European Law Monitor

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European Law Monitor newsTo Russia with love?  

The International Trade Committee has issued an appeal for constructive dialogue on economic relations between the European Union and Russia, an area overshadowed by recent disputes. MEPs believe the future partnership should include a meaningful energy dimension to safeguard Europe's energy supplies from its primary source of oil and gas.

"The sole means of achieving a formal agreement on energy, ratified by Russia, is to negotiate a new framework document, i.e. in the context of the new partnership and cooperation agreement" says the committee in an own-initiative report by Godelieve Quisthoudt-Rowohl (EPP-ED, DE) adopted on Monday. The current partnership agreement expires in December 2007 and negotiations on a new one have reached deadlock. The EU remains highly dependent for its energy on the Russian Federation, taking 63% of the latter's oil exports and 62% of its natural gas exports.
The interruption of gas supplies to Ukraine at the beginning of 2006 and of oil to Lithuania at the start of 2007 are weighing heavily on EU-Russia relations. MEPs call on Moscow "to offer fair and nondiscriminatory treatment to all its partners". They also call for investment to modernise Russia's nuclear power stations.

Concern over climate for investment in Russia

MEPs note that the EU is open to investment from Russia. They therefore consider it "highly problematic" that foreign companies operating in the natural resource sectors in Russia are not granted the same degree of access.   In particular they voice concern at "the bill recently introduced in the Russian Federation, which allows the government to reject foreign bids for majority stakes in Russian companies, thus prohibiting foreign ownership of more than 49% […] in 39 strategic industries". They believe this measure risks damaging Russia's attraction to European investors, who are its main source of capital.   MEPs also want to see increased efforts in the fight against corruption.
The report acknowledges that it is important for the EU that Russia should join the WTO but stresses that this "must not result in higher levels of import duties and stronger protectionism".

Intellectual property rights and Polish meat

According to the committee, the Russian court system needs to be adapted "in order to effectively protect intellectual property rights", in particular to combat the production and sale of counterfeit pharmaceutical products.
Russia's embargo on Polish meat has become another source of friction between Europe and Russia.   MEPs urge the EU "to find a common solution to problems with exports to the Russian market", specifically relating to health and plant health issues. Russia is an important market for agricultural exports - meat, fish and dairy products - from several EU Member States.
Reproduced with the permission of the European Parliament REF.: 20070521IPR06882