A US-China Open Skies agreement is an unlikely prospect in the near future, a Washington panel agreed Monday, but some welcomed the principle of such an agreement while one US economist said China should be treated “like we treated the Soviet Union.”
The panel met at the Hudson Institute think tank in Washington DC May 21 to discuss the Open Skies agreement announced the previous week between the US and the United Arab Emirates. Like the agreement forged in January with Qatar, the UAE deal keeps the Open Skies agreement fully intact, including fifth freedom rights. Also like the Qatar agreement, the UAE government said in a side letter that its airlines—Emirates Airline and Etihad Airway—had “no current plans” to add fifth freedom flights.
But there is no “routes freeze,” as assistant on trade policy to the US President Peter Navarro said last week after the UAE agreement was announced. The White House and State Department issued statements shortly after that seemed to clarify Navarro’s remarks and confirm that the rights contained in the US-UAE Open Skies agreement remained in place.
Navarro gave the opening address Monday at the Hudson event, but did not mention a freeze.
The conclusion of the UAE agreement raised a question during the Hudson discussion over whether there would ever be a US-China Open Skies agreement, allowing the airlines of each country to fly to the other providing there are available slots.
Panelist Jim Burnley, a former US Transportation Secretary, expressed his view that any potential agreement would have to occur within the larger framework of a comprehensive US-China trade deal. While he said he would “love to see” a discussion on Open Skies with China, he added, “I don’t think that day is near us …When all is said and done, I think any Open Skies agreement will play out as part of a much larger discussion about the US-China relationship across all sectors, as opposed to US and Chinese aviation negotiators sitting down and hammering it out,” Burnley said. “If the overall relationship evolves in a positive way, I think that enhances the chances that someday we may be able to do an open skies agreement.”
FedEx Express VP regulatory affairs Steve Taylor emphasized the importance that any negotiations between the two countries should not jeopardize the fifth freedom rights that are important to cargo carriers. While there is no Open Skies with China, there is an agreement that permits US cargo carriers to operate fifth freedom flights via China. FedEx has a large hub in Guangzhou.
“Whatever discussions take place with the Chinese carriers and government about whether they subsidize and to what level, we don’t want it to impact our fifth freedom rights,” Taylor said, adding: “At no time do we want these rights to be held hostage, because there is no upside to parties losing them.”
Economist and American Action Forum president Doug Holtz-Eakin was less keen on any trade agreement with China.
“China is an implacable foe and to treat it as anything otherwise is a mistake,” Holtz-Eakin said. “I don’t think we should do an Open Skies agreement just to pretend there’s a trade agreement in aviation that we should do—I think we have to have a far more systemic strategy toward the Chinese.”