Turkey Downplays Russian Trade Dispute; Medvedev Praises EU

ANKARA, MOSCOW (Bloomberg)–Turkey sought to play down a trade dispute with Russia, refusing to condemn its invasion of Georgia, as Russian President Dimitry Medvedev praised the European Union for declining to push for sanctions.

Turkey, a NATO member, is determined to strengthen economic ties with Russia as it negotiates an end to Russian curbs on its exports, Foreign Minister Ali Babacan said at a news conference in Istanbul Tuesday with his Russian counterpart Sergei Lavrov.

Babacan’s commen’s followed the European Union’s decision yesterday to take the symbolic step of suspending talks over expanded trade ties with Russia over the invasion of Georgia. EU leaders balked at imposing sanctions on Russia, acknowledging the 27-nation bloc’s dependence on Russian oil and gas. Turkey isn’t an EU member.

“Russia is not only a neighbor and friend, at the same time it is a leading partner in energy and trade,” Babacan said. “We are also observing with pride the success of Turkish businessmen in the Russian Federation.”

Turkey, like the EU, relies on Russian energy to power its homes and businesses. Russia is the main supplier of gas to Turkey and is the country’s largest trading partner. Turkey, a close ally of the U.S., has declined to follow Washington in lining up against Russia over its occupation of Georgia.

Medvedev welcomed the bloc’s “sensible, realistic point of view” in not imposing sanctions, saying its leaders had acted in the interests of Europe.

French President Nikolas Sarkozy, holder of the EU’s presidency, will lead an EU delegation to Moscow on Sept. 8 to request that Russia pull back behind the pre-war lines. Turkey, in turn, is promoting a plan to help stabilize Georgia and the Caucasus, an initiative Lavrov said Russia approved of.

Russia was the largest market outside the EU for Turkish goods last year, with $4.9 billion of exports. Russia’supplies about 60 percent of the natural gas Turkish consumers use.

Lavrov said Tuesday he expected Russia and Turkey to agree ways to ease the passage of Turkish goods into Russia. Moscow also wants to simplify import procedures for companies based in Turkey, he said.

Russia drew condemnation from the U.S. and EU last month when it recognized the independence of South Ossetia and Abkhazia, two breakaway Georgian republics. The United Nations may send a team to South Ossetia to assess the humanitarian situation, UN Secretary General Ban ki-moon said.

While Turkey has urged Russian restraint toward Georgia, it has stopped short of condemning the invasion. Babacan said he “expressed concern” to Lavrov, urging Russia to respect Georgia’s territorial integrity.

Lavrov, meanwhile, sought to play down Turkey’s decision to allow North Atlantic Treaty Organization warships to carry aid to Georgia through the Bosporus straits to the Black Sea, where the Russian navy has held sway since World War II. Turkey is upholding laws governing the Bosporus, he said.

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