US, Ukraine allies consider near-total ban on exports to Russia
WASHINGTON, Apr 20 (PRIME) -- Some of UkraineТs key allies, including the U.S., are considering moving closer to an outright ban on most exports to Russia, a potentially significant tightening of economic pressure on President Vladimir Putin, Bloomberg reported on Thursday..
Group of Seven officials are discussing the idea ahead of a leaders summit in Japan in May, according to people familiar with the matter, and the aim would be to include European Union member states in the crackdown. The proposal is still being debated and could change, the people said.
The approach being discussed by diplomatic envoys would flip the existing sanctions regime around, with all exports banned unless exempted, the people said. Under the current criteria all exports are allowed unless sanctioned.
If G-7 leaders endorse the move at the summit, exactly what would be excluded would then have to be agreed, with medicines and agricultural products Ч including food Ч very likely to stay exempted, one of the people said.
But there are potentially serious obstacles to implementation. To come into force in the E.U., the new criteria would need to be adopted by all members, and that would set off a testy debate given the likely backlash from companies that still export goods to Russia, alongside the risk of retaliation by Moscow.
If a near-total embargo on exports is imposed, much of the remaining trade flows from these countries with Russia would evaporate. A spokesperson for the U.S. National Security Council declined to comment on the prospect of such a move.
So far sanctions have almost halved the value of E.U. and G-7 exports to Russia, with limits on everything from electronics to luxury items. That still leaves U.S. $66 billion worth of goods from Europe, the U.S., Canada and Japan going in, according to the Geneva-based Trade Data Monitor.
G-7 members are concerned that is too big a benefit to PutinТs wartime economy, especially as Moscow finds ways around sanctions to bring in goods via third countries. The G-7 and E.U. have imposed several rounds of penalties, some of which included a grace period before coming into effect.
Russia has responded to sanctions by imposing export bans of its own and periodically cutting energy supplies to Europe. The E.U. would be particularly vulnerable to restrictions on commodities like copper. And a near-total ban on exports to Russia could drive Moscow even closer to China as it seeks alternatives to sanctioned goods.