EU's Mandelson tells Russia no politics in energy

ST PETERSBURG, Russia, June 10 (Reuters) EU Trade Commissioner Peter Mandelson told a Russian investment forum today the bloc wanted ''fair rules, not politics'' in energy.

''We need to agree on clear, enforceable rules for energy transit,'' Mandelson told an audience of presidents, business executives and diplomats at the St Petersburg International Economic Forum.

These rules should offer predictability and certainty to both suppliers and customers, he said.

Europe relies on Russia for a quarter of its gas supplies and has been alarmed by Moscow's ability to halt supplies or jack up prices abruptly to former Soviet states which step out of line politically, such as Georgia or Ukraine.

Mandelson said the EU did not want to see the creation of spheres of influence in Eurasia, rather a single sphere of common interest.

He said Brussels' engagement with Russia and former Soviet states was sometimes mistakenly perceived in that region as encroachment.

''We all have an interest in a region of stable and democratic countries where there is free competition in politics and in economics,'' Mandelson said.

Mandelson also said the European Union should keep pressing Russia on human rights, something which has irked Moscow in the past.

''I don't see any case for backing off from key arguments about human rights ... it's not a question of what we say so much as how we are perceived when we say it,'' he said.

Despite his veiled criticisms of Moscow, Mandelson said he would ''continue to work as hard as I have done in enabling not only Russia but also Ukraine and Kazakhstan to become members of the WTO (World Trade Organisation)''.

''Everybody who needs to work on this is working on it and they need to intensify what they are doing,'' he later told reporters.

''The issues that remain are few but they are important and with close working on both sides I am sure we could make progress during the course of the year.'' Andrew Somers, president of the American Chamber of Commerce in Moscow, told Reuters the main issue to be resolved on Russia's WTO talks was agriculture. He remained optimistic that an accord would be reached this year.

REUTERS SLD MIR KP1755