US-EU reach tentative deal on "open skies" pact

WASHINGTON (Reuters) - The United States and the European Union reached a tentative deal on Friday to dramatically expand aviation service and boost competition on both sides of the Atlantic.

Negotiators made substantial progress in the State Department-led talks this week on the breakthrough agreement, which must be reviewed by EU transport ministers, who will meet next month.

Europe is conditioning approval on a crucial side issue -- the U.S. proposal to ease some limits on foreign investment in American carriers. European negotiators first want to ensure the Transportation Department plan is finalized and that it would facilitate greater investment opportunities and wider access to important travel markets.

Daniel Calleja, the European Commission director general for aviation, called the "open skies" agreement a "significant step" and said chances for approval in Europe were good, if the ownership question moves "in the right direction."

The agreement has remained elusive for years and does not require U.S. congressional approval. Nevertheless, there has not been universal support among lawmakers, airlines and labor groups in the United States for further opening the transatlantic market. The Bush administration said it plans to move forward carefully on Capitol Hill.

If approved, the deal would eliminate remaining restrictions on service and routes between European and U.S. destinations. It would also effectively remove fiercely protected competition barriers to London's Heathrow airport, Europe's foremost gateway for international business travel.

The agreement would not impose restrictions on the frequency of service, the type of aircraft used, or routes selected by airlines.

But many large metropolitan airports, especially in the United States, are crowded and space is often tightly controlled for safety. The agreement would grant carriers clearance to apply to regulators for operating rights.

Fares could be set freely and carriers would be granted unlimited rights for service beyond the 25-member EU states and United States to points in third countries.

"We want to open the gates for vigorous competition," said Sen. John Byerly, a senior State Department official and the lead U.S. negotiator.

The deal would also increase cooperation on security, including a provision that could streamline airport passenger screening.

Negotiators for both sides came close last year to securing a broad-based deal to expand where airlines can fly in the transatlantic market, but European transport ministers rejected it.

The United States had liberalization agreements with most European countries before the European Union assumed authority for negotiating a universal agreement.

The primary holdout has been Britain, which has been reluctant to give up more access to Heathrow. Currently, only two U.S. carriers - United Airlines and American Airlines can fly there, and only on a limited basis.

British Airways, the dominant carrier at Heathrow, did not fully embrace prospects for liberalization.

"Right now, the U.S. proposal falls short of the legislative solution that could have delivered a very real transformational change to the restrictive ownership and control rules," said Andrew Cahn, the director of government and industry affairs for British Airways.

Earlier this month, the Bush administration transportation planners proposed to ease restrictions on overseas investment in U.S. airlines, giving foreign investors more input into marketing, routing and fleet planning.

Seventy-Five members of the House of Representatives, including 22 Republicans, have written a letter to Transportation Secretary Norman Mineta opposing the ownership change.

Hunting Loose Nukes in Eastern Europe

Nukes on the Loose

Since 2002, Bolshinsky has almost single-handedly removed 269 pounds of fresh, highly enriched uranium from seven countries — enough to make about five nuclear bombs. And he's just getting started. By 2010, his goal is to remove 2 tons of highly enriched uranium from 14 countries, including his homeland. That's enough for about 80 nuclear bombs.

Ambassador Linton Brooks, head of the National Nuclear Security Administration, which oversees the Energy Department's effort to secure nuclear material around the world, said the task is huge. "This is an effort which is a thousand small victories rather than one galactic one," Brooks said.

A report released this year by Harvard University's John F. Kennedy School of Government says that there is enough material in the former Soviet Union to build 80,000 nuclear weapons — and only half of it is secured.

"There's certainly a huge amount of material," Brooks said. "The Cold War produced in both sides exceptionally large quantities of material."

At the height of the Cold War, the Soviet Union sent nuclear material to 17 Soviet republics and allies, including a reactor in Latvia.

But with the collapse of the Soviet Union, there was neither the money nor the political will to support these reactors. Today, the Latvia reactor's control room is covered with dust — it was shut down seven years ago. But the nuclear fuel remained, protected by only a rickety gate, a few guards and some dogs.

Other sites in Russia were protected by simple locks or just wax and some string — the same technology used to seal official letters hundreds of years ago. The Energy Department says the United States has upgraded

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