US Transport Secy Says Congress Won't Open US Airline Mkt BRUSSELS (AP)--U.S. Transportation Secretary Norman Mineta renewed Washington's opposition Tuesday to opening up the U.S. domestic market to European carriers - a key demand of the European Union for sealing an "open skies" civil aviation deal. After meeting with E.U. Transport Commissioner Loyola de Palacio, Mineta said he told her that allowing foreign carriers to fly between U.S. cities - in direct competition with U.S. airlines - wasn't going to fly. "It's a nonnegotiable item," Mineta said in a telephone interview ahead of a speech at the European Parliament. "It is something that Congress just will resist." Despite the stalemate, Mineta expressed confidence that U.S. and E.U. negotiators would be able to wrap up a "first phase" aviation agreement in time for U.S. President George W. Bush to sign it during a June 26 stopover in Dublin. Talks on liberalizing trans-Atlantic flight travel began last year after Europe's highest court ruled bilateral deals between Washington and individual E.U. countries were partly illegal because they discriminated against airlines from other E.U. nations. Mineta said Washington had made a major concession in accepting the concept of the "European airline," meaning Air France, for example, could fly to the U.S. from any E.U. airport, not just from France. He said the Bush administration also was willing to ask Congress to bring U.S. policy in line with E.U. rules by allowing foreigners to own up to 49% of a U.S. airline, up from the current 25% But opening up the domestic market to foreign competitors - a practice known as cabotage - is politically undoable, he said, especially with the U.S. airline industry still only gradually recovering from its post-Sept. 11 slump. "Cabotage is just to me off the table but I'm willing to go to Congress on increasing the ownership of voting stock from 25% to 49%," he said. The 15-nation E.U. doesn't allow cabotage either. But it has become a matter of principle for the E.U. in promoting itself as the world's largest single market. U.S. airlines can fly passengers from one European country to another, although most leave such flights to their European alliance partners these days. A spokesman for de Palacio couldn't be reached Tuesday, but the E.U. Commission, which is negotiating on behalf of the E.U., last week rejected the U.S. proposal for an initial agreement as insufficient. "European airlines would remain completely excluded from the U.S. domestic market, while U.S. carriers enjoy the right to fly between most E.U. destinations today," a spokesman said. In his speech at the parliament, Mineta said he would commit to a "definite timeline for continuing the discussion" after the initial deal is signed. The two sides are to meet again in Washington during the week of May 10. Dow Jones Newswires 04-06-041416ET Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved Roger EWROPS