Time running short on EU, Russia trade deal

Time is running out for the European Union and Russia to sign a key agreement regulating ties between themselves just six weeks before 10 new states join the bloc, EU Commissioner Chris Patten said yesterday.

"I very much hope we'll make rapid progress because we don't have much time," Mr Patten, the EU commissioner for external relations, told a news conference. The EU expands to 25 members on May 1.

"This is an unnecessary distraction to the business of constructing a positive, strategic relationship and partnership with the Russian Federation," he said. EU ties with Russia are governed by a Partnership and Cooperation Agreement (PCA). Brussels wants it to apply automatically to Russia's relations with the 10 new member states - eight of them former Soviet bloc states - from the day they join.

Moscow says this will cost it trade and other privileges it enjoys with its closest neighbours. The EU argues that Russia may be disadvantaged in some markets but will be better off overall.

The bloc's foreign ministers have insisted the PCA apply to all 25 member states without pre-condition or distinction by May 1, saying that doing so would "avoid a serious impact on EU-Russia relations in general".

EU officials have said the bloc could retaliate with sanctions if Russia applied trade terms on goods from new EU states that differed from those applied to the current 15.

Irish Foreign Minister Brian Cowen, host of a foreign ministers' meeting yesterday as Dublin holds the bloc's rotating presidency, said talks were still going on and everything was being done to put the agreement in place by May 1.

Mr Patten said the two sides were close to agreement in some areas, but there were still difficulties over a statement which Moscow wanted to include on Russian worries about the consequences of enlargement.

"We're also discussing a joint statement that would... address some Russian concerns, and that is perhaps a little more difficult to negotiate," he said.

EU-Russian relations have long been strained, with EU concerns over the war in Chechnya and human rights often irritating Moscow.

If Russia and the EU fail to agree the PCA by May 1, there will be no formal basis for ties between the two major trade partners. The EU is a huge buyer of Russian oil and gas, the mainstays of Russia's economy.