Merry -- I did'nt think US or EC law (or air treaties) governed FF programs. In AA's case you can receive credit on Iberia flights (they compete MIA - MAD) and JAL (they will be competing DFW - NRT and I think they already compete ORD - NRT). Granted you don't get elite qualification (yet). The original AA press release that announced the proposed AA-BA alliance is no longer available on the AA web site, but I seem to recall that they said they could go ahead with reciprocal FF arrangements because this fell outside of the existing treaties between the US and EC. I think it is simply a commercial decision - why would either AA or BA want to loose their share on one of the most profitable set of routes in the world, even if it is to each other.