A WTO plurilateral agreement that became effective on January 1, 1989, is the Agreement on Trade in Civil Aircraft (Aircraft Agreement). Since all WTO members sign them, the majority of WTO agreements are multilateral. A lesser number of WTO members signed the Agreement on Trade in Civil Aircraft, making it one of the plurilateral agreements. One of the four agreements that were first negotiated in the Tokyo Round, which had a smaller set of participants, is the Aircraft Agreement. Government procurement, dairy products, and bovine meat are the other three categories. However, the agreements for bovine meat and dairy ended in 1997.
All aircraft, excluding military aircraft, as well as all other products covered by the agreement — civil aircraft engines and their parts and components, all parts and subassemblies of civil aircraft, and flight simulators and their parts and components — are exempt from import duties under the agreement. It includes regulations on government-directed purchases of civil aircraft, purchasing incentives, and financial assistance for the civil aircraft industry.
The participating nations
There are 32 signatories to the Agreement on Trade in Civil Aircraft. They include Albania; Canada; Egypt; Georgia; Japan; Macao, China; Montenegro; North Macedonia; Norway; Switzerland; Chinese Taipei; UK; the US, and the EU (19 EU member states of Austria, Belgium, Bulgaria, Denmark, Estonia, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Romania, Spain, and Sweden are also signatories in their own right). Those WTO Members with observer status in the Committee are Argentina, Australia, Bangladesh, Brazil, Cameroon, China, Colombia, Gabon, Ghana, India, Indonesia, Israel, the Republic of Korea, Mauritius, Nigeria, Oman, the Russian Federation, Saudi Arabia, Singapore, Sri Lanka, Tajikistan, Trinidad and Tobago, Tunisia, Turkey, and Ukraine. Furthermore, the International Monetary Fund and the United Nations Conference on Trade and Development (UNCTAD) are also observers.
Technical barriers to trade
Trade in civil aircraft is subject to the terms of the Agreement on Technical Barriers to Trade. The Signatories concur that the provisions of the Agreement on Technical Barriers to Trade shall apply to the certification standards and specifications for operating and maintenance procedures for civil aircraft. This implies that technical rules and standards shouldn’t erect needless obstacles to the commerce of civil aircraft.
Mandatory sub-contracts, government-directed procurement, and inducements
According to the agreement, buyers of civil aircraft should have the freedom to choose suppliers based on commercial and technological considerations. Members should refrain from pressuring airlines or other organizations involved in the purchase of civil aircraft to get those aircraft from a certain source. This is being done to prevent discrimination against suppliers from any one source, which would also result in prejudice against suppliers from all Signatories. The products covered by the agreement are bought based on competitive price, quality, and delivery terms. The Signatories further committed to forgoing any inducements of any form that would promote discrimination against suppliers from any Signatory in connection with the sale or acquisition of civil aircraft from any particular source.
Limitations on Trade
The participating nations are expected to refrain from using quantitative restrictions (import/export quotas) or import/export licensing requirements to limit civil aircraft imports and exports in a way that is at odds with the GATT’s relevant rules.
Committee on Civil Aircraft Trade
All Signatories are represented on the Committee on Trade in Civil Aircraft, which is led by the Chairman. The committee meets at least once a year to give Signatories the chance to consult on any issues on how the Agreement is to be operated. They examine any changes to the civil aircraft industry to see if adjustments are needed to maintain free and unhindered trade. The agreement also accepts the general understanding and the understanding’s clauses regarding notification, consultation, dispute resolution, and surveillance. This is a means of resolving any disputes on a subject matter covered by this agreement.
