US perplexing Putin with new round of economic sanctions
“I proposed an action plan for setting the conflict on track towards a peaceful settlement”, said a perplexed Putin to reporters asking about the latest rounds of retaliatory US economic sanctions against Russia.
On September 12, 2014 during a press conference following the Shanghai Cooperation Organization summit, reporters hijacked the news conference to talk about the new economic sanctions against Russian by the United States and the European Union.
Putin did respond to the reporters questions in frankness and honesty saying the new economic sanctions strike him as very strange.
The exchange went like this.
“QUESTION: The European Union has adopted a new package of sanctions. How do you assess them and how damaging will they be for Russia? Will there be any countermeasures, sanctions in response, and if so, what will they be? The new sanctions list the EU has announced includes politicians from Crimea, Donetsk and Lugansk peoples republics, and State Duma deputies too. [Vladimir] Zhirinovsky is on the list and so is [Vladimir] Vasiliyev. What are your thoughts on the matter?
VLADIMIR PUTIN: Russia’s position on sanctions is well-known. We have long since realized that sanctions as a foreign policy instrument are not very effective and almost never produce the hoped-for results, even when used against small countries, let alone against a country like Russia.
Of course, imposing sanctions always causes some damage, including for those who impose them. The sanctions against Russia will be no exception. We know the losses that European business and US business too will face and the damage done to trade relations as a result of the measures Russia has taken in response, but as we say in such cases, we have been left with no choice.
As for the latest round of sanctions, the use of this mechanism looks somewhat strange, even in a generally strange situation. I say this because, as you know, I had a telephone conversation with President of Ukraine [Petro] Poroshenko recently, and following on from that conversation I proposed an action plan for setting the conflict on track towards a peaceful settlement.
I even said at that moment in Ulan Bator, talking about these plans, that President Poroshenko and I were generally in agreement in our positions. Building on that conversation, I put forward a seven-point plan, which, as we saw, essentially became the base of the peace agreements signed at the contact group’s meeting in Minsk.
We are pleased to see that the process did begin and that hostilities have stopped, the militia have ceased hostilities and the Ukrainian army, to give the Ukrainian President his due, has also taken the required steps under the agreements. They have pulled back, in some places at least, and have pulled back their artillery and multiple launch rocket systems to a distance from where they cannot fire on populated areas.
The peace process has begun and so have the first contacts, and I think that the possibility has emerged that this process might produce a political settlement, even if just a temporary one for now. This is definitely a positive shift in the situation that has unfolded in southeast Ukraine.
But I cannot fathom what these latest sanctions are actually about. Perhaps it is not to someone’s liking that the process has taken a peaceful turn? I have already said many times that our Western partners pushed things towards an anti-constitutional coup in Kyiv, and then supported the military operations in southeast Ukraine, and now, just when the situation has taken a turn towards a peaceful settlement, they are taking steps that practically aim to disrupt this peace process. Why are they doing this?
I can’t help but think the seditious thought that no one actually cares about Ukraine itself. They are just using Ukraine as an instrument to shake up international relations. Ukraine is being used as an instrument and has been made hostage to the desire of some players on the international stage to revive NATO say, not so much even as a military organisation, but as a key instrument in US foreign policy, in order for the US to consolidate its satellites and scare them with a threat from abroad. But if this is the case, this is a real shame because it means that Ukraine has essentially become hostage to another’s interests. I do not see anything good in this practice.
As for our retaliatory measures, the Government is considering this. But if they are applied, then they will only be applied with the goal of creating better conditions for us. I feel there are certainly downsides to what was done to limit food imports for us as well, but they are minimal. There are far more positives for stimulating the development of our own agriculture, freeing the market from Western manufacturers that have thoroughly assimilated in our market, and meanwhile, they receive much more support and subsidies at a much higher volume than our agricultural producers.
Some people know, and others don’t, that subsidies per hectare of cultivated lands in the European Union are six times greater – I want to stress this – than in the Russian Federation. So the competition here was not very fair. But if the Government comes up with an idea that will help us somehow resolve our internal problems, then I suppose we should agree with it. But we will not do anything to harm ourselves. This concerns our response to sanctions.
As for the lists, I welcome this resolution by the European Union. The less our officials and heads of major companies go abroad and work on pressing matters instead, the better. The same is true of State Duma deputies, who need to communicate more frequently with their voters, rather than tanning somewhere at foreign resorts. Nevertheless, some questions arise; there are some names there that seem rather strange. I do not recall, I think it was one of the deputies, I think it was Babakov. And then the wording there…
REPLY: For assets.
VLADIMIR PUTIN: Yes, for assets in Ukraine and in Crimea. But Ukraine’s current leadership also has many assets in Ukraine and in Crimea. Apparently, if you follow this logic further, they themselves need to be included in the sanctions list.
Moreover, it included the prime minister of the self-proclaimed Donetsk Republic. Our Western and Ukrainian partners insisted that officials from the self-proclaimed republics participate in the peace negotiation process. They came to us requesting that we use our influence to encourage them to participate.
We tried to do this. The prime minister is participating in this work and was accepted as a participant in the negotiations. But then they included him on the sanctions list. What is this, another attempt to somehow disrupt this peace process? Or what? What is this?
I would not want to think so. But there is certainly no logic in this whatsoever. And overall, you know, I am against these types of things – tit for tat, if they are not letting somebody in then we are not letting somebody in. We invite them to our nation; let them come and work. We are not going to refuse anyone. It is not even our choice. We will not follow that path. But if somebody does not want to work with us, there will always be alternatives.
QUESTION: You said that you will not do anything to harm Russia with these sanctions; nevertheless, the limitations in food imports have already led to increased prices.
VLADIMIR PUTIN: You apparently got a little distracted, because I stated that certain aspects of this are undoubtedly negative. But if we look at the problem comprehensively, there are more positives than negatives.
QUESTION: Yesterday, your aide said that [limitations] might involve cars, pharmaceuticals and…
VLADIMIR PUTIN: Listen. I am not getting involved in such technical work at this phase. It is true that the Cabinet is currently thinking this over, preparing certain suggestions. If my colleagues in the Cabinet come to the conclusion that a specific set of steps correspond to the interests of our economy, then we will do it. And if it’s just about showing off how tough we are, just to snap back and then to suffer damage as a result of that, we will not do it.
Ultimately, I wanted to convey our approach; as for the concrete steps that will be taken, if they are taken at all, we will see. Let the Cabinet think about it and make suggestions.
Thank you very much.”
Source: Kremlin.ru
2014 : U.S. trade in goods with Russia
NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless otherwise specified. Details may not equal totals due to rounding.
Graph showing US Foreign trade between US and Russia
(Source: US Census Department https://www.census.gov/foreign-trade/balance/c4621.html).
Note:
Economic sanctions are generally considered an act of war! Why? Because it is designed to hurt another nation;s economy. If someone did that to the US it would be considered an act of war by us. Why when we do it to others it is not viewed that way?
In this case the new economic sanctions will likely drive Russia’s economy into recession for the rest of 2014, forcing Moscow to provide economic stimulus in 2015 through public sector investment and the financing of public private projects. That costs millions of dollars (I mean “rubbles’).
Furthermore economic sanctions won’t help solve the crisis in the Ukraine.
Its antagonistic and anti productive in the long run.
It could backfire and hurt the US economy as Russia is now put in a position where it has to retaliate with economic sanctions of it own. Evidence suggest it has already done some damage to the US agricultural industry. U.S. exports of food and agricultural products to Russia totaled $1.3 billion last year, while the European Union exported $15.8 billion to Russia in 2013. Some U.S. food sectors are expected to feel the impact of the new Russian sanctions, especially poultry producers, which exported about 267,000 metric tons of chicken, valued at $303 million, to Russia last year.