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Abu Dhabi, UAEFriday 22 June 2018

US-UAE Business Council optimistic Open Skies Agreement will remain

Anti-Gulf carrier provisions dropped from US tax bill 

Danny Sebright says the US-UAE business council has worked hard to convince the US administration of the importance of the Open Skies agreement. Cliff Owen / AP Photo
Danny Sebright says the US-UAE business council has worked hard to convince the US administration of the importance of the Open Skies agreement. Cliff Owen / AP Photo

The ongoing dispute between the US’s three largest airlines and their Arabian Gulf counterparts has reached a point where US government action to revoke Open Skies agreements between the parties is unlikely to be taken, according to the president of influential membership body the US-UAE Business Council.

“I think we’ve done a good job of inoculating against various efforts by the US carriers to find a champion on the inside of [President] Trump’s administration. Now I think we’re at a good place with it,” Danny Sebright told The National in an interview.

“The UAE ambassador and his team, as well as key US firms, have done a really good job of informing the Trump administration of the importance of [maintaining Open Skies agreements between the two countries].

“Saying that, it is still a critically important issue, and we have work to do to prevent legislative action that is not supported by the Trump administration,” Mr Sebright added.

For years, the US carriers have lobbied federal government to curb Gulf carriers’ expansion in the states, which they claim represents “unfair competition” and breaches Open Skies agreements.

They also argue that the three largest Gulf carriers - Etihad, Emirates and Qatar Airways - receive subsidies from their governments to “unfairly” spur their growth. All three deny the claims and insist they have brought substantial economic benefits to the US.

Mr Sebright said his council has sought to communicate “the facts from our point of view,” in Washington circles, and dispute the notion that the Gulf airlines are heavily subsidised.

“The bottom line is that Open Skies doesn’t have anything to do with subsidies. There is no provision in Open Skies anywhere that deals with subsidies,” he said.

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“The US carriers are trying to invent an issue over subsidies and use existing bilateral Open Skies agreements as a false basis to change policy.”

“What we need now is for the Trump team to review the issue, deal with the false allegations and put this issue behind us once and for all.”

A proposal to remove a longstanding tax exemption for foreign airlines was removed from Donald Trump’s tax reform bill at the weekend. The amendment was included in the bill last month by Senator Johnny Isakson of Georgia, whose constituency is home to Delta Air Lines.

Mr Sebright dismissed Senator Isakson’s amendment as “an attempt by US carrier Delta to destroy competition.”

The aviation industry on Saturday welcomed news that the amendment had been pulled, with Abdul Teffaha, secretary-general of the Arab Air Carriers Organisation (AACO), declaring that, “reason had prevailed”.

Abu Dhabi’s Etihad Airways said that the proposed tax "failed a broad set of international and US legal obligations and received almost universal opposition when its true purpose was revealed.”

The US-UAE Business Council serves as a facilitator for good business relations between the two countries. Mr Sebright has strong links with Washington, having begun his career as an intelligence officer in the Defence Intelligence Agency, serving in the Gulf, before working for former US defence secretary Donald Rumsfeld.

The organisation has grown from 80 member companies in 2015 to more than 150 companies today. “The UAE is the nexus between East and West,” Mr Sebright said. “Even despite [regional tensions], this place is still first choice for an American company coming to do business in the region.”

However, he warned that US businesses in the UAE have to be careful not to get caught up in “Trump rhetoric” about American jobs being transferred abroad.

“Opening a new office in the UAE may mean tens of new jobs there, but the ensuing sales can represent hundreds if not thousands of new jobs back home. Companies must be careful to communicate this message,” he said.