Putin Delays Hike of Timber Tariffs

Ria-novostiVanhanen meeting Wednesday with Putin in Moscow, where Putin said a rise in timber tariffs would be delayed.
Two days before a crucial EU-Russia summit in Nice, France, Moscow offered a conciliatory measure on Wednesday by delaying the introduction of higher export tariffs on timber that have been roiling some of its EU neighbors.

The European Union greeted Prime Minister Vladimir Putin's announcement after a meeting with Finnish Prime Minister Matti Vanhanen in Moscow on Wednesday afternoon as a positive sign ahead of the summit, which opens Friday and will have to deal with a worsening of ties since the war between Georgia and Russia in August.

"This ... definitely will be positively assessed by European leaders at the summit," said Denis Daniilidis, spokesman for the European Commission's delegation in Moscow.

The more than 300 percent rise in export duties, from 15 euros to 50 euros per cubic meter of timber, was to take effect on Jan. 1 but will be put on hold for nine months to a year.

The rise had greatly complicated efforts to normalize trade relations between Brussels and Moscow on stiff opposition from Finland and Sweden, whose lumber and pulp and paper industries would have suffered.

Timo Hammaren, the head of the EU delegation's Trade and Economic Section, welcomed the news.

"It gives us time to negotiate a better deal for our industry without disruption of trade in January," Hammaren said by telephone from Nice.

Sanna Kangasharju, a spokeswoman for Vanhanen, said Wednesday that the timing of the decision was a surprise.

"We were expecting it at the EU-Russia summit," she said.

President Dmitry Medvedev heads Thursday to Cannes, near Nice in the south of France, where he will address an investor conference. On Friday, he will attend the summit in Nice, hosted by French President Nicolas Sarkozy, whose country currently heads the rotating EU presidency.

A major issue in the run-up to the summit has been the decision to restart negotiations for a new EU-Russia cooperation agreement.

Brussels postponed the talks in September in protest at Moscow's actions in the conflict with Georgia.

France and other major EU members pushed for the resumption but faced opposition from some members, such as Lithuania and Poland, who wanted the delay to continue until they were satisfied that Moscow had complied fully with the peace plan brokered by Sarkozy in August.

George Schopflin, a member of the European Parliament for the conservative Hungarian Fidesz party, said some members still had serious doubts about resuming talks.

"I sense that rear-guard action is being fought," Schopflin said by telephone from Brussels.

He said the bilateral Paris-Moscow relationship was central to the summit, but France could only go as far as the other EU members would follow.

"The French ultimately cannot commit the union to something its members will not contemplate," he said.

Edward McMillan-Scott, a member of the European Parliament from Britain's Conservative Party and a long-standing member of its Foreign Policy Committee, said the decision to restart the talks was premature. "Both with regard to Georgia and the deteriorating political situation in Russia itself, I would have preferred a pause for thought and more reflection," McMillan-Scott said.

Citing human rights, democracy and the rule of law as primary EU policy goals, he said it was "hard to see that this opening forms a part of such policy."

But Frazer Cameron, the director of the EU-Russia Center, a Brussels-based think tank, said reinstating talks was just common sense.

"In difficult times, it is better to engage your partners than to ignore them," Cameron said by telephone from Istanbul.

But he added that "there will be tough talking from Sarkozy both on Georgia and on the Iskander rockets."

In his state-of-the-nation address last week, Medvedev announced that Russia would station Iskander short-range missiles in Kaliningrad, between Lithuania and Poland, if the United States went ahead with plans to place elements of a missile-defense system in Poland and the Czech Republic.

Moscow argues that the planned U.S. installations in Central Europe threaten the country's nuclear deterrent in the case of conflict with the United States.

Marc Franco, the head of the European Commission Delegation in Moscow, said Moscow's initiative to create a new Euro-Atlantic security system would be a major issue on the agenda.

A senior European diplomat, speaking on condition of anonymity because of the sensitivity of the topic, said EU leaders expected more details about Moscow's plan, but the perception is that Russia has done little to develop the initiative since Medvedev announced it during a visit to Berlin in July.

A press release from the Kremlin on Wednesday listing a new Euro-Atlantic security architecture as a major summit topic provided no new details.

Leaders will also discuss the deepening financial and economic crisis, Franco told reporters late on Tuesday, adding that it would be "an opportunity to compare notes ahead of the G20 summit in Washington."

Leaders of the world's top 20 economies are gathering in the U.S. capital on Saturday to discuss global strategies to overcome the crisis.

Medvedev will be among European leaders who will leave France for the United States on Friday, where they are to attend a dinner in the White House later that evening.

Staff Writer Jessica Bachman contributed to this report.