VZCZCXRO3433
OO RUEHAG RUEHDF RUEHIK RUEHLZ RUEHPOD RUEHROV RUEHSR
DE RUEHBS #0796/01 1591745
ZNR UUUUU ZZH
O 081745Z JUN 09
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC IMMEDIATE
INFO RUCNMEU/EU INTEREST COLLECTIVE IMMEDIATE
RUCNMEM/EU MEMBER STATES COLLECTIVE IMMEDIATE
RULSDMK/DEPT OF TRANSPORTATION WASHDC IMMEDIATE
RHMFIUU/FAA NATIONAL HQ WASHINGTON DC IMMEDIATE

UNCLAS SECTION 01 OF 02 BRUSSELS 000796 
 
SENSITIVE 
SIPDIS 
 
STATE EEB/TRA (BYERLY), EUR/ERA (KESSELER) 
DOT FOR GRETCH AND STEWART 
STATE PASS TO USTR - CHRIS WILSON 
 
E.O. 12958: N/A 
TAGS: EAIR PREL ELAB EUN
SUBJECT: FAA REAUTHORIZATION BILL: EU CONCERNS 
 
¶1.  (SBU)  SUMMARY:  On June 8, USEU Charge was convoked to 
receive a formal EU demarche expressing concerns about 
provisions of the FAA Reauthorization bill regarding 
inspections of foreign repairs stations, further definition 
of actual control of U.S. airlines' operations, and 
restrictions on antitrust immunity.  The demarche highlighted 
the possible negative impact on U.S.-EU aviation cooperation. 
 Scanned versions of two non-papers provided by DG RELEX and 
DG TREN have been emailed to EEB/TRA and EUR/ERA.  The EU 
Commission officials observed that there will be aviation 
negotiations in Brussels on June 22-26.  END SUMMARY. 
 
EU DISAPPOINTED, WORRIED, AND CONCERNED 
 
¶2.  (U)  On June 8, USEU Charge met with European Commission 
officials Alan Seatter, Director for North America (and other 
OECD countries) in the Directorate for External Relations (DG 
RELEX), and Daniel Calleja y Crespo, Director of Air 
Transport (DG TREN) at their request.  Also present were 
Tomas Abadia, DG RELEX desk officer for the United States and 
Canada, the senior FAA Representative in Brussels, and USEU 
Transport Officer. 
 
¶3.  (SBU)  The EU is disappointed, Alan Seatter said, that 
moves in Congress risk reversing on-going U.S.-EU cooperation 
in opening and strengthening the transatlantic aviation 
market, a particular worry during this difficult time of 
global economic downturn.  Seatter noted the House version of 
the FAA Reauthorization Bill (HR 915, passed May 21) would 
impede the entry into force of the 2008 U.S.-EU Aviation 
Safety Agreement, hamper the implementation of the 2007 
U.S.-EU Air Transport Agreement, and make it difficult to 
continue meaningful second-stage negotiations.  He stressed 
that the EU is making its concerns clear by reaching out to 
U.S. counterparts at all levels.  EU Commission Delegation 
Ambassador Bruton and others in the European Delegation in 
Washington are working with industry associations and talking 
with members of Congress.  Seatter urged that the 
Administration send a strong message to Congress opposing 
provisions that negatively impact U.S.-EU cooperation, and do 
so quickly, to be sure that Senate consideration -- which may 
take place in June -- includes language to address potential 
problems. 
 
¶4.  (SBU)  Daniel Calleja, the EU's aviation negotiator, 
reviewed the success of the U.S.-EU Air Transport Agreement 
and explained thatthis agreement and the Aviation Safety 
Agreement were built on long-standing relationships, high 
technical standards, and a shared commitment to safety.  He 
said that if U.S. citizens must exert actual control of all 
aspects of U.S. airline operations, this would cause 
difficulties in implementing the current Air Transport 
Agreement, would reduce possibilities for greater cooperation 
and generally send a bad signal for the second-stage 
negotiations.  According to Calleja, antitrust immunity is 
essential to the Open Skies concept  and the proposed 
three-year sunset clause will give rise to serious issues of 
legal certainty, destabilizing transatlantic cooperation. 
Calleja noted that Transport Commissioner Antonio Tajani had 
raised these issued with Transportation Secretary Ray LaHood 
during the International Transport Forum in Leipzig at the 
end of May. 
 
FOREIGN REPAIR STATIONS AND THE SAFETY AGREEMENT 
 
¶5.  (SBU) Calleja stressed that aviation safety was the prime 
goal of all civil aviation authorities and underlined the 
long-standing cooperation between the FAA and the EU and 
individual member states based on trust and a common 
understanding of technical procedures and standards.  He said 
he understood Congressional concerns to "get tough on safety" 
but noted that "no one is suggesting there is a problem in 
Europe" although there may be some low-cost countries that 
are more worrisome.  He suggested that a "carve out" for the 
EU would be an appropriate solution with respect to this 
language in HR 915.  Both Seatter and Calleja underlined that 
prior to signing the Air Safety Agreement in June 2008, the 
EU had sought and received assurances from the FAA that the 
U.S. Administration did not support requiring U.S. 
inspections of EU certified repair stations.  (Note:  The 
Safety Agreement, signed June 30, 2008, is currently not in 
force pending exchange of diplomatic notes. End Note.) 
Calleja warned that if the current inspection and employee 
drug and alcohol testing provision are passed in the final 
bill, the EU will be forced to take reciprocal action, 
 
BRUSSELS 00000796  002 OF 002 
 
 
requiring the European Aviation Safety Agency (EASA) to 
inspect U.S. facilities.  He noted that inspecting more than 
1,200 repair stations in the United states (compared to 328 
in Europe) will impose huge, unnecessary costs, estimated at 
more than a billion dollars, with no improvement in safety. 
According to Calleja, in consultations with member state 
civil aviation authorities and EASA, DG TREN has begun to 
draft similar EU legislation and to publish the necessary 
tenders to hire additional expert inspection personnel. 
Calleja also said that if the U.S. legislation goes forward 
in its current form, the United States and the EU will not be 
able to begin the process of reciprocal acceptance of pilot 
training and licenses. 
 
ACTUAL CONTROL OF U.S. AIRLINES 
 
¶6.  (SBU)  Calleja pointed to the proposed requirement that 
U.S. citizens control all operational matters of U.S. 
airlines, including marketing, branding, fleet composition, 
and pricing.  He said that this requirement was likely to put 
U.S. carriers in a difficult, non-competitive position and 
would hamper the implementation of the U.S.-EU Air Transport 
Agreement that allows U.S. airlines to enter into franchising 
or branding arrangements with EU companies.  He noted that 
introducing more restrictive control requirements would 
reduce foreign investment opportunities in the United States 
and make the ongoing second-stage negotiations more 
difficult. 
 
ANTITRUST IMMUNITY AND ALLIANCES 
 
¶7.  (SBU)  Calleja Expanded on his point that antitrust 
immunity is essential to Open Skies and was an important 
benefit of the Air Transport Agreement.  He stressed the 
strong competition policy and regulatory oversight in both 
the United States and the EU.  He noted the extensive 
examinations and paperwork requirements and repeated that a 
three-year sunset provision would lead to legal uncertainty, 
increased administrative burdens, and be detrimental to 
consumers.  He indicated that the proposed GAO study on air 
alliances and the effects of antitrust immunity was less 
problematic. 
 
 
¶8.  (SBU)   COMMENT:  USEU has heard repeatedly from EU 
counterparts that certain provisions of the FAA 
Reauthorization Bill (HR 915, Sections 303, 426, and 801) 
pose serious concerns that are detrimental to U.S.-EU 
aviation cooperation and the larger transatlantic 
relationship, and may have additional legal and trade 
implications.  These concerns have also been raised in 
Washington.  EU officials are acutely sensitive to the 
legislative timetable as legislation makes its way through 
Congress.  With the Senate rumored to be considering its 
version of the bill later this month, we anticipate that 
Ambassador Bruton may make more formal representations at the 
State Department and that Commissioner Tajani will write to 
Secretary LaHood to follow-up on their Leipzig conversation. 
 
MURRAY 
.