Winnipeg Free Press - PRINT EDITION

Canada cannot avoid bite of sanctions

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The sanctions battle between Russia and the West has ramped up, with that country banning food and agricultural imports and travel rights, in retaliation for financial restrictions imposed by Europe, the U.S. and Canada. The regional war over rebel attacks in Ukraine, widely recognized as backed by Russia, is having an increasing economic imprint on the world's superpowers.

No one foresees the West going into Ukraine in armed assault, although NATO has sent in support in the shape, it says, of advisers. Putting boots on the ground gives that organization some front-line intelligence but it also has the effect of putting Russia on elevated alert.

That may have been central to President Vladimir Putin's decision this week to double the troops on Ukraine's border. No one at the UN security council meeting was swayed by Mr. Putin's explanation it was a "humanitarian" move designed to push the regions of Luhansk and Donetsk back from the brink of disaster. Instead, the West responded by turning the screws on sanctions announced earlier this spring when Russia invaded Crimea.

Now Canada has felt the pinch of Russia's embargo on food and agricultural products. Pork, shellfish, fish, poultry, beef, vegetables and fruits and other imports are banned for a year, matching the western sanction timelines.

How long those sanctions remain in place depends upon the narrative arc of the conflict, and Russia's ability to withstand what the IMF says is a looming recession, caused by trade restrictions, including the West's move against that country's banks. There is a vigorous international debate about the real usefulness of sanctions. Some regimes and leaders (North Korea) seem impervious to such efforts, but others (Syria, Iran) have shown themselves pliable.

Vladimir Putin is not a madman, disinterested in the broader interests of his people. He is inclined to negotiate, specifically at the European table. And while Russians have historically demonstrated the ability to suffer straitened circumstances, the years of progress, and freer relations with the West, since the Soviet Union collapsed may have softened the population some. Indeed, ordinary Russians are expressing fears over their savings in state and smaller banks affected by western sanctions.

The effects of personal and financial embargoes imposed by the U.S., Europe and Canada on Russia have been felt, and with the ratcheting up of those and introduction other restrictions, such as the trade in weapons and of technology that can be used in the oil and military industries, Russia's economic outlook will continue its slide.

But this is not likely to be a short, sharp intervention. Canada's producers and shrimp fishers will feel the bite most immediately, but demand in international markets will help them find new customers. The largest hit will be felt in the pork industry, with exports to Russia at some $250 million. Disease outbreaks in the industry in other countries should help producers sell that surplus elsewhere.

The legitimate concern is the dispute is prolonged and sanctions expand to other industries, including manufacturing. But sanctions, rather than a show of military force, remain the hard point in negotiations with Russia over Ukraine's future.

Canada cannot champion democratic rights and national sovereignty in global forums and then expect to sit as a passive observer in this fight. Canadian corporations, investors, manufacturers and mining interests alike have aggressively pursued opportunities in Russia over the past decades. They should all prepare now for a sanction chill. The pain that follows is the better option to armed conflict, or the shame of simply doing nothing.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Catherine Mitchell, David O’Brien, Shannon Sampert, and Paul Samyn.

Republished from the Winnipeg Free Press print edition August 9, 2014 A16

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