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Cablegate: Dot a/S Bhatia Attends Aapa Meeting, Meets With

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 TAIPEI 003968

SIPDIS

SENSITIVE

DEPARTMENT FOR EAP/TC AND EB/TRA

DEPARTMENT PASS AIT/W

E.O. 12938: N/A
TAGS: ECON PREL EAIR PGOV OVIP TW
SUBJECT: DOT A/S Bhatia Attends AAPA Meeting, Meets with
Taiwan Officials

REF: A) AIT TAIPEI 2827, B) AIT TAIPEI 3734

Summary
-------

1. (SBU) Department of Transportation (DOT) Assistant
Secretary for Aviation and International Affairs Karan

SIPDIS
Bhatia traveled to Taiwan November 25 and 26 to speak at the
Association of Asia Pacific Airlines (AAPA) 48th Annual
Assembly of Presidents Meeting. A/S Bhatia also met with
Taiwan civil aviation officials and expressed U.S. interest
in adding seventh freedom rights for all-cargo flights to
the U.S.-Taiwan open skies agreement. Officials responded
positively but indicated that they would have to consult
further within the Taiwan government. AIT/T will continue
to explore the possibility of adding "cargo sevenths" to the
open skies agreement. However, prospects for adding it in
the near future are mixed. End summary.

AAPA 48th Annual Assembly of Presidents
---------------------------------------

2. (U) A/S Bhatia traveled to Taiwan November 25 and 26 to
participate in the AAPA 48th Annual Assembly of Presidents
Meeting. A/S Bhatia delivered remarks to the assembly on
the direction of U.S. aviation policy and changes in the
U.S. airline industry. Other speakers at the event included
Peter Harbison, chief executive of the Centre for Asia
Pacific Aviation, who spoke on low cost airlines and their
impact on the Asia Pacific aviation market; Nigel Harvey,
division director of Macquarie Bank, who addressed rising
fuel prices; Mark Hue-Williams, regional director of Willis
Aerospace, who spoke on the aviation insurance market; and
Nick Brown, senior vice president of AIG Aviation, who gave
remarks on war and terrorism insurance. Note: Texts or
summaries of all of the remarks are available at the AAPA
website at www.aapairlines.org. End note.

Civil Aeronautics Administration DG Chang
-----------------------------------------

3. (U) While in Taiwan, A/S Bhatia paid a courtesy call on
Taiwan Civil Aeronautics Administration (CAA) Director
General Billy Chang. A/S Bhatia was accompanied by FAA Asia
Pacific Region Director Elizabeth Erickson and AIT/T
econoff. A/S Bhatia noted the strong relationship between
Taiwan and the U.S. on aviation issues. He pointed out the
benefits to both sides offered by the bilateral "open skies"
agreement. He praised Taiwan's recent progress in improving
air safety and expressed U.S. willingness to continue to
work with Taiwan in this area. A/S Bhatia also expressed
U.S. appreciation for the strong relationship between Boeing
and Taiwan carriers China Airlines and Eva Airways.

4. (U) A/S Bhatia told Chang that the U.S. is interested in
expanding the bilateral open-skies agreement to include
seventh freedom rights for all-cargo flights. "Cargo
sevenths" would allow U.S. airlines to fly cargo routes
between Taiwan and a third location without serving the
United States. So, for example, a U.S. carrier could
conduct a cargo flight between Taipei and Singapore without
having the flight serve any point in the United States. A/S
Bhatia pointed out that China Airlines and Eva Air are both
very competitive in the international air cargo market and
would stand to benefit if the U.S. granted Taiwan "cargo
sevenths." Chang raised no objections to adding "cargo
sevenths" to the bilateral agreement but said that the
Ministry of Transportation and Communications (MOTC) would
make the final decision on such a proposal.

5. (U) Chang explained Taiwan's interest in joining the
International Civil Aviation Organization (ICAO) as a full
member or being allowed to participate in ICAO events as an
observer. He said that participation in ICAO would improve
Taiwan's communication with other civil aviation authorities
in the region and would allow Taiwan to take advantage of
ICAO training programs. A/S Bhatia noted the difficulties
imposed by Taiwan's current status and offered to help
facilitate Taiwan's access to ICAO information.

Ministry of Transportation and Communications VM Tsai
--------------------------------------------- --------

6. (U) In a brief meeting with MOTC Vice Minister Tsai Duei,
A/S Bhatia again expressed U.S. interest in expanding the
U.S.-Taiwan open skies to include "cargo sevenths." Tsai
agreed that "cargo sevenths" could be beneficial but said
that he would like to discuss this issue with CAA. A/S
Bhatia also raised U.S. concerns about auto traffic safety.
He emphasized that reducing the number of deaths caused by
auto accidents is one of Secretary Mineta's highest
priorities. He pointed out that the U.S. and Taiwan already
had a positive dialogue on this issue and looked forward to
continued cooperation.

Comment - Prospects for Cargo Sevenths
--------------------------------------

7. (SBU) Chang and Tsai's receptive but non-committal
reactions on the proposal to add "cargo sevenths" to the
bilateral are consistent with Taiwan's response to AIT's
efforts in 2003 to advance the same proposal. Some agencies
and individuals in the Taiwan government support further
liberalization of the air cargo market with "cargo
sevenths." However, interest in protecting domestic
carriers strong advantage in the air cargo industry has thus
far prevented the Taiwan government from reaching a
consensus to agree to such a proposal. Taiwan's carriers
rely heavily on cargo shipments to make them profitable and
support continued restrictions of international
participation in Taiwan's cargo routes. Taiwan's recently
concluded bilateral air services agreement with South Korea
excludes cargo fifth freedom rights (ref A). Taiwan and
South Korea signed the new agreement on September 1 after a
dozen years without direct air links. AIT/T will continue
to urge Taiwan to add "cargo sevenths" to our bilateral
aviation agreement. However, at this time, the Taiwan
government is not likely to grant "cargo sevenths." End
comment.

8. (U) A/S Bhatia has cleared on this cable.

KEEGAN

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