Aviation, Brexit and COVID19 (ABC) 10

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Now, the topic for writers is what will the new normal look like for civil aviation, and everything else for that matter. That’s the new normal post-COVID-19. Inevitably there’s a great deal of expert speculation wrapped-up in such writings. Without a tried and tested way out of the different national lockdowns there’s a fair degree of guess work going on. That said, public support for the lockdowns remains high, but beneath this, people are having quite different lockdown experiences.

The first recognition of Europe Day was by the Council of Europe in 1964. On Tuesday, the Council of Europe[1] turned 71-years-old. Its 47 Member States are dedicated to the protection of Human Rights, Democracy, and the Rule of Law.  Its work is more relevant now than it has ever been. Especially, when on Friday, we recognise the sacrifices that were made during the World Wars. Many people will be marking the 75th anniversary of VE Day[2] in their homes as the coronavirus outbreak prohibits public gatherings.  History is clear, supporting a strong relationship between the UK and Continental Europe is essential for all our futures.

Also, this week trade talks between the UK and US have kicked-off. This maybe a big mistake having not completed negotiations with the European Union (EU) and during the COVID-19 crisis. Defeating the pandemic should be the UK Government’s sole focus for months to come. At the moment, there’s a lack of seriousness coming from Westminster.

Initially, the UK Government downplayed the risks of COVID-19 but now the world has succumbed to the reality of the pandemic. Trying to fix international relationships covering most of the UK’s trade and travel at a time of great turmoil is unwise. The unprecedented economic and social challenges posed by COVID-19 means we could lock ourselves into arrangement that subsequently turn out to be detrimental but fixed.

In the UK, the Pilots’ Union is saying that civil aviation is in a “death spiral”[3]. This language may seem emotive but there’s good reason for it given the downsizing that aircraft operators are planning. Job losses are certain. A smaller industry will result.

Last year, a part of the Article 50 EU withdrawal process was the possibility of a No-Deal Brexit which in the end both parties avoided. That was a temporary respite. This year, there’s another deadline in prospect; the end 31 December 2020. Last time the brinkmanship practiced produced an agreement but there was no global downturn in progress.  This time is a billion times different. Brinkmanship is not the right formula in 2020.  It’s plain foolish and reckless.

[1] https://www.coe.int/en/web/portal

[2] Victory in Europe Day on 8 May.

[3] https://www.independent.co.uk/travel/news-and-advice/coronavirus-uk-flights-airlines-aviation-pilots-union-a9498766.html

Brexit, Aviation and the Withdrawal 7

imgid153119926One of the popular illusions that Brexit supporters carried off during the campaigning of the last few years was to persuade people that the European Union (EU) was atypically bureaucratic.  A false comparison often suggested that the UK should be more like the US and therefore less bureaucratic.  This nonsense did seem to get into the public consciousness.  Tabloid newspapers peddled the mirage of complete free trade.  Even though it’s, as I say, complete and utter nonsense.

Just a few second of reading the US Federal Register[1], as I often did in my past roles, quickly shows the complexity of the legal and regulatory processes and structures in the US.  Docket No. USTR–2019–0003 a “Review of Action: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute” doesn’t make pleasant reading for the EU or the UK[2].   In fact, there’s nothing to choose between how hard these measures hit EU Member States or the UK.  Brexit doesn’t exist in this dispute.

The outcome of the review is that there will be an increase in the additional duty rate imposed on aircraft and parts imported from the EU and UK, effective from Wednesday, 18 March 2020.  Rightly, the UK’s International Trade Secretary has expressed concern and disappointment[3].   It’s interesting to speculate what this will do to future trade negotiations.  This isn’t the zero-tariff world that Brexit supporters promised.  In the real world, President Trump’s tariffs are popular amongst his supporter base and it’s an election year in the US.

European manufactures are also concerned and disappointed[4].  The sad aspect of this escalation is retaliation and that it’s likely that the EU will impose tariffs on new large US aircraft later in the year.

My view is that, imposing tariffs on aircraft parts is in no one’s interest and harmful to not just the commercial health of the aviation industry but flight safety and security too.

By the way, on a lighter note US fedearal administrative language is a gem: For purposes of the subheading listed below, the informal product description defines and limits the scope of the proposed action and is intended to cover only a subsection of the subheading.

[1]https://ustr.gov/sites/default/files/enforcement/301Investigations/Review_of_Action_Enforcement_of_U.S._WTO_Rights_in_Large_Civil_Aircraft_Dispute.pdf

[2] https://www.latimes.com/business/story/2020-02-14/trump-tariffs-europe-aircraft

[3] https://www.gov.uk/government/news/update-on-airbus-dispute?utm_source=1e391616-b697-49ed-bb9a-bc178465499b&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

[4] https://www.airbus.com/newsroom/press-releases/en/2020/02/airbus-statement-on-ustr-decision–15-feb-2020.html