Abstract
The conclusion of the Tokyo Round of Multilateral Trade Negotiations (MTN) saw the successful drafting of the international agreement that would provide the focus for the trade friction over Airbus — the GATT Agreement on Trade in Civil Aircraft. The Agreement sought to introduce a measure of discipline over government influence on trade in the civil aircraft sector. This process was initiated by the United States government, when President Carter proposed the idea of a multilateral trade accord in civil aircraft to his G7 counterparts in Bonn in 1978. The US government did so in response to pressure from its domestic industry which was, by 1978, beginning to recognize the dangers of increasing international competition in aerospace. Airbus was not the only competitor on the minds of US executives. Several states, including Brazil, Canada and Japan, were developing formidable aerospace industries.
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Notes
W. Stephen Piper, ‘Unique sectoral agreement establishes free trade framework’, Law and Policy in International Business, 12 (1980), p. 231.
Richard R. Rivers and John D. Greenwald, ‘The negotiation of a code on subsidies and countervailing measures: bridging fundamental policy differences’, Law and Policy in International Business, 11 (1979), p. 1449.
Richard Rivers, ‘The system CAN work: the Trade Agreements Act of 1979’, in Robert E. Hunter, Wayne L. Berman and John F. Kennedy (eds), Making Government Work: From White House to Congress, Boulder, CO: Westview Press, 1983, pp. 8–22.
Sylvia Ostry, Governments and Corporations in a Shrinking World: Trade and Innovation Policies in the United States, Europe and Japan, New York: Council on Foreign Relations, 1990, p. 31.
Edward Kolodziej, Making and Marketing Arms: the French Experience and Its Implications for the International System, Princeton: Princeton University Press, 1987, p. 236.
Margaret Sharp and Keith Pavitt, ‘Technology policy in the 1990s: old trends and new realities’, Journal of Common Market Studies, 31 (2), June 1993, p. 135.
Commission of the European Communities, Council Resolution, ‘Action programme for the European aircraft industry’, Bulletin of the European Communities, 3, 1977, p. 18–19. The resolution also acknowledged that cooperation with American aerospace firms may be in the interest of the European industry.
Gilbert Winham, International Trade and the Tokyo Round Negotiation, Princeton: Princeton University Press, 1986, pp. 64–5.
Testimony of Fred Bergsten, Assistant Secretary of the Treasury for International Affairs, ‘Oversight hearings on the Export-Import Bank’, Subcommittee on International Trade, Investment and Monetary Policy, House Committee on Banking, Finance and Urban Affairs, Washington: USGPO, 12 and 19 June 1980.
Aviation negotiations have a long history of this type of agreement. The major bodies overseeing international airline operation, the ICAO and the IATA, were created by a small cadre of early aviation powers (mainly, Canada, UK, and the United States). The regulatory framework they created is still largely in effect and the accession to these organizations by other states has not resulted in many changes to the rules. See Vicki Golich, The Political Economy of International Air Safety: Design for Disaster? Basingstoke: Macmillan Press, 1989, ch. 2.
Ibid., p. 232. Also, interview with former DTI official, London, Mar. 1995. It is known that the French were the most hostile of any European government to any discipline in export finance. See Andrew M. Moravcsik, ‘Disciplining trade finance: the OECD export credit arrangement’, International Organization, 43(1), Winter 1989, pp. 173–205, esp. pp. 184–5.
Joseph Rallo, ‘The European Communities industrial policy revisited: the case of aerospace’, Journal of Common Market Studies, 22 (3), Mar. 1984, p. 259.
Commission of the European Communities, EC Bulletin, 7/8 1977, pp. 18–19. The unit of account (ua) was the precursor of the ECU. Conversion rates as given by the EC were 1 ua = $1.14.
Interestingly, the Aircraft Agreement came in for its most critical treatment in respect of this clause. The critics were not the aerospace industry, but other ISACs which feared that products in their sector would be threatened by imports smuggled into the United States disguised as aircraft parts. See for example the report of ISAC No. 19, Consumer Electronic Products and Household Appliances, Private Sector Advisory Committee Reports on the Tokyo Round of Multilateral Trade Negotiations, Washington DC: USGPO, August 1979, p. 379.
The rise of sectoral codes has greatly increased the difficulties for legal interpretations of GATT rules. On the face of it, sectoral codes appear to violate the most-favoured nation clause of GATT. Moreover, as many sectoral arrangements have their own dispute-settlement procedures there has been a ‘Balkanization’ of the dispute-settlement process. John Jackson, The World Trading System, Cambridge, MA: MIT Press, 1989, p. 57.
Joseph Grieco, Cooperation Among Nations: Europe, America and Non-tariff Barriers to Trade, Ithaca: Cornell University Press, 1990, p. 177.
Keith Hayward, ‘Airbus: twenty years of European collaboration’, International Affairs, 64(1), Winter 1987/88, p. 16.
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© 1997 Steven McGuire
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McGuire, S. (1997). The Agreement on Trade in Civil Aircraft. In: Airbus Industrie. St Antony’s Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230372214_5
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DOI: https://doi.org/10.1057/9780230372214_5
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