Putin and Erdogan

How Biden can Punish Russia for Abandoning its Black Sea Grain Agreement

The death of the Black Sea grain agreement should prompt a fundamental reassessment of American policy.

This decision demonstrates President Vladimir Putin’s conviction that a long war remains Russia’s best, and perhaps only, strategic option. Therefore, there is no purpose to negotiations until he is disabused of this notion.

Turkey, meanwhile, has demonstrated its growing openness to rejoining the Western camp in earnest. The upshot is as plain as it is politically fraught: Ukraine requires the long-range strike capabilities to hit the Russian fleet and turn the Black Sea into a NATO-aligned lake.

The Black Sea grain agreement was meant to demonstrate either Turkish duplicity or Russian reasonableness, depending upon who was asked to assess the issue. Starting in July 2022, the agreement created a maritime corridor for grain exports from Ukraine’s southwestern ports. Since Ukraine was a world-leading grain and fertilizer producer, Russia’s removal of Ukrainian products from the market through its blockade triggered an upward spiral in global food prices that put immense pressure on Africa, the Middle East and South Asia.

Russia’s goal through this commodity warfare was to split the West from the so-called Global South, ideally generating broad international pressure on the U.S. and its allies to negotiate. This never occurred. Although Russia remains relatively popular in Africa, the West never relented in supporting Ukraine.

The agreement had undeniable benefits for the West. It stabilized food prices in Europe and reduced inflationary pressures on Africa and the Middle East. Lest we forget, Sri Lanka nearly collapsed last April due to a massive cost of living crisis, partly induced by Russian grain restrictions.

Yet the agreement, brokered by Turkey and the United Nations over several months of negotiations, also created a lever that Russia could pull if it sought to pressure or divide the West. Russia naturally did not intend to abide by it indefinitely without demanding a variety of concessions.

During previous rounds of brinksmanship, Russia either left the agreement only briefly or never actually went so far as to suspend it.

The difficulty for Russia is that its lever was and remains indirect. In the last year, the West has expanded the amount of grain it can ship overland into Europe, despite resistance from Polish and Romanian farmers earlier this year. It has also improved links between Ukraine, Romanian Black Sea ports and other ports along the Danube, multiplying the grain exported beyond Odesa and other neighboring ports.  Pressure on Africa, meanwhile, has lightened, as more Ukrainian grain has reached African markets during the agreement. Hence Russia’s pressure became increasingly unlikely to prompt a major European policy change.

Russia’s objective in embracing the agreement was a relaxation of international financial sanctions against its State Agricultural Bank, which is a typically neo-Soviet pseudo-private hybrid. Dmitry Patrushev, Russian agriculture minister and the son of former FSB Director and Putin confidante Nikolai Patrushev, runs the bank’s board. As with all major financial institutions in Russia, RusAg plays an essential cash-washing and graft role. Even a small gap in the Western financial sanctions system would have been a lifeline for Russia, allowing much-needed direct cash injections that would have been bent to oligarchic ends.

The EU was reportedly mulling a carve-out for RusAg that might have reconnected it to international markets. But Russia’s exit from the deal implies at minimum that such a policy is improbable.

The Kremlin was once looking for pressure points  wedges with which to probe and push the West apart. It has not failed completely. As the Vilnius summit demonstrated, the Ukraine-NATO issue remains fraught with political division.

Read the rest at The Hill.

Seth Cropsey is the founder and president of Yorktown Institute.

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