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. Last Updated: 07/27/2016

Mandelson Calls for More Economic Reform

Russia must overhaul its economy to attract foreign investment and bolster trade to strengthen ties with the European Union and ease its push for World Trade Organization accession, EU trade chief Peter Mandelson said Wednesday.

"Russia is not really capitalizing on the fact that it is so close to the huge European market,'' Mandelson said at a conference in Brussels, according to the text of his speech. "In part because it lacks the stimulus of greater trade, the Russian economy is underdiversified.''

Mandelson also said EU-Russia ties were likely to come under strain over the next year as Russia changes presidents and the Kremlin has the chance to flex its diplomatic muscles over moves by Kosovo for independence and Iran's nuclear program.

"But what is really striking about the EU-Russia relationship is that political and strategic questions like these still share the same political stage with disputes over timber export taxes and the food export ban that is holding up a ... new EU-Russia bilateral treaty," he said.

"Regardless of who is right or wrong, issues like these should not be allowed to dominate our relationship," Mandelson told a conference on EU-Russia ties.

"We should strive to resolve the remaining issues between us ahead of next week's EU-Russia Summit in Mafra," Mandelson said, referring to talks in Portugal on Oct. 26.