LOOKING AHEAD TO THE EU-RUSSIA SUMMIT

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 005117

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/22/2017
TAGS: PREL EU WTRO ETRD ENRG KO RS
SUBJECT: LOOKING AHEAD TO THE EU-RUSSIA SUMMIT

REF: MOSCOW 4633

Classified By: Minister-Counselor for Political Affairs Alice G. Wells
for reasons 1.4 (b/d).


1. (C) Summary: Russia has set a low bar for the EU-Russia
summit, and will go to Lisbon prepared to push back on
criticism of its human rights and democracy record, as well
as to press for clarity on the implications of EU reform.
With the continued stand-off over Polish meat, the Russians
see "regression," not progress, in the PCA discussions, which
is unlikely to be affected by the outcome of the Polish
elections. WTO is a priority, with the MFA emphasizing the
need for "political level" involvement in resolving
outstanding disputes. Energy security is likely to remain
contentious, with strong GOR criticism of "unbundling
requirements" only marginally offset by a last-minute
agreement over an "early warning" system in the event of
energy cut-offs. While Russia will push for more effective
implementation of the new visa regime, it confronts EU
unhappiness over GOR failure to implement the Siberian
overflight agreement. Russia remains content to let the
momentum of its growing economic relations drive its key
European relations forward. End Summary.

Russian Priorities for Summit
--------------


2. (C) In an October 19 meeting, Director of the Department
for European Cooperation Sergey Ryabkov listed the GOR's
priorities for the October 26-28 EU-Russia Summit, which will
be the last of Putin's presidency. They include the legal
framework for EU-Russia ties, including the future of the
PCA; WTO accession; energy; a dialogue on a future visa-free
regime; and Kosovo. Ryabkov noted that Iran would feature
prominently in the working lunch, with the GOR waiting for
High Representative Solana's report on his meeting with
Iranian former lead nuclear negotiator Ali Larijani in Rome.
(Ryabkov's comments predated Larijani's resignation.)


3. (C) Ryabkov told us the first agenda item was for the EU
and Russia to touch base after the informal summit of EU
leaders in Lisbon October 18-19, which reached an agreement
on the new EU treaty to be signed on December 13. According
to Ryabkov, the GOR wants to discuss how future EU reform
will be implemented, and how it will affect neighborhood and
security policy. Ryabkov, reiterating published remarks by
DFM Grushko, complained that the EU and Russia lacked a
structure in which to exchange views and take joint
decisions, similar to the NATO-Russia Council. Ryabkov said
the GOR was prepared for EU comment on Russia's human rights
and democracy track record, and would counter with its own
concerns on internal practices in Latvia and Estonia.

The PCA and Poland
--------------


4. (C) There has been no progress on opening new PCA
negotiations, Ryabkov told us, but "regression" instead. He
noted that while the level of EU-brokered contacts between
Russia and the Poles had been lower in the past four months
than under the German presidency, the issue had been fully
explored and each side's position made clear. He doubted
that upcoming Polish elections would bring change, because
the "fundamental position of Polish politics was hostile" to
Russia. He said a breakthrough in negotiations could only
come if the new Polish government allowed Russian officials
to access its meat-processing facilities, but noted Poland
will only discuss the matter through the EU at this point,
and the EU will only tell Russia that EU inspectors see
nothing wrong. Ryabkov said that the GOR has provided the EU
with files showing previous quality and documentation
failures. He reiterated that technical, not political,
solutions must be found, and that Russia was "quite relaxed"
about the process.


5. (C) In the wake of Polish President Kaczynski's September
unofficial visit to Russia (reftel),Ryabkov admitted to a
slight softening of tensions between Russia and Poland. He
told us that Presidential Foreign Policy Advisor for Europe
Sergey Yastrzhembskiy had visited Poland recently, and
Chairman of the Central Elections Committee Vladimir Churov
reportedly traveled there on October 20. On the agricultural
side, he said there had been a meeting between Russian and
Polish heads of Veterinary and Phyto Services in Moscow on
October 15, which had been useful to discuss the meat issues,
as well as other agricultural cooperation. EC Commissioner
for Health and Consumer Protection Markos Kyprianou and
Russian Minister of Agriculture Aleksey Gordeyev will meet
again after the EU-Russia summit.

WTO Accession: Now or Never?
--------------

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6. (C) Ryabkov told us that Russia remains politically
committed to joining the WTO, and it would "definitely" be
discussed at the summit. He noted that there were still
ongoing negotiations about IPR and railroad tariffs, and
several Nordic countries felt that an export tariff on timber
(originally aimed by the GOR at Asian countries) was not
compatible with WTO policies. The EU wanted to bring these
issues to the political level, Ryabkov said, connecting them
with progress on a free trade regime between the EU and
Russia. The GOR preferred, however, to bring the tariffs in
line with WTO standards more gradually, and gave as an
example of this the signing of an agreement on releasing
tariffs on steel and steel products. Ryabkov told us that
Russian Minister of Economic Development and Trade Nabiullina
and EU Trade Commissioner Mendelson would be meeting on the
margins of the summit.


7. (C) European Commission diplomats were less optimistic
that the summit would make progress on Russia's accession.
They told us that the Poles are serious about following
through on their threats to block Russia's accession unless
the meat embargo is resolved. They noted that the GOR had
promised they will submit proposals to bring timber and
railway tariffs in line with WTO standards before the summit,
but said that resolving these issues was firmly a Russian
responsibility. Dr. Dimity Danilov, Head of the Department
for European Security Studies at the Institute of Europe
predicted that if progress was not made at the summit and
Russia did not join the WTO within a year, its enthusiasm and
efforts would wane. He warned that the EU was underestimating
how important it was to use existing momentum to achieve real
breakthroughs at the summit.

Energy
--------------


8. (C) According to Ryabkov, new EU energy regulations
requiring "unbundling" production from transportation are "of
a discriminatory nature" towards Russia and have faced a
harsh reaction in Moscow, with Putin himself threatening
retaliation. Ryabkov noted that the regulations seemed
targeted towards recent Russian legislation on the protection
of strategic sectors, which would specifically limit foreign
investment in oil and gas. While regulations were not yet
complete, Ryabkov did not expect the final version to differ
significantly. The GOR was prepared to challenge the EU's
critique of state corporations, he stressed, and had not
received what it considered to be adequate replies to date.


9. (C) Ryabkov told us that the GOR signed an EU proposal on
an early warning system on energy issues on October 17. EC
diplomats expressed pleasant surprise, noting that even a
week prior the GOR had claimed there was no need for such an
agreement, since it always gave the EU "plenty of warning"
before reducing supplies to transit countries (Note: EU
Commission diplomats ironically noted that in the case of
Ukraine in early October, the "early warning" had been 24
hours). However, diplomats believe that Russia wanted to
make progress on energy dialogues to reassure Europe of
Russia's dependability. Danilov agreed, noting that while
the Europeans see this as a security matter, the GOR views it
as a business matter.

Kosovo: No Change in Position Expected
--------------


10. (C) Ryabkov did not expect a breakthrough on Kosovo, and
stressed that the GOR had "no expectations of disunity" among
member states on Kosovo's final status. He stressed that EU
recognition of a unilateral declaration of independence would
be a "very grave" development, and said that Russia would
"strongly urge" them to think more about it at the summit.
The GOR saw the troika process as more useful than expected,
with both the Serbs and Kosovars expressing a genuine
interest in the questions on the table. Ryabkov told us that
this progress should be supported and that Russia will
continue to urge countries to refrain from public statements
on the endgame. Ryabkov stressed that the GOR will support
an extension of negotiations beyond December 10 and argued
that "closing the door on the 10th" was an untenable
solution.

Visa Free Regime and Overflights
--------------


11. (C) Ryabkov predicted that the EU will keep the emphasis
of dialogue on the future of a visa free regime focused
firmly on "the future." He said that new visa procedures
have been implemented on easing diplomatic, business, and
student travel, but the major obstacle to implementation
remains the noncompliance of EU member states on short
turnaround times and the charging of higher visa fees then

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agreed. He also complained that some countries were
requiring a long list of documents from truck drivers, plane
crews, and others who need a multiple-entry visa. He said
that the issue is "technical, yet political at the same
time."


12. (C) EC diplomats told us that Siberian overflight
rights, an outstanding irritant between the EU and Russia,
were agreed to last year, but Russia still has not signed the
agreements. Putin reaffirmed on October 15 that Russia would
join, but nothing has been received yet. EC diplomats
asserted that the EU would link failure on this issue to an
upcoming aviation summit in November, and would cancel it if
the Russians did not show progress. Still, they saw last
minute Russian compliance as "not impossible."

Comment
--------------

13. (C) Russia has set a low bar for the EU summit, and is
content to let the momentum of growing economic ties drive
its European partnerships. Small deliverables, the vigor of
the industrialists' roundtable, and even an imperfect
implementation of new visa procedures highlight that
political problems remain separate from bountiful economic
relations.
Burns