Liberalization of international air transport in the Japan-United States market

The air transport regime, which was established under Bermuda I-type agreements, has been altered during the last two decades through the liberalization of international air transport. International air transport liberalization was initiated by the domestic deregulation of the US. After that, the US began exporting its liberalization policy to the international air transport market through liberal bilateral agreements. Since the early-1990's, the US has concluded numerous open skies agreements. Corresponding with the US liberalization policy, the EC initiated its regional liberalization and the EU achieved a fully open aviation market within the EU region through three liberalization packages.; While liberalization of air transport has been proceeding in the international market, Japan was seeking to amend the Japan-US Civil Air Transport Agreement of 1952, which was modeled on Bermuda I. The development of Japanese and US carriers made the agreement unsuitable for the reality of the Japan-US market. At the same time, the ambiguous capacity clauses of the agreement caused serious interpretive disputes. Japan was seeking a restrictive agreement while the US desired an open skies agreement. It became evident during air transport negotiations.; Japan and the US concluded an interim agreement in January 1998. The agreement of 1998 grants six carriers (three carriers for each country) unlimited third and fourth freedom rights and greatly liberalizes fifth freedom rights. The agreement also guarantees other Japan and US carriers very liberal third and fourth freedom rights and some limited fifth freedom rights. Furthermore, the agreement permits code-sharing in the Japan-US market for the first time.; Although the two countries managed to reach on agreement, Japan must amend the Japanese Aviation Act for more efficient code-sharing between Japan and US carriers and solve its serious airport congestion problem in order to expand services under the new agreement.