EU-Qatar reach an Air Transport Agreement

EU aviation market opens up further

After two and a half years of negotiations, the EU and Qatar have reached a Comprehensive Air Transport Agreement (CATA) providing increased access to each other’s markets. EU and Qatari airlines will enjoy 3rd and 4th freedom traffic rights for passenger flights and ‘limited’ 5th freedom rights for cargo operations. This market opening is in line with the EU’s quest for further liberalisation in aviation and its ambition to reach agreements with other 3rd countries. While such agreements provide a unique opportunity for the EU to include much needed clauses on fair competition and social protection they should also bring in fresh commercial opportunities for our airlines. This is where an EU-Qatar deal falls short.

The economic benefits of this Agreement seem to be heavily concentrated on the side of Qatar, which will now have direct access to 28 EU countries, 500 million customers and a large cargo market. The EU is gaining access to one single consumer market in an isolated region, with only 3 million customers.

“Without wishing to downplay Qatar’s role as a global aviation player, it is only one country in a sparsely populated area and which hardly matches the opportunities provided by the access to the huge EU market. This prompts the question why is the EU so eager to cut deals that undervalue its own aviation market? I’m afraid the answer is that aviation is still considered a bargaining chip in a wider macro-economic or political strategy. EU airlines and their employees shouldn’t pay the price of this short-sighted approach to external aviation policy,” says ECA President Jon Horne.

This is a concern for most of the current EU negotiations with 3rd countries. Those countries can benefit from the access to the EU aggregated market without this market being recognised as the one single economic entity it is in reality. Flying from e.g. Madrid to Helsinki is not considered ‘cabotage’, i.e. the right for foreign carriers to operate domestically. Under such comprehensive agreements the parties obtain great flexibility in routing their traffic in each other’s territory. The flexibility of co-terminalisation, intersecting stop-overs and a network of multiple ‘national’ routes combine to give third country carriers de facto the possibility to directly compete with EU airlines on the EU network, but without being subject to the same set of rules. A flagrant example are the different levels of social protection for workers in the EU and Qatar.

“We are worlds apart when it comes to labour rights and employment conditions,” says Jon Horne, ECA President. “Qatar has a reputation of ignoring fundamental labour rights, not recognising unions or collective bargaining. It is unlikely that any ‘social clause’ – even if it includes ironclad social guarantees – would work out such large differences. However, we welcome the social clause negotiated by the EU as an important and much needed component of the agreement. It should definitely be used as a tool to ensure fundamental workers’ rights are respected and that lower Qatari social standards are not used to outcompete European airlines.”
The Agreement’s social clause recognises that the violation of fundamental labour principles and rights at work cannot be used as a legitimate comparative advantage. Both EU and Qatar pledge to adopt and modify their domestic laws to be in line with ILO obligations. And the clause will apply to any future, more liberal bilateral deals that Qatar reaches with individual EU Member States.

Another key component of the Agreement is the ‘fair competition clause’, which is particularly comprehensive and ambitious, covering not only subsidies but also discriminatory practices. “You will hear today lots of praise for the fair competition and social clauses. But we remain to be convinced that they will make a real difference in practice,” says ECA Secretary General Philip von Schöppenthau. “From experience we know that even the best, supposedly watertight clauses, mean nothing without the political will and true commitment of the EU to enforce them. We hope this element will blow real life into the agreement and ensure that opening our doors will not harm our airlines and the quality employment they provide in Europe.”