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18.06.2008 — COMMISSONER MANDELSON IN RUSSIA FOR TALKS WTO ACCESSION. SPEECH AT THE CONFERENCE "RUSSIA IN THE 21st CENTURY"

On the visit, Commissioner Mandelson said: "I remain optimistic about the opportunities ahead for the EU-Russia partnership. Economic liberalisation and convergence will form the bedrock of that partnership. We need to create a strong, overarching framework and we need to see Russia in the WTO "

The EU has repeatedly argued that Russia's WTO accession is in the interests of Russia's economic goals, especially its increasing external economic interests. Accession is also in the interests of the global trading system, with Russia the only economy of any size outside the WTO. Substantial progress has been made in bilateral talks and Russia's accession is within reach. For the EU there are only a few remaining outstanding issues that need to be solved, notably the issue of export duties, including those concerning exports of wood.

While in Moscow Mandelson will deliver a keynote address to a conference entitled "Russia in the 21st Century", where he will argue that the EU and Russia need to think clearly about the strategic dimension of their common interests in order to make the relationship more effective. Mandelson will argue that economic convergence and closer business ties will facilitate a closer political partnership.

EU-Russia economic ties EU exports to Russia in 2006 amounted to €72.4 billion - mainly machinery and chemicals – and represent 6.2% of EU exports. EU imports from Russia in 2006, amounted to €140.8 billion Euros, mostly concentrated in the energy and minerals sectors. This represents 10.4% of EU imports. Provisional statistics for 2007 show a 26% increase in EU exports over the first 9 months of the year, but a slight decrease in EU imports.

The EU is by far Russia's biggest trading partner and source of investment – it receives more than half of all Russian trade. Although EU-Russia trade is growing, it remains overwhelmingly focussed on energy goods and the energy industry. Opportunities for EU trade and investment in Russia are limited by an uncertain business and political climate and barriers to imports. Closer EU-Russia economic integration would facilitate investment and help diversify the Russian economy, bring greater stability to economic ties and encourage the development of small and medium-sized businesses in Russia.

For more information on EU Trade policy see: http://ec.europa.eu/trade/ or contact Peter Power +32 498 98 03 48 or Michael Jennings +32 498 98 68 80

• The EU and Russia need to think clearly about the strategic importance of common interests. He will say: “Managing challenges as complex as the regional questions in the South Caucasus, Iran or Kosovo, is much more difficult in the absence of enduring trust in the relationship. The same can be said in the economic sphere, whether we look at the EU's increasing dependence on imports of energy, or Russia's wish to re-structure and modernise its industrial base, services sector and infrastructure.”
• The renewed impetus and positive outlook of the new Russian government should be welcomed. He will say: “On Russia's side, I welcome President Medvedev's statement last week that in order to address the issues facing the European continent, we need a stronger sense of shared identity and unity between all of its component parts including the Russian Federation…I am also encouraged by the early statements from the President and members of the government on economic policy. They have confirmed that a free market and openness to the outside world are the best guarantees for ordinary Russians that the positive changes of the last decade will not be reversed.”
• Russia is still facing structural weaknesses in its economy. He will note that Russia’s economy has not sufficiently diversified, that there is insufficient investment in critical infrastructure and that education and research are under-resourced.
• The EU is a vital partner in the drive to harness innovation and drive productivity and growth. In the coming years, “…the technology, management know-how and foreign investment coming out of Europe will be important elements of Russia's success.”
• The immediate priority for Russia in the international economic field is to conclude its negotiations to enter the WTO, in order to fully integrate into the global trading system and protect its growing interests on world markets. Russia’s position as the only economy of its size outside the WTO “…is more and more at odds with Russia's own professed strategy of integration with the wider global economy, and its wish to be considered a functioning market economy like any other. “