Putin's food fight with Ukraine
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Two years after its ex-pro-Russian president reneged on a landmark deal to draw closer to Europe, Ukraine’s much-ballyhooed free-trade agreement with the European Union is set to come into force. And Vladimir Putin is none too happy about it.
Moscow’s food fight with the West has finally landed in Ukraine’s plate.
After slapping a ban on a range of agricultural products from Europe, the US, Canada and beyond, Putin is poised to extend those punitive measures, starting January 1, to the southern neighbour with which he’s been waging a not-so-shadow war of influence for the past couple of years.
The Kremlin insists the looming sanctions against Kiev – which will include a smorgasbord of meat, fish, dairy products, fruits and vegetables – are purely a defensive action.
They are aimed, he says, at protecting Russia’s domestic market from a flood of European goods entering illegally via Ukraine.
"We'll have to protect our market on a unilateral basis from unattended access of goods through Ukraine's customs territory, those being goods from third countries, first of all from the states of the European Union,” Russia’s Economic Development Minister, Alexei Ulyukayev, told the Rossiya-24 TV news channel last week.
But the real message behind Moscow’s embargo is a political one.
Coming a little over a year after Ukraine’s president, Petro Poroshenko, signed an Association Agreement with the EU, the country’s imminent entry into the free-trade zone adds a triumphal economic component to what has been, until now, a political rapprochement.
And Putin can’t stand that.
A rival free-trade bloc
By throwing its economic and financial lot in with Europe, Ukraine is not just spurning Moscow’s longstanding and assiduous courtship.
It is also turning its back - in a very humiliating and public way - on Putin’s own faltering project to forge his own rival free-trade bloc – or blocs.
The so-called CIS free trade zone, encompassing Russia and a hodge-podge of former Soviet states – among them Belarus and Kazakhstan – has been a wobbly work in progress since it was signed into existence in October 2011 – 20 years after the break-up of the Soviet Union. The other bloc – the Eurasian Economic Union – is a sort of sub-set of the first.
The common denominator in both is that their members are often less than enthusiastic participants in a club that many regard (even if they are leery of saying so publicly) as a vehicle for Putin to project his influence and lord it over his vassals.
What’s more, energy transactions are excluded from the CIS free-trade bloc, raising questions as to just how “free” it really is.
The pending food embargo against Ukraine should also be considered in the broader context of a Ukrainian conflict that grinds on, albeit at a lower intensity.
Since the signing of the so-called Minsk II ceasefire accord in mid-February, more than 400 Ukrainian soldiers and over 200 civilians have been killed in the rebel-held regions around Donetsk and Luhansk.
According to Andrew Foxall, a Russian specialist at a London-based research centre, the OSCE had recorded daily violations of the ceasefire earlier this year. Only after the Russian forces arrived in Syria from September 1, did the observers note a “relative calm” on the ground.
But hostilities, Foxall says, resumed in November, since which time authorities in the East have blocked humanitarian organisations such as UNICEF or Doctors Without Borders from gaining access to civilians in conflict areas.
Putin, meanwhile, admitted for the first time last week that Russian military specialists were, indeed, present in eastern Ukraine.
“We never said there were not people there who carried out certain tasks including in the military sphere,” Putin said, adding that this was not the same as regular Russian troops.
But getting back to the food sanctions, they are unlikely to prove a knockout blow to either economy. In the first eight months of this year, Ukraine's agricultural exports to Russia decreased fivefold, to just over $193 million.
Yet even as bilateral trade between the two countries plunged in 2014, by one estimate, exports to Russia still accounted for 19 percent of the Ukrainian total. A quarter of Ukraine’s imports came from Russia.
Which is why many observers say Russia will inevitably remain a cornerstone of Ukraine’s trade – and vice versa.
Despite its European turn, Ukraine won’t be able to escape geography and the historical ties that bond with Russia, many dating back to the Soviet era.
“Not even a country”
But a healthy trade relationship also requires mutual respect – something Ukraine’s leaders clearly feel they aren’t getting enough of from Russia.
Last September, Poroshenko, taking a page from Europe’s punitive playbook, slapped sanctions on 388 Russian individuals and 105 legal entities – including 29 banks and 20 air carriers.
Many Ukrainians – though far from all – are embracing Europe precisely because they feel it embodies values of respect and fair-play that they see as lacking from the leadership of their Great Slavic neighbor.
In a storied slight to Kiev, Putin famously told George W. Bush: “You have to understand, George. Ukraine is not even a country.”
So long as Russia’s paramount leader clings to such a conviction, Ukraine’s leaders are unlikely to let a little food fight drive them away from Europe’s table.