Putin arrives in Portugal ahead of EU-Russia summit

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LISBON, Oct 25 (Reuters) Russian President Vladimir Putin arrived in Lisbon today to meet Portuguese leaders ahead of an EU-Russia summit tomorrow that is likely to be dominated by disagreements on trade and energy.

Russian Economy Minister Elvira Nabiullina set the tone for the summit by urging the EU to back Russia's bid to join the World Trade Organisation.

Brussels has refused to sign off on Russia's WTO bid as it feels Russia has not implemented a 2004 bilateral WTO accession deal, especially by failing to cut export duties on timber.

''The reason there have been delays in increasing the EU-Russia relationship has to do with Russia not joining the WTO,'' Nabiullina told an EU-Russia business conference in Lisbon.

''The longer discussions to join the WTO are delayed, the bigger the losses for EU and Russian companies.'' Relations between Russia and the bloc have been beset by rows over trade, energy, Russia's human rights record and the future of Serbia's Kosovo province.

Portugal holds the rotating EU presidency and Prime Minister Jose Socrates is expected to try to smooth over such disagreements during his meetings with Putin, with whom officials say he has friendly personal relations.

''It's in the interest of both the EU and Russia to create the conditions for trade to grow,'' Portuguese Economy Minister Manuel Pinho told the EU-Russia business conference.

Putin landed in Lisbon mid-afternoon and was due to meet Portuguese President Anibal Cavaco Silva and Socrates later.

This could be the last EU-Russia summit for Putin before he steps down in May. Putin cannot stand again in the March presidential election but analysts say he is likely to maintain political influence after he goes.

Key points of discussion at tomorrow's summit will also include energy, Kosovo and Iran.

A proposal by the European Commission on the energy sector, including a break up of big utilities' grip on power supply, generation and transmission, is set to grab attention.

The plan included a clause to prevent foreign firms from buying pipelines and power grids if their home countries do not have equally open markets and an agreement with Brussels, something seen as targeting Russian state energy giant Gazprom.

European Commissioner on External Relations Benita Ferrero-Waldner was quoted today as telling Germany's Handelsblatt that there has to be a ''a level playing field'' on investments.

''If Russia kept to the rules of the game we would benefit from a good deal,'' she said.

Sergei Yastrzhembsky, the Kremlin's top adviser on EU issues, said on Wednesday the EU plan on restricting foreign ownership of pipelines and energy grids could be ''discriminatory''.

REUTERS SYU MIR RAI2007

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