Things Might Be Tense In A Military Sense, But You Can Still Get A Flight

From the Open Skies Conference Thursday in Ottawa...

I appreciate the kind introduction, and I’m overwhelmed by that very warm welcome.  It tells me that I am not alone in looking forward to expanding upon what is already a very positive and productive aviation relationship between the United States and Canada.

I would be remiss if I did not begin my remarks with a very sincere and personal thank you.  Our partnership was tested on September 11th, 2001.  

As soon as the third plane hit the Pentagon,  I issued the order to ground all aircraft flying over United States airspace and to bring them down immediately.  

Clearing the skies that horrific morning could not have been accomplished without the extraordinary cooperation that we received from our Canadian neighbors. I will never forget the pictures of aircraft lined up wingtip-to-wingtip in places like Gander, nor the stories of heartwarming hospitality shown to stranded passengers who were taken in by Canadian families.

On behalf of President Bush, Vice President Cheney, and the people of the United States, let me once again express our deepest gratitude to our friends in Canada for being the best possible neighbors -- the kind who come through in times of crisis.

This experience provides an important context for discussing the current aviation relationship between the United States and Canada, and where I hope that it can be headed.

Ten years ago, our countries signed the Canada-United States Air Services Agreement,  significantly opening the air services market across our borders.

The results of liberalization speak for themselves -- greater choice and convenience for passengers, better fares, and a rapidly developing cargo market. And, in a larger context, all of

this activity strengthens our economies and our communities, benefiting businesses and workers alike.

Airlines now offer passengers scheduled nonstop service between more than 150 trans-border airport pairs, an increase of more than 50 percent since 1994.  Last year,  there were over 372 thousand flights between our two countries -- almost twice as many as a decade ago.  

Those airplanes carried over 18 million passengers compared to 12.1 million passengers in 1994 under the older and more restrictive bilateral agreement.  

And ticket prices have fallen by almost 20 percent since the agreement and by more than a third when you adjust for inflation.

The effect of the agreement on air cargo has been even more dramatic.  

In 1994, approximately 121 thousand tons of scheduled cargo was carried by air between our countries.  Ten years later, that figure had risen to almost 271 thousand tons, an astonishing 124 percent increase.  

Businesses in 31 cities in Canada and 177 cities in the United States can ship air freight directly across the border. That’s 81 more cities in the United States than had direct service ten years ago, lending important support for our strong and growing trade relationship under the North American Free Trade Agreement.  

NAFTA also has provided a context for cooperation and collaboration in other aviation arenas through the North American Aviation Trilateral.  

Whether through the coordinated placement of Wide Area Augmentation System reference stations in Canada,  Mexico, and the United States, or the recent establishment of a regional monitoring agency to implement Reduced Vertical Separation Minimum standards, the NAAT is laying a foundation for aircraft to move seamlessly throughout North America.

But while we gather today to celebrate the enormous success of aviation cooperation between the United States and Canada, we do so mindful of the limitations of the 1995 agreement.

The United States and Canada, the closest of neighbors and strongest of trading partners, still do not enjoy the full “open skies” relationship that the United States has with 67 other countries around the world -- from Germany to Chile, and from Poland to Korea.

Countries from every region of the world, and at every level of development, are increasingly adopting open skies agreements.  This embrace of open skies reflects a growing understanding of the larger economic significance of international air services,  and the importance of allowing airlines to respond to market demand.

But we don’t have open skies, quite, when it comes to air service between the United States and Canada. The current agreement leaves in place barriers that deny airlines fifth freedom rights and limit multi-city cargo deliveries.

And that doesn’t do justice to the strong overall relationship between our countries,  to our robust trade relationship, or to the cooperation that we have in other areas of aviation. Imagine how strange it would be if, instead of NAFTA, the United States and Canada defined our trade relationship with something less than most favored nation status.

Clearly, this situation needs to change. In fact, the United States and Canada ought not to be playing catch-up when it comes to air services -- we ought to be setting the pace.

That’s my vision.  And I believe that the stars are aligning to make it a reality.

Here in Canada, you have a Transport Minister who recognizes the need to maximize the benefits of aviation services. Minister Lapierre and I met earlier today, and I was most encouraged.  

Our discussions show clear ground for progress and suggest that we share a common vision. Based on today’s discussions, I believe that we can move ahead quickly with exploratory discussions to establish a framework for a more open bilateral agreement.

We are eager for such an agreement on our side of the border. President Bush has described Canada as “America's most vital trade relationship in the whole world,” and pledged that “we will do all that is necessary to keep that relationship strong.” 

At that same meeting, Prime Minister Martin spoke of Canadians’ determination “to ensure our border remains an example to the world in its openness to trade and its demonstration of trust.”

Negotiating the strongest, most open bilateral air services agreement possible -- one that helps goods and people to move easily and conveniently across our borders -- is an important step that we, in the transportation community, can take to help fulfill our leaders’ pledge.  

We have before us an historic opportunity to fully open the air services market to the benefit of consumers, cities and carriers on both sides of the border.  

The potential benefits of taking this step forward could go far beyond “simply” opening the world’s largest aviation market, or even the further integration that could follow it.

Rather, I believe that a bilateral Open Skies agreement would be an important step towards realizing the “vision of NAFTA” in aviation -- that is, towards creating a North American regional trading bloc for air services.

As many of you know,  the United States spent much of last year negotiating with the European Union in an attempt to liberalize the transatlantic air services market.  

During our discussions with the EU,  I was struck by how much progress Europe has made, notwithstanding differences that may persist among the member states, in achieving regional unity as an aviation trading bloc.  

And it also occurred to me how valuable it would be, for both Canada and the United States, for North America to be similarly unified in our approach to aviation.  

If Canada and the United States could fully liberalize our bilateral market, we could then work together to achieve regional liberalization across the Atlantic, in the Western Hemisphere, and with Asia.

If this sounds like an ambitious vision, it is. And we should begin to measure up to that ambition.

I’m optimistic that today can mark a new beginning, with Canada and the United States serving as the architects of the new template that will define international air services relationships into the next decade and beyond.

I appreciate the opportunity to join you today to celebrate the 10th Anniversary of our current air services agreement and begin to envision what may lie ahead.  

Thank you all for being here, and travel safely.

FMI: www.dot.gov