Analysis of John Kerry's latest visit to Moscow
Russia’s bombardment of anti-government forces in Syria, coupled with a few daily poundings of jihadis belonging to the thugs known as the Islamic State may be winning the heart and mind of one man: John Kerry.
He and his Russian counterpart Sergei Lavrov were never bitter rivals. But a recent power-meeting between the two ended with a sober to upbeat sit-down withVladimir Putin on March 25 that bodes well for U.S. Russia relations.
Russian Foreign Minister Lavrov, who has been in the unsavory position of having to explain to the Western world Russia’s actions in Ukraine for the past two years, said he and Kerry “agreed to organize a regular review of our relations, in order to find mutually acceptable solutions on a number of issues,” the State Department published on their website last Thursday. Lavrov said that Russia and U.S. talks were a positive for world affairs, adding that they had “direct influence on the efforts of the international community to settle many issues.”
Lavrov’s comments are welcome news for those in the more realist camp of U.S. foreign policy that do not long for the Cold War. Global investors and corporations, too, are aching to get on more normal footing. For example,ExxonMobil XOM +0.33% has a $700 million joint venture with Rosneft frozen due to sanctions. The U.S. sanctioned American oil and gas companies from conducting technological transfers and drilling operations with the Russians because of the government’s involvement in the east Ukraine separatist movement.
The chilling of relations, largely due to Ukraine-based sanctions but also due to Washington’s concern that the Russians were throwing a wrench in their regime changing Syria machine, led Prime Minister Dmitry Medvedev to solemnly say that a new Cold War was in the works. He singled out an ever-expanding NATO. Speaking at the Munich Security Conference less than five weeks ago, Medvedev said, “NATO’s policy with regard to Russia has remained unfriendly and opaque. One could go as far as to say that we have slid back to a new Cold War. Almost everyday we are called one of the most terrible threats either to NATO as a whole or to Europe, or to the United States,” he said.
Lavrov and Kerry’s meeting in Moscow last week is a step back for the anti-Putin crowd. For them, it is best that the West don’t bother speaking to the Russians at all. At least until their president of choice is elected in some sort of revenge-filled fairy tale.
For his part, Kerry noted at the press conference, transcribed here, “that there have been some differences between the United States and Russia in these past years, but it is precisely discussions like those that we had today that lead to a better set of outcomes. I think Sergey Lavrov and I share the belief that it is always worth the effort to try to be able to make progress on difficult fronts. So it is in that spirit that I very much look forward to continuing our work together in the weeks and months ahead.”
Putin was reportedly his usual self, with his mafia-boss presence and self-deprecating humor that had them laughing about things like Kerry’s briefcase contents. “We are always glad to host you, as your visits take place in a highly businesslike atmosphere and give a chance to advance in resolving serious issues,” Putin said according to the Kremlin transcript.
Last week marked Kerry’s third trip to Moscow since May 2015. Kerry and Lavrov have held 18 meetings over Syria and Ukraine since U.S. sanctions began after the 2014 annexation of Crimea in Ukraine.
Kerry said he and Lavrov speak “almost weekly” by phone.
“We are working effectively even with differences to try to find a path forward,” Kerry told Russia’s 24 hour news channel Rossiya 24. “I think that’s in the interests of the American people and the Russian people,” Kerry said.
Kerry’s comments go against some investors that have been vocal against Russia ever since controversial presidential candidate Donald Trump said he and Putin would get along. Pundits have been using media outlets from The Huffington Post to The Economist to hop on Trump for saying he’d work with Putin, as if working with the head of a major nation is a diplomatic tomfoolery.
But other big name investors have been just as willing to support Russia’s role in the world despite the general DC and national media narrative against it. Investor Marc Faber basically said on Bloomberg that healthy relations with Russia were better than destructive ones.
Emerging market investment guru Jim Rogers said on March 21 that he was a believer in Russia, at least in its ability to pay its debt. Despite sanctions, Rogers was buying short-term ruble-denominated debt, he told the local media.
Wall Streeters prefer an open Russia to one closed off from the West. But policy wonks and Washington think tanks like the Foreign Policy Institute have spun another web, depicting Russia as worthy of indefinite sanctions, effectively cutting it out of its most important market: Europe. The Russian economy is now in its second year of contraction, with corporate investment and retail sales in decline.
Political differences between the Obama Administration and Putin’s Kremlin remain. These include the usual tensions: NATO expansionism in the Balkans — Montenegro is next on the menu — and Ukraine. There are some differences on how to handle Syria, and while both are not in love with Assad, Putin has managed to slip a mickey into the regime change cocktail that’s been the drink of choice in the U.S. government.
On the positive side, Kerry and Lavrov said that their behind-the-curtain work in getting a cease fire in Syria showed the two can work together, namely in fighting Islamic jihadis.
Kerry was vague on sanctions, however. He said that he asked Obama to roll back sanctions immediately, but only when the Minsk II accord is fully implemented. Russia has been supplying arms to rebels fighting the Ukrainian government. That has to stop before Russia can convince the West that they’ve held up to their end of the bargain. Returning Crimea to Ukraine is not part of the Minsk II agreement.
Full implementation also requires actions from Kyiv. The Ukrainian government has been slow in allowing for self-declared autonomous republics in Luhansk and Donetsk to vote for new leadership. The two regions have declared their interest in separating and joining Russia, meaning any vote there would split the region from the national government unless the two sides can agree on some level of autonomy.
No progress has been made on this issue, keeping Minsk on hold for now. This does not bode well for sanctions. Many in the market are betting on sanction removal by July.
“We still disagree on certain things, but we have been able to find agreement on very important issues where we’ve been able to make progress,” said Kerry. “It’s important not just to us, but I believe (it is) progress that makes a difference to all countries that care about not having nuclear weapons or care about people not using chemical weapons or that care about not having millions of people driven out of their homes and tortured and barrel bombed and gassed and made into refugees that crisscross the world today,” Kerry said. “If you care about those things, those are the things that have brought me here, among other things.”