The United States and APEC partners Brunei, Chile, New Zealand and Singapore will announce that they have agreed in principle on a Multilateral Agreement on the Liberalization of International Air Transport. This Agreement is the world's first multilateral "Open Skies" accord and is open to accession by all nations. The United States has negotiated bilateral "Open Skies" agreements with 50 countries, including Brunei, Chile, New Zealand and Singapore. However, the Multilateral Agreement represents the first successful effort to expand this approach on a multinational basis, to promote safe, affordable and efficient air transport services worldwide. Aviation accounts for $1 trillion in global economic activity and 22 million jobs; an efficient air transport system is key to the expansion of international trade and commerce, including electronic commerce.

THE MULTILATERAL AGREEMENT WILL OFFER THREE IMPORTANT BENEFITS:

• Provide a Competition-Enhancing Model for Future Agreements: The Multilateral Agreement mirrors the enormously successful U.S. Open Skies agreements, which eliminate government restrictions on what routes airlines can fly, the number of flights they can schedule and the fares they can charge. Thus it helps set the terms for the global marketplace and increases the odds that the U.S. approach will become the international standard.

• Expand Carrier Access to Equity Financing: Most bilateral agreements require that an air carrier must be substantially owned by either nationals of its home country or the homeland government. However, this requirement has made it difficult for many foreign carriers, which lack access to large domestic capital markets, to obtain cross-border financing. The Multilateral Agreement reduces the traditional ownership requirement, thus enhancing foreign carriers' access to outside investment.

• Streamline International Aviation Relations: Aviation is currently governed by thousands of bilateral agreements between more than 180 countries. The Multilateral Agreement will provide a single, streamlined standard for commercial aviation relations. By joining one multilateral agreement, countries can avoid prolonged negotiation of countless individual bilateral agreements.

THE MULTILATERAL AGREEMENT IS THE LATEST IN A CONTINUING SERIES OF EFFORTS BY THE UNITED STATES TO LIBERALIZE INTERNATIONAL AIR SERVICES. Since the early 1990s, the United States has taken the lead in promoting an "Open Skies" policy to support a competitive global market for airline passengers and cargo. This policy has enabled the competitive U.S. airline industry to meet the growing demand for international air services and has resulted in lower prices and more service options for consumers worldwide. New agreements negotiated by United States since 1992 have liberalized more than 60 percent of U.S. international aviation traffic, allowing customer demand and marketplace competition to determine the variety, quality, quantity and price of air services.

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