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Chirac Tax: Biting the Hand that Feeds Development

The International Air Transport Association (IATA) continues to oppose…

The International Air Transport Association (IATA) continues to oppose French President Jacques Chirac`s tax on aviation for development.

If France is truly interested in solving the problems of developing nations, it should start by eliminating the problems that it creates. The tax is political posturing to divert attention from France`s failure to take down trade barriers that limit access to its markets, said Giovanni Bisignani, IATA`s Director General and CEO.

Bisignani suggested that Europe`s Common Agricultural Policy (CAP) offers an alternative. France receives EUR 11 billion of the EUR 50 billion CAP budget. A quarter of this—EUR 3.3 billion—is consumed by 5% of France`s farmers who are the largest and richest.

CAP does nothing more than subsidise the European farm sector at the expense of developing nations. Diverting even a fraction of France`s CAP budget to development assistance would generate much more than the proposed tax. And it would give the developing world a better chance to compete fairly in global markets, said Bisignani.

Not only is the French Government misguided in understanding the needs of the developing world, it does not even have a grip on what is going on in its own backyard. Airlines and their passengers already make a net contribution of EUR 726 million to France through already excessive aviation taxes and charges, said Bisignani.

Airlines support the fundamentals of development by bringing tourists to destinations and transporting goods to markets. Making air travel more expensive is akin to biting the very hand that feeds development, said Bisignani.

Theodore Koumelis
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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.