The world aviation market is bigger than ever, generating $1 trillion in economic activity and more than 22 million jobs. Expanding this market depends on increasing competition.
Every time we expand competition in international airline services, the market grows substantially, transportation for travelers and shippers improves, and commerce increases between the United States and its trading partners. Our strategy is to expand services and competition wherever possible. Our challenge is to provide the opportunity for U.S. airlines to develop those services in the most efficient and productive manner possible without government constraints that inhibit the full development of the aviation market.In 1994 the Department of Transportation announced a new policy to join with those countries willing to move toward unrestricted air service. At the same time, we recognized that some of our trading partners might be reluctant to embrace a system they could not control and use to protect their own airlines. We indicated a desire to be flexible enough in dealing with such partners to open the market more gradually, but without curtailing existing services.
Unrestricted competition means open access between two countries with no limitations on the level of fares or services, including service beyond those countries. In short, it means ''open skies.'' And that is our primary objective.
Just consider the new agreement with Canada, which greatly expands services and competition in a three-year transition to a fully open market. Before that accord was negotiated a year ago, we - as the largest trading partners in the world with $1 billion of trade every business day - were operating under a restrictive air service agreement dating to the 1960s.
In the last half of 1995, 1 million additional passengers traveled between our countries as a result of our new agreement. Passenger growth is now five times greater than what it was. The bottom line? Increased, competitive air services pumped $2 billion into our economies.
The lesson is that the economic pie gets bigger for all when aviation markets are opened. And we have made considerable progress in convincing more of our trading partners of these mutual benefits.
Take a look back to 1992 when the international picture was far less bright. Countries such as France and Thailand had renounced air agreements with the United States in an attempt to limit service growth. Germany was threatening renunciation of its agreement. Back then, the trend in international aviation was to move away from expanding service and increasing competition.
We have reversed that trend. Under President Clinton's activist aviation strategy, we have signed 35 market-expanding aviation agreements, more than during any other comparable period in history.
In Europe, we entered into open-skies agreements with nine countries shortly after announcing our new international aviation policy. We reached an agreement to phase in open skies with the Czech Republic and to liberalize service to Ukraine.
In South America, we have created new opportunities in the U.S.-Peru and U.S.-Brazil markets. In Asia, where U.S. airlines generate more revenue than they do over the Atlantic, we have won agreements with Hong Kong, the Philippines, India and China, all of which expand important markets.
Even countries that had previously balked at increasing services have now recognized the advantages of growth. Thailand recently signed a new air service agreement providing for additional operations. Germany recently initialed a new open-skies accord. With the German agreement, 40 percent of Europe's aviation market will be open to competition. And we expect soon to begin informal talks on a new aviation agreement with France.
As successful as we have been, we have more work to do. On a visit to Chile last week, I met with 34 transport ministers from throughout the Western Hemisphere to explore opportunities in that region. I visited Asia last fall to continue building relationships in that important market. We are currently working with Poland and Hungary on expanding services.
And of course we must work to improve conditions in two of our primary markets - the United Kingdom and Japan. The United States and Britain simply should not be among the most restrictive aviation markets in the world. While we are pleased with the recent agreement on air cargo services with Japan, which expands opportunities for both nations, Tokyo's restrictive attitude toward aviation continues to pose a major challenge. Expanding services between the United States and these important allies would bring substantial benefits to consumers and expand trade.
The growth of international aviation services is critical to America's future economic position. We must continue removing trade barriers so our communities, consumers and airlines can compete in the global economy.