EU executive says regrets Russian wood duty hike

BRUSSELS (Reuters) - The European Commission said on Tuesday it regretted Russia's decision to raise export duties for wood and that the move may harm the European Union's timber industry.

"This increase will have a significant economic impact on the wood processing industry in the European Union," said Peter Power, spokesman for EU Trade Commissioner Peter Mandelson.

"We therefore regret the decision by the Russian Federation to raise export duties," Power told a regular news briefing.

The issue features prominently in talks about Russia's planned entry into the World Trade Organization and the duty hike did not make those talks any easier, Power said.

Increasing duties on timber exports bumps up prices for EU paper and pulp producers in Nordic states, especially Finland.

Russian Economy Minister Elvira Nabiullina said the duty hikes were planned.

"The timber duty increase took place fully in line with the previous resolution by the government. We are continuing talks with the European Union," she said, declining further comment.

The duties add to costs for Swedish and Finnish paper companies such as Stora Enso (STERV.HE), the world's biggest paper producer, UPM-Kymmene (UPM1V.HE) and M-Real (MRLBV.HE).

Moscow has to get final clearance for its WTO bid from the EU and other countries, including the United States, which is seeking better protection against intellectual property theft.

"The decision to go ahead with the increase in export duties will not make the situation easier," Power said.

"We continue to strongly support Russia's WTO accession," he added.

(Reporting by Huw Jones; Additional reporting by Moscow bureau; Editing by Dale Hudson)