Agreement can be reached by the end of this year on Russia's accession to the World Trade Organisation (WTO), but rows over the trade in meat and timber need to be resolved, the European Union's trade chief said.
"I certainly think we can secure agreement on Russia's accession by the end of the year," EU Trade Commissioner Peter Mandelson told Reuters in an interview late on Wednesday during a visit to Moscow. Commenting on restrictions that Russia, citing food safety concerns, has imposed on the import of some meat products from EU countries, he said: "I regret them and I think the actions taken by the Russian authorities are exaggerated."
"I'm not even sure that it's justified and either way these issues need to be resolved as soon as possible. They are irritants, they are not impediments to the negotiations on WTO," Mandelson said. He said the EU was "taken by surprise, frankly" by Russia's decision to raise tariffs on the export of raw timber, a move that hurt timber processors in EU countries.
Russia is the largest economy still outside the world trade body and has been negotiating membership since 1995. Russian officials say they are now very close to clinching a final deal on joining the organisation. On the prospects of Russia's WTO entry, Mandelson said: "There are certainly important issues that have got to be resolved, certainly, but there aren't that many."
"I don't identify any issue on the table at the moment which is so complex or so big a problem that it causes me to be pessimistic about the outcome," he said. Russia plans to raise duties on exports of raw timber to 80 percent of their value from the start of 2009 from the current 25 percent. That will add to costs for paper companies, especially in Scandinavian countries.
EU diplomats say the rise in duties will put Russia in breach of a 2004 deal it signed with the EU. Russia has denied it is violating the agreement. Mandelson said European industry supported Rusia's strategic bid to develop its domestic timber processors, but European firms should be encouraged to invest for sound commercial reasons and not feel coerced into doing so.
"Finnish companies and Swedish companies, for example, see that (to invest) is the right thing to do on commercial criteria ... not because they are being strong-armed into doing so, or being left with no alternative but to do so."
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