Tony Warren

OPEN SKIES OR OPEN CLUBS? NEW ISSUES FOR ASIA PACIFIC ECONOMIC COOPERATION

Air transport continues to lie outside the rules of the world trading system. Yet pressures for changes in the management of trade in air transport services are emerging within the bilateral system of regulation, particularly through United States efforts to negotiate so-called “Open Skies†arrangements, but also through new regional arrangements. A new method is outlined of exploiting the trends in regional cooperation and the pressures induced by the United States strategy to facilitate the liberalisation of air transport markets. This method applies the principles of what have been called “open clubs†. The principles include transparency and openness to new members as well as the absence of an intention to discriminate against outsiders. These principles are consistent with APECs strategy of open regionalism. The paper suggests that APEC is a suitable process within which to develop the application of the open club idea and it outlines the manner in which its principles might be applied to air transport.

Competition Policy and International Trade in Air Transport and Telecommunications Services

1 Introduction The costs and benefits of a system of internationally coordinated competition policy is a debate that has received a significant amount of attention over the past decade. 2 Increased economic interdependence, arising from technological change and the widespread liberalisation of trade and investment, has expanded the international market opportunities for a diverse range of firms. As these firms have moved into new markets they have increasingly encountered barriers to entry that arise from the anti-competitive behaviour of (publicly-and privately-owned) incumbents, rather than from direct legislative discrimination by governments in the form of tariffs or quotas on foreign firms. Hence, they are encountering barriers to market entry that appear to be within the traditional purview of competition policy — defined broadly to encompass regulation of government as well as private anti-competitive