Cold War Deja Vu Deepens as New Russia Sanctions Anger Europe

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(Bloomberg – – Marc Champion – June 18, 2017)

Russia on Sunday accused the U.S. of returning to “almost forgotten Cold War rhetoric,” after President Donald Trump’s decision to reinstate some sanctions on Cuba. It could have dropped “forgotten.”

There’s been a lively debate among historians and diplomats for years over whether the souring of relations between the U.S. and Russia amounts to a new Cold War, and lately the case has been getting stronger by the day.

Trump’s restoration on Friday of some of the Cold War restrictions on Cuba his predecessor, Barack Obama, eased just months ago was only one example. Earlier in the week, the U.S. Senate approved a bill to entrench and toughen sanctions on Russia that includes several vivid flashbacks to before the fall of the Berlin wall.

German Chancellor Angela Merkel added her voice on Friday to rising European condemnation of a proposal in the Senate draft that would penalize companies investing in new Russian energy pipelines. Nord Stream 2, a project to double the supply of Russian natural gas to Germany via the Baltic Sea, would be especially vulnerable.

President Ronald Reagan used similar sanctions in an attempt to thwart the joint German-Soviet construction of a natural gas pipeline in the early 1980s, only to drop them amid intense opposition from Europe. Again, Germany led the pushback.

The Senate bill would also codify a raft of existing sanctions against Russia, so that Trump would need Congressional approval to lift them. That happened in 1974, too, and the measures proved hard to kill. The legislation wasn’t repealed until a decade after their target, the U.S.S.R., had ceased to exist.

The sense of Cold-War deja vu has been building for some time, according to Robert Legvold, a professor at Columbia University and author of “Return of the Cold War.” There’s a renewed arms race, nuclear saber rattling, the buzzing of ships and planes, proxy wars and disputes over whether missile defense systems count as offense or defense.

For more on the debate read this Quicktake: Cool War

If the trend continues, said Legvold, it will prevent the strategic cooperation between the U.S. and Russia that’s needed to prevent approaching security challenges from spinning out of control: The rise of China, the race to exploit resources in the Arctic, international terrorism and, above all, a world with nine nuclear powers that’s more complex and unstable than in the 20th century.

“These two countries are in a very deep hole,” he said. Congress needs to “stop digging.”

Russian Shadow

The Russia provisions were attached as amendments to a bill to toughen sanctions against Iran. It still needs to pass the House of Representatives, but the 97-2 Senate vote suggests a rare level of bipartisan support. With a similar margin in the House, the legislation would be veto-proof.

Amid investigations of alleged Russian meddling in last year’s presidential vote, debate in the Senate was driven by concern that the decision on whether to keep or lift sanctions should not be left to Trump alone. The curbs were originally imposed in response to Russian President Vladimir Putin’s 2014 annexation of Crimea and covert military intervention in eastern Ukraine.

Speeches on the Senate floor invoked Cold War images of a free world and its values again under threat from a “hostile” power in Moscow. “It is about defending a democratic way of life and democracies across the world,” said Amy Klobuchar, a Minnesota Democrat. The amendment calls for resistance to Russian efforts to sow xenophobia, illiberalism and distrust of democracy across Eurasia.

An administration accused of “collusion” with Russia was sending mixed signals over whether to retain or drop sanctions, said Ohio Democrat Sherrod Brown, one of the amendment’s co-authors. Congress, he said, must send “a clear message.”

Back in the U.S.S.R.

If enacted, the bill would ask Trump to impose a range of new restrictions on Russia, and require approval from both houses of Congress to lift existing ones. That would give the Ukraine-related sanctions a similar status and tenacity to the ones entrenched under Jackson-Vanik, the 1974 amendment that endured for four decades.

The goal then was to pressure the Communist leadership to give all Jewish citizens the freedom to emigrate. Then, as now, legislators expressed fears that their president would sacrifice core U.S. values on the altar of improved relations with Moscow; Richard Nixon was in the early years of his détente policy. The amendment wasn’t repealed until 2012, although Congress approved waivers for a number of years before.

The proposal to sanction pipeline construction is already repeating history. The Senate amendment would restrict companies that invest in or supply new Russian energy pipelines, a problem for the German, Austrian and other European energy companies that are partnering with Russia to build Nord Stream 2. Reagan imposed similar sanctions in 1982 against the supply of equipment to build the first gas pipeline connecting the Soviet Union with Western Europe.

“Europe’s energy supply is a matter for Europe, and not for the United States of America,” said Austrian Chancellor Christian Kern and German Foreign Minister Sigmar Gabriel in a joint statement on Thursday. The proposed measures would amount to “illegal and extraterritorial” support for U.S. gas producers, they said. On Friday, Merkel’s spokesman said she was “in broad agreement.”

‘Worse Idea’

Under the Reagan administration, as now, the stated U.S. rationale was to avoid Europe becoming too dependent on Russia for its energy needs. Nord Stream 2 is also controversial within Europe, prompting eight east European nations to write a joint letter of complaint last year. A former Polish minister once likened the project to the Molotov-Ribbentrop pact between Nazi Germany and the Soviets in the run-up to World War II.

An additional issue today is that the new pipeline could hurt Ukraine — by making redundant the one built over Reagan’s objections, which carries natural gas from Siberia to Austria and Germany. Ukraine’s state gas company Naftogaz has said Nord Stream 2’s construction would cost as much as $2 billion a year in lost transit fees.

The new sanctions proposed by the Senate would punish Russia not just for its energy policy, but also for its actions in cyber security, Syria and domestic corruption. That would make U.S. demands not just inflexible but also confusing and difficult to comply with, Legvold said: It would be hard for Putin to change the policies that led to sanctions being imposed, even if he wanted to.

Inflexible sanctions “were a bad idea during the Cold War,” he said. “They’re an even worse idea now.”

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