AFTER MONTHS OF NEGOTIATIONS, the United States and Britain are close to a deal that will modestly improve air service between the two countries. The Clinton administration sees this as a respectable step toward the larger goal: free aviation trade with Britain. Critics say the deal doesn't go far enough and will only discourage more serious and far-reaching talks later.
The critics are right to be concerned, but they also are wrong. Trading rights between strong countries move ahead in manageable chunks, and the U.S.-U.K. deal is just that. By increasing choices for some passengers, giving airlines a bit more operating freedom and setting the stage for broader aviation talks, the proposed deal shapes up as a clear, if limited, benefit for airlines and consumers.* * * * *
Britain is America's most important international aviation market, but it also is among the most restricted. In part, that's the result of a protectionist deal Britain forced on the United States in 1977 - and which Washington has been trying to change for the last 18 years.
Indeed, Federico Pena, the transportation secretary, pledged in 1993 to push for an "open skies," or free trade, agreement with Britain. After two years of shadow-boxing, Mr. Pena has produced a deal that doesn't even come close.
Britain has steadfastly refused to accept the chief U.S. demand: more U.S. flights to popular Heathrow airport. British Airways jealously guards the protectionist advantage it now enjoys at Heathrow; since Britain wants little
from the United States at this time, it has no incentive to make big concessions at Heathrow.
Still, Mr. Pena and his counterpart, British Transport Minister Brian Mawhinney, have cobbled together a limited agreement to improve air service. The United States gets the best part of the deal: the right to add another U.S. carrier - United Airlines - to the Chicago-London route, which is now served only by American Airlines and British Airways. Access to U.K. regional
airports also would be improved. In return, BA gets more flights in its existing Philadelphia-London market and the right to transport some U.S. government passengers.
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This deal is hardly a coup for the United States. One U.S. airline, United, gets the chief benefit. This has sent other U.S. airlines into paroxysms, especially American, which will face a new competitor at Chicago. Yet there are good reasons for pursuing this accord.
For starters, Mr. Pena and Mr. Mawhinney do not intend to stop with this ''mini-deal." The British have pledged to immediately begin a new round of talks on issues the United States cares about most: better U.S. access to Heathrow, improved cargo rights, freer pricing and a more open charter regime. To be sure, a broader follow-on deal is not assured. The British can be world- class foot-draggers. But Mr. Mawhinney seems genuinely interested in gradually improving aviation ties.
Indeed, adopting an all-or-nothing approach to trade talks - this is what America Airlines is demanding - rarely works. Trading nations have spent nearly 50 years working through the GATT to gradually lower trade barriers. The key to the GATT has been to keep moving forward, and Mr. Pena's deal with Britain follows that example.
Consider, for example, the new Chicago-London service the United States gets in this deal. Under the current agreement with Britain, the United States can add a second U.S. airline in that market when American Airlines' passenger count tops 600,000 a year in two straight years. But American has been manipulating fares and service out of Chicago to stay below that threshold and keep a second U.S. airline out. That has kept fares higher than they should be and hurt London-bound passengers in the Chicago area and in western states. The new accord fixes that problem.
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United's entry into the Chicago-London market would take some business away from American and BA. But United more likely would benefit from new demand spurred by lower fares, and from Western passengers who no longer would have to fly circuitous routes. By comparison, the benefits British Airways would get from the deal are worth much less than what U.S. airlines stand to gain.
Certainly, Mr. Pena's strategy is not the only one. If he rejected a mini- deal and withheld all new access to the U.S. market, pressure might build on Britain to strike a better agreement later on. But this approach is more likely to produce a stalemate than real results.
Incremental trade deals are, admittedly, frustrating. But until countries realize the damage protectionism causes - and most haven't in the aviation arena - slow progress may be the best we can hope for.