Signatories opted for initial certification, then they would have to know who the certifiers were and
there might be a difference in what they were willing to certify or the extent of certification amongst
the various products.  For the United States, virtually all parts of an aircraft were certified and carrieda serial number, so they had complete concordance with the aircraft, but this might not be the case
with other parties.  The question whether the Canadian proposal applied to parts had already been
raised and answered, so he would not go in to that.  There was also the issue of aircraft initiallyTCA/M/10
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certified as a civilian product but which was later modified.  He could give an example of some kind
of ammunition welded on to civil aircraft which would make it no longer certifiable as a civil aircraft
in the United States and he asked how that issue would be dealt with and whether the Canadian
Government had given some thought to those questions.
52. The delegate of Canada stated that as an initial reaction to some of the points raised by the
United States, perhaps their proposal needed to be fi ne-tuned to deal with such an event following the
initial certification, and some thought given as to how that should be dealt with under this Agreement.
53. The Chairperson thanked the delegate of Canada and proposed that the Committee take note
of the statements made and revert to this item at the next meeting.  He asked whether the delegate of
Canada would nevertheless like to introduce the part of the proposal dealing with the modalities for
adoption of the definition of civil aircraft.
54. The delegate of Canada stated that it seemed that the definition clarifying or expanding upon
Article 1.2 defining what was meant by a military aircraft had been done as an interpretation to the
Agreement.  There were two routes that could be followed to deal with the proposal that Canada had
on the table. One was essentially an amendment to the Agreement, that is, an amendment to Article
1.2 to redefine what was meant by civil aircraft and that amendment could be done in conformity with
Article 9.5.1.  Another way of dealing with it, which had been done in other contexts, was as aninterpretation of the Agreement. Canada considered  that such an interpretation would also be under
the purview of the Committee.  Canada was flexible on the modalities which would be used.  If
Signatories were predisposed to an interpretive statement, Canada could put something on the table
for the next meeting as another way of dealing with this same issue.  The modalities were secondary
in nature.  It was the outcome that her delegation was interested in and, given the fact that this was aplurilateral Agreement, the modalities were more flexible.  They were interested in hearing other
Signatories' views on this.
55. The Committee took note of the statements made.
D. UNITED STATES LEGISLATION "AIR 21"
56. The delegate of the European Communities said that his delegation had raised this point
because they were forced to take note of what they believed was a blatant violation of the Aircraft
Agreement.  They wished to draw the attention of the Committee to United States legislation in place,
and they expected this legislation to be repealed as soon as possible and otherwise reserved all their
rights under this Agreement and other WTO Agreements which might be pertinent.  He was talking
about the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century -- which he
would refer to as "Air 21".  This act, which was signed on 5 April 2000 by President Clinton,
regulated, amongst other things, the granting of slots to airlines at four major airports in the UnitedStates (New York's JFK and La Guardia, Washingt on International and Chicago's O'Hare).  Slots had
an enormous economic value.  Regarding these four airports, there was a new paragraph in the law
which said that there were certain factors to be co nsidered when granting slots.  In general, it said
before the award of a slot, the Secretary of Transportation may consider, among other factors, whether
the petitioning air carrier's proposal provides the maximum benefit to the US economy including thenumber of US jobs created by the air carrier, its suppliers and related activities.  For the sake of
completeness, it was interesting to note that the same provision also applied this paragraph in cases
where the air carrier requesting the slot was proposing to use a type of aircraft which was not
produced by a United States manufacturer.  In clear language, this meant that any carrier which
operated non-US large aircraft could face difficulties on applying for slots at these four airports, andthis represented real potential damage to prospective clients for the major European manufacturers of
aircraft.TCA/M/10
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57. His delegation believed that it was quite clear that the intention of this provision was
discriminatory.  It did not apply in the case of certain aircraft for which there was no competition;  the
provision was inserted in the subsection of the Act headed "Competition".  His delegation believed
that a number of important provisions of the Agreement on Trade in Civil Aircraft were relevant.
These were the prohibition of discrimination, which appeared in Article 4.  Article 4.1 related to thefreedom to select suppliers on the basis of commercial and technological factors. Article 4.2 provided
that Signatories "shall not require airlines … or other entities engaged in the purchase of civil aircraft,
nor exert unreasonable pressure on them, to procure civil aircraft from any particular source which
would create discrimination against suppliers fro m any Signatory". Article 4.4 read: " Signatories
agree to avoid attaching inducements of any kind to the sale or purchase of civil aircraft from any
particular source which would create discrimination against suppliers from any Signatory."  Thus, it
was clear that the United States Act did violate these provisions, in particular Article 4.2 and 4.4.  Tobe more specific, Article 4.2 dealt primarily with government pressure on specific contracts, but it
could also deal with such general legislation as Air 21.  Providing the Secretary of Transportation
with discretionary powers in the granting of slots -- even if it was only a potential one due to the word
"may" in the Act -- constituted pressure on the prospective client of European manufacturers.  Since
the ground for this pressure was not objective, this pressure was "unreasonable".  Therefore, theyconsidered that this was a case of unreasonable pressure.  It was more obvious that Article 4.4 had
been violated by the said legislation.  Webster's Dictionary defined "to induce" as "to move by
persuasion or influence".  Since the aim of the provision in question was to persuade or to influence
airlines to "buy American" or "fly American" in or der to maximize their chances of obtaining the very
important landing and take-off slots, it constituted inducement.  Since the inducement's purpose wasto avoid purchase of any other aircraft, the provision created a prohibited discrimination against a
supplier from other Signatories.  As he had already stated, his delegation believed that this legislation
would be repealed and he had been instructed to say that otherwise they were seriously considering
taking this matter up in a more formal way under dispute settlement either under this Agreement or
under the general GATT rules.
58. The representative of the United States stated that, with respect to the allegations of the
European Communities, the United States appreciated its obligations in the Aircraft Agreement and
other WTO Agreements and believed that they were abiding by them.  However, he would take these
concerns back to his government since this was the first time that they were raised here for review.
He asked whether there was any damage or harm that the European Communities could cite resulting
from this legislation?  Was there any instance of supposed discrimination against an EC aircraft
manufacturer or other airline resulting from this legislation that the European Communities would liketo put on the record?
59. The delegate of Canada echoed the concerns raised by the European Communities regarding
the applicability of this clause in "Air 21" in the context of current changes in slot allocation
procedures.  Canada found in principle that there was an implied discrimination in favour of US
companies and this was of grave concern to them as well.
60. The delegate of the European Communities appreciated that the United States would give
their concerns further consideration.  The United States delegate had posed a specific question which
was difficult to answer, because the Act had only been signed in April 2000.  Evidence was not easy
to bring forward because it dealt with inducements.  A second question was whether the evidence was
necessary at all.  Article 4 was a very clear provision and it did not say that you had to provideevidence that you had lost a contract.  It said that Signatories should not require airlines to do certain
things and should not induce by any means and it did not specify which means.  The fact was that this
legislation could influence decisions because it was relevant for an economic asset, a slot.  It was
enough to point out that there was discrimination and a violation here.  His delegation was not
interested in proving the legal point, but rather in having the legislation repealed as soon as possible.TCA/M/10
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61. The representative of the United States said that since the European Communities was
requesting the repeal of legislation, his delegation thought at least they could cite some specific
problem or potential problem.  He wished to note  for the record that there had been a decision under
this slot re-allocation -- and it had very limited application, again it was for airports and only for
reallocation of currently allocated slots, and any airline could apply irrespective of what aircraft theyemployed -- and in this specific case an airline did apply and was granted slots, reallocated from other
airlines, and they indicated in their application that they were using foreign origin aircraft, in this case,
Airbus.  This had been a decision in May.  It seem ed that there could not be any harm or damage from
this particular regulation to that company or to EC interests.  He was wondering how the European
Communities got from this a "blatant violation" and harm being done, as there seemed to be no harm.
His delegation would appreciate hearing whatever allegations of harm there might be and more
information on how this was allegedly inconsistent with their obligations in this Agreement and otherAgreements, as they did not share that view.
62. The Committee took note of the statements made.
E. EUROPEAN COMMUNITY REGULATION ON AIRCRAFT ENGINE NOISE
63. The delegate of the United States wished to reve rt to this item which had been raised at a
number of previous meetings, and to inform the Committee of its status.  At the last meeting, the
United States had indicated that it was in discussions with the European Communities about this
regulation, which, at that time, had been suspended in its application.  His delegation had raised some
concerns, as the regulation was based on design rather than performance characteristics of the
product, it appeared inconsistent with internationally agreed standards of the International Civil
Aviation Organization (ICAO) and it only seemed to  affect adversely imported products and foreign
airlines.  On this basis, they had asked the European Communities to withdraw this regulation.  They
could not reach agreement, nor would the European Communities do it unilaterally, and in fact, on 4
May 2000, the European Communities fully implemented the regulation.  When the United States was
informed of that decision, it submitted a request to the ICAO Council to arbitrate the US-EC
differences and render a view about the conformity of this regulation with ICAO.  ICAO only relatedto aircraft operations and not specifically to goods. His delegation considered that the effect of this
regulation was discriminatory to US aviation operations, but it might also be discriminatory to US
goods.  In fact, there were estimated damages of several billion dollars to US goods and US aviation
companies.  Thus, he reserved the United States' ri ghts with respect to this Agreement and other WTO
Agreements irrespective of their efforts to resolve this through arbitration in ICAO.  He also noted
that there was another possibility of resolution: ICAO was in the midst of a work plan to come up
with a new standard and that standard would be for reduced noise beyond the current standard, whichhad been implemented by the US and which was in the process of being implemented by other
countries including the European Communities.  Presumably, once that standard was adopted, it
would be acceptable to the Signatories.  Those Signatories included the EU Member States. This
could also lead to a resolution of this matter.
64. The representative of the European Communities said that his delegation certainly regretted
that, after having postponed the effective application of the regulation for a full year in order to look
for a mutually acceptable solution, they did not find such a solution.  Now, the United States had
chosen a different path and had filed complaints elsewhere.  There seemed little to be done at this
point to bring this matter forward in a constructive manner here, but he hoped that a solution would be
found.
65. The representative of the United States added that one of their concerns was that the this
regulation did not meet its purported purpose, which was to reduce noise.  In fact, it had the opposite
effect.  In addition, he wished to contrast this with the previous item, where the European
Communities had been unable to cite any alleged damages from the US Act which they had referredTCA/M/10
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to as "Air 21".  In this case, there was significant damage to US interests that was ongoing, while they
still attempted to resolve this issue through ICAO arbitration or through the adoption of new
standards.  They would probably need to revert to this item at the next meeting and he requested that
the European Communities respond to the following que stion: if they were so interested in reducing
noise that they prohibited the operation of aircraft that were fully consistent with the latest ICAOnoise standard, why had they not asked for or required the cessation of Concorde flights? That aircraft
met no ICAO noise standards that had been promulgated to date, so why were they subjecting their
citizens and citizens of other countries to aircraft which did not meet the ICAO standards, while
prohibiting the operation of the aircraft from the US and other third countries that did meet the
standards?
66. The delegate of the European Communities did not wish to prolong this exchange of views
unnecessarily.  They were happy that the Concorde was flying, because it was a technical
achievement.  He agreed that there might be problems if ICAO rules were applied all the time. If there
was any hard evidence of damage to US industry, hi s delegation we would be happy to look at it.  If
there was a claim that this had not reduced, and would not reduce, noise, his delegation would be
happy to look at any hard evidence.  However, he suggested that they should wait for what happened
elsewhere, and see the consequences of the dispute resolution which the United States had launchedelsewhere.
67. The delegate of the United States said that the European Communities did not have to look far
for hard evidence. There was a compla int in the European Court of Justice by an airline that wanted to
procure aircraft which were fitted with hushkits to reduce their noise to the current stage three (which
was not fully implemented by the European Communities to  this date).  The airline felt that they could
not safely procure that aircraft and have them operate in Europe and had therefore brought a
complaint.  To the degree they couldn't buy the US aircraft equipped with hushkitted engines and US
manufacturers couldn't supply that airline, this would seem to be hard evidence of damage. This was
just one instance.
68. The Committee took note of the statements made.
F. BELGIAN AIRCRAFT INDUSTRY SUPPORTS
69. The delegate of the United States said his delegation wished to revert to this item because
they wondered if there was any update on possible on-going changes to Belgian legislation with
regard to support for Bel-Airbus since the last Committee meeting.
70. The delegate of the European Communities reported that the Belgian authorities had informed
his delegation that they had made some progress in the on-going revision of the legislation and the
discussions with the numerous other authorities, including on the sub-federal level, continued.  Therewas no new final legislation enacted yet.  As soon as there was a resolution or new legislation (which
he was confident would be completely in line with the Agreement, as the old legislation had been) his
delegation would let other Signatories know.
71. The delegate of the United States appreciated this response and looked forward to having that
information as soon as it might be available, rather than necessarily waiting until the next meeting of
this Committee.  They were concerned that the cu rrent mechanism in Belgium, which seemed to take
the form of exchange rate guarantees, appeared to be a blatant violation of Article 6 of the Aircraft
Agreement, including the WTO Agreement on Subsidies and Countervailing Measures, and also
seemed to be inconsistent with Belgium's IMF obligations. Establishing dual exchange rates also
probably created internal difficulty in achieving a unitary monetary system within the EU.  TheUnited States looked forward to a substantive response.  If there were no new legislation by the nextTCA/M/10
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Committee meeting, they would appreciate a response with regard to the concerns they had raised
here about this current support not being consistent with WTO obligations.
72. The Committee took note of the statements made.
G. CERTIFICATION OF LARGE CIVIL AIRCRAFT
73. The representative of the United States recalled that his delegation had asked questions at
previous meetings with regard to the status of certification of certain US-origin aircraft by
airworthiness authorities in France and had raised concerns about the consistency of their actions with
Article 3 of the Aircraft Agreement.  These aircraft had been certified at their full passenger carrier
load by the joint airworthiness authorities of Europe and by the United States FAA and by other
certification authorities.  His delegation wondered what the problem might be, and if there was any
update on this situation.
74. The representative of the European Communities stated that his delegation had informed the
Committee at an earlier meeting that contacts were now on-going between the supplier of the product
and the authorities in question, and that there were some specific requests to which the authority in
question had asked the supplier to respond.  To his knowledge, this had been done in the first quarter
of 1999 and there had still been no response from the company in question.  The matter was held up
by the fact that one of the two partners who ta lked to each other had not come forward with the
information that the other had requested.  Once that  information was there, they would have to see
that this issue could be resolved, but that was not possible for the time being because some of the
questions had not been answered.
75. The delegate of the United States appreciate d this response from the European Communities,
but thought that they could not leave this matter as a failed obligation by the US manufacturer.  The
US manufacturer had met all the information requests of the joint airworthiness authority -- in which
France was a participant.  That Committee and its Sub-Committee, which had specifically examined
this aircraft and made recommendations to the J AA, had French airworthiness participation and had
recommended that this aircraft be certified.  All the other participating countries and airworthiness
authorities had, to his knowledge, certified that aircraft and requested no additional information.Therefore, his delegation requested that, if not at this meeting, then at the next meeting, the European
Communities (speaking for France) explain what was wrong with the JAA recommendation of
certification that it could not adopt it or why it was raising issues or additional barriers that may not be
consistent with Article 3.
76. The representative of the European Communities stated that his delegation had pointed out on
previous occasions that the JAA and individual Member States' requirements were not the same thing.
So, even if such a decision had been taken or such a recommendation has been passed in such specificinstances, there might be additional questions or clarifications sought from individual authorities.
That had been the case here.  This was the point of principle and there was nothing wrong with it.  On
this point, it was of relevance to note that, as far as he was informed, the manufacturer had not
indicated what it intended to do with the request.  One could interpret this as a lack of commercial
interest to do anything about this, because if the market were so big and there were so many potentialorders waiting, his delegation would have thought th ere would be more of a dialogue on these specific
items.  The first point was the important one, and they would certainly be happy if necessary to come
back on the more specific details of the system as it operated in Europe, to explain further why
additional questions had been asked in this case.
77. The representative of the United States said that his delegation would also appreciate hearing,
in that future response, examples of individual airworthiness authorities under the JAA asking for
additional information concerning European-origin aircraft after the JAA had recommended theTCA/M/10
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adoption of certification of aircraft by its members.  They wished to know if this was a regular
practice that individual countries still requested additional information after the JAA had made a
recommendation.
78. The Committee took note of the statements made.
H. OTHER BUSINESS
1. Matters under Article 3
79. The delegate of the United States said that there had been a protracted period of review by
joint aviation authorities in Europe of certain small aircraft produced in the United States which had
been certified for some years by the FAA: the Gulf Stream 5.  They understood that the Gulf Stream
manufacturer was making extraordinary efforts to meet all informational requests and testing
requirements of joint aviation authorities in Europe and this aircraft had tens of thousands of hours of
operation by those countries that had certified it.  His delegation wondered if there was someparticular problem here that was causing the delay that might tend to be a barrier of trade, due to
competitive products being produced in one or more of the member countries of the joint
airworthiness authorities, rather than any substantive problem with this aircraft.  His delegation
wished to have a response, if not at this meeting, then at the next.
80. The delegate of the European Communities took note of the proposal, but believed that, as
under the former item, they had to reject any insinuation that this was a discriminatory practice.
These were technical examinations which had taken place.  His delegation would look into the details,
but believed that they would co me up with a satisfactory answer.
81. The Committee took note of the statements made.
2. Matters under Article 6
82. The delegate of the United States said that si nce the last meeting, there had been a formal
announcement by the Government of the United Kingdom that they would provide £500 million in
development support for their Member State member company in the Airbus A3XX aircraft.  This
would be subject to a decision by the Airbus organization to build that aircraft, a decision that had not
yet been finally made.  However, as this had been formally announced, his delegation wondered if theSignatory or the European Communities could provide information on the terms and conditions of this
support, so that his delegation could evaluate whether it was consistent with Article 6 of the
Agreement.
83. The delegate of the European Communities stated that these concerns seemed to be first,
premature and second, unfounded.  The delegate of the United States had been right to point out that
they were in a very preliminary phase of this project.  The commercial decision on whether to build it
or not had not been taken, to his knowledge.  Secondly, past experience showed that Airbus operatedwith loans which had always been fully repaid.  He could cite from the Economist (not that the
Economist magazine was exactly one which supported the general extension of subsidies to anybody),
which had written on 5 May that the British Government got back £2 for every £1 invested in the
A320.  This was just an example of the way that they applied these rules and grants in a way which
was perfectly compatible with the existing rules on subsidies -- whether under this Agreement, orunder the Subsidies Code.  His delegation also was concerned about subsidies and grants which other
companies received which were not one hundred per cent repayable.  So, he requested that the United
States might return to this project once it had developed in a more concrete more form, and then they
could discuss whether there was a point to be taken up here.  It was certainly their understanding that
whatever they did would be absolutely in line with the 1992 bilateral agreement and that any futureTCA/M/10
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financial arrangement -- including the one on the A3XX -- would respect this agreement.  The
European Communities regretted not having had any operation on the bilateral agreement, and
suggested that the United States could first take up this issue in the mechanisms which were foreseen
in their 1992 bilateral agreement.
84. The delegate of the United States said that he would not delay the Committee with the
workings of the bilateral agreement, since it is not within the purview of the Committee.  He noted
that, at least last year, Airbus seemed to have a market share of around 50 per cent.   They were
concerned whether new government support was applie d to any aircraft and if so, how they could
avoid adverse effects on other aircraft companies if that support was not fully on commercial terms.
Specifically, had the UK informed the European Communities of the terms and conditions of the
support that they announced that they would provide?
85. The representative of the European Communities had two points to make.  First, although 55
per cent market share sounded great, eight out of ten aircraft in the air were still not Airbus, but
Boeing or other US aircraft.  Second, regarding internal procedures, he had nothing to say.  Any state
subsidy was usually notified and would then be looked at under their own procedures.  He did not
think this was something they should discuss in this Committee.
86. The representative of the United States recalled that the EC representative had raised the 1992
bilateral agreement, and the text of that was available.  It required that any support by the member
state partners be immediately notified, but they had received no such notification.  They understood
that information had been provided to the European Communities with regard to this support and were
wondering when they might receive some additional information on that.  They were asking for that
under Article 6.
87. The delegate of the European Communities noted in response that the European Communities
had not yet received notification of the United States legislation "Air 21", as required by the Aircraft
Agreement.  Thus, all Signatories would have to consider whether they had lived up to the notification
requirements and he was certain that all wished to abide by the various rules in that respect.
88. The Committee took note of the statements made.
I. DATE OF NEXT REGULAR MEETING
89. The Chairperson stated that the date of the next regular meeting of the Committee was
scheduled for 15 November 2000.  A meeting of the Technical Sub-Committee was scheduled for
14 November 2000.
90. The meeting was adjourned.
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