RESTRICTEDWORLD TRADE
ORGANIZATIONTCA/M/7
30 April 1999
(99-1771)
Committee on Trade in Civil Aircraft
MINUTES OF THE MEETING
HELD ON 30 NOVEMBER 1998
Chairperson:  Mr Didier Chambovey
1. The Committee on Trade in Civil Aircraft (the "Committee") held a meeting on 30 November
1998.
2. The Committee adopted the following agenda:
        Page
A. ELECTION OF A CHAIRPERSON OF THE COMMITTEE ON
TRADE IN CIVI L AIRCRAFT..................................................................................2
B. APPLICATION OF THE EC DIRECTIVE ON
ELECTROMAGNETIC COMPATIB ILITY TO AI RCRAFT .................................2
C. EC REGULATION ON AIRC RAFT ENGINE NOISE............................................2
D. BELGIAN AIRCRAFT IN DUSTRY SU PPORTS....................................................5
E. CERTIFICATION OF LARGE CI VIL AIRCRAFT IN  FRANCE ..........................6
F. "END-USE" CUSTOMS ADMINISTRATION IN THE UNITED STATES..........6G. ASIA PACIFIC ECONOMIC COOPERATION ("APEC") .....................................7
H. RESTRUCTURING OF DOMESTI C AIRCRAFT I NDUSTRIE S..........................7
I. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON
TRADE IN CIVIL AIRCRA FT UNDER TH E WTO ..............................................8
J. UPDATE OF HS HEADINGS IN PRODUCT COVERA GE ANNEX ...................9
K. US AIRCRAFT REPAIR STATION SAFE TY ACT................................................9
L. US ENVIRONMENTA L IMPORT TAX ................................................................10
M. OTHER BU SINESS..................................................................................................10
N. ADOPTION OF AN NUAL REPO RT......................................................................10TCA/M/7
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A.  ELECTION OF A CHAIRPERSON OF THE COMMITTEE ON TRADE IN CIVIL AIRCRAFT
1. The Vice-Chairperson (Ms. Eva Rygh) informed the Committee on Trade in Civil Aircraft
(hereinafter the "Committee") that Mr. Saeki would no longer be able to serve as Chairperson of the
Committee.  The Vice-Chairperson informed the Committee that the Secretariat had conducted
consultations regarding the election of a new Chairperson on behalf of Mr. Saeki, and that Signatorieshad expressed their support for the election of Mr. Didier Chambovey as Chairperson of the
Committee.
2. Following a proposal form the Vice-Chairperson, the Committee elected Mr. Chambovey as
its Chairperson.
B. APPLICATION OF THE EC D IRECTIVE ON ELECTROMAGNETIC COMPATIBILITY TO AIRCRAFT
3. The representative of the United States noted that an EC Directive on electromagnetic
compatibility (hereinafter "EMC Directive") requires certain products distributed within the European
Communities to satisfy certain conditions related to electromagnetic compatibility. He sought
clarification as to whether the EMC Directive would apply to civil aircraft and aircraft parts, such as
avionics, and ground flight simulators.
4. The representative of the European Communitie s informed the Committee that in principle
the EMC Directive applies to all electronic installations in all sectors, including the aeronautic sector.
He stated, however, that Article 2.2 of the EMC Directive provides that legislation governing
electromagnetic compatibility in specific areas shall prevail over the general requirements of the EMC
Directive.   He referred, for example, to Regulation No. 3922/91 concerning harmonisation of the
technical requirements and administrative procedures in the field of civil aviation, which constitutes
specific legislation in the sense of Article 2.2 of the EMC Directive.  He stated that all productscovered by Regulation No. 3922/91 are excluded from the application of the EMC Directive, whereas
the EMC Directive applies to all electric and electronic equipment intended for installation in civil
aircraft outside of the specific coverage of Regu lation No. 3922/91.  He added that the EMC Directive
covers all electric or electronic ground equipment, si nce there is no specific EC legislation governing
electromagnetic requirements for such products.
5. The delegate of the United States sought confirmation that avionics, but not ground
equipment, are covered by the specific legislati on contained in Regulation No. 3922/91.  He stated
that US exporters had experienced difficulty in entering avionics equipment into the European
Communities without markings, despite the fact that it had been certified under the relevant Joint
Airworthiness Authorities' (hereinafter "JAA") regulations incorporated into Regulation No. 3922/91.
He sought assurances that any uncertainty within the European Communities regarding the treatment
of such avionics would be resolved.
6. The representative of the European Communities confirmed that Regulation No. 3922/91
prevails over the EMC Directive.
C. EUROPEAN COMMUNITIES REGULATION ON AIRCRAFT ENGINE NOISE
7. The delegate of the United States informed  the Committee that the European Communities
has proposed a Regulation on aircraft engine noise.  He stated that the proposed Regulation would
restrict the operation of large civil aircraft which have been made quieter through the installation of
aircraft engine "hush-kits", or re-engineered engines with a bypass ratio of under 3.  He informed the
Committee that the proposed Regulation would affect trade in aircraft engines and parts, and also the
operation in the European Communities of large civil aircraft modified through hush-kits or re-
engineered engines.  He requested information from the European Communities on the scientificTCA/M/7
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rationale for the design standards established by the proposed Regulation, and for the departure from
the 1990 International Civil Aviation Organisation (hereinafter "ICAO") Resolution on noise and air
pollution.
8. The representative of the European Commun ities stated that the aim of the proposed
Regulation is to reduce aircraft noise, environmental degradation caused by fuel-burn, and
atmospheric pollutants of airplanes.  He stated that this is an important issue for the European
Communities, given that airports are usually located in densely populated, urban areas.  He stated that
the WTO is not the appropriate forum for a scientific discussion on particular items.  He stated that, in
the opinion of the European Communities, the US policy of fitting aircraft with hush-kits or re-
engineered engines is inadequate.  He stated that hush-kitted aircraft are considerably noisier, and the
environmental performance in terms of fuel-burn and atmospheric pollutants is much worse, than
current production aircraft.  He stated that not a single hush-kitted aircraft meets the requirements ofthe 1990 ICAO Resolution on all measurement points.  He emphasised, however, that the European
Communities is not seeking to phase-out hush-kitted aircraft, but simply to freeze the number of
movements of such aircraft in the European Communities at April 1999 levels.
9. The representative of the United States cited Article 3 ("Technical Barriers to Trade") of the
Agreement on Trade in Civil Aircraft (hereinafter the "Agreement") as justification for raising
scientific/technical matters in the Committee.  He stated that the proposed Regulation has raised a
number of concerns in the United States.  First, the proposed Regulation takes the form of a design
standard, not a performance standard.  Second, the proposed Regulation would only impact on
imported products.  In this regard, he stated that hush-kits and engines with a by-pass ratio of under 3
are only imported into the European Communities, and are not manufactured there.  He also statedthat only imported aircraft would be affected by the proposed Regulation.  Third, the proposed
Regulation constitutes a regional standard, whereas the WTO Agreement on Technical Barriers to
Trade encourages the adoption of international standards, and whereas ICAO has been confirmed as
the appropriate international forum for setting pollu tion standards in the civil aircraft sector.  He
understood that in September 1998 ICAO rejected a European Communities proposal for the adoptionof regional pollution standards.
10. The delegate of the European Communities stated that the European Communities would
have preferred a joint strategy on implementing the ICAO Resolution on pollution.  However, in the
absence of any joint agreement on phase-outs prior to 2002, and given the method of implementation
of the Resolution chosen by the United States, the European Communities considered that it was
required to act independently, and in the manner set forth in the proposed Regulation.
11. The representative of Japan expressed his country's interest in this issue, as well as the
previous issue concerning the EC EMC Directive, and requested that additional information on these
issues be circulated to Japan and the Committee.
12. The representative of the United States presented the following questions to the European
Communities:
• What specific noise and pollution reductions are expected from the proposed Regulation, and how
do these improve on the ICAO Resolution?
• What area around airports is expected to the improved by the proposed Regulation?  In particular,
is the proposed Regulation directed at approach, take-off, or side-line noise?  How muchimprovement is sought from the proposed Regulation?
• Have any studies concerning noise and pollution reduction been carried out?  If so, when can such
studies be made available to the United States?  How much improvement in noise climate didTCA/M/7
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these studies suggest would result from the proposed Regulation?  How much did these studies
suggest that the noise climate would deteriorate if the proposed Regulation were not to enter into
effect?
• Why is the proposed Regulation targeted at specific products, when these products could be
manufactured to achieve specific noise and/or pollution reduction targets.  Why are hush-kits per
se targeted by the proposed Regulation, despite the possibility that a hush-kit could result in less
noise pollution than that stipulated in the applicable ICAO standard?  Why is the proposed
Regulation not performance-based, so as to reduce the risk that the proposed Regulation could be
deemed to be motivated by trade policy rather than environmental policy?
• How does the by-pass ratio of an engine relate to noise?  Do EC studies, assuming they exist,
correlate noise to the by-pass ratio.  Why choose a by-ratio of 3, rather than say 1.5, or 4, or 10?
Is there an engine with a by-pass ratio of over 3 produced in Europe?  If so, by which
manufacturer?
• Why does the proposed Regulation exclude aircraft fitted with re-engineered engines, in addition
to hush-kitted aircraft?  If such engines, with a by-pass ratio of less than 3, were fitted in new
aircraft, would they be excluded under the proposed Regulation?
• Has there been any cost-benefit analysis of the proposed Regulation?  Has the European
Communities projected how cargo carriers will comply with the proposed Regulation?  Has the
European Communities considered the deterioration of the noise climate that will be caused by
the proposed Regulation during an interim period, because of the economic disincentive for the
installation of hush-kits or re-engineered engines during the phase-out period expiring in 2002?
• Have there been any statements in the European  Communities by airport communities or airlines
with regard to the proposed Regulation? and
• Has the proposed Regulation been notified under the WTO Agreement on Technical Barriers to
Trade?  If not, when does the European Communities intend to effect such notification?
13. The delegate of the European Communities said he would refer the US questions to technical
experts in Brussels.  As a matter of clarification, he confirmed the European Communities' support for
the ICAO Resolution, but stated that the European Communities took issue with the method chosenby the United States for implementing that Resolution, since it could prove counter-productive.  He
also stated that the proposed Regulation had not been notified under the Agreement on Technical
Barriers to Trade, but that it would be notified soon.
14. The delegate of the United States stressed that this is an important matter for the United
States, and regretted the absence of a technical representative in the European Communities'
delegation.
15. The representative of the European Communities noted that no hush-kits would be valid after
2002, since hush-kits would not meet the relevant ICAO requirements.  He therefore questioned the
rationale for the United States imposing a (hush-kit) standard that would only be valid for two years.
16. The representative of the United States recalled the earlier statement by the delegate of the
European Communities to the effect that the proposed Regulation is in response to US
implementation of the ICAO Resolution.  He inform ed the Committee that the initiative to reduce
noise pollution was first addressed by ICAO in the 1980s.  In 1990, ICAO adopted a Resolution to
reduce noise by pollution by 1 April 2002.  Both the United States and the European Communities
agreed to that Resolution.  The United States reviewed the relevant technology and economics, andTCA/M/7
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decided that the ICAO noise requirements could be met somewhat earlier than the April 2002
deadline.  Accordingly, the United States put into e ffect a regulation with 10 years' notice, stipulating
that the ICAO requirements would have to be met by 1 January 2000, subject to the possibility of
certain exemptions and exceptions.  Thus, the United States does not consider that the introduction
into force of an ICAO Resolution, agreed to by the European Communities, two years early with 10
years' notice, in any way forces the European Communities to propose a Regulation that, with six
months' notice, would effectively create a new standard.  He noted that the US regulation did not
lower the ICAO performance standard, whereas th e proposed EC Regulation would effectively
introduce a new design standard, to the exclusion of hush-kitted and re-engineered engines.  Thus,
early implementation by the United States in no way justifies the proposed EC Regulation.
17. The representative of the European Communities emphasised that not a single hush-kitted
aircraft meets the ICAO standard on all measurement points.  He asserted that new engines result in
greater noise reductions than could ever be achieved through hush-kits.
18. The delegate of the United States stated that th e standard in the relevant ICAO Resolution is a
weighted average, based on the size of aircraft and various points of noise measurement.  There is no
requirement that the ICAO standard should be met on all measurement points.  Hush-kitted and re-
engined aircraft meet the ICAO standard.
19. The Chairperson urged the United States to put  its questions to the European Communities in
writing, and to circulate them to all Signatories through the Secretariat.  He also urged the European
Communities to respond to the US questions in writing, and to circulate those answers to all
Signatories through the Secretariat.
20. The Committee took note of all statements concerning this matter.
D. BELGIAN AIRCRAFT INDUSTRY SUPPORTS
21. The representative of the United States informed the Committee of the US understanding that
Belgium has maintained an aircraft industry support programme based on foreign exchange rate
guarantees and dual exchange rates, and has now considered -- or even implemented -- a successor
programme.  The United States is seeking detailed information on the workings and status of theseprogrammes.
22. The delegate of the European Communities noted that this issue had been raised before the
Committee on Subsidies and Countervailing Measures in 1997.  He recalled that the European
Communities had explained in that forum that the existing programme was introduced on an ad hoc
basis, and was intended to temporarily relieve Belgium's aircraft parts industry from a crisis prevailing
at that time.  He stated that the existing programme involves the provision of repayable advances.  He
stated that Belgium is now introducing a new system, which ensures that all costs are recoveredwithin a reasonable period of time, without distorting international trade in civil aircraft or parts
thereof.  He asserted that full details of the new programme are currently being finalised.  As the
matter is still under active consideration, and evolving rapidly, it is not possible to provide additional
details at this time.
23. The representative of the United States asked whether the existing programme is still in
effect, and whether it has any linkages to reimbursements related to the exchange rate between the
Belgian franc and other currencies.
24. The representative of the European Communities replied that the existing programme is still
in effect, and that it does provide exchange rate assistance.TCA/M/7
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25. The delegate of the United States noted the obligation on the European Communities under
Article 9.4.2 of the Agreement to "inform the Committee of any changes in its laws and regulations
relevant to [the] Agreement and in the administratio n of such laws and regulations."  He stated that
the United States would send the European Communities a list of written questions concerning the
existing programme.
26. The Committee took note of the statements concerning this matter.
E. CERTIFICATION OF LARGE CIVIL AIRCRAFT IN FRANCE
27. The representative of the United States informed the Committee that France has failed to
provide airworthiness certification for certain Boeing 737-family aircraft, i.e., "new derivatives",
despite the 145 and 189 versions of such aircraft having been certified by the European JAA.  The
United States requested further information from France concerning this matter, particularly in light
of France's obligations under Article 3 of the Agreement.
28. The representative of the European Communitie s stated that for some time there have been
safety concerns regarding the high seat density of the latest version of the Boeing 737.  He stated that
France has not refused certification of the 737-700 and 800 versions.  France has granted certification,
but only for less seats than initially envisaged by Boeing.  Discussions between Boeing and the
French authorities are ongoing.
29. The representative of the United States noted that the relevant aircraft have been in operation
in the United States for 13 years, without safety problems resulting from their high seat density.  The
JAA raised questions concerning the seat density, and an accommodation was reached between
Boeing and the JAA following specific steps to improve egress from the aircraft.  As a result,
provisional certification was granted by the JAA earlier in 1998.  He stated that the additionalinformation requested by the French authorities seems already to have been provided to the JAA.  He
noted that the only EC Member State that has failed to certify the aircraft also has an aircraft
manufacturer that has produced an aircraft of approximately the same size, and with the same number
of seats as stipulated in the French certification for the Boeing aircraft.  He therefore suspected that
certain trade competitiveness concerns may have influenced the French certification, especially as theremaining members of the JAA have certified the aircraft following specific steps taken by Boeing to
address JAA safety concerns regarding high seat density.
30. The representative of the European Commun ities rejected the US suggestion that the
certification decision of the French authorities wa s motivated by discrimination against Boeing or
protection of Airbus.  In support, he noted that the other EC Me mber States involved in the Airbus
consortium had certified the Boeing new derivatives.
31. The Committee took note of the statements concerning this matter.
F. "END-USE" CUSTOMS ADMINISTRATION IN THE UNITED STATES
32. The representative of the United States notified the Committee of a number of changes
introduced in October 1996 concerning the treatment of dual-use civil aircraft products under the end-
use administration of US customs regulations.  He explained that, under the earlier regime, the term
"civil aircraft" was defined by exclusion, in the sense that it covered all aircraft not designated as"military aircraft".  The October 1996 regime defines "civil aircraft" as aircraft that have been
certified by the US Federal Aviation Administration (hereinafter the "FAA"), or by other civil aircraft
authorities recognised by the FAA.  The United Stat es considers that this change facilitates the end-
use administration of the US customs regulations, and therefore the operation of the Agreement.TCA/M/7
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33. He also recalled that the Committee undertook a review in the mid-1980s of the operation of
Signatories' end-use customs administrations.  He stated that it is unclear whether all Signatories are
aware of exactly how the end-use customs administration of each individual Signatory operates.
34. The Chairperson recalled that the issue of civil/military identification for customs purposes
was referred to the Techncial Sub-Committee in March 1983.  The Technical Sub-Committee
reviewed the matter on the basis of factual information supplied by Signatories.  This factual
information is contained in document AIR/TSC/W/49.  In order to increase transparency in this area,
the Chairperson proposed that Signatories update the information contained in AIR/TSC/W/49.  He
proposed that the relevant information should be submitted to the Secretariat within six months, that
is, by 30 May 1999, and, if necessary, to the Technical Sub-Committee for more detailed
consideration.
35. The representative of Canada expressed support for the Chairperson's proposal.
36. The Committee accepted the Chairperson's proposal.
G. ASIA PACIFIC ECONOMIC COOPERATION
37. The United States informed the Committee of a proposal currently under consideration by the
Asia Pacific Economic Cooperation (hereinafter "APEC") for the elimination of tariffs on civil
aircraft and civil aircraft parts.
38. The representative of Canada informed the Committee that APEC was considering early
voluntary liberalization schedules for 15 sectors, including the civil aircraft sector.  He stated that,
before adopting these schedules, APEC had referred them to the WTO in order that multilateral, rather
than regional, early voluntary liberalization might be possible.  He encouraged Signatories to be
active when the WTO considers the APEC proposal for early voluntary liberalization in the civil
aircraft sector.
39. The representative of the European Communities sought clarification of certain aspects of the
APEC proposal for early voluntary liberalization in the civil aircraft sector.
40. The delegate of Canada replied that the APEC proposal would mirror the Agreement by
reducing tariffs in the civil aircraft sector to zero.
41. The Committee took note of the statements concerning this matter.
H. RESTRUCTURING OF DOMESTIC AIRCRAFT INDUSTRIES
42. The representative of the United States inform ed the Committee of recent restructuring in the
US domestic aircraft industry.  The US aerospace industry has undergone substantial consolidation,
with the number of major aerospace manufacturers reduced from 25-30 in the early 1980s, to less than
10 today.  Consolidation has involved US companies inter se , and arrangements between US and non-
US companies.  The role of the US Government in the resultant mergers and acquisitions has beenminimal, for the most part confined to anti-trust  review.  The impetus for the restructuring has been
from the industry, not the Government.  The United States seeks information from other Signatories
concerning restructuring of domestic aircraft industries, and the role played by the relevant
governments in that process.
43. The delegate of the European Communities queried whether this was an appropriate subject
for consideration by the Committee, since it has at best only indirect implications for trade in civil
aircraft.  Nonetheless, he stated that it is important that governments seek to preserve competitionTCA/M/7
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during restructuring by their domestic aircraft industries.  He stated that there has not been as much
restructuring in the European Communities as in th e United States.  Although there is agreement in
principle to merge the four Airbus partners, this has not yet been finalised.  Generally, restructuring in
the EC industry has not yet come to the attention of the EC competition authorities.
44. The representative of the United States stated that this item is appropriate for discussion
within the Committee, since government involvement in restructuring may go beyond mere anti-trust
considerations.  The United States raised a specific concern regarding restructuring in the European
Communities, where government intervention beyond mere anti-trust review is understood to take
place.  In particular, the United States referred to  debt forgiveness by the German Government in the
context of the privatization sale of MBB assets to Deutsche Aerospace.  The United States expressed
concern that similar governmental action could be taken in the context of the restructuring of Airbus.
45. The representative of the European Communities stated that the action of the German
Government referred to by the United States is  in full conformity with the EC - US bilateral
agreement concerning the Application of the GATT Agreement on Trade in Civil Aircraft.
46. The representative of the United States noted that the debt forgiveness in issue preceded the
EC - US bilateral agreement, and would not therefore be covered by that agreement.
47. The Committee took note of the statements made.
I. CONSIDERATION OF THE STATUS OF THE 1979 A GREEMENT ON TRADE IN CIVIL AIRCRAFT
UNDER THE WTO
48. The Chairperson recalled that the Agreement has not yet been adapted to the WTO structure.
He added his voice to those of previous Chairpersons of this Committee in expressing concerns about
this situation, primarily in terms of legal certainty.
49. The representative of the European Communities asked Signatories to indicate what should be
done regarding the legal status of the Agreement.  In light of the decision by the United States to
revitalize the Committee by including numerous items on the agenda for the present meeting, the EC
delegate asked whether there is any change in the position of the United States regarding the status of
the Agreement.  In particular, is the United States prepared to adopt a decision applying theUnderstanding on Rules and Procedures Governing the Settlement of Disputes to the Agreement?
50. The representative of the United States acknowledged the urgent need to adapt the Agreement
to the WTO framework, especially as new Members of the WTO are committed to become
Signatories to the Agreement.  The United States supports rectification of the Agreement, with the US
position remaining similar to that described on previous occasions.  The United States continues to
understand that, with regard to disciplines on subsidies, the Agreement on Subsidies and
Countervailing Measures (hereinafter the "SCM Agreement") takes precedence over the Agreement.This has been the case since the Agreement entered into force in 1980, and should not be changed
through a purely technical rectification of the Agreement.  The United States also considers that any
technical rectification of the Agreement should not af fect the status of footnotes 11 and 24 of the
SCM Agreement.  The United States noted that the operation of certain provisions of the SCM
Agreement, including the footnotes thereto, should be reviewed by the SCM Committee during 1999,in accordance with Article 31 of the SCM Agreement.
51. The representative of the European Communities expressed disappointment with the lack of
flexibility on the part of the United States concerning the adaptation of the Agreement to the WTO
framework.TCA/M/7
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52. The delegate of the United States agreed that flexibility is required on the part of all sides, but
stated that such flexibility should not result in ambiguity.  He proposed that the Chairperson should
reinvigorate the process of searching for a rectification formula, working on the basis of draft
rectifications examined by the Committee on earlier occasions.
53. The Chairperson suggested that he could pursue this matter by (1) consulting with
Signatories, in order to determine what is feasible  in this context, and (2) preparing a proposal for
technical rectification on the basis of such proposals.
54. The Committee agreed with the Chairperson's suggestion.
J. UPDATE OF HS HEADINGS IN PRODUCT COVERAGE ANNEX
55. The Chairperson noted that the Product Coverage Annex of the Agreement identifies products
on the basis of HS headings.  A number of Signatories have noted that, as of 1 January 1996, many of
these HS headings have been amended.  The Chairperson proposed that the Secretariat prepare apaper identifying the relevant changes.  He prop osed that a meeting of the Committee could then be
convened to discuss the need to refer this matter to the Technical Sub-Committee.
56. The representative of the United States supported the Chairperson's proposal.  The United
States also suggested that the Chairperson could consult on a possible substantive expansion of the
Product Coverage Annex, in order to reflect technical developments since the Product CoverageAnnex was last updated in 1986.  The United States suggested that any resultant proposal for a
substantive expansion of the Annex could be forwarded to the Technical Sub-Committee at the same
time as the proposal for technical changes to the HS Headings in the Annex.
57. The representative of the European Communities supported the Chairperson's proposal
concerning the Secretariat paper on technical changes to the HS Headings in the Product Coverage
Annex, but expressed reservations concerning any eventual referral of this matter to the Technical
Sub-Committee.  The European Communities also supported the US suggestion regarding the
substantive expansion of the Product Coverage Annex.
58. The representative of Canada expressed support for both technical and substantive changes to
the Product Coverage Annex.  In this regard, Canada referred to its communication dated 13 October
1994 (AIR/W/97) regarding a proposal for the inclus ion of ground maintenance simulators in the
Product Coverage Annex.
59. The Committee agreed that the Secretariat should prepare a paper regarding technical changes
to the HS Headings in the Product Coverage Annex, and agreed that the Chairperson should conduct
informal consultations on the possible substantive expansion of the Product Coverage Annex.
K. US A IRCRAFT REPAIR STATION SAFETY ACT
60. The representative of the European Commun ities informed the Committee that the United
States proposes to amend the 1997 Aircraft Repa ir Station Safety Act (hereinafter "ARSSA"),
whereby the FAA would only certify foreign repair stations if aircraft are serviced there during the
course of international travel.  The European Communities expressed the concern that this could
imply that repair stations at busy international airports (such as London) could be certified, whereas
repair stations at less active airports (such as Dublin) could not be certified, even if they have a busyaircraft servicing sector.  The European Communities expressed the concern that the proposed
amendments to the ARSSA could be driven by the will to protect US aircraft repair stations.  A US
Senator was recently quoted as stating in Congress that  foreign repair stations are "stealing US jobs,TCA/M/7
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and could potentially jeopardise aviation safety."  The European Communities sought clarification
from the United States on this matter.
61. The representative of the United States informed the Committee that the proposed amendment
was not sponsored by the Administration, but was a private bill sponsored by individual members of
Congress.  Neither the US Administration nor the FAA took any formal position on the bill, althoughthe FAA testified before Congress that certain technical aspects of the bill were not necessary.  He
stated that the United States had specific obligations regarding foreign repair stations in light of
Article VI of, and the Annexes to, the General Agreement on Trade in Services.  Furthermore, he
explained that the provisions of the bill expressly apply to both domestic and foreign repair stations,
whereas foreign repair stations are currently treated more liberally than US repair stations.  He stated
that the bill had not been adopted before the House of Representatives and Senate adjourned sine die ,
and that the bill had therefore effectively died.
62. The representative of Canada endorsed the concerns expressed by the European Communities
regarding this matter.
63. The representative of the United States noted that the United States does not certify any repair
stations in Canada, as a result of a mutual recognition agreement on this issue.
64. The Committee took note of the statements made.
L. US E NVIRONMENTAL IMPORT TAX
65. The representative of the European Communities asked that this matter, which it had initially
included in the agenda for the present meeting, be removed from the agenda.
66. The Committee removed this item from the agenda.
M. OTHER BUSINESS
67. The representative of the European Communities raised an issue concerning the US Fastener
Quality Act, whereby fasteners must meet certain performance criteria, and must be tested in specially
accredited laboratories.  The EC industry considers that this leads to discrimination against non-
NAFTA suppliers of fasteners.  This matter was raised in the context of the Transatlantic Business
Dialogue, as a result of which the EC and US industry issued a joint call for a review of the FastenerQuality Act prior to its entry into force on 1 June 1999, with a view to achieving a workable and non-
discriminatory solution to this matter.  The European Communities sought information on the status
of any such review.
68. The representative of the United States provided a preliminary response to the EC request.
He stated that the US Fastener Quality Act had caused concern on the part of the US aircraft industry,
as a result of which legislation exempting aircraft fasteners from the US Fastener Quality Act has
been passed.  He understood that, as a result, aircraft fasteners certified by airworthiness authoritiesare exempt from the Fastener Quality Act.
69. The Committee took note of the statements made.
N. ADOPTION OF ANNUAL REPORT
70. The Chairperson recalled that Article 8.2 of the Agreement on Trade in Civil Aircraft (the
"Agreement") provides that:TCA/M/7
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[t]he Committee shall review annually the implementation and operation of this
Agreement taking into account the objectiv es thereof.  The Committee shall annually
inform the CONTRACTING PARTIES to the GATT of developments during the
period covered by such review."
71. The Chairperson noted that, despite the termination of GATT 1947, Article IV.8 of the
Agreement Establishing the WTO requires the Committees on the Plurilateral Trade Agreements,
including this Committee, to "keep the General C ouncil informed of their activities on a regular
basis".  The Chairperson emphasised that Item 3 of the procedures adopted by the General Council in
November 1995 for an annual review of WTO activities and for reporting under the WTO state that
"[t]he Committees on the Plurilateral Trade Agreem ents referred to in Article IV:8 of the WTO
Agreement shall be invited to report annually to the General Council."
72. The Chairperson stated that, because this was the first Committee meeting since the last
Annual Report, it had not been possible to prepare a draft report of the activities of the Committee in
advance of today's meeting.  He therefore proposed that the Committee adjourn, pending preparation
of the draft report.
73. The Committee adjourned.
74. Following the adjournment, the Chairman introduced the draft annual report prepared by the
Secretariat.  A number of changes to the draft report were proposed by the European Communities,
Norway, and the United States .
75. The Committee adopted the Annual Report as amended.1
76. The meeting was adjourned.
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1 The Annual Report was subsequently circulated as document WT/L/291.