07 February 2017

Making deals with Moscow

The future of economic sanctions against Russia for its ongoing attack on Ukraine has become a litmus test for the foreign policy effectiveness of President Donald Trump. Lifting sanctions without any tangible benefits to the security of the United States and its allies would make Washington more likely to become embroiled in a future confrontation with Moscow. Russian President Vladimir Putin is bound to interpret such a move as weakness and may miscalculate the U.S. stance in his next foreign adventure.

The new U.S. administration has yet to be tested internationally. Canceling free trade agreements and talking tough with foreign leaders is the relatively easy part. Responding to armed conflict—including a potential Russian attack on an independent neighboring state—would demonstrate the intentions and capabilities of the White House.

The easing of any component of U.S. sanctions, whether over the attack on Ukraine or
in response to Moscow’s interference in America’s elections, would be viewed as a victory in the Kremlin. Moreover, linking sanctions with any potential cooperation in combating ISIS is a self-defeating strategy. It assumes that Moscow seeks to combat anti-Western jihadism, whereas in reality the Kremlin fans Islamist terrorism to distract the White House from its own international ambitions.

The condemnation of Russia’s aggression against Ukraine by
Nikki Haley, U.S. ambassador to the United Nations, underscored that sanctions imposed for the annexation of Crimea will remain in place until Moscow withdraws from the peninsula. Less clear is whether additional sanctions enforced for the proxy war in the Donbas could be eased or whether the White House views these as part of the same package.

In addition, the U.S. Treasury Department’s decision
to ease some sanctions applied by the Obama administration in retaliation for Kremlin interference in the U.S. elections could prove counterproductive. By allowing U.S. companies to conduct transactions with the FSB, the spy agency will calculate that it has a freer hand for further subversive operations. Putin may well be tempted to further test the Trump team to see how much advantage he can gain without any consequential U.S. resistance.

If indeed the lifting of economic sanctions is intended to help U.S. business, then Washington needs to include strict conditions to protect its long-term interests. Such linkage provides an opportunity for Trump to stamp his authority and demonstrate his potency in any deal making with Russia. Without clear markers for the Kremlin, the White House will again find itself floundering when Putin decides to escalate his international offensives.

If sanctions are softened, the United States should demand corresponding concessions by Russia to test Putin’s sincerity in honoring bilateral deals. For instance, removing Russian companies from the sectoral sanctions list, which were added after the attack on Donbas, can be linked with Ukraine regaining full control of its eastern border with Russia. Such commitments must be closely monitored and verified. Several similar deals could be made to restore Ukraine’s territorial integrity and promote a lasting ceasefire with Russia.

At the same time, in order to underscore America’s firmness, the arms embargo on Ukraine needs to be lifted. Kyiv should be allowed to gain lethal defensive weapons, thus overturning the mistaken Obama approach that weakened Ukraine’s self-defenses and encouraged Russia’s incursions. A key part of any emerging Trump doctrine should guarantee every U.S. ally and partner the right to defend itself from outside aggression, thus lessening the need for future American military involvement.

The targeted financial sanctions imposed on Moscow have contributed to the downturn in the Russian economy and damaged the performance of some major state companies. If sanctions were to be eased the Kremlin-controlled oil and gas industry would find it easier to access foreign financing. Although lifting sanctions will not reverse Russia’s economic deterioration, precipitated by low energy prices, lack of diversification, absence of the rule of law, and pervasive official corruption, they will give Putin a short-term propaganda victory.

To guard against Kremlin attempts to manipulate the new U.S. administration, a bipartisan group of Senators have introduced new legislation that would impose further sanctions on Russia. At a time when Moscow is escalating its offensive in the Donbas, withdrawing sanctions would be interpreted as a green light to further aggression, while an additional embargo would signal that the Trump presidency is serious in punishing warmongers.

The proposed congressional sanctions are directed at Russia’s energy sector and its civil nuclear projects. They also aim to terminate trade in Russia’s sovereign debt and remove U.S. investment in the privatization of state-owned assets. Although passage of this legislation seems unlikely at this point, the fact that Congress may consider such a bill conveys a clear warning to Moscow against further meddling in the affairs of its neighbors or in U.S. politics.

Trump himself should not view the proposed legislation as a challenge to his foreign policy goals but a valuable tool that he can keep in reserve if any deals with Putin are violated. While the new U.S. President portrays himself as an artful deal-maker, he must remember that the Kremlin is notorious as a serial deal-breaker. 

Europe's Edge
 is an online journal covering crucial topics in the transatlantic policy debate. All opinions are those of the author and do not necessarily represent the position or views of the Center for European Policy Analysis.