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. Last Updated: 07/27/2016

EU Aims for Russia Free Trade Deal

ReutersFinnish Prime Minister Matti Vanhanen welcoming European Commission President Jose Maria Barroso on Sunday.
HELSINKI -- The European Union aims to start talks with Russia on a free trade agreement in 2007 after a November summit with President Vladimir Putin, Finnish Prime Minister Matti Vanhanen said Monday.

"Our aim is that in November, when we have this EU-Russia summit, to make a decision to start official negotiations ... and that negotiations would be done during 2007," he told a news conference to mark the start of Finland's EU presidency.

European Commission President Jose Manuel Barroso, speaking at the same news conference, reiterated that Russia joining the World Trade Organization was a prerequisite for any bilateral deal between Brussels and Moscow.

"We propose to move towards a free trade agreement to be completed once Russia accedes to the WTO," he said.

The executive European Commission approved a draft negotiating mandate Monday for a new deal with Russia to succeed the Partnership and Cooperation Agreement due to expire at the end of this year.

A Commission trade spokesman in Brussels said the EU wanted Moscow to join the WTO "sooner rather than later" but that a free trade pact with Russia should be seen as a long-term prospect. The mandate did not cover preferential tariff treatment, he said.

The announcement seemed mainly aimed at giving Moscow an incentive to be more cooperative with the EU on energy, while pressing the United States to reach a long-awaited bilateral deal with Russia to clear the way for WTO entry.

Barroso said it was too early to say what the content or timing of an EU trade pact with Russia would be. An EU trade spokesman, Peter Power, said it would include removing non-tariff trade barriers and a comprehensive energy agreement.

Brussels is trying to persuade Putin to ratify an Energy Charter treaty that would force Russia to open its oil and gas pipelines to third-party traffic and allow greater competition in energy.

Moscow has repeatedly said it would not ratify the treaty, which would impinge on state-controlled gas giant Gazprom's monopoly of gas production and transit.

And the United States and the EU both have issues they want Russia to settle before it can join the WTO.

Brussels wants Moscow to end bans on imports of meat from Poland and wine from Georgia and Moldova -- measures ostensibly taken on health grounds -- and phase out fees for overflying Siberia.

Washington's concerns include giving U.S. firms a share of the giant Shtokman gas field project, diplomats say.

Vanhanen said energy security and improving relations with Russia would be among the top priorities of Helsinki's six months in the EU chair.

While Finland sees Russia as a reliable energy supplier and a huge potential investment market and trade partner for the EU, some of the new central and east European countries that joined the bloc in 2004 still harbor resentments from having lived under Soviet domination and seek a tougher line toward Moscow.

They want more focus on human rights and democracy in Russia, on the Kremlin's treatment of neighbors such as Ukraine, Georgia and Belarus, and on its trade practices towards former satellites.

European leaders are preparing for three summits with Putin in the next five months, starting with the mid-July Group of Eight nations meeting in St. Petersburg at which energy security will be the main theme.

Vanhanen has invited Putin to attend part of an informal EU summit in Lahti, Finland, in October, and the next regular EU-Russia summit falls in November in Helsinki.