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Sanctions: Ukraine's Punishment, Russia's Reward
December 26, 2001
Summary
The United States slapped Ukraine with punitive trade sanctions Dec. 21 over its refusal to crack down on compact disc piracy. The sanctions represent more than Washington's efforts to protect American economic interests; they also signal the first reward to Moscow for its new pro-Western foreign policies.
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Analysis
The United States levied trade sanctions against Ukraine on Dec. 21 after the Parliament, or Rada, failed to pass laws to crack down on compact disc piracy. Washington estimates the sanctions, which take effect Jan. 23, will keep $75 million worth of Ukrainian goods out of U.S. markets annually.
The piracy issue has dogged relations between the two countries for years, but Ukraine's geopolitical importance vis-à-vis Russia always prevented Washington from slapping it with sanctions. Coming at this time, the move is as much a testament to Ukraine's declining importance to U.S. strategy as it is to warmer U.S.-Russian relations. The sanctions are an indication to Russia that its new pro-Western stance will indeed be rewarded.
For Ukraine, the move is more than a one-off measure -- it is an indictment of the government's unwillingness to enforce intellectual property laws. So long as sanctions remain in place, Ukraine will find its long-term goal of joining the World Trade Organization imperiled. U.S. and European authorities, meanwhile, are setting up a rapid timetable for Russian accession to the WTO.
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(c) 2001 Stratfor, Inc.
Dan
Sanctions: Ukraine's Punishment, Russia's Reward . . .