US halts aid to Kosovo over tariff dispute with Serbia

By Fatos Bytyci

PRISTINA, March 13 (Reuters) - The United States is halting around $50 million in economic aid for Kosovo due to Kosovo's refusal to lift tariffs on goods produced in Serbia, a U.S. government agency said on Friday.

Kosovo introduced the tariffs in November 2018 after Serbia blocked the breakaway former province's membership of international organisations, including Interpol and UNESCO.

In response, Belgrade broke off talks with Pristina, saying it would continue only once the tariffs were removed.

Kosovo and Serbia have been in talks since 2011 to normalise relations, which would allow both countries to move towards European Union membership.

"Until Kosovo's tariff issue is resolved, MCC will pause implementation of the threshold program and development of the proposed compact program in Kosovo," said a press release from the Millennium Challenge Corporation or MCC, a U.S. government foreign assistance agency, referring to the aid package.

"Once a resolution (on tariffs) is reached, MCC will resume operations as appropriate," the statement added.

Prime Minister Albin Kurti has said Kosovo would remove the tariffs partially and with some conditions. (Reporting by Fatos Bytyci; Editing by Alex Richardson)