Russia’s New Trade War: A Reminder to Ukraine of the Cost of Europe

Russia launched an undeclared trade war on Ukraine this week, going to great lengths to deny that war, let alone that it has anything to do with Ukraine’s determination to realize its European future. No one believes Moscow’s protestations of innocence. Vladimir Putin does not care; his empire is slipping away as Ukraine draws ever closer to Europe.

Last month, Moscow launched a facially ridiculous “health and safety” ban on Roshen, the maker of Ukraine’s best chocolate (and a major exporting firm), after Putin’s last attempt to sell the renewed Russian empire to Kyiv failed. That ban has now been expanded to basically every product Ukraine exports to Russia, including ferrous metals, heavy machinery and chemicals. This has taken the form of intrusive, time-consuming border checks on health and safety grounds of ore and industrial products.

Kyiv wasted no time in accusing Russia of violating outstanding trade agreements to punish Ukraine for its European tilt, while Moscow was quick to deny that anything is amiss (allegedly, the decision to tighten import regulations was made by Russia’s customs service, which of course is part of Vladimir Putin’s state apparatus).

The roots of this week’s events lie in Europe’s halting and inconsistent approach to integration with Ukraine; Russia’s need to bring in its most populous former territory to sustain its drive to empire; and Ukraine’s adoption of a calculated balancing act to placate an insistent Russia while resuming the progress to Europeanization lost during the Orange governments before 2010. Ukraine is on schedule to sign an Association Agreement with the European Union in Vilnius in November, which will see trade and travel liberalization and will mark an enormous step toward integration with the EU.

It will also mark the beginning of the end of Putin’s dream of a revived Russian empire. Russia cannot allow Kyiv to drive Ukraine to Europe. The psychological blow of losing the cradle of Russian culture and faith would be matched only by the economic and geopolitical trauma of losing the transit route for Russian natural gas into Europe, the largest populace of any former Soviet republic, and the most advanced industrial infrastructure Russia can capture with or without military action.

It would also tell other former Soviet republics that a post-Russian life is not merely desirable, but possible.

Putin’s message this week is plain. While the European Union is a larger market for Ukraine’s exports than Russia, the Russian-controlled Eurasian Union (Russia, Belarus, and Kazakhstan) is Ukraine’s largest combined market.

Russia is, with typical Muscovite subtlety, telling Ukraine that it may join Europe or continue to trade with its largest gestalt trading partner. Ukraine’s economy is already feeling the pain; Putin is testing to see whether both Kyiv and Brussels have the stomach to continue.

Yet the effect of this escalation may be to finally awaken Brussels to the dangers just beyond its doorstep. Ukraine cannot hold out against Russian entreaties and trade wars indefinitely; Europe’s shameful practice of holding out indefinitely a deeper integration in return for more and more reforms has placed Kyiv in a position in which it must choose whether to protect its present or its future.

By raising the stakes, Putin may have finally made one miscalculation too many. Europe may finally understand the dangerous but necessary balancing act Kyiv has played to keep its European dream alive.

Whether that happens or not, this is not Putin’s last effort to save his empire. There will be more hurdles on the way to Vilnius, and Kyiv is now experiencing the true cost of its hard work to join Europe at last.

Image Copyright Wikimedia Commons