PRESS CONFERENCE

JACQUES BARROT
VICE PRESIDENT
EUROPEAN COMMISSION & TRANSPORT COMMISSIONER
MARCH 22, 2005

Transcript by:
Federal News Service
Washington, DC

MODERATOR: Sorry for the slight delay but there was a long – if anyone wants a background, I have a spare here.

JACQUES BARROT: I am late because our meeting with Monsieur Mineta was long and very interesting. And I thank you, each of you, to be here for this meeting.

I just met with the Secretary of Transportation, Norman Mineta; I met with Marion Blakey and her team at FAA yesterday. I met with Deputy Secretary Michael Jackson at Homeland Security this morning. I had contacts yesterday at the White House with advisors to President Bush. I have also met with business leaders, and as a consequence, I have a clear sense of the key challenges ahead.

Let me inform you about some of the issues that I discussed and talk about the spirit with which I came here.

I decided to come to Washington early in my mandate as Vice President of the European Commission in charge of transport. I wanted to demonstrate the importance I attach to good relations with our American partners. We have much to gain from acting together on the issues confronting the world.

President Bush recently visited the European Union. He stressed the importance of a strategic alliance between Europe and the United States. A transatlantic alliance needs to deliver tangible results. Civil aviation is an area where we can make progress together.

International aviation is dominated by arcane rules. These rules have passed their expiration date in today’s global economy. We need to reform international aviation. We need to do this together – Europeans and Americans. This is a top priority for me. European and American markets together represent 60 percent of global aviation. We have the capacity to modernize civil aviation.

What do we need to do together? Firstly, we need to avoid rules on both sides of the Atlantic that complicate doing business. We need to avoid adopting divergent regulations. Mutual consultation is absolutely necessary. The EU and the US need to establish permanent cooperation to discuss regulations on security, safety, consumer protection and fair competition.

On security, we should work towards mutual recognition of our rules. We need to create confidence in our systems. We need to give evidence of effective application of security rules to each other. I discussed this with Deputy Secretary Michael Jackson this morning. I also raised the difficulties posed to the EU by the US decision to ban the carrying of lighters by passengers on their person or in their luggage.

We need to look at access to each other’s markets. We need to work progressively, in stages, to open our markets and create more opportunities for companies and passengers. We miss economic opportunities in the absence of an aviation agreement. An extra 17 million passengers across the Atlantic is a realistic prospect. And let’s not forget the spin-off for domestic connections.

To reach an agreement we need to look at both passenger travel and cargo. I discussed with Secretary Mineta how to re-launch negotiations on an open aviation agreement between our markets. Our negotiators will now review the elements to include in an agreement to create a transatlantic aviation market. I insist: create a transatlantic aviation market. It is a very, very exciting – (unintelligible) – but I am sure very necessary.

I myself will discuss this with European ministers in a few weeks’ time. Our goal is to resume formal negotiation in view of a first-step agreement. I think that we should work in different steps. I would like to move as quickly as possible, but I also prefer to take the time that is necessary to establish a solid basis for a transatlantic aviation market. Also, I insist on this point: establish a solid basis to go ahead. I will work on this over the coming months with the partners I met at the Department of Transport and the US Administration. I also found a receptive ear with business leaders whom I met.

I explained to our American partners that the European Commission has recently requested mandates to negotiate with Russia and China on behalf of the EU. And we aim to create a common aviation market with our immediate neighbors at our Eastern borders and in the Mediterranean area.

I was pleased with my contacts at the Federal Aviation Administration yesterday where I met with Marion Blakey. We have an excellent cooperation already. I want to intensify our cooperation. We are working closely on a bilateral agreement in the field of safety of equipment. I hope we can conclude by June – next June. Not next, by June 2006.

I explained to the FAA how we are working in Europe with the new European Air Safety Agency. I also explained how our thinking is developing on environmental matters and on protection of passenger rights. The EU recently introduced the new rules to ensure a high level of protection to passengers. Our new rules want to eradicate overbooking and avoid cancellation of flight for commercial reasons. That is why we now grant compensation to passengers who suffer from intolerable practices by airline companies. These rules are of course non-discriminatory. All airlines are treated the same.

With FAA, I discussed the issue of air traffic management and how to improve it. In the European Union we are launching SESAME, a new technology to improve traffic management. Our common objective is to ensure the interoperability of this system with that operated by the US. It’s very important. With Marion Blakey we have a mutual commitment to make the system interoperable.

To conclude, my visit here was driven by both economic and political considerations. A partnership between Europe and the United States in aviation makes economic sense. A good agreement would bring economic benefits in cargo and in passenger travel. It will increase tourism and create extra jobs on both sides of the Atlantic.

But it also makes political sense. We need to strengthen the strategic alliance between all democracies. The world needs leadership and vision to make a success of globalization. Delivering leadership is a joint challenge for Europe and the United States.

Now I will be happy to take your questions, and you’ll excuse me if I answer in French because I prefer using the most possible precision –

MR. ?: Precise.

MR. BARROT: Precise. Yes.

MODERATOR: Well, thank you very much. For any of you who had any doubt, this is Vice President Jacques Barrot. To his left I’d also like to introduce Stefaan de Rynck. He’s a very able spokesman. And I think –

MR. BARROT: He’s a good spokesman.

MODERATOR: – that Stefaan will literally be doing that job, although I would like to commend the Commissioner on his English and also on the efforts that he displayed.

Perhaps as a return courtesy, if we could ask you firstly to say who you are and the media that you represent. And also, if you can pose your questions in as intelligible form as possible, that would be most appreciated too.

Who would like to lead off?

Q: Perry Flint with Air Transport World Magazine. And I’m wondering if you could characterize your discussions today with Transportation Secretary Mineta in terms of how much progress was made on an open aviation agreement.

MR. BARROT: [Remaining comments through interpreter.] We turned the page of our disappointment of the summer of 2004. We agreed to look at the road forward and to establish the basis for one day – a basis to put one day a global agreement on – a basis to base a global agreement on one day. I think we’re convinced that we cannot stick to the status quo. The status quo would damage our economies; it would damage American companies, European companies. The status quo would be an obstacle to seize on opportunities to develop transatlantic traffic and also to develop traffic towards third countries.

Q: Yes, Ed McKenna from Traffic World Magazine. I am wondering, was there any consideration or talk about maybe a separate cargo agreement?

MR. BARROT: We think that should arrive at a global agreement, so there was no question this afternoon of a separate negotiation on cargo. But nevertheless I think – with Secretary of Transportation Mineta, we think that cargo companies in America and also in the European Union are favorable towards an agreement.

Q: (Inaudible) – with the Washington Post. What are your concerns specifically about some of the US security measures, including banning lighters? And do you plan to raise a more formal objection to the banning of lighters?

MR. BARROT: Rather I took it as an example to show the great interest we have in avoiding unilateral measures without prior consultation. For this specific issue, for this specific measure, we think that the measure will be difficult to apply, and there are also doubts whether this measure will be well understood, because effective measures for security need to be well understood. And I discussed this with Michael Jackson this morning. It is a danger that its security measures are wrongly understood by public opinion that would damage the effectives of these security measures.

With Mr. Jackson this morning, together we agreed that security is an absolute priority and we said that we need to pay attention to choose the most effective measure, and that the more we have prior consultation on security measures, the more effective they will also be in their application; and also, indeed, the better they also will be accepted by passengers.

Q: (Inaudible.) What are the Americans doing to cooperate in this – (inaudible)?

MR. BARROT: I think indeed that the American response is positive and that the more and more we are conscious that we need permanent cooperation. We need a daily dialogue, or a dialogue on a daily basis, and we need to communicate each other’s intentions – the intentions on both sides before taking actual decisions.

Q: Going back to the opening –

MODERATOR: Sorry, can you just introduce yourself?

Q: Oh, I’m sorry. Susan – (inaudible). I’m with Reuters News. Were you and Secretary Mineta able to agree on a set schedule for talks for the Open Skies Agreement?

MR. BARROT: We didn’t establish a specific timing but we established a method – a kind of roadmap. I can tell you what my next actions are. I will meet the 25 EU Transport Ministers at the end of April when there’s a meeting of the Council in Brussels, and maybe we could imagine there to talk about the methods and also see if the bilateral Summit before the summer could also kind of enshrine these methods, and then see if we can work, towards the end of 2005, to define the basis of what would be then a framework agreement, the basis of what would be a global agreement, so that perhaps by the end of the year we could define the headline of this global agreement.

Q: So if I could just ask a follow-up: when would you like to next meet with the US officials about a global agreement? Would be after that, not until the end of the year?

MR. BARROT: We will now let our experts work, the experts of myself, the experts of Secretary of Transportation Mineta. And notably from our side it’s Daniel Calleja, who sits here behind me, who I didn’t write down the precise words of the eulogy for Daniel – (laughter) – but he knows the dossier very well. He’s an expert on this matter. He’s been working on this for a long time, and so he and his team will now work on this with his counterparts in Mr. Mineta’s office. And I invited Mr. Mineta as well to come to Brussels at some point, and I myself also am ready to come here as many times as is needed to Washington.

I want to give, really, an example, a case of how this transatlantic cooperation works, of how the transatlantic alliance works, and how I would like the transatlantic partnership to work.

Q: You complained about the US financial support for US airlines, and you say that is a cause of concern for European companies. What do you plan to do about it?

MR. BARROT: It’s the same thing we need to do: we need to compare on both sides what is happening. I myself am in charge of applying competition rules in the European Union for the specific case of transport, and I’m very attentive to the issue of state aid – or perhaps you call them public subsidies here or state aid. And I am attentive to make sure that this can facilitate restructuring of companies, but I’m very strict in avoiding any form of aid which would distort competition. And I am also very strict for another reason: that is that the Court of Justice in the European Union would actually strike decisions down that I would take if I don’t pay due attention to be very rigorous in this process.

Q: I would like to have an update on two specific transnational agreements. Is there comprehensive agreement inside the EU and between the EU and the US about the quantity and quality of data that can be transmitted about such and such passengers from the travel agencies or the airline companies or police or the aviation authorities? Because you know it’s created some privacy concerns on both sides of the – (inaudible).

And the second one would be: has there been an agreement about the terrorist watch list between the EU and the US that would allow to void such misunderstanding as the grounding of several Air France and Continental planes in Christmas 2003?

MR. BARROT: I allow you to protest if I misunderstood your question, but we are making progress in exchanging data. And one of the issues that we’re exchanging data between FAA and the European Aviation Safety Agency – Mr. Jackson said on that that, you know, after reflection, that there were also some questions here in the United States on the data requested. So we discussed it as well with Mr. Jackson this morning on how extensive these data is and the use of these data, and we said, well, we need to have a fruitful cooperation – a cooperation in confidence as well to define what it is necessary to exchange and what is perhaps not indispensable to exchange.

So there is an agreement between the Commission, the Council and American counterparts. But that agreement has now been contested by the European Parliament. But it is perhaps a question of sort of an internal procedural issue within the European Union more than the question on substance. Or rather than a question on substance, it’s a question of internal procedure within the EU that the Parliament is contesting.

MR.: (Inaudible) – mistakes that provoked the grounding of several planes in the winter of 2003.

MR. BARROT: Well, what was said this morning is what needs to be done is that we really need to target terrorists and avoid perhaps inquiries or investigations on non-terrorist individuals, I would say. I am not in charge of this dossier but that is what I can tell you about this.

Q: John Hughes from Bloomberg. Given your comments that by the end of 2005 you would like to define a basis for a framework agreement, can we assume that you won’t be able to conclude an agreement, at least until 2006 or 2007?

MR. BARROT: (Chuckles.) Hopefully, we can go quicker. And I really think we are in a situation now on both sides of the Atlantic that we realize that the status quo is not playing in the interest of both. So there are two areas where we really need to see the point where both parties can come together. The first is traffic roads, the possibility to liberalize airline routes, and the second area is to – rules on the property of companies – property issues – ownership – ownership, excuse me. So the second is the rules of ownership of companies.

On ownership, carriers that are looking towards the future, carriers that we could label as pioneers – perhaps the best on both sides of the Atlantic – show a willingness to be able to limit or perhaps eliminate rules that hamper the dynamics. I know this is a delicate question for Congress, but also in the United States from the perspective of national defense. I think that we can overcome the obstacles and I think we need to realize that the advantages of liberalization outweigh the inconveniences.

Q: If I understood you right, you set a kind of schedule for Open Skies agreements with Russia and China until 2010. Does that mean that you are more optimistic of these two than on the United States’ agreement?

MR. BARROT: No, no, no, no. (Laughter.) Don’t confuse my caution for pessimism. I am really determined; and because I am determined I want to succeed with the United States. And because I want to succeed, I want to avoid rushing because we cannot afford a second failure. So we will – with Russia and China, we will aim at the concluding Open Skies agreement. But my first concern is the transatlantic sky, which I would like to call a clear sky. We need to a establish a clear sky in the transatlantic area, which would serve as a model also for other countries that are increasingly in demand of more air transports. And that will also serve as a model in our negotiations with these other countries to go to the end of the road with China and Russia. But my priority is to look at a transatlantic workshop first of all – the transatlantic work we have in front of us.

A clear sky is more an issue than only an open sky. (Laughter.) I don’t find exactly the good word to qualify this concept. It’s a concept with a very, very free market, with a good cooperation for technique and for safety and security, but I think it is a paradox that air transportation is so running behind; it’s falling behind. [Audio break, tape change] -- of globalization, and yet you have all these arcane rules. It’s a real paradox.

MODERATOR: Do we have any more questions?

MR. BARROT: The last? (Laughter.)

Q: Perry Flint with Air Transport World again. Today Lufthansa announced it is going to buy Swiss International Airlines. Would you be inclined, based on the initial announcement, to favor that merger?

MR. BARROT: We’re convinced that alliances of companies now allow for better quality of service, better effectiveness. And I don’t see a risk of monopoly, which is why this rapprochement is coming together for Lufthansa and Swiss. It’s a positive thing.

We could ask ourselves a question whether one day these alliances don’t have to evolve into a completely unified company. Of course here we touched on these rules of ownership, which are archaic and which do not apply in other sectors of the economy.

So as you see, I believe in competition, I believe in regulation, I believe in a dialogue on how we see the things on both sides of the Atlantic, in the European Union and the United States. And I think there are good transatlantic dialogues to create what could be a model for aviation.

Thank you.

MODERATOR: Well, on that happy note I’d like to thank Vice President Barrot. He’s spent a good deal of time with the European Commission – has come in and out – and they don’t give enough time for the press. So I’m grateful to you on behalf of the audience.

Stefaan, I think you’ve got a future career as a translator. (Laughter.) And to all of you for coming this afternoon.

MR. BARROT: Excellent. Thank you very much for – thank you.