§ Mr. Wrigglesworthasked the Secretary of State for Trade if he is satisfied that the Bermuda Agreement between the United Kingdom and the United States of America is still an effective instrument for regulating scheduled air services.
§ Mr. DellThe Bermuda Agreement, which was negotiated in 1946 and was the first major Air Services Agreement to be negotiated after the Second World War has over the years become out of date in a number of respects and, in our view, no longer corresponds satisfactorily to the conditions of the 1970s. It has been evident for some time that the benefits the Agreement confers on the United States are much in excess of those gained by us.
During recent years, there has been a closer approximation to a balance of earnings from the rights to operate services across the North Atlantic, but it is clear that a substantial revision of the rights conferred by the Agreement is needed in order to achieve a more equitable balance of benefits overall. In addition the Agreement needs a number of improvements to make it function more efficiently. Its wording is less precise than that of more recent agreements. A more up-to-date text is needed to prevent the difficulties that have increasingly been encountered in its interpretation and implementation. Particular examples are the provisions relating to capacity and to fares.
Consequently, Her Majesty's Government believe that the time has come to renegotiate the Bermuda Agreement as a whole. Accordingly, we have requested consultations for a renegotiation and, pending the outcome of these consultations, we have served notice of termination of the existing Agreement. Such notice will run for 12 months from 22nd June 1976. In the meantime, we shall work constructively with the United States' authorities in order to secure the establishment of a more equitable and rational agreement.