Sanctions and Counteractions or Challenge and Response

Sanctions and Counteractions or Challenge and Response

The war in Donbass, unleashed by Kiev after the coup and supported by the United States and the European Union, is regularly used by the West to demonize Russia and make it subject to political, economic and informational pressure. 

The United States is the leading driving force in the process. It keeps on pushing the European allies to toughen the sanctions against Russian bureaucrats, journalists, as well as the country’s financial and industrial infrastructure.  Steps are taken to destabilize the Russian Federation from inside under the slogans of defending human rights, civil society and fight against corruption.

The “Russian Aggression Prevention Act of 2014” was introduced in the United States on May 1. (1) Actually the bill is a plan of actions to fight Russia, including subversive activities.  The first attempts to put pressure on Russia by imposing economic sanctions   resulted in quite opposite effect. Those European states that followed the United States were hit by strong backlash.   Latvia has the trade turnover with Russia down by 18% leading to 10 percent of GDP reduction. The Dutch-British Shell has suffered much as a result of taking its filling stations out of Crimea. McDonalds expects great losses too.      

Russia has started to discuss the options as it gets ready to  respond. It’ll be hard to normalize the situation till Europe   realizes that the self-inflicted damage by far exceeds the iffy advantage of dancing to the Washington’s tune…Of course, the response should be asymmetric and harmless for Russian economy. Is it realistic? No doubt, it is. The Internet discussions mention some non-trivial steps to be taken.

One of the options is to invite Asian companies to fill the space left vacant by the Western business.  For instance, there are willing competitors in Japan, China and Thailand to rapidly substitute for McDonalds. Asian fast food is popular in Russia; it’s by far healthier than the notorious hamburgers.  The same could be applied to US and European companies joining the sanctions regime.  

The social nets users offer “asymmetrical measures of second grade.”  For instance, those who receive foreign grants for “development of democracy”, “creation of civil society”, “perfection of electoral system, “freedom of speech” etc. should not only register as foreign agents, but also give 50% of income received from abroad to the Russian government. The money is to be spent for funding pro-Russian organizations operating in different countries and support of compatriots. If providing funds for anti-Russian activities is allowed, why not make provide aid to those who protect the interests of the country? 

The “third grade response” is also offered for debates. 

The Russian legislative acts should include the notion of “an aggressor state” meaning those who implement unilateral sanctions. It will broaden the wiggle room for taking retaliatory steps.  For instance, getting out of some international agreements within the framework of WTO.  The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Member.If Russia leaves TRIPS it will hurt the aggressors badly. Until now Russia has been fully complying with the document including the states which have joined anti-Russian sanctions. But the compliance may be selective depending on provisions; it may exclude fiction, music technology, software and medicine.  

Anyone who follows the WTO proceedings knows that intellectual property is a burning issue for the United States and the European Union. Western pharmaceutical companies fight against production of cheaper analogues. It results in millions of dead in the countries where people cannot afford the “brand” price for medicine.  The medicine production giants have agreed to make exclusion for 10 essential medicines to fight the most dangerous deceases in the five countries which are officially recognized as poor.  Software is another example where the United States, an aggressor state, is an undisputed leader. 

Let me repeat, the selective application of TRIPS to the aggressor-states would be a telling blow against the Western sanctions.  Economic benefits would by far exceed the losses suffered by Russia as a result of the sanctions introduced by the West.  This is in no way an all-inclusive list of options for taking asymmetric measures to be introduced by Russia against those who impose sanctions. The steps mentioned above are the most effective while having little negative influence on the Russian economy. They are not the only options to be applied if need be. There is a hope that the United States and the allies will stop this sanctions madness to let Russia abstain from taking the measures in retaliation.  


Tags: Russia  US