The European Union and Russia must get over their post-Cold War problems and a big step forward would be for Russia to move quickly towards joining the World Trade Organisation, the EU's trade chief said.
Peter Mandelson said EU-Russia ties are likely to come under strain over the next year as Russia changes president and over the issues of Kosovan independence and Iran's nuclear programme.
"But what is really striking about the EU-Russia relationship is that political and strategic questions like these still share the same political stage with disputes over timber export taxes and the food export ban," he said.
Talks between Brussels and Moscow on a new trade and cooperation deal are on hold until Russia resolves issues such as its export taxes on lumber, which hurt pulp and paper firms in EU countries Finland and Sweden, and its nearly two-year ban on meat and dairy imports from Poland, another bloc member.
Russia on Friday said it would float a lumber proposal at an EU-Russia summit next week. "Regardless of who is right or wrong, issues like these should not be allowed to dominate our relationship," Mandelson told a conference on EU-Russia ties on Wednesday.
Russia achieving its decade-old plan to join the WTO would attract foreign investors, help diversify the country's energy-heavy economy and counteract "political pressures threatening to pull" the EU and Russia apart, Mandelson said.
He urged President Vladimir Putin to resolve remaining issues preventing Russia from securing final EU blessing for its WTO accession before Putin steps down next year. "Indeed, we should strive to resolve the remaining issues between us ahead of next week's EU-Russia Summit in Mafra," Mandelson said, referring to talks in Portugal on October 26.
The EU is unhappy that Russia insists it can raise its export duties on raw materials when it joins the WTO, something Brussels says runs counter to a 2004 deal, an EU official said.
Brussels also objects to Russia's railways offering lower fees for goods due to be exported from a Russian port as opposed to goods destined for ports in neighbouring Baltic EU states. On energy - often the flashpoint of EU-Russia tensions - Mandelson said Brussels and Moscow needed to resolve their differences over the role of state and private investment.
"An agreement that allows Russian investment downstream and European investment upstream, anchored in a broader economic integration agreement between the EU and Russia, would take a lot of the politics out of energy trade," Mandelson said.
The EU, which is increasingly reliant on Russian gas and oil, recently angered Moscow by proposing measures that could prevent Russian firms from investing in European power networks, while European attempts to crack open Russia's oil and gas industry for investment have been frustrated. Mandelson also proposed setting up a regular high-level dialogue between the EU and Russia, a move that would help Europe speak with one voice to its neighbour.