The wto legality of the application of the EU's emission trading system to aviation

European Journal of International Law

Volumn 23, Issue 2, 2012, Pages 429-467

  Bartels, Lorand ^a  

^a UNIVERSITY OF CAMBRIDGE   (United Kingdom)

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[No Author keywords available]

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EID: 84864513765     PISSN: 09385428     EISSN: 14643596     Source Type: Journal    
DOI: 10.1093/ejil/chs017     Document Type: Article

References (95)

1. According to figures, aviation is responsible for around 2.5% of global carbon emissions. Taking into account other emissions and effects (e.g., on clouds), aviation is responsible for 4.9% of total anthropogenic climate effects: Lee et al., 'Aviation and Global Climate Change in the 21st Century2005
2. 2 Dir. 2008/101/EC amending Dir. 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, OJ L8/3. A consolidated version of Dir. 2003/87/EC ('the Dir.') is available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2003L0087:20090625:EN:PDF.(2008)
3. 5 In fact, the scheme extends beyond the EU to the EEA EFTA countries (Iceland, Norway, and Liechtenstein): EEA Joint Committee Dec. No 6/2011, OJ (2011) L93/35 and Dec. No 43/2011, OJ (2011) L171/44; see also Dec. No 87/2011 and Dec. No 93/2011 (not yet published), and it is envisaged that, following its accession to the EU in 2013, Croatia will also participate in the scheme from 1 Jan. 2014: http://ec.europa.eu/clima/policies/transport/aviation/croatia_en.htm. Switzerland is reportedly negotiating an agreement on aviation emissions: 'Second round of Swiss-EU negotiations on linking emissions trading systems', Swiss Federal Office for the Environment, Press Release, 20 Sept. , available at: www.bafu.admin.ch/dokumentation/medieninformation/00962/index.html?lang=enmsg-id=41297.2011
4. The total number of these allowances was determined by Commission Dec. 2011/389/EU, OJ L173/13(2011)
5. The benchmarks used to calculate the freely allocated allowances are set out in Commission Dec. 2011/638/EU, OJ L252/20. EU Member States were obligated to calculate the actual free allowances allocated to each operator, based on their reported and verified tonne-kilometre figures, by theend of 2011. These figures are available at: http://ec.europa.eu/clima/policies/transport/aviation/ allowances/links_en.htm.(2011)
6. owances nor included within Kyoto targets: Anger, 'Including Aviation in the European Emissions Trading Scheme: Impacts on the Industry, CO2 Emissions and Macroeconomic Activity in the EU', 16 J Air Transport Management (2010) 100-101.
7. Pentelow and Scott, 'Aviation's Inclusion in International Climate Policy Regimes: Implications for the Caribbean Tourism Industry', 17 J Air Transport Management (2011) 199
8. PricewaterhouseCoopers, Aviation Emissions and Policy Instruments, 23 Sept. 2005, at 43 and Ernst &Young, Inclusion of Aviation in the EU ETS: Cases for Carbon Leakage, 31 Oct. 2008, at 72
9. J. Faber and L. Brinke, The Inclusion of Aviation in the EU Emissions Trading Scheme: An Economic and Environmental Assessment, Trade and Sustainable Energy Series, Issue Paper 5 (Sept. 2011).
10. IATA, '2011 Ends on a Positive Note - Capacity, Economy Loom as Issues in 2012', 1 Feb. , available at: This is an aggregate figure. It does not correspond exactly to flights subject to the EU's aviation scheme.www.iata.org/pressroom/facts_figures/traffic_results/Pages/2012-02-01-01.aspx2012
11. Standard &Poor's, 'Airline Carbon Costs Take Off As EU Emissions Regulations Reach For The Skies', 18 Feb. , at 6 (Chart 3). 2011
12. Both assuming a carbon price of € 25/tCO2. Similar costs are estimated by Scheelhaase and Grimme, 'Emissions Trading for International Aviation - an Estimation of the Economic Impact on Selected European Airlines', 13 J Air Transport Management (2007) 253-262.
13. McGarrity, 'Airlines to save up to 150 mln euros through EU offset concession', Point Carbon, Thomson Reuters, 14 Feb. 2012, www.pointcarbon.com/news/1.1753718.
14. CAPA, Centre for Aviation, 'Like dominos: Airlines globally raise fares after EU Emissions Trading Scheme starts' (10 Jan. 2012), available at: .www.centreforaviation.com/blogs/aviation-blog/ like-dominos-airlines-globally-raise-fares-after-eu-emission-trading-scheme-starts-65856
15. Malina et al., 'The Impact of the European Union Emissions Trading Scheme on US Aviation', 19 J Air Transport Management (2012) 36
16. Andrew Charlton has calculated that in 2012 Ryanair will make a profit of € 10.8 million: 'Green taxes - a nice little earner for some', Economist Blog, 6 Feb. 2012, available at: www.economist.com/blogs/gulliver/2012/02/airlines-and-emissions-permits.
17. Albers, Bühne, and Peters, 'Will the EU-ETS Instigate Airline Network Reconfigurations?', 15 J Air Transport Management (2009) 1.
18. Truxal, 'The ICAO Assembly Resolutions on International Aviation and Climate Change: An Historic Agreement, A Breakthrough Deal and the Cancun Effect', 36 Air and Space L (2011) 217
19. Consolidated Statement of Continuing ICAO Policies and Practices Related to Environmental Protection, ICAO Assembly Res A36-22, 28 Sept. , at para. 1(b)(1), available at: www.icao.int/env/A36_ Res22_Prov.pdf.2007
20. Consolidated Statement of Continuing ICAO Policies and Practices Related to Environmental Protection, ICAO Assembly Res A37-19, 8 Oct. 2010, at para. 6©, available at: www.icao.int/icao/en/assembl/ A37-Docs/a37_res_prov_en.pdf.
21. 'ICAO member states agree to historic agreement on aviation and climate change', ICAO News Release PIO 14/10, 8 Oct. , available at: www2.icao.int/en/Assembly37newsroom-public/Documents/ ICAO%20Member%20States%20Agree%20To%20Historic%20Agreement%20On%20Aviation%20 And%20Climate%20Change.pdf2010
22. Reservations to the EU's scheme were lodged by the Russian Federation, the United States, China, and Argentina on behalf of a number of other countries. The reservations are available in an untitled compilation document at: www.icao.int/icao/en/assembl/A37-Docs/10_reservations_en.pdf.
23. The votes were 26 in favour (Argentina, Brazil, Cameroon, China, Dominican Republic, Ecuador, Egypt, El Salvador, Ghana, India, Japan, Malaysia, Mexico, Namibia, Nigeria, Republic of Korea, Russian Federation, Saudi Arabia, Singapore, South Africa, Switzerland, Tunisia, Uganda, United States, Uruguay, Venezuela), 8 against (Austria, France, Germany, Iceland, Italy, Romania, Spain, United Kingdom), and 2 abstentions (Australia and Canada): see 'States opposed to Europe's emissions trading scheme win ICAO Council backing but EU remains defiant', available at: www.greenaironline.com/news. php?viewStory=1366 (states' votes have been calculated based on the ICAO Council membership).
24. ICAO Working Paper, 'Inclusion of International Civil Aviation in the European Union Emissions Trading Scheme (EU ETS) and its Impact' (Presented by Argentina, Brazil, Burkina Faso, Cameroon, China, Colombia, Cuba, Egypt, Guatemala, India, Japan, Malaysia, Mexico, Morocco, Nigeria, Paraguay, Peru, Republic of Korea, Russian Federation, Saudi Arabia, Singapore, South Africa, Swaziland, Uganda, the United Arab Emirates, and the United States), C-WP/13790, 17 Oct. The New Delhi Declaration itself, annexed to the Working Paper, was adopted by 23 countries, including those presenting the paper plus Chile and Qatar but minus Burkina Faso, Cameroon, Guatemala, Morocco, and Peru.2011
25. Wall, 'China's Objection To EU ETS Hits A380 Order', Aviation Week, 28 June 2011, available at: http://www. aviationweek.com/aw/generic/story_generic.jsp?channel=commid=news/avd/2011/06/28/08. xmlheadline=China%27s%20Objection%20To%20EU%20ETS%20Hits%20A380%20Order
26. Kotoky, 'India joins China in boycott of EU carbon scheme', Reuters, 22 Mar. , available at: http:// www.reuters.com/article/2012/03/22/uk-india-eu-emissions-idUSLNE82L022201203222012
27. HR 2594 'European Union Emissions Trading Scheme Prohibition Act of 2011', details available at: The bill is currently being considered by the Senate Committee on Commerce, Science, and Transportation. http://hdl.loc.gov/loc.uscongress/legislation.112hr2594
28. 'EU Tells Clinton It Won't Abandon Carbon Limits for Airlines', Bloomberg Businessweek, 17 Jan. , available at: http://news.businessweek.com/article.asp?documentKey=1376-LXXZVY1A74E801- 7RN4RU7HKN5492BA60E0BF88HF2012
29. Case C-366/10, Air Transport Association of America, American Airlines, Inc, Continental Airlines, Inc, United Airlines, Inc v. The Secretary of State for Energy and Climate Change, OJ (2010) C260/9 (including the claims). The reference was made in R. (Air Transport Association of America Inc) v. Secretary of State for Energy and Climate Change [2010] EWHC 1554 (Admin), 27 May For a transcript of the proceedings see http://www.casetrack.com/ct4plc.nsf/items/8-503-3384.2010
30. Joint Declaration of the Moscow meeting on inclusion of international civil aviation in the EU-ETS, 22 February , adopted by Armenia, Argentina, Republic of Belarus, Brazil, Cameroon, Chile, China, Cuba, Guatemala, India, Japan, Republic of Korea, Mexico, Nigeria, Paraguay, Russian Federation, Saudi Arabia, Seychelles, Singapore, South Africa, Thailand, Uganda and United States of America, available at http://images.politico.com/global/2012/02/120222.pdf2012
31. AG Kokott said that 'the purpose [of the EU emissions trading scheme] is environmental and climate protection and it has nothing to do with the importing or exporting of goods'. This does not of course mean that the scheme has no effects on imports or exports of goods (or services).
32. See WTO Panel Report, Argentina - Hides and Leather, WT/DS155/R, adopted 16 Feb. 2001, at para. 11.20, for a concise statement that 'Article XI:1, like Articles I, II and III of the GATT 1994, protects competitive opportunities of imported products not trade flows'. Further statements to similar effect are found in WTO Appellate Body Report, Korea - Beef, WT/DS161/AB/R, adopted 10 Jan. 2001, at para. 146 (on Art. III:4 GATT), and see the statements of the parties in WTO Appellate Body Report, China - Raw Materials, WT/DS394/AB/R, adopted 22 Feb. , at paras 59, 97, 192 (on Art. XI:1 GATT). The Appellate Body has interpreted the scope of GATS in a similar way: see WTO Appellate Body Report, EC - Bananas III, adopted 25 Sept. 1997, at para. 220.2012
33. WTO Appellate Body Report, EC - Bananas III, at para. 136, where the Appellate Body even stated that the US had standing not only because it might be a future exporter of bananas but also because '[t]he internal market of the United States for bananas could be affected by the EC banana regime, in particular, by the effects of that regime on world supplies and world prices of bananas'. See also WTO Appellate Body Report, US - Bananas III (Article 21.5 - US), WT/DS27/AB/RW/USA, adopted 22 Dec. 2008, at para. 469. Trade effects do, however, have an effect on the value of retaliatory measures than may be adopted by a complainant against an unsuccessful recalcitrant defendant: Art. 22.4 of the WTO Dispute Settlement Understanding (DSU).
34. For a recent analysis of this issue, and the opposite conclusion, see Meltzer, 'Climate Change and Trade - The EU Aviation Directive and the WTO', 15 J Int'l Economic L (2012) 111
35. Earlier general discussions are found in J. Pauwelyn, US Federal Climate Policy and Competitiveness Concerns: The Limits and Options of International Trade Law, Nicholas Institute for Environmental Policy Solutions, Working Paper 02/07, Apr. 2007, at 21
36. de Cendra, 'Can Emissions Trading Schemes be Coupled with Border Tax Adjustments? An Analysis vis-à-vis WTO Law', 15 Rev European Community &Int'l Environmental L (2006) 131
37. R. Ismer and K. Neuhoff, Border Tax Adjustments: A Feasible Way to Address Non-Participation in Emission Trading, Cambridge Working Papers in Economics (CMI Working Paper 36, 2004), at 11
38. Maruyama, 'Climate Change and the WTO: Cap and Trade versus Carbon Tax', 45 J World Trade (2011) 679-695
39. Quick, '"Border Tax Adjustment" in the Context of Emission Trading: Climate Protection or 'Naked' Protectionism?', 3 Global Trade and Customs J (2008) 163-166.
40. On this sentence see Macintosh, 'Overcoming the Barriers to International Aviation Greenhouse Gas Emissions Abatement', 33 Air and Space L (2008) 403-415
41. Federation of Tour Operators v. HM Treasury [] EWHC 2062 (Admin), which was appealed to the Court of Appeal on another issue.2007
42. Note also that Australia describes the first phase of its Clean Energy Act, which sets a fixed price for carbon emissions, but not its second phase, which is a 'cap and trade' scheme, as a 'carbon tax': Clean Energy Bill 2011, Explanatory Memorandum, at 29, available at: http://parlinfo.aph.gov.au/parlInfo/ search/display/display.w3p;query=Id%3A%22legislation%2Fbillhome%2Fr4653%22.
43. Vranes, 'Climate Change and the WTO: EU Emission Trading and the WTO Disciplines on Trade in Goods, Services and Investment Protection', 43 J World Trade (2009) 707, concludes that certificates may constitute both goods, 717-718, and financial instruments, 719-720
44. For the view that EU emissions allowances may constitute property under the European Convention on Human Rights see Boute, 'The Protection of Property Rights under the European Convention on Human Rights and the Promotion of Low-Carbon Investments', 1 Climate L (2010) 93-111
45. WTO Panel Report, Colombia - Ports of Entry, WT/DS366/R, adopted 20 May 2009, at para. 7.227, referring to WTO Panel Report, India - Automobiles, WT/DS146/R, adopted as modified by the Appellate Body Report, 5 Apr. , at paras 7.254-7.263 and 7.265 and WTO Panel Report, Brazil - Retreaded Tyres, WT/DS332/R, adopted as modified by the Appellate Body Report, 17 Dec. 2007, at para. 7.371.2002
46. The CJEU addressed this issue with a non sequitur, focusing on EU internal competences. It said, '[a]s for the fact that the operator of an aircraft in such a situation is required to surrender allowances calculated in the light of the whole of the international flight that its aircraft has performed or is going to perform from or to such an aerodrome, it must be pointed out that, as European Union policy on the environment seeks to ensure a high level of protection in accordance with Article 191(2) TFEU, the European Union legislature may in principle choose to permit a commercial activity, in this instance air transport,to be carried out in the territory of the European Union only on condition that operators comply with the criteria that have been established by the European Union and are designed to fulfil the environmental protection objectives which it has set for itself, in particular where those objectives follow on from an international agreement to which the European Union is a signatory, such as the Framework Convention and the Kyoto Protocol'
47. The case of intra-EU flights carrying products prior to importation is considered below.
48. GATT Panel Report, Italy - Agricultural Machinery, L/833, adopted 23 Oct. 1958. Howse and Regan, 'The Product/Process Distinction - An Illusory Basis for Disciplining "Unilateralism" in Trade Policy', 11 EJIL , argue that all process-based measures fall under Art. III:4 because they affect the sale of products. They dismiss a reading of Art. III:4 that focuses on the acts specifically mentioned in this provision, on the ground that this would exclude regulations affecting internal acts not listed there, such as possession, storage, advertising, and so on(2000) 249, at 254-255
49. GATT Panel Report, US - Malt Beverages, DS23/R, adopted 19 June 1992, at para. 5.63, emphasis added.
50. WTO Panel Report, US - Poultry (China), WT/DS392/R, adopted 25 Oct. 2010, at para. 7.102.
51. Cf WTO Appellate Body Report, China - Auto Parts, WT/DS339/AB/R, adopted 12 Jan. at paras 161-162,2009
52. However, the result was correct. While the prohibition on production by persons within US jurisdiction fell within Art. III:4, the prohibition on importation fell under Art. XI:1. Only if the latter aspect of the measure had been designed to enforce the former (which does not seem to have been the case) could it have been legal.
53. The Panel held that a charge enforcing an internal tax fell under the Note Ad Article III. Cf WTO Panel, China - Auto Parts, WT/DS339/R, adopted 12 Jan. , at para. 7.249-7.2582009
54. Art. XIII:1 GATT requires quantitative restrictions to be applied in a non-discriminatory manner. A number of panels (e.g., WTO Panel Report, EC - Bananas III, WT/DS27/R, adopted as modified by the Appellate Body Report, 25 Sept. 1997, at para. 7.68) and academic commentators (e.g., P. Mavroidis,Trade in Goods , at 64), limit this to permitted quantitative restrictions. 2007
55. Such situations are not covered by Art. V:6 GATT (discussed below), which requires non-discrimination between different routes from the same origin.
56. Cf WTO Appellate Body Report, Canada - Automobiles, WT/DS139/AB/R, adopted 19 June , at para. 78.2000
57. Sometimes, This involves a duty tax rate, or a regulatory procedure that is not available.
58. Though see 'Peak of Insanity? Dutch Dream of Building Artificial Mountain', available at: www.spiegel. de/international/zeitgeist/0,1518,784085,00.html (2 Sept. ), and www.cyclingthealps.com/tour/ NederlandseBerg.html.2011
59. WTO Panel Report, EC - Tariff Preferences, WT/DS246/R, adopted as modified by the Appellate Body Report, 20 Apr. , at para. 7.60.2004
60. WTO Panel Report, EC - Fasteners, WT/DS397/R, adopted as modified by the Appellate Body Report, 28 July , at paras 7.124-7.1272011
61. This finding was declared moot by the Appellate Body on othergrounds, in WTO Appellate Body Report, EC - Fasteners, WTO/DS397/AB/R, adopted 28 July 2011,397-398.
62. WTO Appellate Body Report, Dominican Republic - Cigarettes, WT/DS302/AB/R, adopted 19 May 2005, at para. 96. See also WTO Appellate Body Report, US - Clove Cigarettes, WT/DS406/AB/R, adopted 24 Apr. , at para.179 n 372, casting doubt on this test. 2012
63. There are other cases on Art. I:1 GATT which might appear to be of relevance. However, these are of limited analytical value, as they are based on the erroneous assumption that the requirement in Art. I:1 GATT to accord such advantages 'immediately and unconditionally' applies to conditions which private actors must meet in order to obtain an advantage: see WTO Panel Report, Indonesia - Automobiles, WT/ DS54/R, adopted 23 July 1998, at para. 14.145 and WTO Panel Report, Canada - Automobiles, adopted as modified by the Appellate Body report 19 June 2000, at paras 10.24-10.26. Following this, some panels have even analysed straightforward cases of de jure discrimination in light of this requirement: WTO Panel Report, EC - Bananas (Article 21.5 - Ecuador II), WT/DS27/RW2/ECU, adopted as modified by the Appellate Body Report, 11 Dec. , at paras 7.158-7.1592008
64. WTO Panel Report, US - Poultry (China), WT/DS392/R, adopted 25 Oct. 2010, at para. 7.437. In fact, the requirement of unconditional most favoured nation treatment, historically an alternative to conditional most favoured treatment (on which see S. Schill, The Multilateralization of International Investment Law (2009), at 129-139), is concerned with conditions addressed to WTO members, not to private actors. It precludes WTO members from according an advantage to products on condition that the other WTO member act in a certain way, e.g., by adopting a certain regulatory system, or entering into a treaty: GATT Panel Report, Belgian Family Allowances, GATT Doc G/32, adopted 7 Nov. 1952, at para. 3; Report of the Working Party on the Accession of Hungary, adopted 30 July , BISD 20S/34, at para. 12; WTO Panel, EC - Trademarks and Geographical Indications (US), WT/DS174/R, adopted 20 Apr. 2005, at para. 7.704 (on Art. 4 TRIPS); and see also WTO Panel in Canada - Automobiles, WT/DS139/R, supra, at para.10.25. It does not, however, preclude WTO members from according advantages requiring private actors to comply with certain conditions. This depends on whether the advantage is, in reality, accorded to products from all WTO members.1973
65. The European Commission is reportedly in discussions with Russia, China, and the US on 'equivalent measures': 'US, China, Russia try to fly free of EU aviation emissions cap', Carbon Finance, 14 July 2011, available at: ; but at this stage, it is not known what such measures might involve: E-005387/2011 Answer given by Ms Hedegaard on behalf of the Commission, to written questionP-005387/2011 by Holger Krahmer (ALDE) on 'Aviation in the European Union Emissions Trading Scheme (ETS)', 15 July 2011.www.carbon-financeonline.com/index.cfm?section= lead action=viewid=13817
66. See also WTO Secretariat, Air Transport Services - Background Note by the Secretariat, WTO Doc S/C/W/59, 5 Nov. , at para. 6.1998
67. The commercial significance of this traffic is uncertain, as the EU does not keep statistics of transited goods. It may nonetheless be assumed sufficient to warrant a discussion.
68. This interpretation was foreshadowed and strongly supported by Ehring, 'Freedom of Transit under Article V of the General Agreement on Tariffs and Trade: A Sleeping Beauty of the Multilateral Trading System', draft on file with author, at 16. Jackson, World Trade and the Law of GATT (1969), at 510-511
69. WTO Appellate Body Report, US - Gasoline, WT/DS2/AB/R, adopted 20 May 1996, at 14-15. Technically the issue was not appealed: see at 9-12.
70. Howse and Eliason, 'Domestic and International Strategies to address Climate Change: An Overview of the WTO Legal Issues', in T. Cottier, O. Nartova, and S. Bigdeli (eds), International Trade Regulation and the Mitigation of Climate Change (2009), 61
71. See above at Section 4.B.
72. WTO Appellate Body Report, Brazil - Retreaded Tyres, WT/DS332/AB/R, adopted 17 Dec. , at paras .143-1512007
73. Hepburn and Müller, 'International Air Travel and Greenhouse Gas Emissions: A Proposal for an Adaptation Levy', 33 World Economy (2010) 830.
74. Somewhat questionably, the Appellate Body went on to say that the Chapeau marks a 'line of equilibrium' between one member's rights under the exceptions and other members' rights under the substantive obligations of the GATT, at para.
75. An exception cannot logically be restricted by an obligation to which it is an exception.
76. Something should be said about methodology. The reading of the Chapeau offered here combines economic tests, in identifying the relevant pool of 'countries' to be compared, and in determining discrimination, with policy-based tests, in narrowing down the countries to be compared to those with the same 'conditions', and considering the reasons for any discrimination. This may appear to be inconsistent with the occasional statements made by the Appellate Body which give the impression that neither policy nor economics has any role in the application of the Chapeau. However, it is submitted that this model, based on an oscillation between competitive effects and regulatory purpose, is supported by the jurisprudence on the issue, and also makes doctrinal sense.
77. The Panel considered Iran to be a relevant 'country' and a failure to grant Iranian products the same treatment as Indian products as discriminatory. This is a somewhat peculiar finding, given that Iran, a non-WTO member, was not entitled to any treatment whatsoever.
78. The Appellate Body determined that, due to subsequent negotiations, the measure was no longer being applied in a manner constituting unjustified or arbitrary discrimination.
79. The Appellate Body also said that this solution would have avoided any discrimination at all: at 25.
80. Infact, this was an obiter dictum, as the Appellate Body had already found that there was no discrimination in the first place
81. Arguably, one could treat the different degrees of risk in affected countries as rendering them not the 'same' for these purposes. Such an analysis would achieve a similar outcome to that proposed here.
82. Activities occurring on aircraft are subject to the jurisdiction of the flag state over the high seas, and a concurrent jurisdiction between the flag state and any state over whose territory the aircraft is flying at the time of the activity, with priority granted to the flag state. This applies, e.g., to questions of the nationality of children born while on an aircraft: Rosenne, 'The Perplexities of Modern International Law: General Course on Public International Law', 291 Receuil des Cours (2001) 9, at 336-337.
83. Lufthansa calculates that a Hong Kong-Dubai-Frankfurt flight would result in emissions of 296t of carbon, 18% more than a direct Hong Kong-Frankfurt flight: Lufthansa, 'EU emissions trading: Europeheaded down a dead end', Policy Brief, Dec. 2009, available at http://presse.lufthansa.com/fileadmin/ downloads/en/policy-brief/12_2009/LH-Policy-Brief-December-Emissions-trading.pdf
84. Art. I:1 GATS.
85. Koebele, 'Commentary on the Air Transport Services Annex', In R. Wolfrum et al. (eds), WTO - Trade in Services (2008), at 611
86. This would be equivalent to what has been termed the 'market access' test in EU law: see C. Barnard, The Substantive Law of the EU: The Four Freedoms (2010), at 19-20.
87. See also Zdouc, 'WTO Dispute Settlement Practice Relating to the General Agreement on Trade in Services', in F. Ortino and E.-U. Petersmann (eds), The WTO Dispute Settlement System, 1995-2003 (2004), at 394.
88. In the 'Dunkel Draft' of GATS, GATT Doc MTN.TNC/W/FA, 20 Dec. 1991, this para. referred expressly to the ICAO agreements: '[e]xcept as set out in paragraph 3, no provision of the Agreement shall apply to measures affecting: (a) traffic rights covered by the Chicago Convention, including the five freedoms of the air, and by bilateral air services agreements'.
89. IATA still sets a base rate, but it is of minor importance. E.g., in 2002 it was estimated that as little as 5% of British Airways freight was carried at published IATA rates: R. Doganis, Flying Off Course: The Economics of International Airlines (3rd edn, 2002), at 325.
90. The UK Civil Aviation Authority (CAA) no longer even requires airlines to file their fares. In its view, 'the interests of users will be best served if airlines are free to set their own prices without regulatory intervention, subject only to the application of normal competition policy': Civil Aviation Authority, CAA Statement of Policies on Route and Air Transport Licensing, available at www.caa.co.uk/default.aspx?catid= 589pagetype=90pageid=7228.
91. Board of Airline Representatives in The Netherlands (BARIN) v. The Netherlands, Ministry of Finance, LJN: BI3450, Hoge Raad, 08/04121, 10 July 2009 (applying the relevant test of 'manifest incompatibility'). For an English translation see Barnhoorn, 'Netherlands Judicial Decisions Involving Questions of Public International Law, 2008-2009', Netherlands Yrbk Int'l L (2010) 379, at 432. The case is discussed by Havel and van Antwerpen, 'The Dutch Ticket Tax and Article 15 of the Chicago Convention', 34 Air and Space L (2009) 141 and Havel and van Antwerpen, 'The Dutch Ticket Tax and Article 15 of the Chicago Convention (continued)', 34 Air and Space L (2009) 449.
92. It is possible for WTO members to schedule exemptions from Art. II:1 GATS, but the EU has not listed any relevant exemptions: European Communities and their Member States - Final List of Article II (MFN) Exemptions, GATS/EL/31, 15 Apr. 1994.
93. European Communities and their Member States, Schedule of Specific Commitments, GATS/SC/31, 15 Apr. 1994.
94. It is not necessary to consider the application of Art. VI GATS, on domestic regulation of services.
95. Art. XVII:2 and 3 add some interpretive gloss.