RESTRICTEDWORLD TRADE
ORGANIZATIONTCA/M/12
27 August 2001
(01-4115)
Committee on Trade in Civil Aircraft
MINUTES OF THE MEETING
HELD ON 6 JUNE 2001
Chairperson:  Mr. Didier Chambovey
1. The Committee on Trade in Civil Aircraft (the "Committee") held a meeting on 6 June 2001.
2. The Committee adopted the following agenda:
A. SULTANATE OF OMAN - OBSERVER STATUS IN THE COMMITTEE...........................2
B. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON TRADE
IN CIVIL AIRCRAFT UNDER THE WTO .............................................................................2
C. UPDATE OF HS HEADINGS IN THE PRODUCT COVERAGE ANNEX AND
EXTENSION OF PRODUCT COVERAGE OF THE 1979 AGREEMENT ON
TRADE IN CIVIL AIRCRAFT  AND RELATED ISSUES......................................................3
D. STEPS TAKEN BY SIGNATORIES RELATING TO INTERIM APPLICATION OF
DUTY-FREE TREATMENT TO PRODUCTS IN  TCA/W/5/REV.3......................................8
E. "END-USE" CUSTOMS ADMINISTRATION.........................................................................9
1. Updating Information Regarding Civil/Military Identification for Customs
Purposes....................................................................................................................... .............9
2. Military vs. Non-Mi litary Definition....................................................................................10
F. STATISTICAL REPORTIN G OF TRADE  DATA .................................................................10
G. CERTIFICATION IN EUROPE OF  UNITED STATES CI VIL AIRCRAFT .........................12
H. EUROPEAN UNION REGULATION ON AI RCRAFT AND ENGI NE NOISE ...................14
I. EUROPEAN GOVERNMENT SUPPORT FOR THE DEVELOPMENT OF LARGE
CIVIL AI RCRAF T ................................................................................................................. .14
J. BELGIAN AIRCRAFT INDUSTRY SUPPORTS THROUGH EXCHANGE RATE
MECHANISMS..................................................................................................................... ..15
K. UNITED STATES GOVERNMENT SUPPORT FOR LARGE CIVIL AIRCRAFT
INDUSTR Y ....................................................................................................................... ......16
L. OTHER BU SINESS ............................................................................................................... ..18
M. DATE OF NEXT RE GULAR MEETING ...............................................................................18TCA/M/12
Page 2
A. SULTANATE OF OMAN - OBSERVER STATUS IN THE COMMITTEE
3. The Chairperson recalled that the Sultanate of Oman had requested observer status in the
Committee, and drew Signatories' attention to document TCA/3 in which the Sultanate of Oman
indicated that it had recently acceded to the WTO and had made a commitment to join the Agreementon Trade in Civil Aircraft (the "Agreement") within three years.  The Chairperson pointed out that in
accordance with the procedures adopted by the Committee on the participation of observers,
representatives of Members that were not Signatory to the Agreement may follow the procedures of
the Committee in an observer capacity.  In this context, the Chairperson proposed that the Committee
agree to this request by the Sultanate of Oman.
4. The Committee so agreed.
B. CONSIDERATION OF THE STATUS OF THE 1979 AGREEMENT ON TRADE IN CIVIL
AIRCRAFT UNDER THE WTO
5. The Chairperson recalled that in April 1999, he had sent to Signatories a draft protocol
concerning technical rectifications needed to br ing the Agreement into the WTO framework.  This
was a matter the Committee had considered on different occasions and the Signatories had requested
that this be included on today’s agenda.  He wished to give Signatories an opportunity to sum up thediscussions between Signatories, since the Signatories were encouraged to discuss and cooperate with
each other and to find out whether progress on this important matter could be made.
6. The delegate of the United States stated that his delegation had been discussing this matter,
both internally within the US Government and with other governments, particularly the European
Union.  The United States and the European Communities had mutually noted some problems withthis in their last discussions and had some further meetings scheduled for later this summer on this
matter.  At this time, he did not think his delegati on was in a position to offer any suggestions to make
progress. His delegation remained concerned that any rectification here was a technical exercise, as
previously agreed by the Committee, and did not change the rights and obligations, either by the
nature of the changes they made here or by fact of the timing of this decision or protocol.  Heunderstood Article 8(a) to discuss the application of procedures from the Understanding on Rules and
Procedures governing the Settlement of Disputes , which was part of the Marrakesh Agreement , and
which applied mutatis mutandis  to the parties (the parties in this case were the Signatories and the
Dispute Settlement Body).  He presumed until such time as the Committee decided to adopt the DSU
in its entirety -- a decision it had not taken at this point -- the parties and the Dispute Settlement Body
would be the same.  If there were a dispute, it would not be adjudicated by parties that were not
Signatories to this Agreement.   He asked the Chair whether this was a correct understanding of thewording.
7. The Chairperson stated that he was not certain he was in the best position to give a
satisfactory answer.  He knew this question had been raise in connection with another plurilateral
agreement -- on government procurement -- and there had been a dispute involving that plurilateral
agreement and this issue had been raised during a meeting of the Dispute Settlement Body..  Therewere special provisions to deal with precisely th is point, and perhaps this issue could be further
explored by first looking at the practice that now existed.
8. The representative of the European Communities recalled that his delegation had been among
those in favour of keeping this item on the agenda for the time being, at least to provide some
transparency to other members of this Committee.  If he recalled correctly, they were basicallydiscussing two proposals in the draft protocol of rectification -- recitals No. 25 and No. 37.  One
related to a possible change of Article 6.1 of the Agreement, where his delegation believed that no
modification was necessary; one related to the question of dispute settlement, where his delegation
still had a slight problem in accepting the status quo  and was trying to convince others to integrate theTCA/M/12
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dispute settlement here into the WTO dispute settlement mechanism.  As his colleague from the
United States had said, they had been discussing these issues and would try to convince each other in
a further round of consultations.  Unfortunately, they were not in a position yet to report a
breakthrough or a major advance on these issues, but at least they had not been forgotten.  He
repeated these points in order to direct other delegations who had not looked at this for two years toget them back to the facts.
9. The Chairperson reverted to the question posed by the representative of the United States, and
stated that what seemed to be suggested here wa s not that non-Signatories would be in a position to
adjudicate a dispute brought by a Signatory under this Agreement.  He thought it made sense that such
disputes could only be adjudicated by Signatories to the Agreement, but also invited other Signatories
to offer their view.
10. The Committee took note of the statements made and agreed  to revert to this item at the next
regular Committee meeting.
11. The Chairperson recalled that he was at the disposal of all Signatories in order to give help as
necessary.
C. UPDATE OF HS HEADINGS IN THE PRODUCT COVERAGE ANNEX AND
EXTENSION OF PRODUCT COVERAGE OF THE 1979 AGREEMENT ON TRADE INCIVIL AIRCRAFT AND RELATED ISSUES
12. The Chairperson recalled that pursuant to a decision of the Committee at the last regular
meeting, the Secretariat had produced a further revision of the draft Product Coverage Annex for
review by Signatories, taking into account the changes to the Harmonized System that would enter
into force in 2002.  At the meeting of the Technical Sub-Committee in March 2001, the TechnicalSub-Committee had recommended to the Committee that the proposed revisions to the headings and
descriptions of the draft Product Coverage Annex as they appeared in document TCA/W/5/Rev.4
were acceptable to all Signatories.
1  It was his understanding that the Annex was now ready for formal
adoption, and he asked whether Signatories were in a position to adopt formally, at this meeting, the
Product Coverage Annex in document TCA/W/5/Rev.4 by means of the Protocol (2001) Amending
the Annex to the Agreement on Trade in Civil Aircraft  (the " Protocol 2001 ").
13. The delegate of Egypt stated that during the preceding meetings, Egypt had received an
instruction from capital concerning the extension of product coverage, indicating that the concerned
authorities would not be able to join or adopt this extension of product coverage.  He believed that this
would not block the procedure of adoption by Signatories.
14. The Chairperson asked for clarification, noting that paragraph 3 of the draft Protocol (2001)
contained language to the effect that this Protocol shall enter into force for Signatories who have
accepted it on a certain date.  He understood that Egypt was saying that it would not be in a position
to accept this Protocol by this date, and asked if this understanding was correct.
15. The representative of Egypt stated that this was the position of his delegation, if he
understood the Chairperson correctly.
16. The Chairperson noted that the delegation of Egypt had said that it would not prevent the
Protocol from entering into force for other Signatories, and he thought that Egypt had the flexibility
that it was requesting in the text of the Protocol itself.
                                                     
1 See document TCA/TSC/4.TCA/M/12
Page 4
17. The delegate of Egypt stated that his delegation had no objection on the basis of the content of
what was done, just on the principle.  His authorities had instructed that they would not be able to join
or to accept any extension of product coverage to  the Annex of this Agreement, and he understood
that this would not block any of the activities of this Committee, so the Protocol could be adopted.
18. The Committee took note of the statement of the delegation of Egypt.
19. The Chairperson understood that the Committee could move forward on this basis and invited
comments on the draft Protocol.
20. The representative of the United States wished to know if the delegate of Egypt was in a
position to explain what the difficulty might be in adopting the Protocol, whether it concerned
procedural issues within Egypt or the items that were listed.  It was his understanding that -- perhaps
with the exception of one item, aircraft ground maintenance simulators -- this was a strictly technical
exercise as all the other items were already covered, but had been re-named, re-numbered and/or re-arranged, as a result of the re-writing of the Harmonized System that occurred periodically.  This
occurred also in other product areas, and was not a unique problem here.  There was duty-free status,
and the tariff system had to be brought into accord with the re-classification.
21. The delegate of Egypt indicated that he would take this question back to his capital and try to
provide a further explanation concerning the position of his delegation during the next meetings.
22. The delegate of Japan wished to reiterate his delegation's basic position.  On the substance,
the only problem they had related to the aircraft ground maintenance simulators, which appeared in
HS 9023.00.  Again, on the substance they did not have any problems, and, as the Committee knew,
they had gone ahead with the so-called "political statement" at the December 2000 meeting which
urged Signatories to maintain the customs duty at ze ro.  Japan had already done this, even before this
political statement.  Legally speaking, his delegation still thought that in order to legally incorporate
this into this text, there was a need to amend Article 1.  Again, this continued to be a contentious issue
to at least some of the Signatories, so Japan's position was that if the Signatories could agree to at
least tentatively drop "aircraft ground maintenance simulators" from the Product Coverage Annex,
Japan could go along with the consensus to adopt this draft Protocol, but if they had to keep this item,
his delegation had legal difficulty in adopting this draft Protocol.  He took note that the delegation of
Canada was not present at the meeting.
23. The Chairperson concurred that the absence of the delegation of Canada was regrettable, but
he guessed that that delegation might not change its stance on aircraft ground maintenance simulators.
24. The representative of the European Communitie s stated that his delegation had participated
actively in the work of the Technical Sub-Committee and was quite pleased with the outcome.  He
saw no reason why the Committee could not adopt the Protocol today, although there was somehesitation from Egypt.
25. The delegate of the United States said that his delegation shared the view of the European
Communities in that they felt that a lot of work b een done and there seemed to be agreement on the
technical wording and the list.  They were somewhat troubled by the aircraft ground maintenance
simulator issue as well, because that item was not exclusively allowed for, or described in, the text ofthe Agreement itself.  The United States applied a duty rating of zero to it already, so it did not affect
them one way or another.  He wished to ask whether Japan was making it clear that it could not go
ahead with accepting this Protocol without making the change in Article 1 to include under Article 1.1
the aircraft ground maintenance simulators, or, alternatively, drop that item from the Annex.TCA/M/12
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26. The representative of Japan reiterated that this was a legal issue, and, with respect to
substance, Japan already had no tariffs on aircraft ground maintenance simulators.  As for answering
the question of the United States, logically speaking they only had two options.  One was to agree to
amend Article 1.1 and the other was -- at least for the time being -- to set aside aircraft ground
maintenance simulators from the Annex.  If the Signatories could agree on either of the alternatives,he thought his delegation could go along with the consensus.  He again expressed regret that the
delegate of Canada was not present, and said that his delegation did not want to be too disruptive.
They agreed with the European Communities and the United States that a lot of time had been put into
this issue and, in fact, Japan was one of the countries which had spent a lot of time looking into this
issue. They did not want to be obstructing the pr ocedure.  He thought that it might be possible to
decide to tentatively have the political statement which urged Signatories to afford duty-free treatment
to aircraft ground maintenance simulators and to adopt the Protocol without the reference to theseaircraft ground maintenance simulators.
27. The delegate of the United States thanked the representative of Japan for the clarification of
position and, although the delegate of Canada was not present, Japan had made its position clear that
in order to move ahead, the Signatories either had to drop the reference to aircraft ground maintenance
simulators or amend Article 1, which he did not think they were prepared to do at this meeting.  Hisdelegation had a slight change to the current wording in paragraph 6 of TCA/W/5/Rev. 4 that it
wished to propose for the purpose of clarity and comprehensiveness.
2  He noted that the current
wording referred to existing rights and obligations under the WTO Agreement  and his delegation had
picked up language from elsewhere in the WTO Agreem ents that said that the reference to existing
rights was to rights as they existed on the day prior to entry into force of the Protocol, which wasconventional wording.  In addition, the WTO Agreement  was defined in the Final Act, but it was
nowhere to be found in this Protocol, or in the Airc raft Agreement, so his delegation felt that it was a
little awkward to use an undefined term here, although the Agreement was part of the WTO  His
delegation suggested a reference to Article II of the  Marrakesh Agreement Establishing the World
Trade Organization .  Article II simply referred to all the annexes, which included all the Agreements,
both the multilateral and plurilateral agreements and the Marrakesh Agreement  itself.  His delegation
did not believe that there was any substantive difference between this proposal and the current draft
text.  He wondered whether the Chair or the Secretariat's representative would care to provide any
kind of legal view as to whether there was any substantive difference here between their reference to
the Marrakesh Agreement Establishing the World Trade Organization  or the WTO Agreement  as it
appeared in the Chairman's draft.  The only substantive difference he could see was the specific date
here for what was meant by existing rights and obligations.
28. The representative of the Secretariat stated that he did not see, at present, any substantive
differences, apart from a further clarification of the meaning of the WTO Agreement  in this context.
29. The representative of the European Communitie s thanked the United States for providing an
improved text.  If he remembered correctly, the source of the existing language was also the
United States.  At first sight, he did not think th ere was an obvious problem, but he had not had time
to study the proposal in depth and suggested he be given perhaps two weeks time to come back if
necessary on the legal details.
                                                     
2 The United States' proposal read:
"This Protocol deals only with customs duties and charges under Article 2
of the Agreement.  Except with respect to requiring duty-free treatment forproducts covered by this Protocol, nothing in this Protocol or theAgreement, as modified thereby, changes or affects a Signatory's rights andobligations, as they exist on the day prior to the entry into force of thisProtocol, under any of the WTO Agreements referenced in Article II of the
Marrakesh Agreement Establishing the World Trade Organization ."TCA/M/12
Page 6
30. The Chairperson observed that there appeared to be no comments on the United States'
proposal and recalled that the European Communities had proposed that the Signatories reach
agreement on the new text on an ad referendum  basis and if, within two weeks, no Signatory had
objections to the proposal, this proposal should be accepted.  He felt that this might not suffice to
permit the adoption of the Protocol because there remained the question raised by Japan, andsuggested that the Committee therefore revert to this  item at the next regular meeting.  He was also
open to any other suggestions from Signatories.
31. The representative of the European Communities acknowledged the legal issue that Japan had
raised and asked whether Japan might reconsider whether there was any way around this issue.  He
noted that the question of the relative scope of Articles 1 and 2 of the Agreement and the Annex was
not entirely consistent in any event.  There appeared to be some inconsistencies which had been
agreed upon by common accord in the Committee, and he thought it might be possible, in accordancewith the Vienna Convention , to indicate that it was the common view of Signatories that the item in
question should be covered, even if this was not entirely consistent.  He thought it would be a pity if
Signatories could not resolve this question after having discussed the updating of the Annex for two
years and having a result with which all agreed upon in substance.
32. The delegate of Japan thanked the European  Communities for the constructive idea.  He
shared the feeling that it would be a pity not to somehow formalize the result since so much time had
been put into updating this annex to the most rece nt HS.  He wondered whether the Chair could hold
some kind of informal consultations with the presence of the Canadian delegation to find some way
around this issue as soon as possible.  His delegation was all for revising not only the Annex, but the
entire Protocol, and the lawyers back in Tokyo had always been wanting to re-write and update theentire Agreement to the current WTO framework, as the Chairperson had been endeavouring to do so
strenuously for the last two years.  His delegation's discomfort began with the difficulty the United
States and European Communities seemed to have with amending the Agreement itself.  He took note
of the statement by the European Communities that this Agreement seemed to have discrepancies, not
only with respect to the coverage, but also with respect to the relationship with the WTO Agreement
per se.  In Tokyo's view, the latter was the greatest problem with this Agreement.  However, assuming
that this greater issue could not be resolved, they had difficulty in putting aside the smaller issues and
going ahead with the Protocol.  Japan was, however, extremely willing to go along with this update,
and he hoped that the Chair could hold some kind of consultations, together with Canada, to find
some creative solution to this issue.
33. The Chairperson thanked the delegation of Japan for having clarified Japan's position on the
legal issues.  He wished to explain his understanding of the situation.  First, no Signatory opposed the
technical changes in the list of products in the Annex.  Second, there was a disagreement on the
Protocol, since Japan was not in a position to adopt this decision as such if aircraft ground
maintenance simulators were retained in the Annex.  Japan was positing an alternative: either delete
this item from the Annex, or amend Article 1.1 of the Agreement defining the products covered by the
Agreement.  His sense of the situation was that it would be difficult for Signatories to take a decisionat this meeting deleting aircraft ground maintenance simulators from the annex, especially due to the
unfortunate absence of Canada, and it would be even more difficult to embark on an initiative to
amend Article 1.1 of the Agreement.  Third, there was a proposal made by the United States to amend
the text of the draft Protocol on which the European Communities said it wished to reflect and submit
to the lawyers in Brussels.  Like many of the Signatories, he wished to be in a position to adopt thisProtocol as quickly as possible and to take today a decision ad referendum , but he thought the
conditions surrounding the decision were more complicated than just the legal analysis of a text
proposed by the United States.  As Japan had said, consultations would have to be conducted with the
Canadian delegation, at least, and with other interested parties in this matter.  He proposed to contact
the Canadian delegation as quickly as possible to look at this issue with them.  On the one hand, quiteclearly, if Canada did not agree to remove this item from the list then the Committee would not be in aTCA/M/12
Page 7
position to adopt the Protocol amending the Annex on an ad referendum  basis.  Another possibility, if
Signatories would allow him to explore it, would be for the Committee take a decision to adopt the
Protocol on an ad referendum  basis pending the outcome of the consultations that he would have with
Canada and other interested parties, and to adopt the Protocol within ten working days if there were
no objections to the wording proposed by United States.  He would then have to inform theSignatories of the outcome of those consultations a nd make a decision -- if the Signatories trusted him
and had no objection -- either to adopt the Protocol on the basis of the language that had been
suggested or, if the Committee was not in a position to do so due to the outcome of those
consultations, to revert to the issue at the next meeting in November.
34. The representative of Japan thought that his delegation could go along, but wished to raise the
procedural possibility of leaving this item on the agenda open and continuing to discuss this issue
while the Chair held consultations.
35. The representative of the United States appreciated the Chairman's proposal.  If he understood
it clearly, the Chairman would, if the Committee agreed to adopt the Protocol ad referendum , subject
to no objections being received from delegations on the changes to the Protocol that the United States
proposed, and also Canada's view on accepting that they would have to remove aircraft ground
maintenance simulators from the Annex to satisfy  the Government of Japan's concern, then the
Committee would be in a position, ad referendum , to open the Protocol.  The United States, like the
European Communities, Japan and others were, he thought, anxious to move this along.  It had been a
while.  Some of the changes were already in effect, and some would soon come into effect in order to
meet the time schedule as proposed in the footnotes to the current draft text of the Protocol, which he
thought the Committee would also want to adopt, ad referendum .  There was a general meeting of the
minds here to update the list.  He thought the EC's suggestion to Japan to take another look at Articles
1 and 2 -- as they did both refer to maintenance --  might give some basis for this.  The coverage was
only stated in Article 2.  If there were a firm view  that the Government of Japan could not sign on to
anything that had some legal ambiguity and the alternative was to amend the entire Agreement --
which his delegation was not ready to do -- he thought the Committee would be best off with the ad
referendum approach, subject to consultations on the two items that the Chairman had proposed, and
his delegation would support that.  Just as a point of clarification, while the EC had suggested that his
delegation had drafted the original language in the Protocol, it had come from the Chair.  His
delegation had some concerns about the agreements, but had offered no suggestions either publicly or
privately to the Chair.
36. The representative of the European Communities apologized if he had been misinformed as to
the source of the language.  He had no problem with the suggestion, which he thought was probably a
good one.  His only question was the time-frame.  The Chair would probably need a little bit more
time than two weeks to consult with Canada and Japan to look at some of these options and they
would probably have to go back to lawyers in capitals.
37. The Chairperson gave thanks for the advice and proposed  that the Committee adopt the
Protocol on an ad referendum  basis, on two conditions:  first, no objection received by Signatories
within one month to the language put forward at the meeting; and second, a satisfactory conclusion to
the consultations that he would hold with interested parties on the question of the inclusion, or non-
inclusion, in the list of aircraft ground maintenance simulators.  He took it for granted that, but for the
delegation of Japan and the delegation of Canada, the other Signatories agreed to adopt the Protocol
with the list as it stood, or without aircraft gr ound maintenance simulators.  Signatories would accept
that aircraft ground maintenance simulators be dropped from the list.  They could not accept the other
possible solution, which was amending Article 1.1.  The United States had clearly made that point.
He needed the agreement of the Signatories if they wanted to take the decision ad referendum .  He
thought that the Committee would only be able to adopt, ad referendum , if the outcome of the
consultations was the list as it stood, or the list amended by dropping aircraft ground maintenanceTCA/M/12
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simulators.  If the outcome of the consultations were anything else that required drafting or
interpretation, he thought the Committee would need to revert to the issue in November.  He asked for
confirmation that he had correctly understood the situation.
38. The delegate of the United States agreed with the Chairperson's summary of the positions.  He
wanted to mention a third thing, the provisional application which the Committee had agreed to at the
last formal meeting until such time as the Protocol was adopted.  His delegation's view was that the
Committee should continue the provisional application, also to ground maintenance simulators
specifically, particularly if that item was dropped from the proposed Annex, until such time as it could
be added in an overall change to the Agreement.  The Committee had already agreed in a formal
decision to have that item added.  Even if the delegate of Canada were absent, he wanted to do this
without prejudice to the 189 years of peace they had with Canada and their 3,000-mile long border.
39. The Chairperson took note of the statement by the delegate of the United States.  He thought
that, if the solution was that aircraft ground mainte nance simulators were deleted from the Annex, the
Committee would need to take a decision by which it continued to apply, on an interim basis, duty-
free treatment to this item.  He thought that the coverage of other items by provisional application
would not be necessary any longer in light of the formal adoption of the Protocol.  He asked if his
understanding was shared by all Signatories, and stated that he hoped to be able to resolve the issuewithin one month.  He would report to the Signatorie s, either that the Committee had a solution or did
not have a solution and would have to address the issue at its next meeting in November.  The worst
case scenario would be that no solution was reached and then the Committee would have to go back
to the drawing board in November.  The question of the continuation or extension of the provisional
application to the new changes that had been now inserted in the document was a question that wouldbe dealt with in November, in case the Committee failed formally to adopt the Protocol.  He asked
whether Signatories agreed with this course of action.
40. The Committee so agreed.
41. The delegate of Japan asked what the intention as to the date for acceptance of the Protocol
would be, assuming that the Committee would be able to close the ad referendum decision.
42. The Chairperson stated his understanding that the intention was to retain the date as suggested
in the footnotes of the draft text of the Protocol, as proposed by the United States.  He raised the issue
whether the date in footnote 1 might need to be amended.
43. The delegate of the United States stated that the date of acceptance could be when the
consultations confirmed the ad referendum decision, that is, 6 June 2001.
44. The Chairperson concurred with this understanding.  If the conditions as he had spelled them
out were fulfilled, the date of adoption of the Protoc ol would be the date of this meeting, 6 June 2001.
45. The Committee took note of the statements made.
46. The Chairperson subsequently reported to Signatories.3
D. STEPS TAKEN BY SIGNATORIES RELATING TO INTERIM APPLICATION OF
DUTY-FREE TREATMENT TO PRODUCTS IN TCA/W/5/REV.3
47. The Chairperson recalled that the Committee had taken a decision at its 15 November 2000
meeting inviting Signatories to proceed immediately to the interim application of duty-free treatment
                                                     
3 See TCA/5TCA/M/12
Page 9
of products in the Annex, including aircraft ground maintenance simulators.  The Committee also
decided that Signatories should inform the Committee on any steps they might take with the view to
that implementation.  He therefore invited Signatories to inform the Committee of the steps they had
taken.
48. The delegate of the European Communities stated that they were preparing the legal
instrument, which was a regulation, and would presen t it -- if everything went smoothly --  to the
European Council before the summer break.  If things went smoothly, adoption in the second half of
this year was a realizable possibility.
49. The representative of the United States stated that, as he had already informed the Chair, they
had implemented duty-free status on all the items as they had been changed under the Harmonized
System already and they planned to continue that in the future.
50. The representative of Japan stated that Japan had a footnote in the annexed schedule for the
WTO which stated that items included in the Agreement would automatically be granted non-tariff
treatment, so whatever was under the current Agreement was already automatically given tariff free
treatment, whatever the Harmonized System changes.  To reiterate as far as aircraft ground
maintenance simulators were concerned, as for other liberalization measures which Japan had taken
years ago, that item had already been granted non-tariff treatment so it did not have any tariffs at themoment.
51. The Committee took note of the statements made.
52. The Chairperson proposed that the list of goods in the Product Coverage Annex in document
TCA/W/5/Rev.4 be circulated as a Committee document and treated as a derestricted document for
WTO purposes.
53. The representative of the United States stated that his delegation wholeheartedly supported
the Chairperson's view on derestricting the Protocol and Product Coverage Annex, if adopted ad
referendum following the 30 day consultation period.  Just to avoid confusion with the public, he
suggested derestriction take place on the same date, otherwise there might be two different versions of
the Annex, with and without aircraft ground maintenance simulators.
54. The Committee took note of this suggestion and so agreed .
E. "END-USE" CUSTOMS ADMINISTRATION
1. Updating Information Regarding Civil/Military Identification for Customs Purposes
55. The Chairperson noted that no further information had been received from any Signatory
since the last regular meeting of the Committee.
56. The representative of the United States recalled that his delegation had supplied information
on the US end-use customs administration and he thought  it would be useful to see how others applied
end-use customs administration.  They particularly wished to understand the EC's application of
import tariffs used for parts which could either be used in military or civilian registered aircraft, and
how they were treated.
57. The representative of the European Communities wished to recall that they had provided
information, and he was not sure that he understood what seemed to be an additional request from the
United States on specific items.  He would be happy to take that in a more specific form back to
Brussels if he knew exactly what the open questions were.TCA/M/12
Page 10
58. The delegate of the United States said that his request was just informational and had no
negative connotation.  They had read the EC's submission and with respect to item 2, where it
described that for the purpose of paragraph 1, "civil aircraft" meant aircraft other than aircraft used in
military or similar services in the member states which carried a military or non-civil registration.
That explained what one did with complete civil aircraft, with complete aircraft in the conventionaldefinition.  It did not make clear to the United States what happened to civil aircraft as defined by the
Agreement, which meant civil aircraft engines, parts, components, sub-assemblies, etc., and so they
were wondering what happened if an imported part could be used in either that an aircraft can be used
for military purpose or can be used for civilian purpose.   How was that part dutied?  The United
States had made it clear that it treated them the same, that the civil part was treated as duty-free
whether or not it was used for military purposes, even though that was not an obligation under this
Agreement.
59. The Committee took note of the statements made.
2. Military vs. Non-Military Definition
60. 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 would have liked to invite the delegate of Canada to introduce this item, butunfortunately Canada was not represented at the meeting.  He invited Signatories to comment on the
proposal, if there were any new element to communicate to the attention of the Signatories.
61. The representative of the United States stated that his delegation continued to review the
Canadian proposal.  His delegation had noted previously that the United States already applied a
definition similar to Canada's proposal.  This was contained in a "dual use" paper already provided tothe Committee.4 His delegation had a few questions about the Canadian proposal, but would revert to
those when a representative of Canada was available.
62. The representative of the European Communities said that his delegation could accept the
proposals by Canada and hoped that the Committee could reach agreement on that proposal in order
to make this known to the outside world.  He put it that way to give some impetus to this important
question.  For the time being, he was not sure whether there was agreement within the Committee, but
if agreement could be reached, his delegation would be happy to explore ways with the Chairman on
whether this work that had been going on could be given some prominence.
63. The delegate of Japan had hesitated -- he had been contemplating some technical questions
but he would try to clarify the situation and address this issue as soon as possible when the Canadian
delegation was available.
64. The Committee took note of the statements made and agreed to revert to this item at the next
regular meeting.
F. STATISTICAL REPORTING OF TRADE DATA
65. The Chairperson recalled that the issue of the statistical reporting of trade data had been
raised during the November 2000 meeting and, at that meeting, the Signatories agreed to endeavour to
communicate by 1 May 2001 the trade statistics for the most recent annual period.  To date, theSecretariat had received statistics from the United States which were circulated in document
TCA/TSC/W/9.  The Secretariat had also received statistics from Switzerland that morning, as well as
from the European Communities the day before, but these two documents had not yet been circulated.
                                                     
4 TCA/TSC/W/5.TCA/M/12
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The Chairperson understood that these Signatories considered that the communication of the statistics
was useful and that it was a practice which should be continued.  He invited comments from
Signatories.
66. The delegate of the European Communities wi shed to thank the Chairperson for mentioning
the EC's submission, which was a real brick of 80 pages, rather detailed, and split up by countries.
They could make the document available for those delegations that wished to have it electronically,
also via the Secretariat.  His delegation wished to  apologize that they were a bit late with the
submission, but now that they had done it, the quest ion was whether they should continue to do it.
They were open to views.  They also had a question to the Secretariat in that respect.  He thought that
at the last Committee meeting, there had been a question to give some background on why Signatories
had decided to submit statistics in the 1980's, and also some of the delegations had put questions to
his delegation, including the Canadian delegation which was not present at this meeting.  This wassaid to have been a transparency exercise and the databases were not as good then as they were today.
Having said this, he did not see any harm, especially since with the new databases, it was actually
quite easy to compile the information .  His delegation wished to have the view of other delegations
who had not provided the information as to whether there was a fundamental problem -- given the
classification issues behind it -- or whether there was just a lack of interest in continuing the exercise.
67. The representative of Japan wished to report on the latest status of how Japan was doing on
this issue.  Japan apologized for the fact that they had not yet submitted the data.  This was not a
fundamental problem, or something they objected to, but they simply had a technical problem in
statistical compilation of the data.  His delegation foresaw that they would be able to submit data
within the month, and asked Signatories to bear with them.
68. The Chairperson understood on the basis of this short discussion that the Signatories
considered that the submission of such statistics was useful, so the Committee would continue this
practice.  He urged other Signatories to fulfil this commitment and submit their statistics.  As he was
going to suggest that the Committee hold its next meeting on 21 November 2001, Signatories who had
not yet fulfilled their obligation might submit their statistics by 1 October 2001.
69. The representative of the United States stated that his delegation also wished to see the other
submissions and to reserve its view on how valuable the exercise was until they actually saw the
submissions.  They felt that the suggestion fr om the European Communities to make this data
available electronically was an environmentally friendly measure, not to kill trees for this exercise.  In
the future, rather than submitting documents, Signatories might consider explaining where the
information was available in electronic version or hard copy without going through the Committee,
because it seemed such information was becoming more and more readily available through otherchannels.  This had not been the case when the Committee decided to undertake this exercise 20 years
ago.
70. The Chairperson believed that these were useful proposals, especially the environmental
concerns which were most welcome in a Committee that was dealing with aircraft -- such aircraft
might contribute to the depletion of the ozone layer, so this was a good reason.  The Chairpersonproposed that those Signatories who had not yet notified their data on 2000 should do so by 1 October
2001, and that those notifications would be considered at the next regular meeting of the Committee
currently proposed for 21 November 2001.  At that meeting, he would invite delegations to come up
with any proposals they had to circulate this info rmation in the most environmentally-friendly and
competent way they could.
71. The Committee took note of the statements made and so agreed
.TCA/M/12
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G. CERTIFICATION IN EUROPE OF UNITED STATES CIVIL AIRCRAFT
72. The delegate of the United States wanted to reve rt to the question that the United States had
asked the European Communities at the previous mee ting to which they did not receive what they felt
was a sufficient answer.  The question related to the reason for the delay in France's certification of a
Boeing 737, new NG version.  It was th e understanding of his delegation that that certification had not
been approved.  He asked if the European Communities could inform his delegation of the current
status and what the reason was for any delay.
73. The representative of the European Communitie s stated the minutes of the last meeting
reflected that the United States and European Co mmunities had an in-depth exchange on this issue.
He wished to recall their understanding that this matter only concerned a very small number of
aircraft to begin with, and as they saw it, it appeared that neither the US manufacturer in question nor
the US aviation authorities had replied to requests made by the French aviation authorities in respectof the 1998/99 period.
74. The United States thanked the EC delegate for this reply.  It appeared that this matter
remained as it was when they had last enquired.  At the last meeting, the United States had reminded
the European Communities and France -- also a Si gnatory to this Agreement -- of its understanding
that the joint airworthiness authorities of Europe had carefully reviewed the certification of thisaircraft and that the French authorities had participated in the Committee that had reviewed the data
and the aircraft.  The recommendation of the joint airworthiness authorities was to certify the aircraft.
All European airworthiness authorities, with the exception of France, did certify the aircraft.  The US
FAA had certified the aircraft, other countries in which it has operated had certified the aircraft, so
there was one exception, and they asked the supplemental question whether there was some problemwith the certification safety of this aircraft as evaluated by the joint airworthiness authorities.  Was
that the reason -- that France lacked confidence in  the recommendation of its sister participants in the
joint airworthiness authorities -- or was there some r eason other than safety involved in not certifying
this aircraft?
75. The delegate of the European Communities thought that his delegation had sufficiently
answered these questions before.  First of all, the JAA did issue recommendations, but it remained up
to individual member states to do the certification.  Secondly, it was not a question of anything else
but safety.  Thirdly, it was not a question of whether this aeroplane could be certified, there was a
minor question of how many seats the aeroplane could have, so they were not questioning the
certification as such, but there was one individual aspect which they had been discussing here.
76. The delegate of the United States accepted that correction.  They did not exactly describe it as
a lack of certification, it was a lack of certification of the aircraft at the full seating capacity that was
allowed by all other JAA members and the United States, and it turned out that that seating capacity
was slightly greater than the competitive aircraft  that was made in France and Germany.  So, the
understanding that they had with regard to the request for supplemental information by the French
airworthiness authorities was that Boeing had pr ovided all supplemental information that it could
provide, the only thing outstanding was some question of whether the aircraft should be re-tested as tothe evacuation times, based on live testing, as they did in the United States in a darkened hangar with
all people trying to leave the aircraft with some of the doors blocked.  In other words, the testing had,
in their view, been done.  As they understood that request, a major problem that their applicant had
was that the configuration of the seating was a co nfiguration that they did not even produce the
aircraft and that was not permitted by the US FAA or other certification authorities.  It was an oldconfiguration that they did not produce, and this request did not take into account the fact that
automatic over-wing doors had been installed.  This obviously increased the speed of exit from that
aircraft.  No other aircraft had these installed.  This included earlier versions of the Boeing aircraft
and all versions of the Airbus aircraft and that data was provided on the enhanced speed of exit fromTCA/M/12
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the aircraft to the French airworthiness authorities.  He hoped that they would take another look at this
matter and see if this issue could be expedited and a conclusion reached, because all necessary
information, in his understanding, had been provided.
77. The delegate of the European Communities thought that they should not go into dark hangers
to find out what exactly the requests were!  He thought the important point to note was that, first, it
was not a question of anything else but safety and he reiterated that any insinuation about
competitiveness of other manufacturers was not so mething which they would accept.  Secondly, he
thought it was worth noting again that there was a request put forward which had not been followed
up and he thought the authorities had the right to request additional testing if they saw fit.  Thirdly, he
thought they had not heard from the manufacturer and the authorities concerned for two years now, so
he was not sure it made much sense to discuss the details here when they were still waiting for an
answer on specific requests the authorities concerned had made.  He hoped that this would satisfytheir friends from the United States.
78. The representative of the United States stated that if the matter was only safety, then he heard
the representative of the European Communities asserting on behalf of France that somehow their
safety standards were higher than the other members of the joint airworthiness authorities, their
European colleagues in that organization, and than the FAA.  With regard to their question forsupplemental information, of course all these issues were a matter of details, and the problems were in
the details.  The darkened hanger test of filling up the plane with 189 passengers and having them exit
at the speed they would if there was a real emergenc y fire or something similar, to get results, to do
this again, only for the airworthiness authorities of France, was a risky measure.  As he had previously
pointed out, there had been injuries to people invo lved in these tests, serious injuries, such as a
women who had a spinal injury (she had, in effect, broken her neck) from participating in these tests.
These were a risky measure, and data did exist to show adequately the exit speed from this aircraft,
and this was supplied by Boeing, and Boeing had been in prior formal and informal communication
with French airworthiness authori ties in the period, within the two years.  It was his understanding
that they had not agreed to conduct a darkened hanger test of this nature, specifically on aconfiguration of the seating which they no longer manufactured.  They felt this was a useless,
worthless endeavour, so they hoped that there must be some way of resolving this problem.  It seemed
inappropriate and it was certainly not the way French authorities would like the United States to treat
French-manufactured aircraft, by delaying on certification for two or three years beyond the rest of
the world.  His delegation hoped that they would take another look at the matter and see what they
might need from Boeing that was reasonable and prop er and that would allow them to conclude, in an
appropriate manner, according to their regulations and laws, this certification process for the full
seating capacity for these aircraft.
79. The representative of the European Communities thought that he had tried to make clear that
interest seemed rather minimal and that they were not here to discuss testing methods, as they were
not the experts for that.  If there were concerns, he thought the best way to go forward was to respond
and re-contact the authorities.  He was not sure that that wouldn't be the best way to proceed with thisissue instead of throwing the balls back and forth in this Committee.
80. The representative of the United States wished to add a minor detail, that the manufacturer in
the United States indicated that they had had contact within the last few months and their
understanding was that nothing had changed, but he would double check that and he hoped that, on
the EC side, they would double check as well in line with the suggestions that he had proposed.
81. The Committee took note of the statements made.TCA/M/12
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H. EUROPEAN UNION REGULATION ON AIRCRAFT AND ENGINE NOISE
82. The delegate of the United States said that US concern about the EU's hush-kit regulation was
well-documented in previous minutes of this Committee.  The intention was not to go into depth about
those discussions.  His delegation's intent today was simply to give an update to the Committee of
recent events, to keep the Committee informed on something which had been discussed at length priorto today.  His delegation believed it was, of course, of interest to all members of this Committee to
maintain the order and integrity of our global aviation system and this regulation, and these issues
more specifically of global noise and environment, were of importance to all of the Committee
members.  In January, ICAO members participating in a Committee on Aviation and Environmental
Protection, or CAEP, met for 9 days to talk about a new noise standard and to talk about procedures
related to noise mitigation for civilians affected by civil aircraft noise around the world.  The United
States believed that that was a very successful meeting.  European members of the CAEP Committeealso participated actively and contributed signific antly to the work of that Committee.  At that
Committee, a recommendation was made for a new standard for civil aircraft and that
recommendation, as he understood it, would be forwarded to the ICAO Council for consideration,
during the meeting taking place at this time.  Committee members also discussed procedures related
to civil aircraft, in particular Committee members of CAEP decided and agreed that there were aseries of different measures which could be used to provide improvements in noise affecting people in
and around airports and elsewhere.  This was the balanced approach adopted as a general concept by
all the members there.  It was determined that there needed to be further discussions and development
of those ideas by the members of CAEP and the members of ICAO.  At the same time as the CAEP
meeting took place, the United States and the European Communities entered into negotiations
mediated by the ICAO Council president, as laid ou t in the dispute settlement procedures of their
hush-kit regulation dispute and, as part of those discussions, they had had detailed discussions on an
informal basis about a way that they could work through both resolution of a new procedure, or new
procedures, related to the operation of civil aircraft as well as the feasibility for that to help them to
solve the Article 84 dispute between the United States and the EU.  They very much appreciated theconstructive discussions they had been having with the Commission on this issue and with the
individual Member states. They believed that ICAO was the appropriate forum to deal with these
questions and with civil aircraft noise and procedures. They had, in fact, had recent discussions, as
late as last week, to discuss a possible outcome that could be beneficial to both of them.  It was
critical for them to work out their differences on these issues prior to the end of the ICAO Council, so
that they could have a successful discussion of this issue at the ICAO Assembly meeting in September
in Montreal.  They looked forward to their continued constructive discussions with the Commissionon this issue.
83. The delegate of the European Communities noted, on a somewhat lighter note, that the
discussion on the last agenda point and possibly on this one had more or less emptied the room.  He
had his own idea of the reason for that.  On this particular item, he fully agreed, and he wanted to
thank the US delegate for informin g the Committee.  He fully agreed with the points the US delegate
had made and that the appropriate forum to discuss this was the ICAO and that they had had
constructive discussions there.  The same was true for the bilateral contacts which were underway and
which would continue.
84. The Committee took note of the statements made.
I. EUROPEAN GOVERNMENT SUPPORT FOR THE DEVELOPMENT OF LARGE CIVIL
AIRCRAFT
85. The delegate of the United States recalled that at the last meeting, his delegation had
requested an update of government support that was contemplated by the European Communities and
member states for what was now called the A380 programme, and received information.  They had, ofTCA/M/12
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course, discussed this matter bilaterally with the member states and the European Communities, and
had received information there, but they noted that there was a bit of a public announcement on this
matter about a month ago, and since this was the Aircraft Committee and they generally discussed and
reported on major developments in this area and due support for new aircraft programme was a major
development, they asked whether the European Communities would like to update their last reportand add some additional information for the edification of the Committee.
86. The representative of the European Communities stated that he thought his delegation was
slightly surprised that this issue had come back to them here, because, as recently as 19 April, they
had given full information under the 1992 EC-US bilateral agreement about the support committed by
now 7 EU Governments to this project.  He thought there were some outstanding further requests for
details in that forum, which they were willing to provide.
87. The delegate of the United States stated that as he had noted, this was the Aircraft Committee
and one of the things over the years had been to discuss various developments, major developments,
and they considered this to be one.  With regard to the bilaterals, his delegation could confirm that
they were discussing, and would discuss, this with the European Communities, under the 1992
bilateral agreement, of which the Committee had previously received copies.  Of course, the bilateral
was framed as an interpretation of some of their obligations under this Agreement bilaterally, andtherefore they felt that, multilaterally, there should be an interest and support as well.  He had one
small question for the European Communities on the support, as they announced in their press stories.
He did not know whether the EC delegate was in a position to answer it, but considering that Airbus
was now an independent entity and owned by compan ies whose combined assets were greater than its
competitor in the United States, Boeing, and that their government business was greater, their militarybusiness was greater than Boeing's, his delegation wondered, if this was a commercially viable
programme, why the governments felt the need to provide government loans, to revert taxpayers'
money to the private sector for this venture.
88. The representative of the European Communities thought that his only answer to that question
was that around the globe, various forms of ensuring the competitiveness of aircraft industries existed,
as the US delegate had said.  Some had large budgets for aerospace in national agencies dealing with
that, others had found other means to do that, but he thought they had tried to strike a balance on these
in bilateral fora and bilateral agreements.  He thought that this was still the case.
89. The Committee took note of the statements made.
J. BELGIAN AIRCRAFT INDUSTRY SUPPORTS THROUGH EXCHANGE RATE
MECHANISMS
90. The delegate of the United States said that this matter had come up at previous meetings and
the European Communities had updated them on the status of what they perceived to be an exchange
rate guarantee mechanism that was operated for the benefit of the aircraft industry in Belgium.  On the
part of the United States, there were serious questions about the compatibility of such a mechanism
with Belgium's obligations under this Agreement, and under other WTO Agreements and under their
IMF obligations.  His delegation wished to know what the status was on replacing that.  From the lastmeeting, they understood that this was in process, but had not been concluded.  They wished to know
if there was any change in that status.
91. The delegate of the European Communities stated that, at the last meeting, they had
committed themselves to keeping the Committee informed  on that issue and he also wanted to restate
that the Belgian Government remained committed to setting up a new industrial policy on that issue.This process, unfortunately, was still on-going and had not been concluded.  It might be some
consolation to point out that, given current exchange rates, there was no economic significance of thisTCA/M/12
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rather theoretical measure because it was not being used for the time being, and had not been used for
quite a while.  So he thought he had to point out again that as long as the conditions were not fulfilled
for  these measures, there was no real harm done.  But, as he had said, it would be remedied and the
Belgian authorities remained committed to that and the results would appear.
92. The Committee took note of the statements made.
K. UNITED STATES GOVERNMENT SUPPORT FOR LARGE CIVIL AIRCRAFT
INDUSTRY
93. The delegate of the European Communities had two small requests for information to the
United States, and if the Chair would allow, he would present them together because it was basically a
request for information.  The first concerned what he would call BT17.  It was a plan, of which his
delegation had taken note, by the US airforce to help a large manufacturer in the United States to sell
a commercial version of its latest jumbo military transport plane to private cargo companies.According to the information that they had receiv ed, the idea was to provide an array of financial
subsidies to encourage private carriers to buy that plane, including things like guaranteed government
transport business, or a promise of the Pentagon to buy back these planes from firms that go bankrupt,
and even up-front subsidies.  He wished to ask the United States whether they could confirm that this
plan was being pursued and also whether they were, at this stage, in a position to quantify the amountof subsidies which would be involved.  The other issue related to the project called "sonic cruiser" --
of which he thought all here were aware.  This was a plan by a large manufacturer of aircraft in the
United States to construct and build a new aircraft flying just below Mach 1, a so-called "sonic
cruiser", and the question here was that in the last four years from 1997 to 2001, NASA had spent
$1.76 billion dollars on two programmes called "Hig h Speed Research, High Speed Civil Transport",
that was the first one and the other one was "Advanced Sub-Sonic Technology". His delegation
wished to know how much technological benefi t of that programme would flow into the new
construction.  What were the benefits for the large civil aircraft manufacturer?  Were they making use
of the results of these programmes?
94. The representative of the United States said, with regard to the first question regarding the
BT17, he thought there was a profound misstatement of the purpose of the military programme.  The
purpose of the programme was to provide adequate cargo lift capabilities for the US military in
support of its international obligations, its peace-keeping functions and its humanitarian functions.
There were no similar civil aircraft with roll-on, roll-off capabilities, heavy lift, and large cargo.  The
US Department of Defence was not seeking to support a civilian version to market and have civilian
aircraft for that purpose.  Its purpose was to make sure that it had adequate lift capabilities, and a
choice of buying the aircraft itself or leasing the aircraft or shipping cargo on civilian-held aircraft.  Itwas determined that it would be less costly if there happened to be civilian aircraft around that were
able to carry its loads.  So one could argue that this was not a subsidy by the Department of Defence,
but a subsidy -- if they wanted to use that term, although he did not really think it applied here --on
the civilian side for the military.  This was really a services issue.  Military use of aircraft made it
military and not really covered by their bilateral agreement, although he was pleased to respond to thisquestion.  The current status was that the Department of Defence had issued a request for interest in
such a project.  The Department is to encourage availability and describe possible scenarios that
would make this aircraft commercially viable to those who might buy it.  However, it was no way
committing to subsidize the private use of it.  It would, in fact, be in a position of having to pay up-
front for its future, or make commitments to the amount of cargo that would be carried in order tomake a sure environment for those who might want to invest in such an aircraft.   But it was not doing
that beyond the use that it would actually need for it self.  It was not arranging or offering to arrange to
provide, as his EC colleague had questioned, some kind of subsidy for civilian use.  It was only
allowed under law to provide for what it would buy and, if necessary, to buy back the aircraft if no
longer used for civilian use.  But, of course, from this perspective, the Department of Defence was noTCA/M/12
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different from buying the aircraft initially itself  and holding them, so it saw nothing there.  With
respect to the question on "sonic cruisers", this was a proposal.  There was no formal launch of this
aircraft.  The technologies were new, there was no fixed design.  They had no information on what
technologies would be used.  Therefore, they di d not know of any government-supported technologies
that would be employed in that aircraft.
95. The delegate of the European Communities had one question.  The point had been made that
this was to ensure transport capacity for the US airforce, but if he was correctly informed, there had
been a plan, some years ago, to buy 240 of these planes which had already been cut to 210 or 220.
There was a report from a congressional research team which said even 100 would be enough for the
airforce.  So, he did not really see how that fit in with the new assessment that much more was needed
and that this sort of scheme seemed to be necessary to ensure that the airforce kept flying.
96. The representative of the United States said that there were various assessments of the needs
to support their alliances.  Part of the cost of the aeroplane depended on the number being built;  since
several European military were considering an alte rnative aircraft, that meant fewer sales of the C17
for military purposes in Europe.  This meant the cost increased.  However, the alternative aircraft
being considered by the European authorities was an aircraft that did not have the same capabilities in
either range or lift capacity or size.   This created a problem for potential military needs and their needto support their alliances in peace-keeping forces throughout the world and certainly even in Europe,
where they had recently supplied military assistance in Eastern Europe, despite the fact that there was
available regional support.  There was a view to be involved with their allies in supporting peace-
keeping functions and they needed the adequate lift.  This was a long tradition, since World War II in
the United States.  The airforce had contracted in advance and paid for the use of civilian aircraft intime of military need.  As it was paid for regularly, this was a matter indicating another normally
civilian used aircraft, because of the special nature of this aircraft, in order to make clear to those who
might operate them, exactly what the needs of the airforce were. They were in fact stating those up-
front to encourage the availability of those aircraft if, in fact, the civilian buyers concluded that there
was legitimate civilian commercial purpose for them, but that was up to them and not to the airforce.It struck him as rather ironic that this matter should be raised on this date, which was some 57 years
after the United States had put in quite a few resources in support of certain alliances in Europe.  They
had maintained this capability.  In any case, they had asked before and they asked again, whether
from the European side there was any commercial interest or concern they had, since they did not
make any competitive aircraft that had this capability --  short-range take-off, heavy lift, large load,
roll-on, roll off.  So, as stated initially, his delegation felt that this was a military aircraft and a use of
service of aircraft issue, which was not covered by this Agreement.
97. The delegate of the European Communities had one concluding remark and one concluding
question:  first, whether the US delegate was able to confirm that the civilian version of this plane
would really be usable under military terms in the way it was equipped and sold as a commercial
aeroplane; second, whether he would agree to keep them informed of any further developments, as his
delegation understood that this programme was under discussion for the time being, but had not beenadopted.  He was asking for the last point because, even if there was perhaps no competing product,
any incidence on the supplier concerned, and any subsidies which would help the supplier concerned,
was, of course, of interest to them.   He thought this went without saying.
98. The delegate of the United States said, in answer to the first question, that the airforce had
concluded that these aircraft would be usable for military purposes, although in their civilian use they
would be modified from what they were, in the way they were manufactured for military use.  The
civilian versions would still be usable for military use, or applicable to military use, otherwise they
would not be seeking this programme.  As far as keeping the European Communities informed in the
future, certainly on a bilateral basis they discussed m ilitary issues and there were other fora that they
would certainly be willing to discuss this with them.TCA/M/12
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99. The Committee took note of the statements made.
L. OTHER BUSINESS
100. The Chairperson wished to raise the issue of the report which this Committee was to send to
the General Council as its input to the 4th Ministerial Conference which would take place from 9-13
November this year.  The General Council would be meeting on 23/24 October in order to examine allthe reports submitted to it by the subsidiary bodie s.  After this, it would be drawing up its own report
to be submitted to the Ministerial Conference.  As Signatories would no doubt understand, there was a
problem of calendar because the next meeting of this Committee will be held on 21 November, after
the General Council would have met to discuss this report.  This was nothing new.  It had already
happened before the Geneva and Seattle Ministerial Conferences.  This was not a problem which
arose only for this body; there were other bodies in the same position.  The means to deal with this
situation would be to ask the Chair of the Committee to send a letter to the Chairman of the GeneralCouncil, containing a factual report, of the activities of this Committee since the adoption of the last
annual report in November 2000.  This was a report by the Chairman and bound only the Chairman.
This was a procedure which he suggested so as to avoid having to call a special meeting simply to
adopt a report for consideration by the General Coun cil, so that the General Council may examine it
on 23/24 October.  He proposed that the Committee follow past practice and authorize him to send aletter, which would be the report of this Committee -- to the Chairman of the General Council before
its meeting on 23/24 October.  This letter would report on this meeting and would indicate that there
had been a joint meeting of this Committee in informal mode and the Technical Sub-Committee in
March 2001.  Of course, he would send copi es of this letter to all Signatories.
101. The Committee so agreed.
M. DATE OF NEXT REGULAR MEETING
102. The Chairperson proposed that the date of the next regular meeting of the Committee was
21 November 2001.
103. The Committee so agreed.
104. The Chairperson recalled that Signatories had asked him to carry out certain tasks and stated
that he would do his best to undertake these in the next period.
105. The meeting was adjourned.
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