Viewing cable 10LISBON64
Title: PORTUGAL: DEMARCHE ON U.S.-EU SECOND STAGE AIR

IdentifierCreatedReleasedClassificationOrigin
10LISBON642010-02-11 09:19:00 2011-08-30 01:44:00 UNCLASSIFIED Embassy Lisbon
VZCZCXRO1185
RR RUEHIK
DE RUEHLI #0064 0420919
ZNR UUUUU ZZH
R 110919Z FEB 10
FM AMEMBASSY LISBON
TO RUEHC/SECSTATE WASHDC 8112
INFO RUCNMEM/EU MEMBER STATES
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHBS/USEU BRUSSELS
UNCLAS LISBON 000064 
 
SIPDIS 
 
DEPT FOR EEB/TRA 
 
E.O. 12958: N/A 
TAGS: EAIR EUN KTIA ECON PO
SUBJECT: PORTUGAL: DEMARCHE ON U.S.-EU SECOND STAGE AIR 
TRANSPORT NEGOTIATIONS 
 
REF: STATE 9584 
 
¶1. Emboffs delivered reftel demarche on February 8 to Joao 
Confraria, Deputy Chairman of the Board of the Portuguese 
Civil Aviation Authority (INAC), and Fernanda Bandarra, Head 
of the Market Access Department at INAC, urging a realistic 
and pragmatic approach in the upcoming round of U.S.-EU 
negotiations to reach a second-stage agreement by the end of 
¶2010. 
 
¶2. Bandarra said that Portugal has been closely following the 
rounds of negotiations and that senior INAC negotiator Ana 
Cristina Pais would be participating in the Madrid 
negotiations.  She acknowledged the policy and legal 
challenges for both sides -- for EU member states to change 
legislation regarding noise-related operational restrictions 
at EU airports and for the U.S. to change its laws on 
ownership and control of U.S. carriers. 
 
¶3. Confraria noted that airport noise restriction is a 
national, not EU, competency, with each EU member state 
regulating its own level.  He explained that changes to 
domestic noise-level legislation is difficult due to the lack 
of legal obligation and absence of Portuguese tradition to 
subject such legislation to cost-benefit analyses.  He 
pointed out that even if the benefits outweighed the costs, 
environmentalists in Portugal are well organized and would 
oppose proposed changes. 
 
¶4. Confraria told us that Portugal is in favor of reducing 
emissions by 2020 but not at the expense of competitiveness. 
He noted that some U.S. airlines have filed action in British 
courts, challenging a U.K. effort to bring them into the EU 
emissions trading scheme by 2012 to fight climate change. 
(The European Parliament voted in July 2008 to add EU and 
foreign carriers to the emissions trading scheme, which 
imposes a cap on industrial emissions of carbon dioxide.)  He 
pointed out that if the U.S. carriers prevail and they are 
exempt from the scheme, Portuguese airlines would be at a 
"cumulative competitive disadvantage" starting in 2013, with 
the implementation of the emissions trading system, which 
would require developed nations to reduce emissions from 1990 
levels by 2020. 
 
¶5. Confraria viewed favorably U.S. willingness to recognize 
traffic rights awarded to merged companies that have already 
signed Open Skies agreements, describing it as a "friendly 
move" by U.S. negotiators and "potentially more interesting" 
than Portuguese airlines having stakes in U.S. companies. 
Nonetheless, he affirmed that Portugal would support a common 
EU position and defend the right of EU companies to buy a 
controlling share in U.S. companies if that was the final EU 
position.  He anticipated that if air traffic continues to 
grow at a steady 3.5 percent per year, capacity at Lisbon's 
international airport would be exhausted by 2020, resulting 
in some congestion and decreased quality of service.  He 
calculated that construction of the new airport could be 
completed by 2020 if begun in 2012. 
 
 
For more reporting from Embassy Lisbon and information about Portugal, 
please see our Intelink site: 
 
http://www.intelink.sgov.gov/wiki/portal:port ugal 
BALLARD