Articles Eligible for Duty-Free Treatment Pursuant to the Agreement on Trade in Civil Aircraft
The global aerospace industry is rapidly expanding with massive investments in research, development, and production of new aircraft and related technologies. As the industry grows, it also provides opportunities for global trade, with many countries exporting and importing civil aircraft and related articles. To promote such trade and encourage investment in the industry, many countries have agreed on the Agreement on Trade in Civil Aircraft or the “Civil Aircraft Agreement.”
The Civil Aircraft Agreement aims to eliminate tariffs and other trade barriers on articles associated with civil aircraft, including aircraft, engines, and related equipment. It requires countries to provide each other with duty-free treatment on eligible articles. It also outlines specific requirements for countries to qualify for such duty-free treatment.
Which articles are eligible for duty-free treatment?
The Civil Aircraft Agreement covers a broad range of articles, including but not limited to:
1. Civil aircraft
2. Engines and parts thereof, including:
d. Exhaust systems
e. Turbine engine starter motors and controllers
f. Propellers and parts thereof
g. Auxiliary power units
3. Auxiliary equipment for use with civil aircraft, including:
a. Airborne electronic equipment
b. Emergency equipment
c. Ground servicing equipment
d. Ground power units
e. Hydraulic equipment
f. Navigation equipment
g. Oxygen equipment
h. Pneumatic equipment
i. Refrigeration equipment
j. Safety equipment
k. Water and waste systems
4. Parts and components used in the manufacture, assembly, or repair of the above articles.
To be considered eligible for duty-free treatment, these articles must meet specific requirements, such as being used exclusively for civil aircraft, manufactured in a country that is a signatory to the agreement, and must be accompanied by the appropriate documentation.
Why is the Civil Aircraft Agreement essential?
The Civil Aircraft Agreement provides a framework for countries to promote trade and investment in the civil aircraft industry while eliminating various trade barriers. It encourages cooperation and collaboration among countries, enabling them to share knowledge, technology, and best practices. By promoting an open and predictable trading regime for the sector, it stimulates competition, which can lead to improved product quality, reduced prices, and enhanced innovation.
Additionally, the Civil Aircraft Agreement contributes to the growth of the aerospace industry by increasing access to production inputs, boosting the competitiveness of the industry, and creating better job opportunities in the sector. It also ensures that the highest safety and environmental standards are maintained in the production, assembly, and use of civil aircraft.
The aviation industry is crucial to the global economy, generating significant revenue and creating employment opportunities. The Civil Aircraft Agreement plays a vital role in promoting trade in the industry by creating a predictable and transparent trading environment. By providing duty-free treatment on eligible articles, it eliminates trade barriers, encourages investment, and fosters innovation in the civil aircraft sector. The agreement offers significant benefits to countries, companies, and individuals involved in the industry, making it an essential framework for global trade.