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And the Winner in Ukraine Is...China

March 12, 2014 Topic: Global Governance Region: Ukraine

And the Winner in Ukraine Is...China

America's reaction to the Crimea crisis risks reducing flexibility on a paramount priority.

Here we go again. The Obama administration, confronted with a foreign-policy crisis, is flailing. This time it isn’t Syria, but Ukraine.

The Crimea’s March 16 referendum looms larger each day, but U.S. officials are issuing declarations and little more. America’s paramount goals over the next few days must be to make a final serious effort to preserve Ukraine’s territorial integrity—with a weak hand and very limited time—and to prepare a post-referendum plan to contain the strategic damage from the Obama administration’s latest fumble. If the president and his advisors fail, the only beneficiary would be Beijing.

The crisis in Ukraine is a product of Russia’s desire to restore control over Crimea and of Ukraine’s deep social and political divisions. But in a manner more reckless than feckless, the Obama administration has made matters worse at each step. It is fair to say that the White House “led from behind” as the European Union sought an Association Agreement with Ukraine by failing to press Brussels to do more to secure ousted president Viktor Yanukovych’s signature on the deal—something that could have avoided the crisis and protected key U.S. interests. Once the protests began, the administration essentially abandoned its efforts to persuade Russia that Ukraine’s Western orientation would be “win-win” and instead supported a “winner-takes-all” approach in the streets of Kiev and other Ukrainian cities—something that quickly backfired when a fractured Supreme Rada voted to remove Yanukovych without reaching the constitutionally mandated supermajority and then appointed a new government with only token representation from Russian-speaking regions. Russia has now deployed troops in Crimea, where the region’s legislature likewise went around the constitution in scheduling a referendum on autonomy, and then advancing its date from March 30 to March 16 and adding the option of incorporation into Russia.

After Russian forces established control in Crimea, Obama returned to a policy process that has already failed repeatedly elsewhere: 1) make bold and moralistic pronouncements, 2) put America’s prestige and credibility on the line, and 3) produce no real policy. U.S. policy toward Syria has been the most visible and damaging application of this approach so far, but it is far from the only one. This is how an administration that entered office determined to rebuild America’s image has instead further marred it, discouraged allies, and emboldened foes—grand talk and no action. The administration’s peculiar combination of Bush-era self-righteousness with Obamian instinctive caution, whether through analysis-paralysis or simple timidity, offers the worst of both worlds.

Issuing pompous press statements or fact sheets that approach Bill Clinton’s definition of “is” in their linguistic parsing may be emotionally satisfying, but it does not help to keep Ukraine intact. Nor does it impress Russian leaders who are long past caring about White House bluster or their favorability ratings in Western public-opinion polls. Posturing is not policy. Worse, it is counterproductive when it comes to the one person making decisions about Crimea: Vladimir Putin.

Salvaging Ukraine’s unity requires pragmatic, private and high-level negotiations on significant Crimean autonomy as part of a comprehensive Ukraine settlement with no further delay. Synchronizing America’s and Europe’s positions will be extremely important.

In dealing with Russia, U.S. officials should reiterate that a Russian annexation of Crimea would make Western-Russian relations newly adversarial and that the coming days will provide the final opportunity to avoid that outcome by finding a path forward that preserves Ukraine’s territorial integrity. Specific threats are unwise and will serve primarily to provoke counterthreats, especially if stated publicly.

At the same time, in conversations with Kiev—including during Prime Minister Arseniy Yatsenyuk’s March 12 visit to Washington—the administration should urge restraint and flexibility. Keeping Crimea and calming eastern Ukraine will likely require several steps, including not only very substantial autonomy for Crimea (with guarantees that Kiev will not unilaterally revoke this status in the future), but also a lesser degree of autonomy for some eastern Ukrainian regions and a national-unity government that includes Russian-speaking political leaders. The administration should offer expanded assistance to Ukraine to win its support. The $1 billion already announced is too little.

With Crimea’s regional government, the United States could offer its own commitment as a guarantor of Crimea’s autonomy, modest financial assistance, and a dose of reality: if Russia annexes Crimea, the peninsula will enter a legal no-man’s-land that will constrain its future development. U.S. officials should also seek to persuade the Crimean government to delay its referendum and preferably to remove integration into Russia from the ballot. One option would be to combine a delay in the referendum with a delay in Ukraine’s national elections, scheduled for May 25, if Kiev would agree.

Unfortunately, the odds for success with this approach are less than 50-50 and are decreasing on an almost hourly basis given the scale of the task and the time available. If negotiations fail, the United States must move swiftly after the referendum and Russia’s presumptive incorporation of Crimea to deter Moscow from further intervention and to reassure Ukraine, U.S. allies, and others in the region. Several important realities should guide America’s response.

First, the United States and NATO do not have a credible military option to liberate Crimea. Russia’s military lags far behind America’s, but Moscow is still a nuclear superpower and Russia would have a much higher stake in an armed conflict, particularly after taking a public position that Crimea is Russian territory.

 

Second, while it will be tempting to punish or to isolate Russia, this could have profound and destructive unintended consequences. The Obama administration and members of Congress must consider whether they are prepared to make Crimea’s fate the organizing principle of U.S. foreign policy—which it will become either deliberately or by default should the United States take this path. They should also think carefully about how other nations, including U.S. allies and rivals, would react.

It is far from certain that the European Union would join the United States in applying the “crippling” sanctions some members of Congress are already discussing. Because Europe-Russia trade and investment are more than ten times greater than U.S.-Russia trade and investment, Washington would be asking its allies to risk over $170 billion in foreign direct investment in Russia and over $100 billion in annual European exports. With only about $10 billion or so in U.S. investment and an equivalent amount in annual exports, European capitals may not be too impressed with our support.

Outside Europe, few seem likely to put their ties to Russia on the line over Crimea. Would Brazil or India take this approach? How about Japan or South Korea? Hopefully President Obama does not really believe his rhetoric about standing with a nonexistent “international community.” Similarly, though Secretary of State John Kerry has reportedly informed his Russian counterpart Sergey Lavrov that Crimea’s annexation “would close any available space for diplomacy,” this does not seem credible. The Bush administration terminated contacts above the deputy assistant secretary level after Russia’s 2008 war with Georgia, and America may do the same again this time. But how long will it last? Obama’s reset ended that effort after just a few months—for good strategic reasons.

The United States can wound Russia’s sputtering economy, but Moscow would look for—and find—ways to respond. Threats to seize officials’ assets are nugatory—what self-respecting Russian official who did not move assets out of the United States after the U.S. Congress passed the Magnitsky Act over a year ago would not have immediately phoned his or her banker the day after the White House announced this option? Broader sanctions against Russian companies could invite disproportionate retaliation against U.S. firms and their employees, who have few legal protections in Russia. To raise revenue, Russia would aim to maximize earnings from its most saleable exports: energy, high-tech and low-tech weapons, and no-questions-asked nuclear power plants with new proliferation risks.

Ukraine would be the first victim of any extended confrontation because it would inevitably become a political, economic and social battlefield, if not a military one. Russia might start by shutting off its natural-gas exports through the country. Though this would be costly for the gas monopoly Gazprom, Ukraine would suffer the most—especially eastern Ukraine, where the country’s industrial cities depend on steady supplies. Ironically, inflicting the greatest pain on predominantly Russian-speaking eastern Ukrainians might only further polarize Ukraine’s divided population. Necessary economic and political reforms would be considerably harder than they have been in the past. Europe would certainly survive a disruption in gas supplies, but it would likely be costly and difficult. Because dependencies and policies vary, it could also stoke differences inside the EU. Finding new energy suppliers and increasing domestic production would preoccupy top officials.