Energy must not be 'geopolitical bargaining chip,' warns EU

Nov 21, 2006, 12:43 GMT

Brussels - The European Union's top trade official on Monday warned against allowing energy resources to become a 'geopolitical bargaining chip' among nations.

In comments made ahead of an EU-Russia summit expected to focus on EU demands for better access to Moscow's vast oil and gas resources, European trade chief Peter Mandelson made another push for energy issues to be covered in the bloc's planned trade pact with Russia.

Countries could use bilateral and multilateral agreements to establish new rules for trade in energy to calm 'some existing tensions,' Mandelson told a Brussels conference on strategic energy policy.

Energy products are not covered by international rules set by the Geneva-based World Trade Organization (WTO).

EU leaders meet Russian President Vladimir Putin in Helsinki on November 24. Putin has so far refused EU demands for ratification of an international energy charter to liberalize competition in the oil and gas sector.

The Russian leader is also wary of EU plans to include an energy chapter in a planned EU-Russia cooperation deal.

Mandelson insisted that nations could not allow energy resources to become a 'geopolitical bargaining chip.'

'More international rules can provide stability and fill the legal vacuum that is currently the source of international tension and insecurity,' Mandelson said.

He added that the application of trade rules to the energy sector could help producer countries find foreign markets, and consumer countries find resources beyond their borders.

Stability for investors would also be created, Mandelson said.

The EU trade chief argued that trade rules on energy would have to reflect the legitimate demands of energy producers.

'The most promising scope for stronger and mutually beneficial relationships on energy trade and investment exist...in our relations with Russia, Ukraine and Turkey,' said Mandelson.

He said such agreements could cover difficult questions of access to markets, resources and infrastructures, transit as well as improved conditions for investment and competition rules.