DEVELOPMENTS IN SELECTED SECTORS Page 114 (Para 8)

It is expected that further reforms of the CAP will be decided in 2013 for implementation in 2014. …… According to the Commission, post-2013 reforms are expected to continue the direction towards market orientation of policy while decoupled direct payments will remain the core of CAP spending. However, the reform post-2013, like earlier reforms, will not directly address market access conditions into the EU market, and tariffs, tariff quotas and the Special Agricultural Safeguard will not be affected.

Questions:

90．Please inform the considerations of the EU on not making corresponding reforms of the relevant policies on agricultural products market access while continuously promoting common agricultural policy reforms.

EU reply: CAP reforms are not intended to change the EU's agricultural tariffs. Any change will result from a successful conclusion to the DDA. In the meantime, the EU will continue to respect its WTO commitments.

Page 117 (Para 4.20)

Support in the fruit and vegetables sector is structured through Producer Organizations, which may set up a fund to finance operational programmes approved by member States. …… Among the eligible actions that producer organizations may choose to implement under operational programmes are: crisis prevention and management measures such as market withdrawal (where products are withdrawn from the market); non-harvesting (where no commercial produce is taken); and green harvesting (total harvesting of non-marketable products before normal harvesting). Crisis prevention and management also include promotion and communication, training, harvest insurance, and support for the administrative cost of setting up mutual funds. In addition, they may also implement measures related to planning of production, improvement and maintenance of product quality, marketing and promotion, training and environmental actions. Questions:

91．The Secretarial Report indicated that fruit and vegetable producer organizations may select several support programs, including crisis prevention, non-harvesting and green harvesting. Could the EU please describe in detail the operations in practice of such programs? How are these programs classified in the notifications submitted by the EU to the WTO under the Agriculture Agreement?

EU reply: The EU would like to refer China to notification G/AG/N/EEC/69 of 24 January 2011 which presents the reform of the fruit and vegetables sector.

Page 118 (Table 4.7)

Outturn

2007 Outturn 2008 Outturn 2009 Outturn 2010 Outturn 2011

Cereals 41.80 9.70 0.85 -0.37 0.05

Rice 0.05 0.00 -0.03 0.00 0.01

Questions:

92．Please indicate the meaning of the negative value of the expenditures on cereals (2010) and rice (2009) in the table.

EU reply: Unlike export subsidy notifications to the WTO which are based on licences issued, Table 4.7 contains export subsidy payments from the EU budget. Negative values in the budget indicate that the previously paid amounts have been recovered. The reason for such recoveries could be, for example, the exporter's non-compliance with the criteria for granting the refund. Such recoverees are made on a regular basis, after the ex-post checks carried out by the EU and Member States authorities.

Page 147 (Para 4.113)

Environmental services constitute an important economic sector for the EU as their two main susbsectors (water collection treatment and supply on the one hand, and sewerage, waste management, and remediation on the other hand) employed 1,037,000 persons in 2007 and accounted for a gross value added of €100.5 billion (€29.6 billion for water, €69.8 billion for the remainder), i.e. an approximate turnover of €250 billion.

Questions:

93．Does the EU have its own definitions and classifications in relation to the environment services sector? What are the definitions and classifications?

EU reply: The European Union submitted to the WTO "Communication from the European Communities and their Member States: GATS 2000 environmental Services", S/CSS/W/38 dated 22 December 2000 as well as "Communication from the European Communities and their Member States: Classification issues in the Environmental Sector", S/CSC/W/25 dated 28 September 1999,

by which presented the proposal for classification for environmental services that is used by the EU in its bilateral agreements.

94．Which department in the Commission is responsible for regulation of the environment protection sector?

EU reply: The Directorate-General for the Environment.

95．Does "sewage" only refer to domestic sewage in the EU's definition? Or does it include industrial waste water and municipal sewage?

EU reply: Directive 91/271/EEC on urban waste water treatment covers both 'domestic waste water' meaning waste water from residential settlements and services which originates predominantly from the human metabolism and from household activities; and 'industrial waste water' meaning any waste water which is discharged from premises used for carrying on any trade or industry, other than domestic waste water and run-off rain water.

96．What does "waste management" cover? Does "waste management" cover the disposal or treatment of industrial solid waste, domestic rubbish, dangerous waste and medical waste?

EU reply: Waste management' means the collection, transport, recovery and disposal of all types of waste, including the supervision of such operations and the after-care of disposal sites, and including actions taken as a dealer or broker (Directive 2008/98/EC on waste).

97．How does the Member States of the EU collect and manage "sewage"? Is there any specific responsible authority? How do the responsible institution and the local and central governments of a Member State cooperate with each other?

EU reply: The EU Member States are obliged to collect and manage sewage following the letter of articles 3, 4 and 5 (when applicable) of Directive 91/271/EEC. The basic principles of collection and treatment (which mostly depend on the size of the settlement and the nature of the area of discharge) are regulated by these articles, with additional details in the Annexes and Tables of reference. Regarding the Authorities which are responsible for collection and treatment in each MS and the linkages between Authorities, it is MS' choice to regulate such issues (subsidiarity principle), whenever it is enabled compliance with the aforementioned articles.

98．Have the Member States of the EU established specific institution or authority to regulate the solid medical/dangerous wastes? Who are these institutions?

EU reply: Member States have to transpose Directive 2008/98/EC on waste which governs how such waste shall be managed. It is up to the Member States to set up the necessary institutions/authorities

99．Which authorities take responsibility for regulating the clearing, transportation and disposal of the domestic rubbish in the solid waste? How to regulate?

EU reply: See reply to Question 98.

100．What is the proportion of industrial solid waste in the solid waste management in the Member States of the EU? What is the proportion of recycling?

EU reply: The proportion of industrial waste (NACE B – F) of total waste generation in EU Member States (EU 27) amounts to 83%, in 2010. It is worth recalling that industrial waste is not a separate category in European waste statistics, the aggregate of NACE B to F is usually understood as representing industrial waste. In 2010, 39 % of the total amount of waste treated in Member States has been recycled. Worth stressing also that recycling is not a separate category in European waste statistics, recovery excluding energy recovery and backfilling is the best proxy for recycling.

101．What is the proportion of government procurement in the overall environment services of the EU?

EU reply: The Commission does not possess data on the proportion of government procurement in the overall environment services of the EU.

Page 155 (Table 4.31 Regulatory framework for EU aviation services)

Airport charging is regulated at EU level by Directive 2009/12/EC of the European Parliament and of the Council of 11 March 2009 on airport charges.

Questions:

102．Could the EU please inform types, standards, collecting targets and methods of airport charging?

EU reply: The term 'airport charges' is used in Europe to describe charges levied on airlines for the use of aeronautical infrastructure at airports. They cover the use of services and facilities provided by the airport managing body for landing, take-off, lighting and parking of aircraft, and the processing of passengers and freight. Typically this relates to the use of runways and associated area and terminal infrastructure.

Charges for groundhandling services are not included in this definition. Such services may be provided by an airport, an airline or an independent groundhandling agent and are charged for separately.

At EU level, airport charges are governed by the Airport Charges Directive (Directive 2009/12/EC, OJ L 70 of 14.3.2009), which applies at the largest airport in each Member State plus all airports handling 5 million passengers per year.

This framework sets out minimum standards with regard to the following:



Greater transparency on the costs which charges are to cover. Airports are obliged to share a detailed breakdown of costs with airlines in order to justify the calculation of airport charges.



Non-discrimination: airlines receiving the same service shall pay the same charge. However,

airports can differentiate their services as long as the criteria for doing so are clear and transparent. Airports can also vary charges on environmental grounds (e.g. lower charges for more environmentally-friendly aircraft).



Systems of consultation on charges between airports and airlines (which are already in place at many EU airports) will become mandatory at all airports covered by the Directive.



Member States will designate or set up an independent supervisory authority whose job will be to help settle disputes over charges between airports and airlines.

Due to the perception that in many cases airports are monopoly providers of infrastructure, many Member States have put in place, for example, specific sectoral rules for the setting of airport charges, or apply competition rules to airports' pricing behavior. Member States may apply systems of economic regulation, which can take the form, for example, of a price or revenue cap. 103．How will the airport charges be used? Is there any competent management authority? If yes, please inform how it operates.

EU reply: For those airports to which the Airport Charges Directive applies, airport charges are levied for the use of the facilities referred to in the answer to question 102. Member States are free to assign a role to a competent management authority, although in principle airports are responsible for setting their own airport charges. Under the Directive, however, the Member State must designate an independent supervisory authority which has the power to intervene in disputes

over airport charges between airlines and airports and is responsible for ensuring that the minimum standards set out in the Directive are properly applied.

As referred to in the answer to question 102, Member States may apply systems of economic regulation to the independent supervisory authority, where the latter sets airport charges. The procedures and rules on how such authorities operate are the responsibility of the Member State. Page 156 (Table 4.31 Regulatory framework for EU aviation services)

Emission trading scheme (ETS) for aviation Questions:

104．The EU has included international aviation into ETS. How to ensure that the EU legislations will not conflict with or violate the international laws such as Chicago Convention and bilateral aviation agreements?

EU reply: The EU ETS is in line with international law and with the Chicago Convention. In 2011, the highest Court in the EU, the European Court of Justice, issued its ruling on the case brought by a group of American airlines and IATA (C-366/10). The Court confirmed that the legislation is fully compatible with international law, including the Chicago Convention and bilateral air service agreements. The EU has always pursued addressing international aviation emissions multilaterally, notably at ICAO, and effective actions agreed there would be the best way forward.

In 2001 ICAO recommended in principle developing open emissions trading as part of a comprehensive approach to reducing emissions from international aviation, but in 2010 the ICAO favoured a framework for national and regional action. A single global MBM is not in place, nor is likely to be before 2020.

The "stop-the-clock" derogation is provided by the Union to facilitate an agreement at the 38th session of the ICAO Assembly on a realistic timetable for the development of a global MBM beyond the 38th session of the ICAO Assembly and on a framework for facilitating the comprehensive application of national and regional MBMs to international aviation, pending the application of the global MBM. On this basis, with a view to facilitating the optimal interaction between any such outcome and the scheme for greenhouse gas emission allowances trading within the Union, further steps could be considered. The EU calls on China to take a constructive approach to the on-going negotiations at ICAO on both the MBM framework and the global MBM scheme in order to reach a successful outcome at the ICAO Assembly in September/October 2013.

Page 157 (Para 4.123)

In terms of applied regime, save for commercial aviation (airlines and air taxi), the air transport sector obeys the general rules of treaties on establishment and there is therefore no foreign ownership restriction (Table A3.10)

Questions:

105．It seems that there is no Table A3.10 mentioned in paragraph 4.123 in the Secretarial Report. Could the EU please clarify?

EU reply: The EU notes that there is table A4.10 of the Secretariat. Regional Aviation Transportation of the EU

Questions:

106．The regional aviation of the EU is quite mature, but it seems that the Secretarial Report has not indicated the development of the regional aviation and the relevant polices in the section of air transportation. Could the EU please briefly describe the current development of its regional aviation?

EU reply: The regional aviation in the EU is governed in general by the same regulations as for other types of commercial air transport. That is to say, carriers operating regional routes are licensed in the same way as for other carriers. However, there are several provisions in place which recognize the importance of regional air routes, in particular for those parts of Europe where access by air to the large population centers is particularly important due to geography and where other transport modes do not offer a viable alternative.

Regarding the development of the regional aviation market, it is clear that the internal aviation market, established 20 years ago, has had an important impact on the connectivity of Europe's regions. Since 1992, the number of intra-EU routes operated has more than doubled and there has been a 150% increase in long-haul flights departing from European airports. In 1992, just 93 European routes were served by more than two airlines. In 2010 there were 479 such routes. In recent years, the emergence of low cost carriers has played an important role in providing new point to point connections between regions in Europe. More recently, larger regional airports have been able to attract non-European carriers offering direct connections to points outside the European Union. This has been a response both to increasing congestions (and scarcity of slots) at some large hub airports and also as a result of a gradual opening up of traffic rights to such carriers.

On the other hand, the market share of classic regional carriers, operating smaller jet aircraft and turboprop aircraft, has been decreasing during the past decade (from 22,6% in 2001 to 16,7% in 2010, based on capacity available). This share is split by turboprop and jet type of aircraft, the latter having taken an increasingly important role in the regional market.

107．What support policies have the EU and its major Member States adopted in relation to the development of regional aviation? If yes, could the EU please inform the sources of the funds for and the methods, standards and related information of such supports?

EU reply: With regard to the support for the development of regional aviation, this is covered by the EU infrastructure development policies (Trans-European Networks), by the EU cohesion policy, EU State aid policy and the public service obligation provisions in transport policy.



In terms of development of airport capacity, EU funds are available to fund air traffic management systems, environmental improvements, multi-modal connections and capacity increase. Projects have to be of common European interest (not only interest of particular regions or Member States). Funding for capacity increase in the upcoming financial period (2014-2020) is still under discussion. If it will be possible, increase of airport capacity would be funded under the future Connecting Europe Facility. The EU also provides funds for airport development from the so-called Structural Funds.



The EU state aid policy is a unique regime controlling and regulating the use of public subsidies within the EU. Subsidies (called State aid) are perceived as distorting fair competition and trade between EU Member States. The European Commission is the sole enforcement body for State aid control in the EU and, as a rule, has to authorize any State aid a Member State intends to grant.



State aid for airports is allowed only under strict conditions. Airlines can in principle receive three types of State aid. First, airlines in financial difficulties can receive rescue and restructuring State aid under very strict conditions. Second, airlines flying from regional airports can receive so-called start-up aid as a way of attracting airlines to new destinations. Finally, airlines can receive State aid in form of compensation of costs related to the provision of the so-called public service obligation.



Public Service Obligations (PSOs) are to be considered as an exception to the freedom to provide air services as defined in Article 15 of the Air Services Regulation (Regulation 1008/2008, which also lays down rules for the licensing of air carriers in the European Union). The role of PSOs is to set fixed standards of continuity, regularity, pricing or minimum capacity to ensure the access to isolated regions or in the framework of the regional development policy when a Member State finds that its objectives will not be adequately met by free play of market forces. However, PSOs must respect the principles of non-discrimination and proportionality and they must not go beyond what is needed to attain the policy objectives.

As PSOs are an exception to the general principle of the freedom to provide services, any restrictions arising from the imposition of PSOs need to be interpreted narrowly. Member States enjoy an ample discretionary power - under the supervision of the Commission - to judge the need for a PSO, which however should not lead to an excessive recourse to PSOs or to obligations disproportionate to the economic and social objectives pursued.

PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT

In document ( ) Page: 1/387. TRADE POLICY REVIEW EUROPEAN UNION MINUTES OF THE MEETING Revision Chairperson: H.E. Mr. Shahir Bashir (Pakistan) (Page 137-143)