Motyl: Russia’s trade war against Ukraine will backfire
Stupidly, if not unexpectedly, the Putin regime has declared [1] a trade war on Ukraine in order to force it to turn away from an Association Agreement with the European Union and, instead, join the Customs Union consisting of Russia, Belarus, and Kazakhstan. The war will be painful for Ukraine, but its expected effect is highly unlikely to happen, demonstrating, once again, just how little Russia’s elites understand Ukraine and Ukrainians.
On August 14th, Ukrainian exports to its northern neighbor came to a halt [2] after Russian authorities imposed onerous border procedures on vehicles transporting Ukrainian goods. Since 25 percent of Ukraine’s exports go to Russia, a prolonged blockade could cost Ukraine [3] as much as $2.5 billion in 2013. The Kremlin (which, as a recently leaked document appears to suggest [4], apparently has developed a ramified neoimperialist strategy vis-à-vis Ukraine) obviously expects these numbers to persuade the Yanukovych regime that the Customs Union is its least worse option.
That expectation is misplaced for several reasons.