Issue 22

THE BRETON/GEROLNEWSLETTER

INTER-ESTABLISHMENT CONFRONTATION IN WASHINGTON AND ITS WORLD-WIDE IMPACT

Even before the current crisis,-some are calling it more serious than the Watergate affair, few were truly neutral about President Trump. His inadequate reaction to global and local events, questionable morality, controversial decisions taken only to be reversed the next morning, shocking and often vulgar tweets and statements, his ambiguous relationship with the facts and his innate conviction that big politics is akin to running a business always made Trump the most unusual and odd president of the United States in recent memory. In two years on the job Trump managed simultaneously to ruin US relations with Europe, China, NATO, Canada, Mexico and further destroy already poor relations with Russia. Furthermore Trump is constantly in conflict with members of his own administration and the American intelligence community. And here comes the main paradox of the realities in Washington: Trump's approval rating is slightly over 40%, surprisingly high for the level of scandals around him. The other side of this paradox is the curious duality of the administration: while Trump deals with all the shenanigans and controversies, his administration carries on with day to day business in almost a professional way.

More clarity can, however, be expected after the November 6th midterm elections. If the Republicans lose control of the House of Representatives or the Senate (or both) the fate of the 45th President could change dramatically.

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CANADA'S FUTILE AUGUST ATTEMPTS TO RESURRECT NAFTA

Those who predicted that Trump's unpredictability had limits were obviously wrong. His sudden announcement that the US and Mexico had reached the "biggest ever" deal, replacing NAFTA, was an exaggeration. It simultaneously insulted Canada. Apparently Canada was not even consulted during the lengthy bilateral negotiations between US and Mexico. Canadian politicians and experts interpreted this demonstrative snub to Canada as Trump's wish to prove that NAFTA no longer exists. Ottawa was given an ultimatum of sorts: to join the US-Mexico deal as it is or be slapped with high tariffs on Canadian automotive production.

Chrystia Freeland postponed her umpteenth visit to Ukraine and flew to Washington in an attempt to resolve this stand-off. Canada is, so far, on the losing end in this crusade against NAFTA initiated by Donald Trump.

Canada is also facing the real threat of losing a share of American markets due to high tariffs on Canadian industrial and agricultural products. Canadian foreign policy needs a combination of flexibility and firmness that the Trudeau government is evidently lacking.

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PUTIN'S VISIT TO AUSTRIA (PLEASURE AND BUSINESS) AND GERMANY (STRICTLY BUSINESS)     

Putin's August 18^th visit to Austria lasted only one hour. He came to attend the wedding of Austrian Foreign Minister Kneissl. Putin was accompanied by a renowned Cossack folk song choir. The Russian president spoke fluent German in his congratulatory address to the newlyweds and even danced with the bride.

President Putin congratulating Foreign Minister Kneissl

...with Chancellor Kurz looking on

It is highly unlikely that President Putin would do anything of such lighthearted nature without some deeper reasons. Among remarkable guests at the wedding was Austrian Chancellor Sebastian Kurz. His country will chair the European Union for the next half a year, a very important span of time for Russia to energize those in EU that are opposed to sanctions against Russia. Another significant conversation that Putin managed to have at the wedding was with Mohammed Barkindo, Secretary General of OPEC (its center of operations is in Vienna). Ups and downs of oil prices have a direct impact on the oil-dependent Russian economy. Therefore anything to do with the business of OPEC, especially its decisions to increase or decrease the oil output is of paramount concern to Putin. Another aspect, not covered by the media at all, was that if Nord Stream 2 is implemented, Austria will become a central distributing hub for the Russia gas flow into Western Europe.

Right from the wedding Putin flew to Germany to meet Angela Merkel at her private residence near Berlin. Both leaders briefly discussed Ukraine and Syria, but the main point was the same important project of Nord Stream-2. Putin concurred with Merkel that Ukraine will remain a transit point for the Russian gas parallel to Nord Stream-2 project. Also, both sides inched closer to the idea of introducing UN peacekeepers in the Donbass region, while confirming Moscow and Berlin's adherence to Minsk II agreement.

Chancellor Merkel and President Putin meeting at Schloss Meseberg, August 18th

What adds to the complexities of every decision made in Berlin and other major EU countries in relations to economic or peace deals with Russia is the ever present reality of American pressure and Donald Trump's often unpredictable moves.

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FOR UKRAINE OR FOR POROSHENKO

Since the signing of the Minsk II Agreement in 2015, there has been virtually no progress on resolving the crisis in Ukraine. Other issues do arise but Ukraine remains the most important source of conflict between the US and Russia and between the EU and Russia. The Presidential election scheduled for March 2019 and President Poroshenko now regularly polls under the 10% threshold. Even worse he is no longer in second position: some polls have him in fifth position.

As President, Poroshenko can still enjoy the support of Ukraine’s steadfast allies. There is, however, a distinct lack of enthusiasm in going the extra mile to bolster his status. The fact that he could only secure the attendance of National Security Adviser John Bolton, rather than the more senior US official he was expecting, for this year’s Independence Day celebrations in late August confirms this. As a candidate for a second term, with slowly but surely decreasing prospects, he may be tempted to use the time remaining in his presidency to promote policies and positions that might give him back the hope of a longer political life. The trouble, so to speak, is that the policies in question are merely a rearranging of the chairs on the deck of his own sinking ship.

President Poroshenko greeting John Bolton, August 24th, Kyiv

For instance, Whereas Poroshenko initially couched his initiative to seek the creation of one autocephalous Ukrainian church as a spiritual endeavour, he has now taken off the gloves and called it what it really is, a jab at he Russian Orthodox Church and at its Patriarch as close ally of Vladimir Putin.

A few months ago, Poroshenko was not so certain about the overall cancellation of the Ukraine-Russia Friendship Agreement. He now has issued instructions for measures to be taken to abrogate the Agreement. In the same vein Poroshenko had his UN Ambassador state that Ukraine was preparing a few nasty surprises for Russia at this year’s UN General Assembly.

Poroshenko’s attempts to regain the support of the nationalist electorate are not likely to change his political fortunes. These measures may indeed annoy Russian officialdom. Whether they serve to advance long-term Ukrainian interests is a moot point.

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CASPIAN SEA: FIVE COUNTRIES SIGN DEAL TO END DISPUTE

Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan, the countries bordering the Caspian Sea, have agreed in principle on how to divide it up. The leaders of the five countries signed the Convention on the Legal Status of the Caspian Sea in Aktau, Kazakhstan. It establishes a formula for dividing up its resources and prevents other powers from setting up a military presence there.

It is an important step in the easing of regional tensions. It would be reasonable to assume that the Caspian Sea is, well, a sea. But at the heart of this long-running dispute is whether or not the 370,000 km2 body of landlocked water should be considered as a lake. Until the collapse of the Soviet Union in 1991, that is how it was known. It was shared between the USSR and Iran. The current agreement settles this dispute to a large extent. The agreement gives the body of water a "special legal status" which means it is not defined as a sea or a lake, officials involved in the deal claimed.

Leaders of Caspian Sea countries, August 12th, Aktau

The surface water will be in common usage, meaning freedom of access for all participatory states. The seabed, which is rich in natural resources (oil and gas) and the fishing areas (including the sturgeon habitat, a source of invaluable black caviar) will be divided up.

The loser of the deal is probably Iran that will have lesser access compared to other participants. Already some Iranian news agencies have criticized the agreement.

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SYRIA, ONE REGION AFTER THE OTHER

The forces of President Assad and their various allies seem to have regained full control of the southeastern part of the country. The problem of how this would be seen in Israel and in Jordan may, however, not have been entirely resolved. The presence of Russian military forces, among other areas, in the Golan Heights and the assurances offered by President Putin to PM Netanyahu and to King Abdallah may have quieted matters for the time being, but the presence of Iranian forces in relative proximity to Israel is matter over which Israel will want a long-term solution that includes the departure of Iranian units.

Assad forces are now moving North in the direction of Idlib for the next major offensive aimed at regaining territory occupied by rebel forces. The Idlib region is where the rebel forces expelled from other regions have concentrated. It is also close to the area occupied by the Turkish army and the area occupied by US-supported Kurdish forces. Dealing with the rebels is only the beginning. For Assad and his Russian allies, the other task is to assuage the concerns of Turkish President Erdogan and eventually to have him bring his troops back home. The related problem is the proximity of Kurdish forces that are the pretext for Turkey’s military presence. The latest rumour is that the US may be offering a deal that would see it leave most areas of Syria, including the Kurdish region, in exchange for the departure of Iranian forces from the vicinity of Israel. There would also be some other elements to the proposed deal including, for good measure, access to Syrian oil resources for US companies. The Syrian side has reportedly refused the deal. The Idlib battle could be a long and complicated affair.

In late August, while in Israel, National Security Adviser reiterated the warning that there would be serious consequences to any other use of chemical weapons by the Syrian Army. Shortly after, in the context of the upcoming Idlib offensive, the Russian Ministry of Defence warned of possible chemical attack provocations on the part of rebels. The UK representative at the UN called this non-sense. By starting the public relations battle even before the incident takes place, the Russian side is securing a modest tactical advantage.

Finally, some Arab observers have noted that, should the upcoming Syrian Army’s Idlib offensive be successful at weakening further the position of the Islamic State, this could have as a side effect to hasten the passage of the Islamic State from an entity defending territory to one committing random acts of terrorism in various locations, a sobering prospect.

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MAN OF THE MONTH: ALEXEI KUDRIN

Current Auditor General and former long-time minister of finance of the Russian Federation, Alexei Kudrin has always positioned himself between constantly feuding sectors of conservatives and liberals within the Russian corridors of power. Kudrin also happened to work at St.Petersburg City Hall at the same time as Vladimir Putin. Both were Deputy Mayors under then Mayor Anatoly Sobchak, Putin’s acknowledged mentor.

As a highly qualified and respected economist, Kudrin always skillfully resisted rapid increases in the Russian military budget. That opposition eventually pitted him against powerful heads of the Russian military industrial complex and upper echelons in the Ministry of Defense. He was a champion of raising retirement age to 62 for women and 65 for men aligning Russia's pension policies to that of other European states. The then Russian president Dmitry Medvedev, in order to secure shallow populist appeal among voters, publicly denounced and fired Kudrin from the government.

Vladimir Putin, when he took over from Medvedev as President, in recognition of Kudrin's abilities made him one of his economic advisers and recently appointed him Auditor General, a position where he does not come under the supervision of his rival Dmitry Medvedev, but in which he can play a significant role in the management of government affairs. Currently Alexei Kudrin is in charge of the main scourge of Russian life,-deep and institutionalized corruption.  Kudrin

Some observers believe that Alexei Kudrin still has a political future when Putin will finally let Medvedev go.

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JOHN McCAIN (1936-2018)

Now that he has passed away after a long illness, it would be Inappropriate and disrespectful to go after John McCain policy record. Historians will have plenty of time to do this later.

The fact is that he developed a reputation of great integrity and that he was a significant figure in US foreign policy for virtually the whole time of his tenure as a member of the US Senate. It is not to disparage John McCain to observe that there might not have been the same outpouring of sympathy and admiration for him had any other person than Donald Trump been the US President. McCain’s honesty and human qualities so contrast with what we see everyday of the street-smart President that his departure is felt even more deeply.

No doubt on the basis of his own personal experience in Vietnam, McCain was to the end of his life, a believer in the role of America as the liberator of oppressed people. This put him in diametrical opposition to Vladimir Putin. McCain was in the room when Vladimir Putin delivered his famous 2007 Munich speech in which it went after the very US foreign policy for which McCain was one of the most fervent apologists. The relationship between them was never going to be friendship. McCain instead befriended those he saw as standing up to Russia, especially former Georgian President Saakashvili and current Ukrainian President Poroshenko. His views of Russia were probably summarized in one of his most famous quotes: "It is a gas station run by a mafia that is masquerading as a country ».

Official Russian coverage of McCain death was initially matter-of-fact. Itar Tass for instance simply finished its relevant news item by this line: “McCain was one of the staunchest supporters of anti-Russian sanctions and was known for his harsh criticism of Moscow”. A few legislators even had some kind words about McCain’s character. Others were not so kind and went as far as to call him a war criminal. One news channel even recalled that it was a Russian missile that downed McCain aircraft over North Vietnam, living the reader to draw his own conclusions about the true reasons for McCain’s disdain for Putin’s Russia.

The comment has been made that even after McCain there would be to advocate similar policies. For now, there is certainly no one of his stature.

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BRIEFLY NOTED

RUSSIA

In an unusually lengthy and somewhat dramatic address to the nation, President Putin acknowledged that the planned pension reform was too drastic and painful. In its original form the pension reform proposal, that had been suddenly introduced on the opening day of the recent World Cup in Russia, foresaw that the retirement age for women would be raised from 55 to 63 and for men from 60 to 65. This announcement triggered an unprecedented wave of social protests. Apart from economic hardships, those changes touched a nerve with most Russians because the pension system introduced in 1932 remained a sort of sacred cow in a country with low life expectancy. Taking into account popular discontent, Putin offered a compromise by which the retirement age for women will go up to 60 instead of 63. For men it will however still move up to 65.

Putin's main motivation behind this move was his desire to curb the fall of his approval rating that which has been steadily coming down and now hovers just above 60%.

UKRAINE

Kiev and self-proclaimed breakaway republics in Donbass have announced back-to-school ceasefire. While the hostilities somewhat subsided the conflict continues. President Macron's unexpected statement on the Ukrainian crisis, that was not well received in Ukraine, suggested that the US-backed idea of bringing international peacekeepers to Donbass should be scrapped for the time being. According to Macron, it would be better to concentrate on the realization of Minsk agreements in closer cooperation with Russia.

US-RUSSIA

Russian Security Council Secretary Nikolai Patrushev and US National Security Adviser John Bolton met in Geneva on August 23^rd  for a prolonged, substantial and, according to Russian sources, constructive discussion. According to Bolton, the discussions covered “the whole range of issues that the two countries have on non-proliferation, on arms control, on a range of bilateral issues, counterterrorism, illegal immigration, cyber-related issues, regional issues, like Syria, the broader Middle East, Afghanistan, and Ukraine”. There was no joint statement at the end of the meeting on account of the disagreement over whether or not Russia meddled in US elections.

CHINA

In an unusually sharp rebuke to President Trump's recent assertion of China's alleged secret assistance to North Korea in their attempts to circumvent its obligations the Chinese Foreign Ministry condemned the tone and substance of American accusations. China however continues to be the main provider of food and fuel to North Korea and has no intention to break its historic ties with the regime in Pyongyang.

CZECH REPUBLIC

Milos Zeman, president of Czech Republic has become first leader of the EU country to call for lifting economic sanctions against Russia. According to Zeman, both the European countries and Russia are losers in that lengthy and futile practice. Zeman might be the first EU head of state to openly voice his opposition to the anti-Russian sanction, but he is not alone because a number of his European counter-parts (specifically in Italy and Austria) may not be saying it outright but nevertheless quietly support this idea.

SAUDI ARABIA

Media reports from Saudi Arabia say Crown Prince Muhammad bin Salman has met with the visiting leader of Russia's Chechnya region, Ramzan Kadyrov. The reports said the talks were held at Mina Palace in Jeddah in August 21, with the crown prince and Kadyrov exchanging regards on the occasion of the Muslim holiday of Eid al-Adha. Kadyrov has made private visits to Saudi Arabia and several other Middle Eastern countries in recent years, leading commentators to conclude that Russia is using the head of the mostly Muslim-populated North Caucasus region to promote Kremlin interests among the influential leaders of the Arab world. Saudi Arabia has recently increased its investments in Chechnia's oil industry and number of religious institution, mosques, Islamic schools and cultural centers.

THE AUTHORS

Ilya Gerol, former foreign editor of the Citizen in Ottawa, syndicated columnist in Canadian, US and European media specializing in international affairs. His particular area of expertise includes Russia, Eurasian Economic Union, Eastern and Central Europe.  Ilya Gerol has written several books, one of them, The Manipulators, had become a textbook on relations of media and society.

During his career in the Canadian Foreign Service, Gilles Breton had three assignments at the Canadian Embassy in Moscow. His first posting there began during the Soviet period, in 1983. His last was from 2008 to 2012 as Minister-Counsellor and Deputy Head of Mission. He also served as Deputy Director responsible for Canada’s relations with Russia from 2000 to 2008. As an international civil servant, he was Deputy Director of the OSCE Office for Democratic Institutions and Human Rights in Warsaw from 1994 to 1997.