American Olive Branch or New Crisis?

December 15, 2011Russiaby Lauren Goodrich

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Russia’s Roulette: Will Moscow Risks Its Relationships With The US & Europe?
Russia’s Roulette: Will Moscow Risk Its Relationships With The US & Europe?

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In recent months, the United States has cultivated one potential olive branch to defuse short-term tensions. Previously, there was little the United States could offer Russia short of abandoning US strategy in Central Europe. When tensions escalated in 2009 and 2010, the United States offered to facilitate large economic deals with Russia that included modernization and investment in strategic sectors, mainly information technology, space and energy. Since Russia had just launched its sister programs of modernization and privatization, it jumped on the proposal, reducing tensions and eventually joining US initiatives such as sanctions against Iran. Now, the United States is extending another carrot: WTO membership.

Russia has sought WTO membership for 18 years. Even though it has the 10th largest economy in the world, it has failed to win accession to the 153-member body. Though the country’s extreme economic policies have given members plenty of reason to exclude Russia, the main barriers of late have been political.

For its part, Moscow cares little about the actual economic benefits of WTO membership. The benefits it seeks are political, as being excluded from the WTO made it look like an economically backward country (though its exclusion has given it a convenient excuse to rail against the United States and Georgia).

As Russia sorted through its economic disputes with most WTO members, Georgia alone continued to block its bid because of the Russian occupation of the disputed Georgian territories of Abkhazia and South Ossetia. In recent months, Georgia has dropped its opposition under US pressure — pressure that originated from Washington’s need for something to offer the Russians. With all obstacles cleared, the WTO should approve Russia’s candidacy Dec. 15-16, apparently giving the United States the olive branch it sought.

Unfortunately for the United States, however, once Russia is voted in, each member-state must “recognize” Russia as a member. No WTO members, not even Georgia, have indicated that they intend to deny Russia recognition. But there is one country that cannot legally recognize Russian membership: the United States.

The United States still has a Soviet-era provision in federal law called the Jackson-Vanik Amendment, which bars trade relations with certain countries guilty of human rights violations (namely, the Soviet Union). The measure continued to apply to Russia after the Soviet collapse, though every U.S. president has waived its provisions by decree since 1992. Only Congress can overturn it, however, and until it does so, the United States cannot recognize Russia as a WTO member.

The White House has called for the provision’s immediate repeal, but with Congress and the White House divided over so many issues, it seems unlikely the issue will be resolved swiftly — if at all — under the current Congress and presidency. This gives Russia another opportunity to increase US-Russian tensions. Indeed, Moscow could noisily decry the insult of the United States making Russian WTO accession possible only to derail it.

Related: Putin Demands End to 18-Year WTO Wait

Related: Energy: Russia, Georgia and Azerbaijan – Linked and Divided by Oil Pipelines

Balancing Crisis and Strategy

Just how many crises in U.S.-Russian relations does Moscow want, and what is its goal? Moscow’s strategy involves using these crises with the United States to create uncertainty in Central Europe and to make the Europeans uncomfortable over perceptions that the United States has forced Russia to act the way it is acting. Thus, it is not a break between Russia and the United States that Moscow seeks but a break between Europe and the United States.

Indications are emerging that the Central Europeans are in fact growing nervous, particularly following Medvedev’s new defense strategy announcement. With the United States not responding to the renewed Russian aggression, many Europeans may be forgiven for wondering if the United States is planning to trade its relationship with Central Europe in the short term to ensure the supply lines via Russia into Afghanistan remain open. It is not that the Central Europeans want a warmer relationship with Russia, only that they may feel a need to hedge their relationship with the United States. This was seen this past week with Poland announcing it would be open to discussions with Russia over missile defense (albeit within the paradigm of separate BMD systems), and with the Czech Republic, a previous American missile defense partner, signing multibillion-dollar economic deals with Russia.

Related: A New Russian Empire: What Exactly Is Putin Planning?

Related: Kremlin Intrigues: Russian Economic Reforms or Clan Purges?

Related: Tensions Brew In The Caspian Sea With Russia’s Latest Move

But with more opportunities arising for Russia to escalate tensions with the United States, Moscow must avoid triggering a massive crisis and rupture in relations. Should Russia go too far in its bid to create an uncomfortable situation for the Europeans, it could cause a strong European backlash against Russia and a unilateral unification with the United States on regional security issues. And it is in Russia’s interest to refrain from actually disrupting the Northern Distribution Network; Moscow is seeking to avoid both complications in the Afghan theater that could hurt Russian interests (one of which is keeping the United States tied down in Afghanistan) and a strong US response in a number of other areas. Moscow must execute its strategy with precision to keep the United States caught between many commitments and Europe off balance — a complex balancing act for the Kremlin.

By Lauren Goodrich

Lauren Goodrich is the Senior Eurasia Analst for the private intelligence corporation Stratfor.

Russia's Plan to Disrupt U.S.-European Relations is republished with permission of STRATFOR.

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