Asean China Air Services Agreement

Asean China Air Services Agreement

In 2010, ASEAN and China signed an air services agreement to establish a liberalized market access regime for airlines of both parties. Nevertheless, the benefits of the agreement have been unbalanced, as China generates much greater benefits in terms of access than ASEAN countries. A closer look at this imbalance clearly shows the need for a genuine internal air transport market throughout ASEAN. Due to the lack of agreement, ASEAN countries now have the `single aviation market`, wrongly referred to as the `internal air transport market`. In short, it is “individually” only in the name. The crucial seventh freedom, which would allow, for example, a Thai aircraft carrier to deploy aircraft to Singapore and operate Indonesia, continues to be rejected by most ASEAN countries and their airlines. THE ASEAN countries had tried to negotiate as a bloc to strengthen their negotiating position against China. Until then, market access was governed by bilateral agreements between the various ASEAN countries and China. These agreements have generally imposed strict caps on the number of flights or types of aircraft flown by the airlines of each party in the other party`s market. Air transport has become increasingly important as a result of the gradual globalization of economic activity and the emergence of low-cost carriers (LCCs). It is in this context that ASEAN has liberalized its internal aviation market. Although ASEAN has attempted to sign air agreements (ATA) with neighbouring countries, the ASEAN ATA, signed in 2010, is the only agreement that came into force today.

The only way for small ASEAN countries to balance the power of their major trading partners is to consolidate their different markets and create a common market space. This is a major challenge for trade diplomacy between Southeast Asia and China. This research project aims to provide useful and objective information on the potential effects of ALAT, based on a numerical analysis of the impact of ATA ASEAN-China, using institutional information, flight and airport information, as well as trade and passenger statistics. To be fair, there is a liberalisation movement within ASEAN, but it is ongoing and ongoing. The ten ASEAN member states do not have a supranational guidance mechanism, such as the European Commission, which can compel Member States to pursue a common regional interest. With very different levels of development and airlines of different powers, ASEAN member states have huge differences in the interests of aviation policy. The lack of fully liberalized access within ASEAN has a direct strategic impact on its air relations with third countries such as China. By denigrating the right of the seventh freedom, the ASEAN countries have failed to create a genuine single market for air transport in the region. ASEAN governments must grant each other the “seventh freedom” of air – the right of an airline to travel between one foreign country and another without any connection to their country of origin – if they want to transport traffic between any point in ASEAN and China. This is the only strategic way to achieve the ability of Chinese airlines to do the same. Instead of achieving full liberalization among themselves, the ASEAN countries have adopted an ATA with China that could ultimately be detrimental to their airlines.

Alan Khee-Jin Tan is Professor of Aviation Law at the National University of Singapore. This article was published in the latest issue of the East Asia Forum Quarterly, “Strategic Diplomacy in Asia.” The decision to pursue an ATA with China was made at the request of more liberal states, such as Singapore and Malaysia, which have powerful airlines backed by a proactive ASEAN secretariat. The reason for this was to stimulate the nascent liberalisation movement within the ASEAN countries. But these states now have to face the interests of larger and more conservative states, such as the