European Union (EU) and Russian leaders meet in the southern French city of Nice at a time when relations are soured by the Russia-Georgia military conflict and trade disputes between Russia and the EU.

EU foreign ministers on Monday agreed to resume negotiations with Russia on a framework agreement, creating favorable atmosphere for the EU-Russia summit. But thorny issues abound.

After the Russia-Georgia conflict, EU leaders at their Sept. 1 emergency summit decided to suspend the negotiations as a signal to disapprove Russia's handling of the Georgia crisis. The new agreement will succeed the current Partnership and Cooperation Agreement.

"We attempt to come to agreement with the Russian side to resume this negotiation process, with working groups installed in November and with a steering group meeting of the chief negotiators in early December," said an EU official prior to the summit.

Dates are hopefully to be announced at the summit, said the official who spoke on condition of anonymity.

The EU, however, cautioned that the resumption of negotiations on the framework agreement does not mean "business as usual."

The EU does not accept the status quo in Georgia and wants Georgia's territorial integrity to be restored, said the European Commission in its pre-summit review of EU-Russia relations.

Georgia launched a sudden attack on its breakaway region of South Ossetia on Aug. 7, triggering prompt military action by Russia. Russian troops defeated the Georgian military in five days.

Russia withdrew its troops from Georgia proper under a deal brokered by French President Nicolas Sarkozy but still has thousands of troops in South Ossetia and Abkhazia, another breakaway region of Georgia, as peacekeepers. Russia's recognition of the two regions as independent states has been condemned by the EU.

At the Nice summit, the EU will persuade Russia to give monitors from the EU and the Organization for the Security and Cooperation in Europe (OSCE) access to Abkhazia and South Ossetia. The EU also wants full access of humanitarian experts and reconstruction aid experts in the two regions.

The EU will also discuss with Russia the issue of international inquiry into the Russia-Georgia conflict. The EU is setting up a team of experts to look into the cause of the conflict.

Other international issues include Iran's nuclear program, Afghanistan and the Middle East.

Trade will be an important topic at the summit. Despite rapid growth in bilateral trade, there is "an unnecessarily long list of irritants," said the EU official.

Thorny issues include Russia's insistence on demanding payments from EU airlines that use Russian airspace, or Siberian overflight rights; duties on Russian wood exports; Russian trade barriers on agricultural products; and delays in customs reform.

Siberian overflight rights, which Russia has linked to its World Trade Organization (WTO) accession, cost EU carriers 350 million euros (440 million U.S. dollars) per year, while restrictions on wood exports have severely affected the economy of several EU member states, particularly countries in the north, said an EU trade official.

The EU is eager to strike a deal with Russia on the wood issue as foreseen increases in duties on Jan. 1, 2009 will cause further damage.

Russia is the EU's third largest trading partner and an important source of energy supply for the EU. About 40 percent of EU gas imports and 25 percent of oil imports are from Russia. The dependence is projected to grow in the long term.

Energy supply disruptions as a result of disputes between Russia and transit countries, such as Ukraine and Belarus, have caused concern in the EU.

Russian President Dmitri Medvedev is expected to discuss with EU leaders his proposal on a new European security architecture. But the EU member states are yet to reach consensus on this issue. The EU will listen carefully to Medvedev, said the EU official.

The two sides will also spent considerable time on the current financial crisis as the leaders will travel to Washington immediately after the Nice summit to attend a Group of 20 summit dedicated to the crisis.

(Xinhua News Agency November 14, 2008)