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EU, Russia reach accord on ending Siberian overflight charges

The European Union said it reached an agreement with Russia to end its fees on EU airlines that fly over Siberia, removing a threat to Russian entry into the World Trade Organization.

The EU wanted Russia to reduce Siberian overflight charges over the next seven years and end the fees altogether from 2014. The European Commission said today it struck an accord with the Russian government on the issue without providing details. “This issue has been a trade irritant for the EU and Russia for a long time,” EU Trade Commissioner Peter Mandelson said in a statement released in Brussels. “Its resolution is important and shows that the EU and Russia can resolve trade disputes by negotiation where there is a will to do so.” Russia is the only country in the world to charge for overflight rights and the fees, which affect EU flights to Asia, cost European airlines €300 million ($393 million) a year. The policy is a relic of the Cold War, when Russian airspace was out of bounds and Russia excluded Siberia in return for a fee. As part of a 2004 political accord with the EU on Russia's WTO membership, the Russian government pledged to end the charges after 2013 and reduce them in the meantime. The government then failed to follow through with detailed plans, according to the commission, the 25-nation EU's regulatory arm. The commission said in March the EU may delay signing the WTO entry accord with Russia in the event the country refuses to produce plans for phasing out the charges. Finland, current holder of the bloc's rotating presidency, repeated the threat last month. Russia, the biggest economy outside the WTO, this month won US backing to join the Geneva-based trade body, clearing one of the last hurdles. (Bloomberg)