The Life and Death of a Treaty

Bermuda 2

Handley Stevens

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN: 9783319657042
• eBook ISBN: 9783319657059
• Topic: Politics & International Relations
• Subtopic: American Government
• Index: Politics & International Relations

This book offers an exceptionally well informed and well documented study of the processes by which a Treaty is not only created, but managed and adapted as a living organism, responding to changing political and economic circumstances throughout its life. Bermuda 2, which governed air services between the UK and the USA from 1977 till 2008, had to accommodate rapid but volatile market growth, conflicting policies for a more open market, and a market structure which evolved from national champions to multinational alliances. With stakes high enough for Presidents and Prime Ministers to intervene at key moments, the dramatic narrative (Part I) is helpfully cross-referenced to a fully annotated Treaty text (Part II) as well as a unique collection of supplementary documents (Part III). These three elements offer students of international law and international relations, as well as to-day's post-BREXIT practitioners, a comprehensive guide to the wide range of legal instruments and negotiating strategies that may be used to govern and regulate a major industry within the framework of a Treaty relationship.

Part IThe Narrative

© The Author(s) 2018

Handley StevensThe Life and Death of a Treaty https://doi.org/10.1007/978-3-319-65705-9_1

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Chapter 1 Introduction

Handley Stevens¹

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London, UK

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The title of this book—The Life and Death of a Treaty—makes the point that a treaty is not a static instrument, chiselled into tablets of stone like the Ten Commandments. It is a living organism. It has ancestors in treaties past, parents who give it life, endowing it with some of their own peculiar traits, and godparents to watch over its early development. As it grows up it may try to impose its will on the world about it, but it will also be changed by such encounters. It may have many children, as was certainly the case with Bermuda 1, or none at all, and ultimately, when it can no longer live and breathe and adapt to changing circumstances, it will be allowed to die. If it is lucky, it will receive the decent, respectful, but honest farewell which this book seeks to offer to Bermuda 2. Finally, in politics as in nature, death often makes way for new life, which is arguably what happened when the EU-US Agreement took the place of Bermuda 2, along with all the other air service agreements between the USA and the separate member states of the European Union.

Bermuda 2 is the common name given to the Air Services Agreement between the Government of The United States of America and The Government of the United Kingdom of Great Britain and Northern Ireland, signed at Bermuda on 23 July 1977.¹ It took the place of an earlier Bermuda agreement, now known as Bermuda 1, which had survived from 1946 to 1976, when the UK government gave the twelve months’ notice required to terminate it. Bermuda 2 remained in force from 23 July 1977 until 30 March 2008 when its application to air services between the United Kingdom and the USA was suspended under the Air Transport Agreement between the United States of America and the 27 Member States of the European Union (Air Transport Agreement 2007).

Since 2008 the ghost of Bermuda 2 has lingered on as the legal basis for air services between the United States of America and the remaining British territories in the Caribbean , as well as Bermuda itself, so it may be a slight exaggeration to speak of its death. There is a theoretical possibility that the main body of the Agreement, which at the time of writing (January 2017) has not been formally terminated, might have a new lease of life when the United Kingdom ceases to be a member of the European Union. All the options will be discussed in Chap. 7 (Conclusions), when it will also be possible to review in the light of the evidence how far Bermuda 2 as a bilateral treaty fits into the patterns of relationship between the European Union and the United States, identified and explored by Steven McGuire and Michael Smith (McGuire and Smith 2008).

Although this book tells the story of a single treaty governing air services, it is also a case study in the art of negotiation and in the practice of international diplomacy at every level of government. With so much at stake—the North Atlantic has long been a major source of profit for the international aviation business—the story itself is an exciting contest, hard fought and of sufficient importance to have engaged the periodic attention of Presidents and Prime Ministers. How did the negotiators, acting on behalf of the Contracting Parties (ie the two governments), succeed in reconciling the divergent policy objectives of their airlines and their governments over a period of thirty years to maintain an agreed framework for the operation of these critically important air services? If Britain’s departure from the European Union (Brexit) means that there will have to be a new air services agreement between the UK and the USA, what lessons should be drawn from Bermuda 2 for the shaping of such an agreement?

Finally, it is hoped that the juxtaposition of the narrative in Part I with the consequent Treaty changes in Part II, illuminated by the collection of supplementary documents in Part III, will give students of international law as well as international relations some insight into the capacity of a Treaty to accommodate and respond to change both in the external environment to which it relates, and in the policy preferences of the contracting parties. The hierarchy of legal instruments, both formal and informal, that was used to amend, modify, interpret or apply the Treaty is listed and described in the introduction to Part III.

The story of Bermuda 2 has been of sufficient academic interest and political salience to attract considerable attention over the years both in the Press and in academic journals. Flying in the Face of Competition (Dobson 1995) explains how Bermuda 2 accommodated the divergent policies of the US and the UK up to about 1994, including the major crisis in 1991 when Bermuda 2 was implicated in the demise of Pan American World Airways (Chap. 4). The negotiation of the EU-US Air Transport Agreement which superseded Bermuda 2 in 2008 also generated extensive coverage (Chaps. 6 and 7). However, this is the first book to attempt, in Chap. 7, a balanced assessment of Bermuda 2’s contribution to the rapidly changing structure of the international air transport industry over the full period of its life.

This first chapter sets the scene for the narrative account which follows in Chaps. 2, 3, 4, 5 and 6 by sketching in the nature of the air transport industry and the way it is regulated internationally, as well as the key differences between the UK and US airline industries, and between the aviation policies of the two governments. It outlines the scope and purpose of a bilateral air service agreement , as well as describing how such an agreement is negotiated, carried into effect, and where necessary changed. With this background to the industry and its framework of regulation , the reader should be able to follow the story of Bermuda 2 with an understanding of the industrial and political context within which its life was played out.

In a book about the air transport industry it is difficult, without cumbersome circumlocutions, to avoid using certain technical terms which may not be familiar to the general reader. Most of them will make their first appearance in this introduction, to which a glossary of aviation terms has therefore been attached.

An Industry Shaped by Regulation

In the case of almost any other industry, it would be appropriate to start with a discussion of the industry itself, before considering the rules developed to regulate it, but in the case of civil aviation, it makes better sense to start with the regulatory ground rules, since these began to be laid almost a decade before the first commercial flights took place, and it is arguable that the industry was shaped by those very early decisions. As long ago as 1910 politicians were worried about the potential vulnerability of their cities to attack from the air; the use of zeppelins to drop bombs on London in the First World War must have reinforced those concerns (Staniland 2008, 17). As a result, the 1919 Paris Convention on Civil Aviation stated unequivocally that ‘every power has complete and exclusive sovereignty over the airspace above its territory,’ and this approach was followed by the International Convention on Civil Aviation (the Chicago Convention), signed at Chicago on 7 December 1944,² which established the International Civil Aviation Organisation (ICAO)³ and laid the foundations for the regulation of the modern air transport industry. The wording used in Article 6 of the Chicago Convention is as follows: ‘No scheduled international air service may be operated over or into the territory of a contracting state, except with the special permission or other authorization of that state’.

It followed from these early assertions of sovereignty that the aircraft of one state wishing to land in another, or even to fly through another country’s airspace without landing, would require formal authority to do so. At Chicago the US Government had proposed a more ambitious International Air Transport Agreement that would have opened all markets to its strong airlines, but the United Kingdom, anticipating the need to secure protection for its severely weakened airlines when the war ended, led a majority of nations which insisted that the commercial rights to take on board or disembark passengers and freight must be negotiated and exchanged bilaterally.

One of the lasting legacies of the Chicago Conference is the series of definitions that appeared in the abortive draft International Air Transport Agreement, setting out the different rights (known as freedoms) which an airline might exercise. These ‘freedoms’ (for a fuller explanation, see the glossary) were classified as follows:

• First freedom—to fly across the territory of another state;
• Second freedom—to land in another state for non-traffic purposes;
• Third and fourth freedoms—to set down in another state (third freedom) and take on board (fourth freedom) passengers, mail and cargo to or from the airline’s home state;
• Fifth freedom —the right of the airlines of one state to set down and take on board, in the territory of another state, passengers, mail and cargo to or from a third country.

The first two freedoms are widely, though not universally, exchanged on a multilateral basis under the International Air Services Transit Agreement⁴ (IASTA), but the commercially valuable rights to pick up and set down traffic were jealously guarded by states, which often owned the airlines operating under their flag. These rights were therefore carefully defined and traded bilaterally, becoming in effect the currency of bilateral air service agreements. Other ‘rights’ have been defined and widely exercised, notably the use of third and fourth freedom rights to carry traffic between places not named in the same agreement by the use of connecting services (the so-called sixth freedom⁵) but it is only the five freedoms named above which are reflected in the route schedules of a bilateral air service agreement (for example, see Annex 1 of the Treaty at Part II). Like most bilateral agreements, Bermuda 2 was designed to accommodate mainly the traffic carried between the two Contracting Parties under the third and fourth freedoms, together with small volumes of fifth freedom traffic.

Bilateral Air Service Agreements

The first post-war air service agreement , signed at Bermuda on 11 February 1946 (Bermuda 1—1946) between the United States and The United Kingdom, established a widely followed template for such agreements. If the carriage of all revenue-earning traffic...

Table of contents

• Cover
• Front Matter
• Part I. The Narrative
• Part II. The Treaty
• Part III. Supplementary Documentation
• Back Matter