EU resolves Siberia overflight row with Russia

HELSINKI/BRUSSELS, Nov 24 (Reuters) The European Union said today it had agreed with Russia a resolution to a long-standing dispute over charges imposed on foreign airlines flying over Siberia.

The charges, which the European Commission says cost EU airlines more than 300 million dollars a year, were the main outstanding issue for the EU following its agreement with Russia on the country's entry to the World Trade Organisation.

Russia has agreed to phase out the overflight charges leading to elimination by the end of 2013, the EU said in a statement.

Russia had previously said it saw no need for a gradual reduction of the fees.

''This issue has been a trade irritant for the EU and Russia for a long time. 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,'' EU Trade Commissioner Peter Mandelson said in a statement.

Transport Commissioner Jacques Barrot said the pact would help normalise aviation relations between the two sides.

''The agreement will significantly improve the competitive situation of our European airlines and ease their operations between Europe and the growing markets in Asia,'' he said. The agreement will need to be ratified by EU member states.

A European Union official said any new transit paths would be subject only to normal management payments.

''New frequencies should be freer of the Siberian overflight payments,'' said the official, who asked not to be identified.

Other details have yet to be completed, the official said.

Overall, the payments will be phased out between now and 2013 with no new charges, another official said.

REUTERS DKA KN1636