US and Russia: Great bargain possible or excluded?

US and Russia: Great bargain possible or excluded?

Bob Satterfield, August 3, 1914, Source Lambiek Comiclopedia

Author of this text Martin Svárovský is a historian and diplomat. He is currently working on Czech Ministry of Foreign Affairs. This is a short version of the article that was recently published in Russki Vopros.

The opinions expressed in this article are the author’s own and do not reflect the view of the Czech ministry of Foreign affairs.

No matter how paradoxical it may sound, the current, firm stance of the US administration under president Trump on Russia is neither a U-Turn nor a major surprise. It is not based primarily on some set of values but rather on a pragmatic, rational consideration originating from a “businesslike” approach towards policy. The logic applied by the Trump administration says that if you like to make business with someone then he needs to have something to offer.

Russia has, at least for now, nothing or very little to offer. The following article will explore the areas where the Russian and the US interests appear contradictory and therefore Russia cannot offer a deal. The areas are for example some of the following: the oil and gas industry, fight against terrorism, Syria, China, Security Architecture in Europe/strategic stability, trade, Ukraine, North Korea…

The outcome of the policy based on a businesslike approach (or calculation if you like) can – under the current circumstances – lead to some feeling of relief in Central and Eastern European countries (hereinafter as CEE countries) since it does not allow great bargain (or reset 3.0) at their expenses. Nevertheless, the question is how sustainable these circumstances are. I assume that a pragmatic, businesslike approach to the policy will prevail for the whole duration of the Trump administration.

As a result, here is quite good possibility that the outcome of the policy approach based on a pragmatic calculation will be changing depending on the Russian ability to come up with a tangible offer.

Oil and Gas industry
The importance of this field for US-Russia relations is clear, taking into account the dependency of both countries’ economies on fossil fuels, the amount of revenues obtained from the oil and gas market and also usage of hydrocarbons as a foreign policy tool. Yet there is a clear clash of interest between USA and Russia in this field.

Due to the “shale revolution”, the USA switched from the position of a big importer to a producer with a good prospect of becoming a major exporter. Moreover, the American shale industry is a very flexible one with an ability to react quickly to any increase or decrease of the price of oil and gas. This is a very challenging factor vis-à-vis shared interest between OPEC cartel and Russia to maintain the price of oil as stable and profitable as possible. Moreover, the U.S. very well understand the Russian approach under Putin to use oil and gas as a political weapon and thus supports efforts of some European countries to get rid of their dependency on Russia in this field.

In particular, the U.S. endorses implementation of the “Southern Gas Corridor” which explicitly aims to diversify European imports away from Russian gas. The same position is also manifested by the firm stance of the U.S. administration against the NordStream II project, which gained its further spin with sanctions approved by the Congress in late July this year. However, already the first round of the sanctions after 2014 led to substantial reduction of the U.S. investment in mining industry on the Russian territory, which created an additional problem for Russia that desperately needs western high-technology of exploration and production equipment. Currently, Russian companies cannot cooperate with Americans to share or develop deep-water, shale or Arctic technologies.

Thus, the field of oil and gas supply now looks like a battlefield rather than a field for cooperation. The point is that even in case there were no sanctions after Russia’s interference into Ukraine’s affairs, only the mere fact of the U.S. and Russia now being competitors in the gas and oil field prevents any geopolitical bargain.

Fight against terrorism
Fight against terrorism holds the same importance for the U.S.-Russia relations as the field mentioned above. Russia´s awareness of this fact is demonstrated in its foreign policy concept from 2016 where the plans of how to combat terrorism are listed in detail. Both the USA and Russia have a long track record in this field. The cooperation between them would be natural and the importance of the fight against terrorism suggests that this field is an avenue for further cooperation as well as substantial deals.

On the other hand, there are clear limits to this option. This lies with the Russian way of understanding terrorism and the way of combating it. Hardly any administration of a democratic state could afford to fight terrorism in a way that was used by Russia in Chechnya. There the pro Kremlin puppet dictator implied a horrible regime that conducts atrocities against its own population. Syria as well, where Russia is intervening since 2015, is a problematic case in this regard. Russian military is targeting ISIS only to some extent, with majority of its actions rather being directed to other militant groups. So far Russia has showed in Syria that it has other priorities than to fight against ISIS.

The problem also lies in Russian military capabilities and its usage. Russia is much less ready to deploy precise weapons and ammunition or Special Forces like USA or Israel that are capable of fighting terrorists in dense populated areas with maximum respect to the civilians. A survey has been conducted, showing that the Russian bombing in Syria has caused far more civilian casualties than the bombing conducted by the US-led coalition against ISIS. For a leader of a democratic country it is politically sensitive if the public is horrified by pictures of civilian casualties This put another serious limit on the possibility of US-Russia coalition in the fight against terrorism.

It cannot be claimed that these limits make the cooperation entirely impossible. Fight against ISIS is of paramount importance which speaks in favor of such cooperation despite the differences in the combat strategy. Nevertheless, the cooperation will have a rather delicate form that might bring Russia some particular gains. I doubt that this would be sufficient for the great bargain.

Coordination in Syria?
The topic of Syria was the main item on the agenda of two recent meetings between ministers Tillerson and Lavrov. Both countries, as well as the whole international community, are interested in solving Syrian crisis that has negative consequences beyond the borders of the country. Moreover, the USA and Russia have their own interests in the country and in the Middle East.

Even though both countries are decisive players in Syria, the real alliance between them cannot be expected. There are several reasons for that. The point is that as the main clash between US and Russia poses not the fact that Russia supports Bashar Assad but the fact that Russia is cooperating with Iran in Syria. This is a real redline for US that was clearly communicated to Russians on several occasions. It was also the reason for US skepticism on Astana process. But Russia cannot abandon its ally, no matter how problematic one. Russia-Iran relation is full of historical and political differences and conflicts. Nevertheless, the Moscow position in the Middle East is not as strong as the position of the USA. As a consequence, Russia badly needs allies in the region, even if the relation with them is based just on the transactional principle rather than strategic cooperation.

Another obstacle for cooperation in Syria is the fact that the substantial military cooperation between US and Russia is restricted by the American legislative. The only way of military cooperation applied on the spot was a sort of coordination in order to avoid incident between two operating militaries.

Still, Syria today is a complex issue that offers many kinds of international actions. The range of them extends up from the official, formal agreements between states down to pure pragmatic operative deals or even field collusions. Remarkable in this regard are the ongoing talks between US, Russia and Jordan in Amman. One can assume that the talks are not only about de-escalation zones but on broader spectrum of issues.

From a strategic point of view, it seems that Russia might accept the fact that Syrian crisis will be somehow solved with significant US contribution. What it cannot accept is firstly that it would be solved without Russia and secondly that the solution would lead to major strengthening of the US position in the region.

The strategic point is that there is a fundamental clash of interest and approach between the USA and Russia in Syria. Had the only priority of both Russia and the USA been the real solution of the Syrian crisis as such, some chance of the US-Russia partnership on Syria might have been there. But Syria today represents rather a “power game” between external powers. Therefore, only partial agreements like the truce in south-west zones of Syria are possible.

Triangle USA-China-Russia
Could any new model of the so called triangular diplomacy work in current circumstances? Could Russia play this game in a way that would bring it some benefit? Proclamations of the US president at the beginning of his term suggest that China will be an economic as well as a security challenge for his administration to tackle. Would Russia use this situation as a window of opportunity and try to raise its value for the United States?

Anyway, if the United States will not succeed in calming down a bit their relations with China it might result in the situation of the US competing (or confronting) with the second and twelfth largest economy with huge armies at the same time. This can appear to be bit off more than you can chew.

For Russia, the favorable scenario would be if the United States decided to confront primarily China and Russia would try to place itself in a position of a US ally in this specific version of triangular game. But even if this were the case it would hardly work because Russia does not have enough leverage on China. On the contrary, in Russia-China relation Russia is the weaker player. It is manifested by several cases: China used the difficult international situation of Russia after 2014 and demanded very assertively a discount on Russian oil. The same assertive approach might be expected in case of the gas pipeline the “Power of Siberia” which is also dependent on Chinese money, either in the form of prepayments for gas supplies or loans.

Russia, on the other hand, has an advantage in terms of weaponry. But there is a prediction that due to the Russian technological stagnation and the Chinese ability of copying, these technological comparative advantages will be lost within couple of years. In the field of nuclear power plants China is already almost self-sufficient with only 20% of services bought from Rosatom. The entire dependency of Russian economy on China’s finances is obvious; today, China is the largest foreign creditor of Russia.

What Russia could offer in the triangular setting is that it would cut off its cooperation with China in terms of both exercises and armaments. Would it be enough? Well, China represents a complex challenge for the U.S., not only in the field of security/military but in the economic, financial, technological and political one as well.  It leads to the conclusion that even in the most convenient scenario Russia could not help the United States much with China in the triangular setting.

Security architecture in Europe/Global strategic stability
In 2008 and 2009 Russia came up with two proposals concerning new security architecture. They were the so-called “Medvedev proposal” on new European security architecture and the so-called “Lavrov proposal” on relations among NATO-Russia Council members. For CEE countries, both these proposals were rather problematic. Many of the principles set out in the Russian drafts were aimed at limiting the autonomy of decision-making processes in both Euro-Atlantic institutions and the right of a state to join any security alliance according to its own choice. At the end, none of them materialized but the discussion on them lasted for more than two years. At that time, Russia had a position of a heavy-weight security player, at least in the conceptual debate. This debate was a sort of test ground of solidarity and coherence of NATO and the EU foreign policy. If such a debate was initiated now, one can imagine that possible targets from the Russian side might be the Enhanced Forward Presence of NATO or European Reassurance Initiative. Nevertheless, it is significant that since 2008-2009 Russia has been unable to propose anything else of comparable significance.

In the past, both superpowers were able, even during the difficult times, to find a common ground for moves in favor of strategic stability. There were several bilateral treaties in this field.  Last of them was the New Start Treaty on Further Reduction and Limitation of Strategic Offensive Arms that was signed in 2010 in Prague and entered into force in 2011. In the complex field covered by the term “strategic stability” there is clearly space for further steps.

Many experts think that both sides share the common interest in strengthening of strategic stability. Could this field play the role of a driving force improving the US-Russia relations?  Well, there are different opinions about whether the Russian or American side are really interested in making further steps in this field. One clear obstacle is Russian violation of the Intermediate-Range Nuclear Forces Treaty (INF). Unless Russia corrects its stance, neither the administration nor the Congress will give a green light for a new treaty.

Another problematic issue might be represented by the missile defense. The New Start does not constrain testing, development, or deployment of the current or planned U.S. missile defense programs or long-range conventional strike capabilities. The Americans would certainly not like to change anything in this. There is also a difference in opinions on what strategic stability includes. US approach is focused on offensive nuclear forces whereas Russia includes overall military potential, including both offensive and defensive weapons.

US-Russian trade
Economic ties between states and interests of major business players play an important role in international relations. Trade has been traditionally in the center of the American strategy – not only to bolster economic growth but also to build partnerships with states with shared values and interests. The economy is an important factor, for instance in German-Russian relations.  In the case of US-Russia, the picture is different. Russia is the 22nd trade partner of USA with only 1% share on the US foreign trade. The trade exchange between the United States and Russia is smaller than the US trade with Belgium. Therefore, the negative impact of sanctions and Russian countermeasures on US economy is marginal

The overall economic picture of Russia is not encouraging.  Its economy already started to decrease three years before the first sanctions were introduced. This negative trend lasted for five consecutive years. Annual inflation rate of about 20% depleted the Russian buying power. There is some prediction for improvement of the economic situation but it is not so cheerful.

Still, the Russian internal market with 142 million inhabitants is quite large. But the US economy is not an export economy. In regards to this, the commentaries that Trump is travelling in order to boost the American export (such commentary appeared for instance with his visit to Warsaw) are rather groundless. The balance of the US foreign trade is traditionally in a negative balance (with the exception of agricultural commodities). So, the famous saying “America first” means more protection of the internal market and American producers rather than a boost in the foreign trade. From the strategic point of view, it is not very convenient for Russia to have its economy highly dollarized.

The economy in U.S. – Russia relations can hardly play a role comparable to the case of Germany and Russia.

The repeatedly voiced position of the US administration is that the conflict in Ukraine poses a major obstacle for the improvement of US-Russia relations. Taking into account the atmosphere in the Congress, the expert community and the public, there is no need to have doubts about this proclamation nor about the US administration’s determination to help Ukraine in solving the conflict with Russia. There is not enough space in this article to elaborate more on the complexity of the Ukrainian crisis. Therefore, let us concentrate on what are the possible solutions that might bring a positive effect on US-Russia relations.

Is a great deal possible in the case of Ukraine? Well, Crimea is probably lost. Russia will never give Crimea back. Not only because it is a matter of national pride and the annexation is popular among Russians. Crimea also has a strategic importance for Russia. The annexation in 2014 and its military build-up on the Black Sea laid the base for Russia´s Syria operation as well as the base for projecting power in the Middle East. Conceivable scenario is that Russia will make a concession on Eastern Ukraine hoping it would be enough for the West “to swallow” somehow annexation of Crimea.

Russia has some space for tactical maneuvers in this regard (The reality is that Russia is able to pursue its influence on Ukraine even without keeping its military presence or presence of its proxies in eastern Ukraine). Only the eventuality that Russia fulfils the military conditions of Minsk II. agreement would put Poroshenko under enough pressure to fulfil political conditions of settling the crisis in east Ukraine. This message was also conveyed to Foreign Minister Klimkin during his visit in Washington.

In addition, Germany and France would be probably in favor of some deal on Ukraine. Firstly because it would mean their diplomatic success in the Normandy format and secondly because these two countries do not see Ukraine as their strategic priority.

One has to bear in mind that the real game changer in the attitude of American public towards Russia was caused not by Ukrainian crisis but rather by the Russian interference into the elections. The USA is not bound by commitments towards Ukraine comparable to the Baltic or the Black Sea states. The USA can keep the same track of deterrence even if Crimea stays in the Russian hands. On the other hand, hypothetical withdrawal of sanctions without major political concession from Russia would not only be a false political signal to Ukraine and wrong message about credibility of US sanction policy. It would also signal that the only real guarantee against incursion of a big power into your own territory are nuclear weapons that Ukraine deliberately removed after Budapest memorandum from 1994. This would have detrimental impact on the global non-proliferation policy.

Taken together, the possibility of some agreement between the USA and Russia regarding Ukraine is higher than in other mentioned cases. Ukraine is important but it is not a matter of vital importance for the United States. Anyway, the weight of such move might be sufficient for overcoming the stalemate in the relations but it is not a strategic issue with global impact.

North Korea
The North Korean case is a matter of strategic importance to United States. A lot is at stake here: security of South Korea, impact of North Korean behavior on nuclear proliferation as well as strategic stability of the entire region. One should not forget that Japan needs to feel safe in order to keep relying on the US protection. Otherwise, the country with huge economic and military potential might would choose a more autonomous way of safeguarding its security. That is certainly not in the interest of the USA.

The clock is ticking in this issue.  Some experts speak about “a zone of immunity” known from the Iranian case. It means the danger of North Korea reaching a certain degree of capability and a point at which nothing could be done about its missile and nuclear program.

Taking the brisance of the matter, there is no doubt that the USA tries to engage Russia as much as possible. It already brought results in the UN Security Council resolution that imposed sanctions on North Korea not being vetoed by Russia or China. This is a signal of possible understanding and particular deals in this matter. However, there is still a basic divergence of interests. While the USA is interested in solving the North Korean issue because of the above-mentioned reasons, Russia’s (and China’s) strategic priority is not to allow further increase of the American geopolitical influence in this region.

The danger of such increase is more important for Russia than the nuclear threat posed by North Korea. Russia is confident it has enough deterrence potential against this threat. Russia is also not concerned about South Korea or about the global danger of nuclear proliferation spiral like the USA.

Among the listed, North Korea is no doubt the most topical and delicate issue where any prediction is very difficult right now.

Sustainability of the current US stance
Going through all the above-mentioned aspects, one can make the conclusion that the US foreign policy based on a businesslike approach (or transactional logic if you like) can – under the current circumstances- hardly lead to any great bargain (or another reset). It is my personal belief that this is good for the Czech Republic and other CEE states. Unless the Russian policy will change and show clear, undisputed respect for independence, stability, values and political and economic orientation of the Czech Republic and other CEE states, no such strategic bargain with Russia could bring anything positive for us. This was the case of the previous attempts to reset the relations with Russia and it was to some extent the case of the so-called “policy of détente” in seventies.

However, there is one big question mark. How sustainable are these circumstances that do not make the great bargain possible? Well, the administration is still in the process of transition and the review of policy towards Russia is underway. We may assume that pragmatic, businesslike approach in foreign policy will prevail during the whole term of the Trump administration.

So far, it seems that among the newcomers there are two different groups in the administration with the influence on shaping the US foreign policy. Those who have very good record of accomplishments in foreign policy and in some cases deep knowledge about Russia in political, military or economic aspect. Some of them dealt with this issue for several years and published books or articles about this topic.

The second group are newcomers without any record in foreign policy or even without any experience with the state service as such. This group might incline to the pragmatic approach to policy that was labeled as “businesslike” approach at the beginning of this article. The influence of this group is further strengthened by the fact that not an insignificant portion of Trumps’ electorate have some sympathy to the President Andrew Jackson’s foreign policy. This domestic factor leads to the conclusion that the first group is unlikely to prevail.

It is only logical that the outcome of the policy approach based on pragmatic calculation may change, depending on the Russian ability to come up with a tangible offer. There is some probability that eventually the Russian leadership will conclude that the current line in relations with the U.S. and the EU as well is not sustainable.

Trying to seek the answer to the question, one has to look at possible motivation to improve mutual relations.

What does the United States want from Russia? The set of items listed by Julianne Smith seems to be illustrative and comprehensive enough: to stop the disinformation campaign, to stop fueling instability in Europe, to stop promoting the division of Europe, not to interfere in German elections, to direct the combat operations really against the ISIS and of course to stop brewing crisis in Ukraine.  Perhaps to stop to interfere in Montenegro domestic politics could be added to this list. Since the frozen conflicts like Abkhazia and Ossetia, Nagorno-Karabakh or Transnistria are rather long pending issues, they do not necessarily need to be listed in this US wish list. The question is the scale of the American motivation to have these problems solved.  Do any of them represent real strategic interest for the United States? Rather not. Maybe the most significant for the US would be unstable and divided Europe. But here the resilience is quite high and Russia does not have enough leverage to achieve this goal.

Today, the discussion in Washington about the possibility of the great bargain fell silent in contrast to the atmosphere at the very beginning of president Trump’s term. And rightly so. From what was examined in the article, the great bargain is practically out of the question at a moment. But as it was already said we cannot exclude some small partial deals. This move can be driven by the fact that the Russian administration would come to conclusion that it is necessary for Russia to have fair relations with the United States. Russian leadership might be motivated to this conclusion by the complexity of domestic problems and weak international position.

If this is the case, it is not a negative thing as such. A bit problematic situation for CEE states would be the U.S. readiness to make deals regardless of the behavior of the Russian regime. As I already put it in 2011, such scenario is far riskier for smaller and weaker states. The strong powers could afford being more generous towards an adversary. From what it is known so far about the American administration, such possibility cannot be excluded. Even for superpower like the U.S., there is no obvious approach to global international order that will allow to fully avoid trade-offs among its national security goals.

But in which of the fields the deals are to be witnessed? Where is the bargaining chip, or rather chips? Can those small deals lead to a great bargain? What is it that Russia will offer and the USA will buy? Nobody knows yet. The attention of an expert community, diplomacy and intelligence of the Czech Republic should be directed at this enigmatic question.

Also, in which territories one should search for the possibility of partial deals/great bargain? Will it be in Europe or rather in the Middle East?  In any case, the current US tactics is to tackle different issues separately and try to make progress step by step. The US administration is assuring that a particular deal in one item does not mean that the US will make concession in another item in exchange.

I think the possibility of a major breakthrough in Ukraine (lost case of Crimea) or in Syria (Russia does not want Syria to be another US base in Middle East) is quite low. At least in short term, rather small operational deals are to be expected.

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