EU's Mandelson backs new Russia WTO bid push

Russia could join the World Trade Organisation this year if it gives a quick response to the handful of outstanding issues blocking a deal, European trade chief Peter Mandelson said on Friday.

Following talks in Moscow with Russian Finance Minister Alexei Kudrin and top trade officials, Mandelson said he felt there was a renewed desire by Russia, the European Union and the United States to bring Russia into the global trade body soon.

"Frankly, we want to see Russia in the WTO, it's the largest economy of its size and importance outside of the organisation, there are benefits, substantial benefits, both for Russia and its trading partners to see Russia in the WTO," said Mandelson.

"We're now down to, frankly, a handful of issues, a handful of bilateral matters that have got to be resolved," the European Union's Trade Commissioner, who negotiates trade deals on behalf of the 27-member bloc, told Reuters in an interview.

"Russia in its turn must make sure that it is able to give a quick response. If that happens, we can do this, this year and it's certainly desirable and important to do so."

The main outstanding problem between Russia and the European Union is a deal on timber export tariffs, which is of particular concern to Finland. The tariffs have hit Finnish wood processors which import timber from Russia.

No breakthrough was achieved on the issue this week, though a further round of talks is expected after consultations.

"It's getting a decision taken that's most important, on all sides. If we can achieve that, we can put this thing finally together," said Mandelson.

He also called on Russia to implement a deal already agreed on Siberian overflight fees for European carriers travelling over Russian airspace to Asia.

REASONABLE REQUESTS

The renewed Russian momentum to join the WTO comes as Russia's ex-Soviet neighbour Ukraine prepares to accede, after concluding its talks with the trade body.

Ties between Kiev and Moscow are frosty, and analysts have said Ukraine could use its new status as a WTO member to block Russian membership.

Ex-Soviet Georgia, with which Moscow also has strained relations, is already a WTO member and is withholding its approval for Russia to join.

Mandelson said no country should suddenly introduce new demands at this late stage in the process.

"We've got to makes sure that the requests being made to Russia are proportionate and reasonable," said Mandelson, without naming any country.

Mandelson said he did not anticipate any major change in Russia's policy direction after President Vladimir Putin leaves office. Putin's ally Dmitry Medvedev is favourite to win a March 2 election to choose Putin's successor.

But Mandelson said Russia needed a different emphasis in its economic policy to achieved sustained growth.

"There is a desire on Russia's part to assert some national strategic interests and control over its natural resources and its energy base, that's not unreasonable."

"But at the same time the idea that Russia's economic growth and future can be driven simply by high energy prices and energy exports is becoming unrealistic and I think Russia recognises that," said Mandelson. (Reuters)