EU seeks free-trade pact with Russia after WTO entry

World

European Union regulators proposed abolishing trade restrictions with Russia after the country joins the World Trade Organization, highlighting the EU's interest in access to the Russian energy market. “We should work for a free-trade area with Russia,'' European Commission President Jose Barroso said at a press conference yesterday in Helsinki. “Russia is a strategic partner for the EU and we share many areas of interest and inter-dependence,'' External-Relations Commissioner Benita Ferrero-Waldner said in a statement released in Brussels. The 25-nation EU wants Russia to give European companies access to its energy market, boosting investment and capacity there to help ensure adequate supplies for Western Europe. OAO Gazprom, the world's biggest natural-gas producer, is the monopoly operator of Russia's gas network and also has a monopoly on exports. Russia supplies a quarter of the gas in the EU, which relies on imports for half of its overall energy needs. European nations grew more concerned about security of supply after a Russian gas-price dispute with Ukraine at the start of the year disrupted shipments to the EU. The commission, the EU's executive arm in Brussels, asked member states to give it a mandate to negotiate a free-trade pact with Russia. The accord would replace a 10-year Partnership and Cooperation Agreement due to expire in November 2007. The commission said in a statement it “wants to consolidate the EU-Russia energy relationship based on reciprocity, fair and equal access and a level playing field'' in a new agreement. Finland, which took over the EU's rotating presidency for six months on July 1 and borders Russia, wants to make deeper ties with the country a priority. Barroso aims to use this focus to push forward the trade plans with Russia and get a negotiating mandate from EU governments before the end of the year. An EU free-trade accord would depend on Russia's entry into the WTO and would go further than the Geneva-based organization in breaking down trade barriers. Russia won EU backing to join the WTO in 2004 and still needs the support of the U.S. government. The administration of President George W. Bush said in late May that a U.S. accord with Russia on WTO entry was “very close.'' the commission today urged a speedy deal to clear the way for Russia, the world's largest economy outside the 149-nation WTO. Russia has been trying to join the trade organization since 1993. Russia's accession to the WTO “is a priority'' and should take place “sooner rather than later,'' commission trade spokesman Peter Power told reporters today in Brussels. (Bloomberg)

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