DOMINICAN CONGRESS REJECTS 1999 AIR TRADE AGREEMENT

C O N F I D E N T I A L SANTO DOMINGO 003417 SIPDIS SIPDIS DEPT FOR WHA/CAR, EB/TRA J. HORWITZ; DEPT PASS DEPT OF TRANSPORTATION FOR BRIAN HEDBERG E.O. 12958: DECL: 10/31/2011 TAGS: ECON EAIR DR SUBJECT: DOMINICAN CONGRESS REJECTS 1999 AIR TRADE AGREEMENT REF: A. 06STATE127291 ¶B. 06SANTO DOMINGO 2899 Classified By: EcoPol counselor Michael Meigs. Reasons 1.4(b),(d) ¶1. (C) Summary. On October 17, the Dominican House of Representatives refused to ratify the 1999 Air Trade Agreement with the United States. Congressmen said the consensus was that the agreement is harmful to the interests of the country. The official report contained language recommended by the Board of Civil Aviation. End Summary. -------------- BACKGROUND -------------- ¶2. (U) The United States and the Dominican Republic negotiated and signed a bilateral air trade agreement on December 16, 1999. The U.S. view has been that the agreement entered into force upon the exchange of notes at that time. The Dominican authorities have maintained that the agreement has remained inoperative because he Dominican congress must ratify it. (reftel B). This difference of views was emphasized in 2004 during a dispute between American Airlines and privately owned airport management corporation Aerodom over the business of ground-handling. Although the parties settled the issue, the Board of Aeronautica Civil (CivAir) notified the Ambassador in February 2005 of the government's legal opinion concerning applicability of the 1949, 1986, and 1999 Air Trade Agreements between the United States and the Dominican Republic. Embassy faxed official transcript to Department on October 18, 2006. Excerpts of the unofficial translation follows: (BEGIN EXCERPTS) "The Bilateral Agreement in force concerning Air Transport Services signed between the United States of America and the Dominican Republic is the one dated July 19, 1949, amended on October 19, 1971. Pursuant to the provisions of number 14 of Article 37 of the Constitution of the Dominican Republic, it is up to the National Congress 'to approve or disapprove international treaties and conventions celebrated by the Executive Power.' The 1949 Agreement was approved by the National Congress by means of Resolution No. 2087, dated August 20, 1949, and published in the Official Gazette No. 6978, dated August 29, 1949. "The Bilateral Agreement on Air Transport Services signed by the governments of the United States of America and the 
Dominican Republic on July 22, 1986, was not approved by the National Congress, and at the initiative of the United States government, it was substituted by the agreement signed on December 16, 1999. "The 1999 Agreement was submitted for the consideration of the National Congress by His Excellency, the President of the Republic, Dr. Leonel Fernandez, in his previous constitutional period of government, by means of official document number 2515 dated February 29th, 2000. To date, it has not been approved by the National Congress, and therefore, the legal procedures established for it to take effect according to the constitutional norms of the Dominican Republic have not been complied with. Until it takes effect, as already pointed out, the 1949 Agreement prevails, which is the only legal binding instrument between the contracting parties, which constitutes a valid obligation of the Dominican State." (END EXCERPTS) - - - - - - - - - - - - - - - - - - - - - - - CONGRESS REJECTS THE 1999 AIR TRADE AGREEMENT - - - - - - - - - - - - - - - - - - - - - - - ¶3. (U) On October 17, 2006, the Dominican House of Representatives voted not to ratify the 1999 Air Trade Agreement. The legislative report characterizes the agreement as harmful to national interests, specifically with regards to the ability of the state to regulate the price of air transport; to impose airport and aeronautical taxes and fees according to its sovereign fiscal criteria; to operate, manage concessions, and perceive income from ramp services in the country's airports; and to ensure the collection of said taxes in the corresponding currency. The report stated that Articles 8, 10, and 12 contained numerous aspects that were not in accordance with Dominican law. Embassy faxed official transcript and emailed unofficial translation to the Department on October 18 and October 23 respectively. ¶4. (C) The House replied quickly on the air trade agreement. Official contacts indicate that on October 5 the CivAir Board sent a letter to the House special committee urging the committee not to approve the agreement. On October 9 the committee sent its official report (reprising the Board's letter) to recommend that House members reject the bill that proposed approving the agreement. Although emboffs met with CivAir deputy directors Luis Rodriguez and Ivan Vasquez on October 5 and October 13, CivAir officials failed to inform emboffs of the Board's recommendation or the Committee's decision. ¶5. (U) The CivAir Board wrote to the House: "The Civil Aeronautics Board is not opposed per se to the signing of open skies or liberal agreements like the one recently negotiated and signed with the United Kingdom, which being open and liberal does not contain clauses like the ones which are objectionable in the 1999 agreement with the United States of America; and which respect the reciprocal interests of both sovereign states concerning aspects that could limit the capacity and authority of both countries to regulate at their own discretion air transport in sensitive and strategic areas." ¶6. (SBU) Comment. CivAir officials deliberately misled embassy officers, almost certainly because none of the airport managers want to lose the ground-handling business - - Aerodom, belonging to the Hazoury family, is particuarly influential with the CivAir Board. For months, emboffs had tried to engage CivAir officials about the 1999 Air Trade Agreement, its status, and any outstanding Dominican concerns or objections to it. In early October, emboff requested a meeting between CivAir officials and the Department's country desk officer to discuss CivAir's "concerns"; it is evident that at the time of the meeting, CivAir had already forwarded its recommendation to Congress. ¶7. (U) Drafted by Chris Davy. ¶8. (U) This report and extensive other material can be consulted on our SIPIRNET site, http://www.state.sgov.gov/p/wha/santodomingo/ . HERTELL