Kinnock defeat over air deals

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Business Editor

Neil Kinnock, the European transport commissioner, yesterday backed down publicly from his campaign to take control of negotiations over air transport between member states and the US.

Mr Kinnock said member states would be allowed to maintain their existing air traffic agreements with the US.

According to a report from Helsinki, he added that existing agreements would be the starting point for discussions when EU transport ministers meet to talk about "open skies" negotiations in Madrid next month.

Open skies agreements allow European airlines to choose their own destinations in the US. At present they are highly restricted in where they can go.

This is a reversal of Mr Kinnock's first high-profile moves after taking office, when he issued a strong warning that bilateral agreements with the US were illegal. He later threatened to sue half a dozen smaller member states that were ignoring him, and in April he extended this threat to the UK, which was also negotiating a bilateral deal with the US. He encountered fierce opposition from the Department of Transport, which reiterated yesterday that it believed member states were free to negotiate bilateral aviation agreements with the US, and this was entirely in accord with Community agreements and national law.

As late as June, the commission said it wanted to have sole negotiating rights on air traffic agreements with third parties.

Mr Kinnock had previously argued that the US was picking off European states one by one, initially by offering concessions to the smaller countries that had no large international airlines. Officials claimed that by reaching bilateral deals, the US was strengthening its bargaining power ahead of a planned liberalisation of the European airline market. US airlines want to compete on internal services round Europe.

The Brussels argument for centralising negotiations was that it would increase the negotiating power of Europe as a whole. However, Mr Kinnock found himself on the sidelines because six EU countries had already reached agreements with the US.