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08.10.10
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Russia Profile Weekly Experts Panel: A Quid Pro Quo Reset
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Introduced by Vladimir Frolov
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Contributors: Vladimir Belaeff, Edward Lozansky
On October 1, Russia’s President Dmitry Medvedev and U.S. President Barack Obama reached the final deal on the terms of Russia’s accession to the WTO. A week earlier, on September 20, president Medvedev signed a decree that banned the sale of advanced Russian weaponry, including the S-300 air defense missile systems, to Iran. Was the WTO deal a direct quid pro quo for Medvedev’s ban on selling S-300 missiles to Iran? If so, what does it say about the reset in U.S.-Russian relations?
The United States was the last largest trading partner to agree to Russia’s WTO entry. Moscow has spent almost a decade in exhausting trade negotiations with Washington that covered issues from intellectual property rights to sanitary controls on imports of U.S. poultry to Russia. On many occasions Moscow accused Washington of using the WTO accession talks as a political tool to gain Russian concessions on other international issues.
A week earlier, on September 20, president Medvedev signed a decree that banned the sale of advanced Russian weaponry, including the S-300 air defense missile systems, to Iran. For years both the Obama and George Bush administrations implored the Kremlin not to follow through with its 2006 signed agreement to sell almost $1 billion worth of S-300 air defense systems to Iran, but Moscow always asserted its right to sell “defensive weapons systems” to Iran, and only recently claimed that the sale of S-300 missiles did not fall under the latest set of UN sanctions on Teheran. Medvedev’s decree, however, specifically cited the latest UN Security Council sanctions resolution as the legal ground for his decision to ban the sale of S-300 missiles to Iran.
U.S. officials acknowledged that Moscow was seeing the “Iran deal” as an asymmetrical transaction with Washington, in which the Obama administration was willing to provide U.S. support for Russia’s bid to join the WTO. “Momentum on WTO accession is what they see as the next big negotiations with us. We're right in the middle of that. That's asymmetric because that's more in their interest than ours. I think we have to deliver on that,” an unnamed U.S. official told the Foreign Policy Web site.
Last week the two pieces of the deal finally came together, as the United States finally gave its approval to the terms of Russia’s entry in the WTO. The deal would also automatically lead to Russia’s graduation from the infamous Jackson-Vanik amendment.
The entire affair appears to justify the basic premise of Obama’s policy of a reset with Russia – to make Russia’s relationship with the United States more valuable to Moscow than its relationships with Iran or other rogue states. The Obama team has rightly concluded that allowing Moscow to have a direct stake in its relationship with Washington would make Russia’s foreign policy much more cooperative. It provides justification for their bet on dealing directly with Medvedev and bypassing Prime Minister Vladimir Putin on key international issues.
It also says something about Medvedev’s willingness to chart his own course in foreign policy. Not only has he scuttled the Iran deal that was negotiated under former president Putin (although there is a lingering suspicion that it might have been negotiated precisely as a bargaining chip to extract future concessions from Washington), he also pushed WTO accession as a priority, basically ignoring Putin’s moribund project of creating a Customs Union of Russia, Belarus and Kazakhstan, which implies joining the WTO as a “trading block.”
Was the WTO deal a direct quid pro quo for Medvedev’s ban on selling S-300 missiles to Iran? If so, what does it say about the reset in U.S.-Russian relations? Does Russia now have a serious enough stake in its relationship with the United States to justify n concessions on other issues and a more restrictive policy toward nations like Iran? Is this a stake for Russia, or is this a stake for Medvedev and his team to further their political interests inside Russia? Is president Medvedev, like former Soviet leader Mikhail Gorbachev, trying to shore up his domestic position with foreign policy accomplishments and support from Washington? Is Medvedev going against Putin on WTO accession? Is WTO entry indeed more valuable to Russia than commercial weapons sales to Iran?
Vladimir Belaeff, Global Society Institute, Inc., United States:
The recent cancellation of delivery of Russian S-300 SAM systems is likely to be an act of compliance with the recent U.S. Security Council decision to impose economic sanctions on Iran, enforcing the nuclear weapons non-propagation regime directed at that country.
In the context of the UN Security Council resolution, which Russia supports, the delivery of weapons systems to Iran is not acceptable, and president Medvedev is obligated to fulfill Russia’s commitment to the UN.
Whether the cancellation of the S-300 delivery led to Washington’s clearing of Russian membership in the WTO is a question best addressed to the White House (a clear answer is highly unlikely). Russia is expected to comply with the resolutions of the UN Security Council; therefore, Medvedev would have had to stop the delivery of S-300 (and other weapons) to Iran independently of the WTO accession process.
When the WTO was originally established, it was touted as the instrument which would provide a “level playing field” for emerging economies, providing developing nations access to the rich markets of the developed world. It is generally recognized that this promise was not fulfilled to any substantial degree and global trade disparity has remained – the real world has a way of overturning the idealistic fantasies of na?ve believers in utopia.
Accession to the WTO has always been a strongly political process. Countries which were useful to the geopolitical objectives of any given period were granted accession without serious regard to their political or economic condition. Thus, economically feeble Albania and the dysfunctional dictatorship of Zimbabwe are members of the WTO, whilst Russia is not.
As to Russia’s own motivation – one wonders whether the eagerness of some influential groups to promote accession to the WTO is backed by a realistic, current cost-benefit analysis, or is due to a very human and forgivable psychological need to belong to what appears like an exclusive club. One fervently hopes that Russian WTO partisans have presented to their country a convincing, truthful and testable economic case for joining the WTO – because exiting the organization (should it prove harmful for Russia’s interests) may be much more complex than joining it (and this step as we see has been complex enough.)
Accession to the WTO was initiated during Putin’s tenure as president; therefore it is not accurate to suppose that he is intrinsically against joining the organization. There is indeed evidence that accession to the WTO was used as a geopolitical carrot for some Russian policymakers. It is notable how agitated the globalist community became when Putin at one point announced that joining the WTO was no longer a priority for Russia – the “carrot effect” of accession was being lost. After this statement, the process of accession was allegedly continued with greater alacrity, but it has taken over one year now and Russia is still not a member – one can suppose that the alacrity was not sincere and the carrot stratagem was probably used again.
One important effect of the global economic crisis of 2008 to 2010 is that economies dependent on foreign trade were affected more severely. Economies where import and export (of any products – raw commodities or manufactured goods) is a large GDP component experienced greater difficulties in recovery. Turning to internal markets was the key to survival and recovery for many countries, including Russia. If this lesson is learned, and foreign trade becomes less significant, then the WTO itself may become less relevant for many self-sufficient countries. Russia might finally join the WTO at a time when it no longer has a strong need for this organization.
Edward Lozansky, President of the American University in Moscow and Professor of Political Science at Moscow State University, Washington, DC:
If the pledge by the United States to help Russia’s WTO bid is indeed a trade-off for Medvedev’s ban on the sale of the S-300 air defense missile systems to Iran, and not the product of speculation by foreign affairs pundits, the value of such a deal for Russia appears highly questionable.
First of all, there is still a debate going on in Russia as to whether the WTO will do this country more harm than good.
Secondly, America may not deliver on its promise even if at the moment it truly intends to keep it. Judging from past experience, several other stumbling blocks may emerge, especially after the November elections, when the number of Obama’s supporters in Congress will be reduced substantially.
Then there is always the possibility that the erratic Georgian president will try to veto Russia’s entry to the WTO, and he has plenty of “we are all Georgians” types in Washington who will gladly encourage him to do that. These folks will always find another excuse, however spurious, to humiliate Russia. For a partial list of these excuses go to the recent Washington Post article by former Assistant Secretary of State David Kramer, as obvious a regurgitation of Cold War clich?s and recipes as one might find these days in the most moss-brained circles.
One only has to review the U.S. policy on the repeal of the obsolete Jackson-Vanik amendment to question the United States delivering on its WTO pledge to Russia. This Cold War-era trade restriction was intended to encourage Jewish emigration from the Soviet Union, but is still used as the leverage to get more concessions from Russia, like forcing it to buy more U.S. poultry. U.S. government officials have said many times that they will seek to repeal this ludicrous regulation, but there exists a common understanding that Congress might not go for it.
Any link to WTO negotiations apart, Russia’s cancellation of the deal to sell S-300 missiles to Iran is absolutely logical and in line with UN Security Council’s decision. For the good of mankind, and especially for Russia and America, it would be highly advisable for the United States to respond to the Kremlin’s courageous decision in kind, not with empty or irrelevant promises but with real deeds. The word “courageous” is used here not only because Russia has lost over one billion dollars, and potentially much more than that in future weapons sales; nor because we hear ever louder screams of “death to Russia” on Tehran’s streets. There is the real danger that Iran can retaliate by supporting terrorist networks in the North Caucasus, the same way it supports Hezbollah, Hamas, and other radical Islamist groups.
So far, according to reliable sources, most of the funding for terrorist activities in Russia has come from Saudi Arabia. The least the United States can do is put some pressure on one of its devoted allies, who, incidentally, did not come out of the September 11 tragedy looking pure as the driven snow. Washington should also consider joint U.S. – NATO – Russian military operations in the North Caucasus and Afghanistan, since the best way to build mutual trust is by becoming comrades in arms while fighting and defeating a common enemy.
It is high time for the United States and Russia to stop zero-sum political games aimed at outmaneuvering each other. Russia needs to modernize its economy, and it cannot do so without normal relations with the United States in terms of trade, investment, exchange of technology, and generally preferred nation status.
The United States, bogged down in Afghanistan, facing the prospect of a nuclear-armed Iran, not to mention huge problems in Pakistan, North Korea, etc., needs Russia’s cooperation in handling these and many other global security problems. If a WTO for S-300 trade-off deal has indeed taken place, but Washington fails to deliver, it will undermine Medvedev’s credibility irreparably. Indeed, it may even ruin his chances for reelection in 2012. At best, he will be seen as the same type of trusting, dreamy guy as, say, Gorbachev. That sort of naivet? is seldom, if ever, forgiven in the hard-nosed game of politics. |
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