A bilateral U.S. foreign aid agency that specializes in development assistance in Kosovo has announced its suspension of a program to help boost prospects for economic growth in that decade-old Balkan state until Pristina "resolves" its "tariff issue" with neighbor Serbia.
In a March 13 press release, the U.S. government's Millennium Challenge Corporation said that it would "pause implementation" of a so-called threshold program to help provide reliable electricity to Kosovars and encourage rule of law, good governance, and transparency along with another program known as a "compact."
Authorities in the partly recognized Kosovo levied a 100-percent tariff on Serbian goods in November 2018 over Belgrade's diplomatic campaign to encourage some of the 110-plus countries that have recognized Kosovo since it declared independence from Serbia in 2008 to reverse their position.
The United States is one of Kosovo's biggest backers and is generally highly regarded by Kosovars since leading a NATO operation in 1999 to force Serb-led Yugoslav troops out of Kosovo and usher in an international presence there.
But Washington regards the tariffs as a major obstacle to a resumption of talks on normalized Serbian-Kosovar relations, the subject of years of EU- and U.S.-mediated negotiations and a source of instability in the region.
U.S. special envoy for Serbia and Kosovo Richard Grenell has led an intense push recently to restart those talks, including several breakthroughs that could initially restore transport ties between the two former Yugoslav entities.
Newly appointed Kosovar Prime Minister Albin Kurti's government on February 27 announced it would temporarily and partly lift the tariff.
Kurti has repeatedly said he seeks "reciprocity" in Serbia-Kosovo relations.
Kurti on March 13 said Kosovo would not lift the 100 percent tariffs any time soon because the coalition government could not agree on whether the import fees should be phased out or all eliminated immediately.
Kurti said his Self-Determination Movement (Vetevendosje) seeks a phased lifting of tariffs, while the main governing partner, the Democratic League of Kosovo (LDK), wants them dropped at once.
With the parties unable to reach a compromise, Kurti said that “everything remains as it is, the 100 percent tax remains.”
Grenell described any partial repeal as a “half measure.”
Grenell earlier this month brought Kosovar President Hashim Thaci -- a Kurti rival -- and Serbian President Aleksandar Vucic together at the White House to discuss ways to reach a final agreement between the two Balkan countries.
A member of the U.S. Senate Armed Services Committee, David Perdue (Republican-Georgia) on March 10 called on Kosovo to "do its part" and annul the tariffs on Serbian goods and services or face a withdrawal of U.S. troops.