TRADE IN CIVIL AIRCRAFT 181
AGREEMENT ON TRADE IN CIVIL AIRCRAFT
PREAMBLE
Signatories1to the Agreement on Trade in Civil Aircraft, hereinafter ref erred to
as "this Agreement";
Noting that Ministers on 12-14 September 1973 agreed the Tokyo Roun d of
Multilateral Trade Negotiations should achieve the expans ion and ever-greater liberalization
of world trade through, inter alia , the progressive dismantling of obstacles to trade and
the improvement of the international framework for the cond uct of world trade;
Desiring to achieve maximum freedom of world trade in civil aircraft, parts and
related equipment, including elimination of duties, and to the fullest extent possible, the
reduction or elimination of trade restricting or distortin g effects;
Desiring to encourage the continued technological development of th e aeronautical
industry on a world-wide basis;
Desiring to provide fair and equal competitive opportunities for the ir civil aircraft
activities and for their producersto participate in the exp ansion of the world civil aircraft
market;
Being mindful of the importance in the civil aircraft sector of their overa ll mutual
economic and trade interests;
Recognizing that many Signatories view the aircraft sector as a particul arly important
component of economic and industrial policy;
Seeking to eliminate adverse effects on trade in civil aircraft resu lting from
governmental support in civil aircraft development, produ ction, and marketing while
recognizing that such governmental support, of itself, wou ld not be deemed a distortion
of trade;
Desiring that their civil aircraft activities operate on a commercia lly competitive
basis, and recognizingthat government-industryrelation shipsdiffer widelyamong them;
Recognizing their obligations and rights under the General Agreement on Tariffs
and Trade, hereinafter referred to as "the GATT", and under o ther multilateral agreements
negotiated under the auspices of the GATT;
________________
1The term "Signatories" is hereinafter used to mean Parties t o this Agreement.182 TOKYO ROUND AGREEMENTS
Recognizing the need to provide for international notification, consul tation,
surveillance and dispute settlement procedures with a view to ensuring a fair, prompt
and effective enforcement of the provisions of this Agreeme nt and to maintain the balance
of rights and obligations among them;
Desiring to establish an international frameworkgoverningconduct of trade in civil
aircraft;
Hereby agree as follows:
Article 1
Product Coverage
1.1 This Agreement applies to the following products:
(a) all civil aircraft,
(b) all civil aircraft engines and their parts and components,
(c) all other parts, components, and sub-assemblies of civil a ircraft,
(d) all ground flight simulators and their parts and component s,
whether used as original or replacement equipment in the man ufacture, repair,
maintenance, rebuilding, modification or conversion of ci vil aircraft.
1.2 For the purposes of this Agreement "civil aircraft" mean s (a) all aircraft other than
military aircraft and ( b) all other products set out in Article 1.1 above.
Article 2
Customs Duties and Other Charges
2.1 Signatories agree:
2.1.1 to eliminate by 1 January 1980, or by the date of entry in to force of this
Agreement, all customs duties and other charges1of any kind levied on,
or in connection with, the importation of products, classif ied for customs
purposes under their respective tariff headings listed in t he Annex, if such
products are for use in a civil aircraft and incorporation th erein, in the course
of its manufacture, repair, maintenance, rebuilding, modi fication or
conversion;
_______________
1"Other charges" shall have the same meaning as in Article II o f the GATT.TRADE IN CIVIL AIRCRAFT 183
2.1.2 to eliminate by 1 January 1980, or by the date of entry in to force of this
Agreement, all customs duties and other charges1of any kind levied on
repairs on civil aircraft;
2.1.3 to incorporate in their respective GATT Schedules by 1 January 1980, or
by the date of entry into force of this Agreement, duty-free o r duty-exempt
treatment for all products covered by Article 2.1.1 above an d for all repairs
covered by Article 2.1.2 above.
2.2 Each Signatory shall: ( a) adopt or adapt an end-use system of customs administration
to give effect to its obligations under Article 2.1 above; ( b) ensure that its end-use
system provides duty-free or duty-exempt treatment that is comparable to the
treatment provided by other Signatories and is not an impedi ment to trade; and
(c) inform other Signatoriesof its proceduresfor administer ingthe end-use system.
Article 3
Technical Barriers to Trade
3.1 Signatories note that the provisions of the Agreement on Technical Barriers to Trade
apply to trade in civil aircraft. In addition, Signatories a gree that civil aircraft
certification requirements and specifications on operati ng and maintenance procedures
shall be governed, as between Signatories, by the Provision s of the Agreement on
Technical Barriers to Trade.
Article 4
Government-Directed Procurement, Mandatory Sub-Contrac ts
and Inducements
4.1 Purchasers of civil aircraft should be free to select sup pliers on the basis of
commercial and technological factors.
4.2 Signatories shall not require airlines, aircraft manuf acturers, or other entities engaged
in the purchase of civil aircraft, nor exert unreasonable pr essure on them, to procure
civil aircraftfrom any particular source,which would crea te discriminationagainst
suppliers from any Signatory.
_______________
1"Other charges" shall have the same meaning as in Article II o f the GATT.184 TOKYO ROUND AGREEMENTS
4.3 Signatories agree that the purchase of products covered by this Agreement should
be made only on a competitive price, quality and delivery bas is. In conjunction
with the approval or awarding of procurement contracts for p roducts covered by
this Agreement a Signatory may, however, require that its qu alified firms be
provided with access to business opportunities on a competi tive basis and on terms
no less favourable than those available to the qualified fir ms of other Signatories.1
4.4 Signatoriesagree to avoid attaching inducements of any kind to the sale or purchase
of civil aircraft from any particular source which would cre ate discrimination against
suppliers from any Signatory.
Article 5
Trade Restrictions
5.1 Signatories shall not apply quantitative restrictions (import quotas) or import licensing
requirements to restrict imports of civil aircraft in a mann er inconsistent with
applicable provisions of the GATT. This does not preclude im port monitoring or
licensing systems consistent with the GATT.
5.2 Signatories shall not apply quantitative restrictions or export licensing or other similar
requirements to restrict, for commercial or competitive re asons, exports of civil
aircraft to other Signatories in a manner inconsistent with applicable provisions
of the GATT.
Article 6
Government Support, Export Credits, and Aircraft Marketin g
6.1 Signatories note that the provisions of the Agreement on Interpretation and
Application of Articles VI, XVI and XXIII of the General Agre ement on Tariffs
and Trade (Agreement on Subsidies and Countervailing Measu res) apply to trade
in civil aircraft. They affirm that in their participation i n, or support of, civil aircraft
_______________
1Use of the phrase "access to business opportunities ... on te rms no less favourable ..." does not mean
that the amount of contracts awarded to the qualified firms o f one Signatory entitles the qualified firms of other
Signatories to contracts of a similar amount.TRADE IN CIVIL AIRCRAFT 185
programmes they shall seek to avoid adverse effects on trade in civil aircraft in
the sense of Articles 8.3 and 8.4 of the Agreement on Subsidie s and Countervailing
Measures. They also shall take into account the special fact ors which apply in the
aircraft sector, in particular the widespreadgovernmenta l support in this area,their
international economic interests, and the desire of produc ers of all Signatories to
participate in the expansion of the world civil aircraft mar ket.
6.2 Signatories agree that pricing of civil aircraft should be based on a reasonable
expectation of recoupment of all costs, including non-recu rring programme costs,
identifiable and pro-rated costs of military research and d evelopment on aircraft,
components, and systems that are subsequently applied to th e production of such
civil aircraft, average production costs, and financial co sts.
Article 7
Regional and Local Governments
7.1 In addition to their other obligations under this Agreem ent, Signatories agree not
to require or encourage, directly or indirectly, regional a nd local governments and
authorities, non-governmental bodies, and other bodies to take action inconsistent
with provisions of this Agreement.
Article 8
Surveillance, Review, Consultation, and Dispute Settleme nt
8.1 There shall be established a Committee on Trade in Civil A ircraft (hereinafter
referred to as "the Committee") composed of representative s of all Signatories.
The Committee shall elect its own Chairman. It shall meet as n ecessary, but not
less than once a year, for the purpose of affording Signatori es the opportunity to
consult on any matters relating to the operation of this Agre ement, including
developments in the civil aircraft industry, to determine w hether amendments are
requiredto ensure continuance of free and undistortedtrad e, to examine any matter
for which it has not been possible to find a satisfactory solu tion through bilateral
consultations, and to carry out such responsibilities as ar e assigned to it under this
Agreement, or by the Signatories.
8.2 The Committee shall review annually the implementation and operation of this
Agreement taking into account the objectives thereof. The C ommittee shall annually186 TOKYO ROUND AGREEMENTS
inform the CONTRACTING PARTIES to the GATT of developments d uring the
period covered by such review.
8.3 Not later than the end of the third year from the entry into force of this Agreement
and periodically thereafter, Signatories shall undertake further negotiations, with
a view to broadening and improving this Agreement on the basi s of mutual
reciprocity.
8.4 The Committee may establish such subsidiary bodies as ma y be appropriate to keep
under regular review the application of this Agreement to en sure a continuing balance
of mutual advantages. In particular, it shall establish an a ppropriate subsidiary
body in order to ensure a continuing balance of mutual advant ages, reciprocityand
equivalent results with regard to the implementation of the provisions of Article 2
above related to product coverage, the end-use systems, cus toms duties and other
charges.
8.5 Each Signatory shall afford sympathetic consideration to and adequate opportunity
for prompt consultation regarding representations made by another Signatory with
respect to any matter affecting the operation of this Agreem ent.
8.6 Signatories recognize the desirability of consultatio ns with other Signatories in the
Committee in order to seek a mutually acceptable solution pr ior to the initiation
of an investigation to determine the existence, degree and e ffect of any alleged
subsidy. In those exceptional circumstancesin which no con sultations occur before
such domestic procedures are initiated, Signatories shall notify the Committee
immediately of initiation of such procedures and enter into simultaneous consultations
to seek a mutually agreed solution that would obviate the nee d for countervailing
measures.
8.7 Should a Signatory consider that its trade interests in c ivil aircraft manufacture,
repair,maintenance, rebuilding,modificationor convers ionhave been or are likely
to be adversely affected by any action by another Signatory, it may request review
of the matter by the Committee. Upon such a request, the Commi ttee shall convene
within thirty days and shall review the matter as quickly as p ossible with a view
to resolving the issues involved as promptly as possible and in particular prior to
final resolution of these issues elsewhere. In this connect ion the Committee may
issue such rulings or recommendations as may be appropriate . Such review shall
be without prejudice to the rights of Signatories under the G ATT or under
instruments multilaterally negotiated under the auspices of the GATT, as they affect
trade in civil aircraft. For the purposes of aiding consider ation of the issues
involved, under the GATT and such instruments, the Committe e may provide such
technical assistance as may be appropriate.
8.8 Signatories agree that, with respect to any dispute rela ted to a matter covered by
this Agreement, but not covered by other instruments multil aterally negotiated underTRADE IN CIVIL AIRCRAFT 187
the auspices of the GATT, the provisions of Articles XXII and XXIII of the General
Agreement and the provisions of the Understanding related t o Notification,
Consultation, Dispute Settlement and Surveillance shall b e applied, mutatis mutandis ,
by the Signatoriesand the Committee for the purposes of seek ing settlement of such
dispute. These procedures shall also be applied for the sett lement of any dispute
related to a matter covered by this Agreement and by another i nstrument
multilaterally negotiated under the auspices of the GATT, s hould the parties to the
dispute so agree.
Article 9
Final Provisions
9.1 Acceptance and Accession
9.1.1 This Agreement shall be open for acceptance by signatu re or otherwise by
governments contracting parties to the GATT and by the Europ ean Economic
Community.
9.1.2 This Agreement shall be open for acceptance by signatu re or otherwise by
governments having provisionally acceded to the GATT, on te rms related
to the effective application of rights and obligations unde r this Agreement,
which take into account rights and obligations in the instru ments providing
for their provisional accession.
9.1.3 This Agreement shall be open to accession by any other g overnment on
terms, related to the effective application of rights and ob ligations under
this Agreement, to be agreed between that government and the Signatories,
bythe deposit with the Director-Generaltothe CONTRACTING PARTIES
to the GATT of an instrument of accession which states the ter ms so agreed.
9.1.4 In regard to acceptance, the provisions of Article XXV I:5 (a) and ( b) of
the General Agreement would be applicable.
9.2 Reservations
9.2.1 Reservations may not be entered in respect of any of the provisions of this
Agreement without the consent of the other Signatories.
9.3 Entry into Force
9.3.1 This Agreement shall enter into force on 1 January 1980 for the
governments1which have accepted or acceded to it by that date.
_______________
1For the purpose of this Agreement, the term "government" is d eemed to include the competent authorities
of the European Economic Community.188 TOKYO ROUND AGREEMENTS
For each other government it shall enter into force on the thi rtieth day
following the date of its acceptance or accession to this Agr eement.
9.4 National Legislation
9.4.1 Each government accepting or acceding to this Agreeme nt shall ensure,
not later than the date of entry into force of this Agreement f or it, the
conformity of its laws, regulations and administrative pro cedures with the
provisions of this Agreement.
9.4.2 Each Signatory shall inform the Committee of any chang es in its laws and
regulations relevant to this Agreement and in the administr ation of such
laws and regulations.
9.5 Amendments
9.5.1 The Signatories may amend this Agreement, having rega rd,inter alia , to
the experience gained in its implementation. Such an amendm ent, once
the Signatories have concurred in accordance with the proce dures established
by the Committee, shall not come into force for any Signatory until it has
been accepted by such Signatory.
9.6 Withdrawal
9.6.1 Any Signatory may withdraw from this Agreement. The wi thdrawal shall
take effect upon the expiration of twelve months from the day on which
written notice of withdrawal is received by the Director-Ge neral to the
CONTRACTING PARTIES to the GATT. Any Signatory may upon such
notification request an immediate meeting of the Committee .
9.7 Non-Application of this Agreement Between Particular Sign atories
9.7.1 This Agreement shall not apply as between any two Signa tories if either
of the Signatories, at the time either accepts or accedes to t his Agreement,
does not consent to such application.
9.8 Annex
9.8.1 The Annex to this Agreement forms an integral part ther eof.
9.9 Secretariat
9.9.1 This Agreement shall be serviced by the GATT secretari at.
9.10 Deposit
9.10.1 This Agreement shall be deposited with the Director- General to the
CONTRACTING PARTIES to the GATT who shall promptly furnish t oTRADE IN CIVIL AIRCRAFT 189
each Signatory and each contracting party to the GATT a certi fied copy
thereof and of each amendment thereto pursuant to Article 9. 5 and a
notification of each acceptance thereof or accession there to pursuant to
Article 9.1, or each withdrawal therefrom pursuant to Artic le 9.6.
9.11 Registration
9.11.1 This Agreement shall be registered in accordance wit h the provisions of
Article 102 of the Charter of the United Nations.
Done at Geneva this twelfth day of April nineteen hundred and seve nty-nine in a
single copy, in the English and French languages, each text b eing authentic, except as
otherwise specified with respect to the various lists in the Annex.1
_______________
1On 25 March 1987,the Committee agreed thatthe Spanish texto f the Agreement shall also be considered
authentic.190 TOKYO ROUND AGREEMENTS
ANNEX
(as amended by the Protocol (1986) amending the access to the Agreement on Trade
in Civil Aircraft.
PRODUCT COVERAGE
1. The product coverage is defined in Article 1 of the Agreeme nt on Trade in Civil
Aircraft.
2. Signatories agree that products covered by the descripti ons listed below1and properly
classified for customs purposes under the Customs Co-opera tion Council Nomenclature
(Revised) headings of the Harmonized System codes shown alo ngside shall be accorded
duty-free or duty-exempt treatment,if such productsare fo r use in civil aircraft or ground
flying trainers* and for incorporation therein, in the cour se of their manufacture, repair,
maintenance, rebuilding, modification or conversion.
These products shall not include:
an incomplete or unfinished product, unless it has the essen tial character of a
complete or finished part,component, sub-assembly or item of equipment of a civil
aircraft or ground flying trainer*, (e.g. an article which h as a civil aircraft
manufacturer s number),
materials in any form (e.g. sheets, plates, profile shapes, strips, bars, pipes, tubes
or other shapes) unless they have been cut to size or shape and /or shaped for
incorporation in civil aircraft or a ground flying trainer* (e.g. an article which has
a civil aircraft manufacturer s part number),
raw materials and consumable goods.
4. For the purpose of this Annex, «Ex» has been included to ind icate that the product
description referred to does not exhaust the entire range of products within the Customs
Co-operation Council Nomenclature (Revised) headings or t he Harmonized System codes
listed below.1
_______________
1The list is not reproduced.
*For the purposes of Article 1.1 of this Agreement «ground fl ight simulators» are to be regarded as
ground flying trainers as provided for under 8805.20 of the H armonized System.