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Monday, 11 May 1987
Page: 2891

Mr LEE —Is the Minister for Aviation aware of media reports that the fourth round of talks on the Australia-United States air agreement has been unsuccessful in preventing American carriers from dumping surplus capacity on the Pacific route? Are these reports correct? If so, what action does the Government intend to take to ensure that Australia's national interests are protected from the predatory tactics of United Airline Inc. and Continental Airlines?

Mr PETER MORRIS —I thank the honourable gentleman for his question and commend him for the very keen interest he takes in the important area of aviation policy. There have been a number of reports as to the outcome of the negotiations with the United States last week. I say at the outset that these discussions have been going on for a long period. There have been four rounds of talks. Really, we have a David and Goliath situation-the David being Australia's international air service operator and the Goliath being the two global giants of the United States of America. The two Uuited States airlines are the two largest airlines in the world, with the exception of Aeroflot.

Australia has been seeking to develop a fair, sensible set of arrangements that will overcome the heavy bias and partiality that exists in the 40-year-old agreement in the favour of the United States. We have not sought any decrease in capacity, as has been wrongly reported, and we have not sought to prevent services being provided to Australia. We are simply saying: `This agreement was drawn up in the aftermath of World War II. We think it is high time that we looked at the provisions of that agreement and the adjustments that have been made since then to ensure some fairness for Australia's own industry and to ensure that we are providing adequate services for people who want to visit Australia and travel to the United States'. Australia is not alone in this problem with the United States. Other South Pacific nations have had a similar problem with the United States airlines. They are watching very closely what happens in Australia's negotiations with the United States. We are seeking to have some type of safety valve arrangement inserted into the agreement for future capacity in those services. I make that point very clear to the honourable member. Despite what may have been said or implied in some of the US reports or statements or the local reports, there has been no alteration in the level of capacity or attempts to change the level of capacity being provided.

Continental Airlines Inc. some weeks ago sought to replace its DC10 aircraft with 747 aircraft-aircraft for aircraft. That would have meant a 60 per cent increase in one hit in the number of seats it provides across the Pacific. We already have more than 10 empty jumbos flying across the Pacific each week and somebody has to pay. Continental Airlines uses only about a third of its capacity to bring people direct from the United States to Australia. That is the background to its situation. In the talks last week that followed months of intransigency and stubbornness by the United States, we gave notice of termination of the 1980 memorandum of understanding. The effect of that is to say that if we want to add new capacity on to the Australian-United States route, we need to sit down together and talk about it. That is all that has been done.

I would like to bring to the attention of the Parliament the reaction from the United States which I find, in a way, offensive to all Australians. But we should bear in mind that the kind of debate we are having with the United States, the kind of negotiations in trying to achieve some fair and sensible arrangements in air services, is the same kind of debate that is going on in our agricultural export market. As the United States operates in a manner that obviously has little regard for our primary produce exports, similarly it does so in this area. The United States in its statement on Saturday-apart from the inaccuracies which I will not take the time of the House to detail as I can do so individually-concludes with this paragraph:

In the United States view, the Australian government has created a crisis in United States-Australian aviation relations.

I have explained that that is nonsense. It continues:

Given Australia's limitation on airline service levels, the United States must now consider the need for appropriate action in response.

That is clearly intimidatory. It is clearly a threat of retaliatory action. I say again to the House: The provision within the existing agreement and arrangements wrote in the process that we exercised in the discussions last week. That process was written into the agreement because clearly at the time it was anticipated that a situation might arise some time in the future where there could be disagreement and there would be some appropriate course to follow. All that Australia's negotiators have done, and the Australian Government resolved last week, is decide that we will exercise the rights provided to us in the terms of that 1980 memorandum of understanding. We are quite happy to talk. We look forward to further discussions with the United States, but I underline the fundamental requirement-what we want on behalf of Australia is some fair, sensible set of arrangements with some safety valve provision in it to stop Australia's own services being swamped by airline services being dumped in this region of the world. We want the opportunity to develop those services to the betterment of the Australian tourist industry and for all Australians.