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US Move "kills" Open Skies ... For Now!  
User currently offlineKaitak From Ireland, joined Aug 1999, 12328 posts, RR: 35
Posted (7 years 4 months 3 weeks 20 hours ago) and read 9653 times:

Well, pretty much as expected, the US DOT has announced that plans to issue a new rule on foreign ownership of US carriers - seen as the major barrier to an EU/US Open Skies deal - have been scrapped. Thus, there will be no deal. The US has only just announced its plan, so the chain of events leading to a metaphorical mushroom cloud emanating from the EU Commission won't be evident yet; sufficeth say, it will be a very good opportunity to learn swear words in a wide variety of European languages. (Merde! Schweinhund! Ay carumba!)

http://www.rte.ie/business/2006/1205/airlines.html

Anyway, we'll see what the EU Commission says and how it will react, but the ball is in its court now. Frankly, I have very little sympathy for the Commission; I think it was duped. There was a small group of airlines, indeed arguably just one (BA) - which was demanding something which it knew was a non-runner, because the last thing BA wants is hordes of EU and US carriers competing on its prime LHR-US routes. And what better way to frustrate negotiations than to demand something it knew was not on the table. And the EU itself didn't help by demanding cabotage.

So, where to from here? The EU has to refocus its efforts on what is going to be possible. At the end of the day, everyone knew that the issue of O/S would founder on LHR access and US ownership; they must see that this is the key obstacle, so why hold everyone else up when this is clear? They could be negotiating for six years more and it would still come down to this and BA would still find a way to frustrate the whole thing - canny people, they, when they want to be.

This is going to be fun to watch ...

70 replies: All unread, showing first 25:
 
User currently offlineTristarSteve From Sweden, joined Nov 2005, 3934 posts, RR: 34
Reply 1, posted (7 years 4 months 3 weeks 19 hours ago) and read 9604 times:

Well BA knew this would happen.
I saw some planning document for 2008 and it said..all figures quoted assume no open skies..


User currently offlineCommavia From United States of America, joined exactly 9 years ago today! , 11147 posts, RR: 62
Reply 2, posted (7 years 4 months 3 weeks 19 hours ago) and read 9519 times:

This was pretty much a given. As far as I'm concerned, the Bush Administration should just forget about trying to get any E.U.-U.S. bilateral air treaty done in the last two years of his presidency. As long as the Democrats and their labor union fundraisers are calling the shots on Capitol Hill, there is now way they will ever go along with any plan that could have even the slightest chance of jeapordizing a single U.S. airline worker's job in the name of economic liberalization.

User currently offlineElmoTheHobo From United States of America, joined Aug 2006, 1534 posts, RR: 1
Reply 3, posted (7 years 4 months 3 weeks 14 hours ago) and read 9198 times:

Quoting Commavia (Reply 2):
As long as the Democrats and their labor union fundraisers are calling the shots on Capitol Hill, there is now way they will ever go along with any plan that could have even the slightest chance of jeapordizing a single U.S. airline worker's job in the name of economic liberalization.

Uh are you serious?? We have a Republican president, a Republican Senate, a Republican House of Reps, a conservative Supreme almost entirely appointed by Republicans. I guess it's still the Democrat's fault though, right?

Remember, Clinton was the one that pushed Free Trade forward to what it is now.


User currently offlineFalcon84 From , joined Dec 1969, posts, RR:
Reply 4, posted (7 years 4 months 3 weeks 14 hours ago) and read 9195 times:

Quoting Commavia (Reply 2):
there is now way they will ever go along with any plan that could have even the slightest chance of jeapordizing a single U.S. airline worker's job in the name of economic liberalization.

Translation; "More outsourcing, please".

That's all we need-to get rid if more decent U.S. jobs in the name of "economic progress."  Yeah sure


User currently offlineElmoTheHobo From United States of America, joined Aug 2006, 1534 posts, RR: 1
Reply 5, posted (7 years 4 months 3 weeks 14 hours ago) and read 9188 times:

A liberalized aviation deal isn't going to lead to outsourcing, it's going to mean more foreign involvement in the aviation industry - and more foreign capital. This will create more jobs in the long run.

User currently offlineBlrsea From India, joined May 2005, 1393 posts, RR: 3
Reply 6, posted (7 years 4 months 3 weeks 14 hours ago) and read 9164 times:

I don't understand how open skies will lead to job losses? The european airlines won't be flying domestically within US, so US airlines will still be operating just as they are now. Won't more flights from Europe mean more money spent in US for airport, crew stay, crew spendings, support services for those flights etc?

User currently offlineCommavia From United States of America, joined exactly 9 years ago today! , 11147 posts, RR: 62
Reply 7, posted (7 years 4 months 3 weeks 13 hours ago) and read 9125 times:

Quoting ElmoTheHobo (Reply 3):
Uh are you serious?? We have a Republican president, a Republican Senate, a Republican House of Reps, a conservative Supreme almost entirely appointed by Republicans. I guess it's still the Democrat's fault though, right?

Nobody every used the word "fault" or assigned any blame.

What I was saying is that this deal had a hard enough time even getting attention with the Republican Congress, so the chances of it getting even brought up for discussion by the Democrats -- especially after they've just been handed control of both houses of Congress in large part due to fears about globalization -- is less than zero. The Dems already made rumblings before this announcement that they would punish the DoT if it decided to proceed with these proposed rulemakings. That was the death knell.

Am I saying its the Democrats' "fault?" No. Am I saying that the pro-union, increasingly globalization-sceptic Democrats will make it virtually impossible for the DoT to carry out this proposal without paying for it dearly? Yes.


User currently offlineIloveboeing From United States of America, joined Oct 2005, 771 posts, RR: 0
Reply 8, posted (7 years 4 months 3 weeks 13 hours ago) and read 9093 times:

I really wish we would have Open Skies. Open competition will benefit all. It will help keep all carriers in line, and keep their costs in check. They'll all be forced to compete, instead of just exist. Competition is also a win-win for the consumers in both the US and Europe.

User currently offlineBistro1200 From United States of America, joined Oct 2003, 337 posts, RR: 4
Reply 9, posted (7 years 4 months 3 weeks 11 hours ago) and read 8943 times:

Funny, I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.


Measure to the millimeter, mark with a crayon, cut with an axe.
User currently offlineElmoTheHobo From United States of America, joined Aug 2006, 1534 posts, RR: 1
Reply 10, posted (7 years 4 months 3 weeks 10 hours ago) and read 8905 times:

Quoting Bistro1200 (Reply 9):
I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.

Now the issue with that is yes Americans are working at those institutions, but unless that BMW is made in South Carolina, you are sending your money to pay a German worker when in theory that work could be done in the USA.

To get around this a lot of companies are building manufacturing plants in the US. BMW has a plant in South Carolina, Toyota has plants across the US, heck, even Airbus is building (or might build) a plant in Mobile to build KC-30s.

Quoting Blrsea (Reply 6):
I don't understand how open skies will lead to job losses?

Management jobs might get sent overseas, foreign management may be more willing to outsource work to other countries where costs are lower. Really a lot of senseless Xenophobia. (One of the reasons we're building a damned wall along the Mexican border).

Quoting Falcon84 (Reply 4):
That's all we need-to get rid if more decent U.S. jobs in the name of "economic progress."

A lot of people seem to forget that outsourcing doesn't just happen in the US. Foreign companies outsource work to the US, whether it be R/D, manufacturing or white collar work. But you are right, a lot more high paying jobs are leaving than are being created.

The economy works in a cycle, so who knows, in 20 years the trend may reverse itself and more high paying jobs may return to the US.


User currently offlineBlrsea From India, joined May 2005, 1393 posts, RR: 3
Reply 11, posted (7 years 4 months 3 weeks 9 hours ago) and read 8837 times:

Quoting ElmoTheHobo (Reply 10):
Management jobs might get sent overseas, foreign management may be more willing to outsource work to other countries where costs are lower. Really a lot of senseless Xenophobia

What management jobs? A handful of top guys might be from other countries, but what else will be outsourced? The ground staff, the flight crew, the mid-level management all will continue to be in US. I just don't buy the argument that allowing more foreign investment will lead to job losses.


User currently offlineANother From , joined Dec 1969, posts, RR:
Reply 12, posted (7 years 4 months 3 weeks 9 hours ago) and read 8771 times:

Quoting ElmoTheHobo (Reply 3):

Remember, Clinton was the one that pushed Free Trade forward to what it is now.

If you go a little further back US domestic deregulation happened when Jimmy Carter was in the White House.


User currently offlineElmoTheHobo From United States of America, joined Aug 2006, 1534 posts, RR: 1
Reply 13, posted (7 years 4 months 3 weeks 8 hours ago) and read 8754 times:

Quoting Blrsea (Reply 11):
A handful of top guys might be from other countries, but what else will be outsourced

That's the point. Currently, a significant portion of upper management must be American, as well as 75% of a company's equity. Move management overseas or bring in managers from overseas who aren't as big on the whole "buy American" thing (not that there are many left), and you could see a whole lot of work that was once done in the US shipped abroad.

Also, maintenance work, customer relations, etc... could be moved abroad.

Quoting ANother (Reply 12):
If you go a little further back US domestic deregulation happened when Jimmy Carter was in the White House.

True, but it was Reagan and Clinton who really pioneered free trade agreements.


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5222 posts, RR: 7
Reply 14, posted (7 years 4 months 3 weeks 8 hours ago) and read 8733 times:

Quoting ANother (Reply 12):
If you go a little further back US domestic deregulation happened when Jimmy Carter was in the White House.

Yes, but he also agreed to Bermuda II. I guess that was before he was born again, again.



Consilivm: Cave ne nothi te vexant
User currently offlineANother From , joined Dec 1969, posts, RR:
Reply 15, posted (7 years 4 months 3 weeks 7 hours ago) and read 8662 times:

Quoting ElmoTheHobo (Reply 13):
That's the point. Currently, a significant portion of upper management must be American, as well as 75% of a company's equity.

The DOT wasn't proposing to change this rule. Have a look at Jeff Shane's speach here. to see what this really is all about.

But tell me, why does a CEO of a US airline have to be a US citizen? Ford, or GM don't have such rules - nor does Boeing, or other suppliers to the US Military.


User currently offlineN1786b From United States of America, joined Sep 2005, 558 posts, RR: 17
Reply 16, posted (7 years 4 months 3 weeks 4 hours ago) and read 8568 times:

Quoting ANother (Reply 15):
But tell me, why does a CEO of a US airline have to be a US citizen? Ford, or GM don't have such rules - nor does Boeing, or other suppliers to the US Military.

The requirement for a US citizen to be the head of an airline has an historical context that reaches back to the establishment of Flag carriers. Even today in Europe, this can still be seen with the "golden shares" held by governments, or fancy financial holding companies that own but do not 100% control bi-national airlines (I am thinking of Air France / KLM).

IIRC suppliers to the Pentagon DO have to have an American in control. With companies like BAE systems and Bell Labs (part of Lucent recently merged with France's Alcatel), there are programs that only US citizens have access to and lead - just ask BAE systems about their Pentagon deals. And the opposite is true as well - the French only deal with the French (Thales for instance - has international sections and French sections - even in their BUILDINGS) and there are parts of EADS where the Spanish and Germans have no place (the French strategic missle programs)

- n1786b


User currently offlineChrisNH From United States of America, joined Jun 1999, 4013 posts, RR: 2
Reply 17, posted (7 years 4 months 3 weeks 4 hours ago) and read 8537 times:

Quoting Bistro1200 (Reply 9):
Funny, I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.

Nooooooooooooooo...that's altogether 'different,' you see. The Unions here and the Liberals need to give you this pair of cute, colorful glasses so that you can see things the way they OUGHT to be seen...Their way.

As an aside, I wonder how all the Americans who have jobs and are waiting for Virgin AMERICA to take wing are feeling right about now?

Chris in NH


User currently offlinePar13del From Bahamas, joined Dec 2005, 6743 posts, RR: 8
Reply 18, posted (7 years 4 months 3 weeks 3 hours ago) and read 8492 times:

Maybe some experts in this field could explain something to me.
The US and a lot of American's push free trade, yet the US trade deficit is growing every year, while countries trading with the US are either even or working on a surplus, how is free trade supposed to aid the US?

The US currently has a lot of carriers, and in many area's too much capacity, how exactly would open sky's benefit, by introducing more competition, more capacity? If the problem within the US is poor service, the only way to solve that is by having "foreigners" do the job? Presently, how many foreign carriers have crew bases in the US, and how many use American crews?

Foreign flights into the US are turned around within hours, many with the same crews, for those flights why would that change under open sky's?

Is this really about service to the customers?


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5222 posts, RR: 7
Reply 19, posted (7 years 4 months 3 weeks ago) and read 7936 times:

Quoting Par13del (Reply 18):
The US and a lot of American's push free trade, yet the US trade deficit is growing every year, while countries trading with the US are either even or working on a surplus, how is free trade supposed to aid the US?

Theoretically every country in the world performs whatever work it can do most economically and trades without impediment; and, if a country prices itself out of the market, it either devalues its currency, suffers from unemployment, or finds some other product or service to produce.

In its purest form it doesn't work; but neither does autarchy.



Consilivm: Cave ne nothi te vexant
User currently onlineMaverickM11 From United States of America, joined Apr 2000, 16985 posts, RR: 48
Reply 20, posted (7 years 4 months 3 weeks ago) and read 7825 times:

Quoting ElmoTheHobo (Reply 3):
We have a Republican president, a Republican Senate, a Republican House of Reps, a conservative Supreme almost entirely appointed by Republicans. I guess it's still the Democrat's fault though, right?

Yes. It is the Democrat's fault:

http://www.atwonline.com/news/story.html?storyID=7273

"Bowing to domestic political pressure exacerbated by the Democrats' rise to power in last month's midterm elections, the US Dept. of Transportation yesterday abandoned its 13-month effort to ease restrictions on foreign control of domestic airlines, delivering a setback to a potential open skies agreement with the EU."



E pur si muove -Galileo
User currently offlineFlying-Tiger From Germany, joined Aug 1999, 4151 posts, RR: 37
Reply 21, posted (7 years 4 months 2 weeks 6 days 23 hours ago) and read 7721 times:

Quoting Par13del (Reply 18):
The US and a lot of American's push free trade, yet the US trade deficit is growing every year, while countries trading with the US are either even or working on a surplus, how is free trade supposed to aid the US?

Basically an easy answer: currently citizens of the US spend future income by spending borrowed money. Thus, they consum more today than they can actually justify with their current income. That means that consumption (and thus import of manufactured goods) is higher than it actually should be to keep the financial house in order.

=> It is thus not the fault of free trade, but more of excessive spending which increases the trade gap.



Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
User currently offline727forever From United States of America, joined Jan 2006, 793 posts, RR: 5
Reply 22, posted (7 years 4 months 2 weeks 6 days 23 hours ago) and read 7413 times:

Quoting Bistro1200 (Reply 9):
Funny, I have seen Americans working at BMW dealerships, Shell gas stations, and Ikea stores all here in the USA.

This is a good point except for one little difference. I haven't seen to many BMW dealerships, shell gas stations, or Ikea stores where the employees desk or counter can skip across several continents within a single day. Cabotage is a real threat to airline flight crewmembers. You wouldn't see ground handlers and gate agents of foreign citizenship on a massive scale but you certainly could see flight crewmembers of foreign citizenship. Those flight crewmembers could start their 2 or 3 week long trip in China on an A340, fly to the U.S., then hop into the company A320 and bounce around the U.S. for a couple of weeks, then fly the A340 back to China. Quite feasable under cabotage and I for one am glad that this is squashed for now. I've watched my dad suffer for years as his manufacturing work goes abroad to China and India due to lower wages in those countries. I will fight to ensure that my work does not do the same.

727forever



727forever
User currently offlinePEK18R36L From China, joined Dec 2005, 107 posts, RR: 0
Reply 23, posted (7 years 4 months 2 weeks 6 days 22 hours ago) and read 7229 times:

Quoting 727forever (Reply 22):
Cabotage is a real threat to airline flight crewmembers.

The flow of crews works both ways. I was on a domestic Air China flight Beijing to Shanghai the other day, and the flight deck was an Aussie pilot and a British co-pilot.

China is now actively hiring FOREIGN pilots for its airlines - and will be for decades - because it can't produce flight crews fast enough and of sufficient quality.

While your scenario is feasible under cabotage, it is unlikely in the foreseeable future. Chances are greater you'll be spending 2-3 weeks popping around Asia on a flight deck under open skies.

However, if you've got some links to some juicy reports generated/sponsored by ALPA, I'd be happy to have my mind changed.

David



In China, everything is possible - but nothing is easy.
User currently offlineBistro1200 From United States of America, joined Oct 2003, 337 posts, RR: 4
Reply 24, posted (7 years 4 months 2 weeks 6 days 22 hours ago) and read 7208 times:

Quoting 727forever (Reply 22):
Cabotage is a real threat to airline flight crewmembers. You wouldn't see ground handlers and gate agents of foreign citizenship on a massive scale but you certainly could see flight crewmembers of foreign citizenship.

Any of the proposed deals involving open skies relate less to labor (in terms of using foreign nationals on domestic routes) and more to capital. In fact, it's been spelled out in a couple of presentations that "flights operating completely within the USA would have to use staff that have a legal right to work in the USA". Just because the workplace has wings does not make it immune to US Labor law.

Look, I'm as opposed to foreign nationals working US flights as anyone, but that isn't a threat here. The Department of Labor says that to work in the USA, you have to have a legal right to work in the USA. Same goes for US crewmembers working intra-EU flights.

And finally, by the nature of this rule, the demand for inflight, pilot, and other types of jobs will increase and *should* increase wages for all involved. If BA, QF, and LH were looking for US citizens to work their intra-US flights, that would be a good thing, right?



Measure to the millimeter, mark with a crayon, cut with an axe.
25 Charlienorth : Nothing better than being aboard an aircraft overhauled in Honduras. Give credit where credits due..Thank You Democrats!! Meaning labor..Right??
26 TristarSteve : But you have an American handle!! I thought all yanks were protectionist. Like BA you mean? Ex CEO Eddington Australian CEO Walsh Irish. Yes I unders
27 Post contains links Travelin man : The US already has "open skies" agreements with (in order of date signed): Netherlands Belgium Finland Denmark Norway Sweden Luxembourg Austria Icelan
28 ElmoTheHobo : Archaic laws that no one has taken the time to change. ... and the Republicans never spin things in their favor. I coudn't give a sh!t how many sales
29 MaverickM11 : Calm down there...that's what the article said. I happen to agree, but honestly, this one of the more black and white cases out there. The Democrats
30 Post contains images Blrsea : Add India to that list too. Isn't NW or some other US airlines already doing that? Businesses go where they can to cut cost/make profit. Doesn't the
31 Lowrider : I look at this open skies idea and I have to wonder, what's in it for the US? Do we need more airlines? More capacity? We already have a wide selectio
32 Pope : A US Treaty obligation trumps a statute or regulatory ruling. Therefore, technically this is not an impediment to anything. The Senate would simply ha
33 Travelin man : That was a list of just the European countries the US has Open Skies with, but there are a number of others, including India.
34 MasseyBrown : Aviation bilaterals (open skies or not) are agreements, not treaties; they do not require Senate concurrence.
35 Kaitak : The list also includes some countries like Switzerland, Iceland and Bosnia, which are not actually EU members. Obviously, as you'll see from the littl
36 Getdonnie : Does this impact the launch of Virgin America?
37 Post contains images ANother : Why should it? Virgin America is majority owned by US citizens and has show that they meet all of the DOT's current rules for ownership and control.
38 Travelin man : So Ireland cannot negotiate an Open Skies bilateral with the US as other European countries have done? I thought aviation was a sovereign power of in
39 VV701 : The Bermuda 2 Agreement is, under EU law, illegal. It is therefore a priority of the EU that there should be an Open Skies agreement between the UK a
40 Threepoint : Nor will it, in Canada at least. Transport Canada (and I presume the air carriers as well) are adamantly opposed to cabotage by any foreign airlines
41 ElmoTheHobo : True, I also said earlier that management would be more willing to do so. I don't believe any US carrier has outsourced all of its maintenance to a 3
42 Travelin man : The statistics are interesting. But you have to make a point of differentiation. Which of those airports you mentioned have competition actively cont
43 Aa757first : Not all, but I think a lot of America West and jetBlue aircraft have heavy maintenance done somewhere in Central America. AAndrew
44 Sllevin : But it wouldn't be open competition at all, because we're not starting from a level playing field. Carriers with existing LHR slots will be able to c
45 Travelin man : How is that fair to UA and AA, which DID have to pay $$$ for their LHR slots? (via buying them from TWA and Pan Am).
46 Blrsea : And quite a few other airlines too which have paid good money for gates at LHR!!
47 VV701 : Except that: Access to DFW is controlled by treaty. Under Bermuda 2 neither AA nor BA can fly DFW-LHR. Access to IAH by BA is controlled by treaty, n
48 ElmoTheHobo : True. JetBlue gets their heavy maintenance work done in Canada by Air Canada IIRC. JetBlue never had major maintenance & overhaul (facilities for C c
49 Sllevin : First off, AA and UA have made significant premiums from flying to Heathrow. They bought rights to be one of just two US carriers that could operate
50 ANother : That's not completely correct. I'll try and keep this simple (if anything dealing with EU is simple) The European Commission took those Member States
51 Travelin man : Honestly, I am not quite sure what you are arguing. The US wants "Open Skies" with the UK. Meaning any US or UK airline can fly to any US or UK airpo
52 ANother : Sorry for the confusion. You need to look at what is happening in Europe as being evolutionary. The Member States want to see some success (the US be
53 Travelin man : But Ireland, which does not have Open Skies with the US, is prohibited from opening those discussions directly with the US? It would be a shame if th
54 Post contains links Kaitak : You're telling me it is! If it were something Ireland specifically wanted, then one could understand the EU telling Ireland to stay put, but clearly A
55 ANother : You keep bringing up the "LHR situation". To be clear the Europeans (i.e. Brussels and all the member states) are prepared, subject to some condition
56 ANother : Of course, but I am sure that a number of the MS will argue to keep the multilateral approach. United we stand, divided we fall. Is it a question of
57 Kaitak : It's not as if the Irish govt had a choice; the EU got its mandate to negotiate from the ECJ as a result of the action it took against Germany (and o
58 ANother : Sorry Kaitak, but the 'Council of Ministers' the representatives of the Member States gave the mandate to the European Commission. And the message fr
59 IADLHR : Niether AA or UA is really a loser. AA would get to operate DFW-LHR and RDU-LHR if they decided to move that flight to LHR. In addition, under opensk
60 MasseyBrown : I think you would have been right if Ms. Palacio were still in charge of air transport matters. For a European bureaucrat, she had a real sense of "D
61 Kaitak : Thank you, ANother - very interesting, but I have to say I am still confused. May I just copy some comments passed to me by the Transport Commissione
62 Travelin man : I fundamentally disagree with this. VS, BA, UA, and AA have every reason to maintain the status quo at LHR. Requesting cabotage within the US and the
63 ANother : What you posted, it seems to me, to be what would happen when the agreement negotiated by the EC with the US was implemented. Had that agreement been
64 Kaitak : I agree with this completely; I just don't see the upside for the UK govt or VS/BA to this and I would think that this "spanner in the works" is one
65 Post contains images Ikramerica : Whenever this example is thrown in, I know the poster is purposely trying to distort the issue. These rights were negotiated in a different time. The
66 ANother : I think you are purposely trying to distort the issue. The agreement on the table for signature contains unlimited 5ths for both parties. In the EU t
67 Kaitak : Does anyone know when the EU Ministers are supposed to meet; I thought it was this week, but I'm not sure when, exactly. With all due respect, while t
68 Post contains links ANother : 11/12 December see: http://www.eu2006.fi/calendar/vko50/en_GB/1147700142524/ Kaitak - It really isn't up to the Commission, it's the Council who will
69 Kaitak : I have no expectation that they will sign; I just want to know where they will go next and what stance they will take. At least we don't have too long
70 ANother : As it is a report from the Commission I doubt if there will be much of a debate. They likely will 'note' the report and send them off to negotiate so
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