EU backs mandate for talks

Russia should loosen its grip on its oil and gas pipelines and give European Union investors more protection in return for a new trade and co-operation agreement with its most important commercial partner, according to documents seen by the Financial Times.

EU foreign ministers yesterday approved a negotiating mandate for a new partnership agreement with Russia. It could cover broad areas such as trade and security as well as key sectoral issues, including energy.

The mandate, agreed provisionally this month, was formally endorsed by ministers without further discussion in Brussels after 18 months of objections, first from Poland, then Lithuania.

Key to Vilnius lifting its veto was a confidential annex, seen by the FT. In it its EU partners recognise Russia has agreed to implement key provisions of the energy charter, an international agreement regulating investment, by signing it.

While the annex calls on Russia to ratify the treaty, a footnote makes clear it has already agreed to abide by key provisions. Implementing the charter would oblige Gazprom to allow third parties to use its pipeline network. It would also give greater protection for foreign investors. Shell, BP and other western oil companies have seen projects forcibly taken over by Russian companies.

Russia has said it will not ratify the charter until EU member states implement it, claiming that the EU is equally wary of foreign investment in its energy infrastructure and has blocked Gazprom’s efforts to take over EU companies.

“I am very happy. Today the EU is more united than yesterday,” Petras Vaitiekunas, Lithuanian foreign minister, told the FT. “All the issues we raised on energy and justice have been addressed.”

However, with such sensitive issues on the table, the talks, which will be launched at a summit on June 26-27 in Siberia, could drag on for many months. Diplomats warn that it could be a couple of years before any agreement is finally -ratified.

“Negotiations will certainly not be easy . . . I don’t want to speculate at this moment but I think they will take quite some time,” said Benita Ferrero-Waldner, the EU’s external relations commissioner.

Separately, a joint Polish-Swedish proposal put forward in Brussels yesterday suggested the EU should develop an “eastern partnership” to help former Soviet republics co-operate more closely with the EU, possibly with a view to ultimately joining the bloc.