This will be the first of two Ukraine Updates that will be posted on 18 January, 2022. The amount of activity in and around Ukraine, and related news and events in Europe appears to be increasing steadily with every passing hour.
Russia is continuing a drawn-out evacuation of its diplomats, embassy staff and dependents from its embassy in Kiev. The first departures began in the days leading up to the first negotiations between Russian and US officials in Europe last week. They have continued at irregular intervals since then. 50 people have left the embassy in total and a smaller number has departed from the Russian consulate in Lvov. Diplomats and staff at other Russian consulates in Ukraine have been told to be prepared to leave the country at some point in the coming days. The purpose behind this move is unknown. Some sources claim it is strictly a propaganda move to further cause uncertainty in Ukraine and the West. Traditionally, the departure of embassy staff and diplomats is a sign that hostilities are imminent. Yet until today, few people paid close attention to the comings and goings at the Russian embassy and consulates in Ukraine. In the wake of the cyber attacks last week, eyebrows are starting to be raised.
Material help from the West is continuing to arrive in Ukraine. Not in the numbers and types that will deter a potential Russian attack, but some is better than none. Great Britain has started shipping light anti-tank guided missiles to Ukraine. A small number of British troops will also arrive to assist with training. Canada has sent a contingent of special operations troops to Ukraine. The appearance of Canadian troops is expected to be part of a NATO effort to deter Russia from launching an invasion. These troops will also be tasked with helping to develop evacuation plans for Canadian diplomatic personnel in the event that an invasion does occur.
Russia has started moving military forces into Belarus, ostensibly to take part in the military exercise Joint Resolve, which is scheduled for February. The maneuvers are set to take place along the western border of Belarus, in close proximity to Poland and the Baltic States, as well as the southern border neighboring Ukraine. We’ve discussed the Russian obsession with using military exercises as cover for real military operations before. That is a topic that will be talked about more in the coming days.
I haven’t talked much about our friends to the north in this blog, but tonight I’d like to make an exception. Canadian news media is now projecting that Justin Trudeau will remain as Canada’s prime minister, and the Liberal Party will remain in power as the results of the Canadian Federal Election come in. Polls taken in the days before the election suggested the elections would be close and Conservatives, with their leader Andrew Sheer, might be able to assume control of the government. As it stands right now, that doesn’t appear likely to happen.
Trudeau is safe, although its not yet clear if Liberals will form a minority or majority government. Again, as it stands right now, a minority government seems more likely. This scenario will leave Trudeau in a far weaker position, and needing the support of other left-leaning political parties to push legislation through. When the election results become more concrete, a better picture of the current political situation in Canada will develop.
However it goes, this election will have little effect on Canada’s geopolitical stature. Truth be told, the Trudeau government’s actions abroad have resulted in a minimal net gain for Canada, except for a handful of good soundbites.
Perhaps later in the week, as it becomes clear what direction the new Canadian government will be going in, I’ll look at the future of Canada’s military, and geopolitical agendas.
President Trump and other world leaders have arrived in Buenos Aires for the 2018 G20 Leaders’ Summit. As the summit starts, there are a number of subplots worth watching over the course of the next few days. The recent clash between Ukrainian and Russian ships in the Black Sea region, concerns about whether or not the US-China trade war will escalate, and the continuing blowback of the Khashoggi Murder are three of the issues G20 leaders will be contending with.
Kicking off the summit was an announcement that the United States, Canada, and Mexico have completed and signed a trade agreement. The United States, Mexico, and Canada Agreement (USMCA) will replace NAFTA. When President Trump took office restructuring or even replacing NAFTA was a top priority. After two years of negotiations, and some arm-twisting, the new agreement has become a reality.
The fate of President Trump’s planned meeting with Russian president Vladimir Putin in Buenos Aires is uncertain right now. Trump announced he was canceling the meeting in response to tensions between Russia and Ukraine. The Kremlin, however, has said nothing about the talk having been cancelled, leaving the fate of the meeting up in the air.
Interaction between Trump and Chinese leader Xi Jinping will be closely watched this weekend as well. The two leaders will meet during the summit, raising hopes that the ongoing trade war between the world’s two largest economies can be deescalated, and the souring relations between China and the United States reversed. A ceasefire on tariffs would be especially welcomed, although one is unlikely to be reached this weekend. Trump views tariffs as leverage and an effective weapon. He will not be prepared to give it up so easily. The US-China relationship is complex, and a prime example of economic and geopolitical interests clashing head on.
It would seem, for the moment, that Saudi Crown Prince Mohammed bin Salman will receive a pass on the Khashoggi murder. The G20’s attention this weekend will be on the global economy, climate and energy concerns, and other similar issues. Khashoggi’s murder by Saudi agents at the Saudi Arabian consulate in Istanbul is a topic to be avoided and understandably so. The G20 is an economic club at its heart. As a general rule, dubious political matters are avoided at all costs, even though the global media would love nothing more than for Salman, and Saudi Arabia to receive a comeuppance of sorts in Buenos Aires.
Not surprisingly, the new Italian government’s calls for debt relief from the European Central Bank (ECB) appear to be falling upon deaf ears. The ECB has released a statement saying current treaties in place forbid such a move. German Chancellor Angela Merkel ruled out the possibility. In an interview published today in Frankfurter Allgemeine Sonntagszeitung Merkel said the eurozone should not be transformed into a ‘debt union.’ These dismissals set the stage for a potential showdown between the EU and Italy’s populist government over the future of Italy’s place in the eurozone. Giuseppe Conte, the new Italian prime minister, is expected to meet with Merkel, and French President Emmanuel Macron at this week’s G7 summit in Canada.
Italy will not be the only major point of discussion in Quebec later this week. US trade tariffs, and their potential impact will be discussed at length. At midnight on Friday tariffs on steel, and aluminum imports from the EU, Canada, and Mexico were put into effect. The US has been negotiating with all parties involved. Progress has been slow in coming, however, prompting the US to take unilateral action. The EU has promised strong countermeasures in response.
Fears of a global trade war have been looming for some time. Negotiations between the US and China appeared to have pushed much of the concern to the background for some time. Markets had stabilized, and investors seemed to be getting over their jitters. If the EU, Canada, and Mexico are unable to reach some sort of compromise with the US this week, those fears could spiral out of control and have an adverse effect on global markets, and the global economy as a whole.
This promises to be a busy upcoming week in Quebec.
While in Argentina over the weekend, Secretary of State Rex Tillerson remarked to reporters that the imposing of oil sanctions and restrictions against Venezuela’s oil sector is now on the table. US oil sanctions are considered the nuclear option and would close off Venezuela’s economy to the single source of dependable income it has left. US and international sanctions already in place against Venezuela have not had the intended effect. If anything, the moves have emboldened Venezuelan strongman Nicolas Maduro to dig in his heels and go for broke. In January, 2018 Maduro announced he will be seeking a new term in office. The presidential election has been scheduled for 30 April of this year and with the majority of opposition candidates and leaders banned from running, Maduro is expected to skate to an easy victory.
If the presidential election proceeds, and the Trump administration imposes an oil embargo in response, the impact on markets, supply, and output will be significant. 2018 has seen an overall tightening in the oil market and a supply disruption now is sure to cause reverberations that weren’t felt when there was a crude superabundance. If Venezuela faces an oil embargo its economy will collapse entirely and that could cause an undesirable chain of destabilization among its neighbors, and other Latin American nations. The prospects of sanctions bringing a scenario like this to life are real. Caribbean nations rely heavily on cheap Venezuelan oil and have resisted Tillerson’s calls for a hemisphere-wide effort to challenge Maduro. US, Mexican, and Canadian oil officials, and diplomats are forming a working group to try and find an alternative to Venezuelan oil for nations in the Western Hemisphere that are reliant on it at the present time.
President Trump favors harsher sanctions against Venezuela, though its uncertain if he’s willing to turn to his nuclear option just yet. As mentioned above, the current sanctions in place have not motivated Nicolas Maduro to begin the reform process. If US efforts to create an anti-Maduro coalition show signs of success between now and the end of April, expect the Trump administration to begin thinking seriously about oil sanctions, or an outright embargo against Venezuela by 1 May.