When leaders meet in Khabarovsk on Thursday for the next EU-Russia summit, they will review progress in negotiations for a new strategic agreement.

Since the last summit in Nice in November, there have been a number of major developments affecting the relationship. Russia has come to recognize that it is not immune from the global economic crisis. Indeed, its economy has been severely affected by declining growth, high inflation, rising unemployment and capital flight.

Second, there is a new occupant in the White House keen to see some progress in U.S.-Russia relations. Presidents Barack Obama and Dmitry Medvedev enjoyed a good first meeting during the April Group of 20 summit in London and agreed to initiate a new round of arms control negotiations. This could bring dividends to the EU-Russia relations as well.

Third, the European Union has launched its Eastern Partnership designed to align several former Soviet republics closer to the EU. Moscow has criticized the new policy as an EU attempt to expand its sphere of influence in Russia's backyard.

Fourth, the Kremlin has still not complied with all elements of the cease-fire agreement on Georgia in terms of withdrawing its troops to prewar levels. To make matters worse, three weeks ago Medvedev authorized sending additional Russian border guards to South Ossetia and Abkhazia.

The EU-Russia summit will take place just before the fifth round of negotiations on a new strategic agreement. So far, there has been little progress in the areas of security, human rights, economic cooperation, research, education and culture. Moscow is pushing for a framework agreement, and the EU prefers a comprehensive agreement where nothing is agreed until everything is agreed. But both sides are beginning to understand each other better, which is essential if progress is to be made.

The difficult areas of the negotiations are not surprising with energy and human rights at the top of the list. Russia was annoyed that the EU and Ukraine discussed a deal to modernize the gas pipelines running through Ukraine without involving Moscow. The Kremlin has sought more explicit EU support for both the Nord Stream and South Stream pipelines. Medvedev has announced proposals for a revised energy treaty that would replace the Energy Charter that Russia has signed but not ratified. European Energy Commissioner Andris Piebalgs, however, has rejected this new proposal. On human rights, Russia is seeking to minimize commitments already undertaken at the Organization for Security and Cooperation in Europe and Council of Europe.

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The European Parliament is pressing the European Commission to be tough on Russia, stressing that the violation of Georgia's territorial integrity and the January gas dispute have seriously endangered EU-Russia relations. They also want a tougher EU line on human rights and support for civil society. There are a limited number of areas of agreement between the two sides, including terrorism, drug trafficking, science and culture. No one knows how long the negotiations will last. An educated guess would suggest a minimum of 18 months to two years, and ratification will require the same amount of time.

The recent spat between Russia and NATO over military exercises in Georgia and tit-for-tat spy expulsions will also affect EU-Russia relations. Russia seems split between those who think that the country can still go it alone in world affairs and those who would like to integrate the country fully into the global community. The debate on accession to World Trade Organization is a good example of this struggle. Relations with the EU are another.

Many in the business community and the more forward-looking politicians would prefer to continue working toward a strategic partnership with the EU. Most economists understand that Russia can only modernize its economy with the support of the EU. Despite the rhetoric about not fearing another Cold War, both Prime Minister Vladimir Putin and Medvedev know that the country could not sustain another arms race. In addition, with a falling population Moscow must be worried that the country does not have the resources to provide adequate defense of its own territory, let alone engage in reckless expansionism.

How should the EU react to inevitable Kremlin pressure and attempts to divide it? The first step is for member states to recognize that the EU has a number of strong cards to play in negotiating with Russia. The EU has almost 500 million citizens compared to Russia's 140 million. The far wealthier EU has the largest and most attractive internal market in the world, and Russian companies want a slice of this pie. Europe pays top rates for Russia's natural resources, and Gazprom gets 70 percent of its profits from sales to the EU. The EU buys nearly 60 percent of Russia's total exports. Moscow wants to join the WTO, and the EU can help facilitate this process.

Although the EU has no single big carrot, it has many things that the Kremlin would like. EU policy, therefore, must be based on a firm understanding of its common interests and then pursuing these interests with a single voice. It is difficult, but not impossible.

Fraser Cameron is director of the EU-Russia Centre in Brussels.