Legal Issues On Opening Of Traffic Rights In China-ASEAN

The thesis endeavors to explore some of the legal issues relating to the opening of traffic rights between China and ASEAN primarily based on the Air Transport Agreement between the Governments of the Member States of the Association of Southeast Asian Nations and the Government of the People's Republic of China (hereafter refer to as the Agreement) signed recently. Following are the main issues involved: the legal mode for traffic rights opening between China and ASEAN, the provisions of"substantial ownership and effective control"and the competition issues in the context of the liberalization of air transport services.As the prerequisite of further elaborating, ChapterⅠmakes a brief introduction to basic concepts and theories of traffic rights and its opening. The official definition of"traffic rights"can be found in two legal documents: GATS Annex on Air Transport Services and ICAO Doc. 9626 Manual on the Regulation of International Air Transport. However, there are some defects in these two definitions. The author holds the view that the very essence of traffic rights is state sovereignty and the performing subject of it are sovereign states. Furthermore, clarifying these two issues should be indispensable for defining traffic rights since they are prone to give rise to misunderstandings. By remedying the defects of the definition in the aforementioned legal documents, this thesis concludes a new definition of traffic rights which has clarified both its essence and performing subject. Then the thesis discusses the meaning of opening of traffic rights and the development of its legal mode.ChapterⅡmakes a systemic study of the legal mode adopted by the Agreement for opening of traffic rights. By comprehensively comparing the Agreement and the U.S. Open Skies Agreements, the author comes to the following conclusion: the Agreement draws on the experience of the U.S. Open Skies Agreements to a large extent. Even if the Agreement is not as liberal as the U.S. Open Skies Agreements in only few aspects, the legal mode for opening of traffic rights between China and ASEAN could still be categorized into the"open skies mode".ChapterⅢdeeply looks into the"substantial ownership and effective control"provisions in the Agreement. This requirement is usually embodied in the provision of"Designation and Authorization"and of"Withholding, Revocation, Limitation and Suspension of Authorization", that is, provided the relations of other Parties and their designated airlines do not meet the requirement of"substantial ownership and effective control", the Parties receiving the applications can refuse to grant operating authorization and technical permission to the airlines, or revoke, limit, suspend such authorization and permission. In addition, some of the air services agreements have established the criteria to evaluate"substantial ownership and effective control". Such provisions also can be found in the Agreement. According to the Agreement, substantial ownership and effective control are allowed to be vested into any one or more member states of ASEAN when the designated country is an ASEAN member state. It is in conformity to the"ASEAN single aviation market"plan. It is noteworthy that there is no provisions relating to the criterion for evaluation of"substantial ownership and effective control"shown on the Agreement, which may bring troubles to practices. At last, after discussing the debate on keeping versus abolishing the foregoing requirement, the author agrees that it is necessary to keep the current existing provisions and suggests introducing flexible criteria to the Agreement. As for China, the criteria could be"absolute stock holding"and"relative stock holding"which would allow more flexibility.ChapterⅣmakes a research on the relevant competition issues. This chapter firstly explains the necessity of regulating anticompetitive conducts in the context of China-ASEAN traffic rights opening. Subsequently, the thesis generalizes the main anticompetitive conducts in the air transport field, including conducts performing by states and by airlines. The former are regulated by the international law, the later are primarily regulated by domestic laws. Under this circumstance, conflicts may arise from respective competition regimes. The Agreement has taken measures in order to resolve these problems. However, the author thinks that the measures are not enough to promote fair competition since the Agreement lacks the cooperation mechanism to harmonize respective competition regimes in this broad region. To build such a mechanism, U.S.-EU Air Transport Agreement ANNEX 2 Concerning Cooperation with Respect to Competition Issues in the Air Transportation Industry would be an outstanding example for reference.ChapterⅤbriefly summarized all the conclusions drawn above.On the whole, the thesis provides a few innovation points of view. Firstly, it reviews the provisions of the Agreement and the U.S. Open Skies Agreements comprehensively, and then draws a conclusion on the legal mode for opening of traffic rights between China and ASEAN. Secondly, this thesis gives a further analysis on the characteristics, flaws and progress of the provisions relating to"substantial ownership and effective control", as well as a suggestion on laying down a standard to evaluate such ownership and control. Thirdly, based on an overview of the competition regimes in both China and the ASEAN member states, the thesis sheds some lights on the conflict concerning competition regimes in air transport industry, and argues that a cooperation mechanism should be introduced to the Agreement.