Japan and the United States have agreed to resolve their ongoing civil aviation dispute in September by resuming formal negotiations early next month in Tokyo, Transport Ministry officials said July 11.

The agreement was reached after three days of unofficial talks held in Portland, Ore. Both sides decided to hold official vice-ministerial level talks in Tokyo in early August toward an agreement over both passenger and cargo services.

Transport Minister Makoto Koga hailed the latest agreement as a major step forward. “Although there is still a gap in basic standpoints, the U.S. side strongly hopes to resolve the aviation issue in the early stage. We understand that the U.S. has a strong motivation to resolve the cargo service issue,” another ministry official said.

Federal Express Corp., a major American freight carrier, plans to provide service to Beijing and Shanghai via Japan from early next year. The U.S. needs to resolve its “beyond rights” dispute, which restricts service by American carriers to pick up passengers and cargo in Japan for destinations in a third country. Japan had said it would show flexibility in the “beyond rights” issues on freight services if the U.S. gives up its “open skies” pursuit and agrees to equalize conditions under the 1952 bilateral aviation treaty.

On the other hand, the U.S. maintains it would agree to set a transitional period if Japan agrees to the “open skies” policy as an ultimate goal under which the two countries would mutually remove all restrictions in civil aviation. In earlier discussions in Portland, the U.S. side proposed negotiating the cargo issue separately from the passenger issue. But Japan insisted the cargo and passenger issues should be handled together.

Japanese and U.S. sources said Tokyo is ready to allow FedEx to pick up more cargo in Japan for other Asian destinations as long as the freight makes up less than 50 percent of total revenue per flight. This would replace the current limit of 50 percent of the total cargo weight loaded from the U.S. to Japan.

The revenue-based method would substantially increase the volume of cargo FedEx could pick up in Japan because trans-Pacific charges are far higher than those between Japan and Asian destinations. Japan is also considering similar proposals for passenger carriers, the sources said.

In exchange, Tokyo wants Washington to show similar flexibility, particularly on its demand that the two sides work toward an “open skies” goal. At earlier talks, the two sides agreed to seek an interim deal that would last for three to four years, but remained divided on “open skies.”

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