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Moscow Times
February 4, 2009
Trade Spats, Visas to Top EU Talks
By Nikolaus von Twickel / Staff Writer

European Commission President Jose Manuel Barroso and a team of key commissioners will hold difficult talks in Moscow this week over old and new trade disputes and a new visa feud, diplomats said Tuesday.

Ties with Brussels have worsened considerably after the Ukraine gas war last month, and European lawmakers said they expected some plain talk about Russia's reliability as an energy provider, especially since Moscow's position has weakened because of the deepening economic crisis.

Barroso and nine commissioners will meet on Friday with their Russian counterparts, including Prime Minister Vladimir Putin and President Dmitry Medvedev, Marc Franco, the head of the EU's delegation in Moscow, said Tuesday.

The visit is the first in this format since 2004 and was originally planned for last summer but postponed because of the August war in Georgia.

But while the political dispute over the Georgia conflict has become somewhat muted, foreign investors have encountered vexing new tariffs and bureaucratic problems.

The Federal Migration Service late last month ended a policy of issuing work permits and visas to foreigners in one procedure, requiring companies to engage in extra rounds of tedious application work.

Calls to the migration service went unanswered Tuesday, but Alexei Filippenkov, the director of the Visa Delight agency, confirmed the change. "They ended the 'one window' policy for visas and work permits, so now you have to go to at least two departments," he said.

He said he suspected recent management changes at the migration service to be the reason for the change. "New department heads want to follow the law more strictly," he said.

Franco said that regardless of the reason, the issue would feature in the talks between Barroso and Putin. "It is important that this will be raised at the highest level," he said, speaking at a conference with the Association of European Business.

Also, investors are angered about a road charge for foreign trucks that came into effect this week. Diplomats said the charge of 60,000 rubles ($1,700) per year, or 400 rubles per day, is discriminatory because it is levied on European-registered vehicles but not on Russian ones.

The government has said the fee will only apply to trucks from countries that charge Russian trucks, but European officials point out that EU member states with similar tolls, like Germany, apply them on all trucks regardless if they are domestic or foreign.

Franco also voiced concern about a lack of progress in negotiations over Russia's membership in the World Trade Organization. He said recent Russian hikes in tariffs for timber exports and car imports had complicated negotiations.

Putin announced in the fall that the last round of hikes for timber exports would be put off temporarily, but Franco said "the tariffs are still there."

He said the lack of progress on WTO membership bodes ill for negotiations on a new partnership and cooperation agreement between Moscow and the EU. While negotiations on the agreement's political aspects were going quite well, it will be very hard to have a meaningful discussion on trade as long as Russia remains outside the WTO, Franco said.

Moscow has been negotiating to join the Geneva-based trade body for more than 15 years, but tariff disputes and other issues have delayed talks.

"The message we are receiving is that Russia is not very clear yet as to whether it wants to join or not, and this is possibly because of the [economic] crisis," a senior EU diplomat said Tuesday under condition of anonymity because he was not authorized to speak about the matter.

Agriculture Minister Alexei Gordeyev said last month that the country should ascend to the WTO in 2009. Yet officials have stressed that Moscow would only join if it deemed the conditions satisfactory.

Energy policy will also be high on Barroso's agenda Friday after last month's suspension of Russian gas supplies left millions without heating in eastern EU member states.

Some European lawmakers voiced concern that the commissioners might be too soft on the issue. "We need a serious dialogue that includes critical issues such as Russia's reliability as a natural gas provider," Alexander Lambsdorff, a deputy in the European Parliament for the German Free Democrats, said by telephone from Brussels.

But Frazer Cameron, head of the EU-Russia Center, a Brussels-based think tank, said the Europeans would probably make a tough showing. "There will be some plain speaking because energy security is such an important subject," he said by telephone.

He said EU leaders would be more cautious than at previous meetings. "They recognize that the policy needs to be based on the realities and that illusions about Medvedev's presidency leading to a more open and liberal Russia have not materialized," he said.

Moscow, on the other hand, can no longer afford to maintain its blustering foreign policy because of the effects of the economic crisis, he said.

There is considerable bickering in the EU about how to best diversify energy imports.

Many governments have thrown their weight behind the proposed Nabucco pipeline that would carry gas from Iran and the Caspian basin to Europe, bypassing Russia.

But some see the $13 billion project threatened by Moscow's plans to build the Nord Stream and South Stream pipelines, not least because Russia might be the only viable source for gas to fill Nabucco.

Poland, the Baltic and some Scandinavian states heavily oppose Nord Stream, which would run under the Baltic Sea and is supported by Germany and Gazprom.

The Czech presidency of the European Union will use a May 21-22 summit with Russia to discuss energy security, Czech Ambassador Miroslav Kostelka told the same conference Tuesday.

Ahead of the May summit, a preliminary meeting will be held at the ministerial level this month, followed by human rights consultations in March, Kostelka said.