Asean China Air Transport Agreement

The ASEAN countries had tried to negotiate as a whole in order to strengthen their negotiating position against China. Until now, market access has been governed by bilateral agreements between the various ASEAN countries and China. These agreements generally set strict ceilings for the number of flights or aircraft types operated by each Party`s airlines in the other Party`s market. In the absence of an agreement, the ASEAN countries now have the internal market, wrongly called the “internal air transport market”. In short, it`s just the name “single”. The seventh crucial freedom – which would allow, for example, a Thai airline to deploy aircraft to Singapore and operate it to Indonesia – remains rejected by most ASEAN countries and their airlines. The lack of fully liberalised market access within ASEAN has a direct strategic impact on its air relations with third countries such as China. By denouncing the right of the seventh freedom, THE ASEAN countries have failed to create a truly unique aviation market in the region. At first glance, the ATA appears to be a gold mine for ASEAN airlines that allows them unlimited access to mainland China, but a deep aeropolitical imbalance remains between the two. A single ASEAN airline can only connect to China from its home region and not from points in other ASEAN countries with China (the so-called “seventh freedom”). However, it is essential that Chinese airlines can effectively connect every point in China to any point in each of the ASEAN countries.

This article appeared in the latest issue of the East Asia Forum Quarterly, “Strategic diplomacy in Asia”. Indeed, the ASEAN countries agreed on an agreement that did not pre-the collective interest of the group beyond the sum of its individual interests. Instead, the ATA appears to have strengthened Chinese airlines, which are now the only airlines that can actually connect any point between the respective land masses in an unlimited way. While Chinese airlines are not as competitive or well-run as some Southeast Asian airlines, they are growing rapidly and will become big competitors in the coming years. The seventh right to freedom – which was even rejected within ASEAN – was not seen anywhere in the ATA with China.