EU to press Obama at summit for aid in cutting Russian gas imports

BRUSSELS (Reuters) - The European Union will press U.S. President Barack Obama on Wednesday to help reduce Europe's reliance on Russian energy by exporting U.S. natural gas, at a time of chill in relations with Moscow over its intervention in Ukraine.

After a visit to a World War One battlefield, Obama will have just 75 minutes over lunch with the EU's top officials to tackle issues ranging from energy to climate change, in a meeting that will be dominated by the Ukraine crisis.

Yet if there were any doubts about the EU-U.S. relationship after last year's revelations that Washington spied on its allies, Obama plans to assuage them later in the day in a speech to some 2,000 guests, before leaving for Rome.

"Recent developments just underscore the importance of the transatlantic relationship," Obama's top trade envoy, Michael Froman, said during a visit to Brussels before the summit.

"Right now, as we look around the world, there is a powerful reason for Europe and the United States to come together to demonstrate that they can take their relationship to a new level," said Froman, who is the U.S. Trade Representative.

Obama will seek to send that message in his tour of Flanders Field in northern Belgium where U.S. soldiers fought a century ago, a visit steeped in historical significance that has been accentuated by the tensions with Russia over Crimea.

Earlier this week, both sides sought unity in The Hague, where Obama and Germany, France, Britain and Italy, along with Japan and Canada, warned Russia it faced damaging economic sanctions if Moscow took further action to destabilise Ukraine following its seizure and annexation of Crimea.

Ukraine will be foremost in discussions on Wednesday in light of the EU's efforts to scale back its imports of Russian energy. Russia provides around one third of the EU's oil and gas and some 40 percent of the gas is shipped through Ukraine.

EU leaders dedicated part of a summit to the issue last week and German Chancellor Angela Merkel said she supported asking Obama to relax restrictions on exports of U.S. gas.

21ST CENTURY TRADE PACT

One way to do that is through the proposed free-trade agreement between the United States and the European Union, which would be the world's biggest accord of its kind, dubbed the Transatlantic Trade and Investment Partnership, or TTIP.

"We should have an ambitious chapter on energy in the TTIP," EU Trade Commissioner Karel De Gucht, who will attend the summit, said at the weekend, referring to EU demands for a clear framework setting out U.S. commitments on gas exports.

The issue will also be discussed next week at a special EU-U.S. Energy Council, officials said.

In the wake of the worst financial crisis since the Great Depression, EU governments and the Obama administration see a deep and broad free-trade deal as the best way to create jobs, removing burdens and customs duties on businesses.

They say a "21st century" trade pact encompassing almost half the world's economy could generate $100 billion in additional economic output a year on both sides of the Atlantic and set the standards for global business before China does.

The European Union and the United States already trade almost $3 billion in goods and services each day, and by thickening economic ties, the pact could create a market of 800 million people where business could be done freely.

But eight months into talks, public hostility is growing at the idea of unfettered transatlantic commerce, while negotiators remain far apart on many issues.

Reports of U.S. National Security Agency spying in Europe have combined with concerns about the damage to food safety and the environment under a free-trade pact. In both the United States and Europe, unions also worry about lost jobs or lower working standards and say that a trade pact will serve only the interests of multinational companies.

Inside the negotiating rooms, other difficult issues include how to open up to each other's markets, removing customs duties that cost companies billions of dollars each year, particularly automakers such as Ford and Volkswagen.

Washington and Brussels are at odds over an initial exchange of offers to open up markets and cut tariffs, with each saying the other has not been ambitious enough.

In an effort to overcome that, Obama, along with European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy will promise to remove all tariffs on bilateral trade, according to a draft of the summit's joint declaration seen by Reuters.

"We reaffirm the objectives we agreed," the summit draft declaration said. "Those goals include eliminating all duties on bilateral goods trade." ($1 = 0.7255 Euros)

(Editing by Mark Heinrich)

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