Energy and trade dominate Putin's last EU summit

LISBON, Oct 26 (Reuters) Differences over investments in energy markets and Moscow's bid to join the World Trade Organisation are expected to dominate the last summit Vladimir Putin holds as Russian president with the EU today.

Russia, main gas supplier to the 27-nation bloc, and the European Union are at odds over Brussels' plans to vet foreign investment in European energy networks and Moscow's reluctance to give EU companies access to Russian pipelines.

A dispute over Russia's ban on the import of Polish meat has prevented the two sides from starting talks on a new partnership and cooperation agreement to replace a deal which expires in December. The new pact is meant to have a chapter on energy.

The two sides are also haggling over trade issues, including Russia's export duties on timber, which the EU wants resolved before giving its final blessing to Moscow's entry into the WTO.

Other differences likely to feature at the one-day summit will include how to deal with Iran and Kosovo.

Officials on both sides played down prospects of major breakthroughs at the meeting in Mafra, near Lisbon.

''I hope the summit contributes to consolidate relations between the EU and Russia, cementing cooperation where it exists, identifying new areas where it is possible and opening solutions where difficulties still exist,'' Portuguese President Anibal Cavaco Silva said at a dinner for Putin yesterday.

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

Putin shrugged off suggestions of sharp divisions. ''I do not think relations with Europe are in a regrettable shape. There are simply issues on which we disagree,'' he said.

EU External Relations Commissioner Benita Ferrero-Waldner has said the bloc would raise concerns about human rights in Russia.

The two sides are expected to sign agreements on trade in steel and steel products, and details of an early warning system in the case of disruption of gas supplies are likely to be hammered out.

Reuters SZ VP0528