On June 2, 2021, the Association of Southeast Asian Nations (ASEAN) and the European Union (EU) agreed to the world’s first bloc-to-bloc air transport agreement through the ASEAN-EU Comprehensive Air Transport Agreement (AE CATA).
The AE CATA, once formalized, will bolster connectivity between the EU and ASEAN, which has been decimated by the pandemic. The agreement allows airlines of ASEAN and EU countries to fly any number of non-stop passenger and cargo services between the two regions.
In addition, airlines will also be able to fly up to 14 weekly passenger services with one-stop within the other region to pick up passengers on the return leg. There is no limit for cargo flights. ASEAN and the EU hope the agreement will make their respective airlines more competitive as their international airline routes are currently dominated by carriers from the Middle East.
Importantly, the AE CATA can increase cooperation in technical areas, such as aviation safety, consumer protection, air traffic management, and environmental issues.
The AE CATA can improve trade between ASEAN and the EU
Besides the liberalization of air transport, the AE CATA can strengthen reciprocal prospects for trade and investment between ASEAN and the EU.
ASEAN is the EU’s third-largest trade partner (after China and the US) with over 189 billion Euros (US$223 billion) worth bilateral trade of goods recorded in 2020, and 93 billion Euros (US$110 billion) worth bilateral trade in services recorded in 2019.
The EU is by far the largest investor in ASEAN countries. Some 313.6 billion Euros (US$370 billion) in foreign direct investment (FDI) stocks went to ASEAN members throughout 2019. Further, ASEAN investments into the EU have also steadily increased to a total stock of 144 billion Euros (US$170 billion).
Source: ASEAN Briefing
Author: Ayman Falak Medina
Original published date: 15 July, 2021
Read full article here https://www.aseanbriefing.com/news/asean-eu-agree-to-worlds-first-bloc-to-bloc-air-transport-agreement/
July 19, 2021
