The United States said on Tuesday it has signed a deal with the European Union, Iceland and Norway in which the European governments agreed to scrap restrictions on foreign airlines leasing planes and crew from U.S. carriers.

The EU in May 2017 agreed to open talks with the United States on the issue. The leasing of crewed planes from another airline - known as wet leasing - is a common practice in the industry to boost flexibility in meeting demand.

The State Department said Tuesday the deal would "remove one-sided time constraints on U.S. air carrier leases of aircraft with crew in the lucrative U.S.-EU air transport market.

(Reporting by David Shepardson and Lesley Wroughton)