Anton Zhelezkov's Blog

US-Russian Cooperation for a Prosperous and Secure Indo-Pacific Region

August 8, 2020
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A new period of relations between Russia and the United States of America began after the Ukrainian crisis of 2014. Following Western sanctions imposed on Russia, Moscow has an additional incentive to rebalance its foreign policy endeavors, with special focus on the Asia-Pacific. It brings both opportunities and challenges. Russia should make an effort to prevent excessive escalation, given that the US now has a major stake in the Indo-Pacific formation and the growing anxiety between Washington and Beijing.

While there are enhancing traditional strategic partnerships with China and India, Russo-Japanese relations demonstrate positive dynamic. The year of 2018 testified Russia's growing stake in multilateral diplomacy of East Asia. In 2019, at the Second Belt and Road Forum for International Cooperation, Russian leader Vladimir Putin accented the vision of a Greater Eurasia, integration of existing entities.

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Photo: Second Belt and Road Forum for International Cooperation (BRF), working visit to China / Kremlin.ru

In the pursuit of increasing its presence in East Asia and having less influence compared with the US and China, Russia, virtually being a third power, is able to strengthen institutionalism and support regional centrality in ASEAN, given the US-China growing rivalry. In addition, the adherence to international rules would strengthen confidence in Russia as a responsible and credible partner among its Asian counterparts, providing them with an alternative. In fact, Moscow is already promoting cooperation in the military area, information security, mining and energy, integration projects between the ASEAN and the Eurasian Economic Union, demonstrating its independent foreign policy line.

The United States notes a tendency that Russia reestablishes its footprint in the Indo-Pacific through military, economic and diplomatic actions. It seems for the US to consider the Russo-Chinese tandem. The factor of growing rivalry with the US, is an essential source for strengthening bilateral and international coordination for both states. Even without the formal alliance (although it can be read in different ways), encompassing the military-political and economic domains, and actions at international institutions, having a similar stance on promoting a multipolar world, it is capable to create an environment where America is less influential.

The US designates Russia in its 2017 National Security Strategy as the main competitor in Europe, and as Revitalized Malign Actor in its Indo-Pacific Strategy. Being in a strategic competition with China and Russia, two major world powers, simultaneously, it can play a bad game with the US to sustain its influence in the region or even globally. Due to growing instability, given that Washington and Moscow are not burdened by serious contradictions in the Indo-Pacific, the region could become a place for a new constructive dialogue to find ways to cooperate and resolve various contradictions.

As both states have a stake to increase their regional profile, the paper proposes feasible areas of achieving cooperation in a short prospective through political, economic and security endeavors, averting extreme escalation in the future.

Political Revitalization through Multilateral Arrangements

As the US national documents contain statements about the willingness to work with all nations, and the non-exclusion of any nation. Given a lack of common grounds, multilateral fora could be beneficial to seek potential ones, intensifying a high-level dialogue. ASEAN mechanisms, the Shangri-La Dialogue, the APEC, and the Eastern Economic Forum (EEF) could set up mutual agenda.

It is worth noting a Donald Trump’s position on the G8 expresses the willingness to pursue a high-level dialogue. Considering recent years, relations of France, Italy, Germany and Japan with Russia have a positive dynamic, it could be a reason for America to initiate the process. Due to the chairmanship in 2020, Trump has an intention to invite Russia along with Australia, India and South Korea. Despite Russian officials have repeated that the G8 does not meet modern conditions, it comprises counterparts Russia has something to discuss with in the Euro-Atlantic and the Asia-Pacific.

As a more engaged, the US has to try to include Russia in its schedule and policy. Overtly trying to build a dialogue and include in negotiations within East Asia (recognizing that more than a half of Russian territory lies in Asia and where its interests are tangible) would encourage Moscow to be an active actor with independent posture. Acting oppositely, it would encourage Russia to seek opportunities in China.

As Washington primarily relies on bilateral dialogue, it does not lose anything, interacting with Russia through multilateral fora. On the contrary, such format could bring aligned Asian interests on the agenda to discuss them more properly and effectively on bilateral level. Establishing a productive dialogue and the US support would give Russia tangible engagement in Asian affairs, albeit with elements of competition (e.g. arms sale). For Washington, improving ties with Moscow could have a strategic character in sustaining its leadership in the region.

The US and Russia have reaffirmed their commitment to the centrality of the ASEAN as a stabilizing factor. Under the ASEAN, both states participate in security mechanisms such as the ARF, ADMM +, and the EAS. The latter is the only platform in the eastern part of Asia that covers the whole range of issues facing its members, which could become central to the bilateral negotiations between senior officials.

Recent events within the Shangri-La Dialogue show an increasing competitive spirit between Washington and Beijing. The same platform could serve Russia and America for a better understanding of each other's actions that would be further taken at a higher level, and lead to the establishment of bilateral military contact groups. A similar situation has the APEC forum: in 2018, the United States and China disagreed, and a formal joint declaration of the members was not adopted. While the APEC-2019 was canceled and holding the forum in 2020 is not clear due to COVID-19 pandemic. Washington and Moscow are not members of the RCEP or CTTP, and support the APEC and its FTAAP, serving as a relevant venue in pursuit of ongoing improvements in mutual trade between the two.

A US participation in the Russian EEF would testify a clear shift in relations, also show the prestige the forum and Russia, benefiting Washington in the long term.

Economic Cooperation within the Russian Far East

Of primary importance for Russia is the development of its poor developed and small inhabited eastern territories (consequently, a small domestic market; but there is a huge growing market of Asian economies). In 2013 Vladimir Putin, in his speech to the Federal Assembly, declared that Siberia and the Far East is “National priority for the whole 21st century”. While Siberia is relatively advanced, the Russian Far East (RFE) possesses almost half (41%) of Russian soil with only 5% of whole population living there.

Overall economic relations between Russia and the United States are low, for example, the total trade volume during the last years of the presidency of Barack Obama was seriously reduced and accounted to about $ 20 billion. Trade during the period of Donald Trump shows positive dynamics, in 2019 the level was $ 27 billion. There are some initiatives designed to give a new impetus to the business dialogue such as a bilateral Business Advisory Council proposed in 2018.

On local level, the dialogue develops naturally, albeit slowly. One of these formats is the Russian-American Pacific Partnership (RAPP), covering the Pacific coasts of them, and acting primarily as a venue for showing potentials and promoting advantages of the parties. Given the political impetus, the RAPP, as an existing mechanism, could gain new content for efficiency.

There are several economic regimes powered by the Russian Government (e.g. Free Port of Vladivostok (FPV), Advanced Special Economic Zones, the Special Administrative Region Russky Island). These mechanisms are able to interest American entrepreneurs and tourists. For Russia, diverse investment flows reduce the threat of overdependence on Chinese capital, the creation of infrastructure not in the European part of Russia (where it mostly exists) but in the Asian part (where it, by and large, does not) could serve as the basis for more effective engagement in Asian affairs both in politics and economics.

US FDI can seriously compete with Chinese one. Washington could offer financially sound, transparent investment alternatives for poor developed territories through the Better Utilization of Investments Leading to Development (BUILD) Act signed in 2018. Established by the law, US International Development Finance Corporation could catalyze significant amounts of private capital into the RFE. FDI could have a positive effect, creating a greater interdependence, and competing with the prevailing Chinese capital within the Indo-Pacific scale, which would also affect Russia pulling it into a balancing that does not directly conflict with America.

The dialogue at the highest level would stimulate the development of joint investment ventures within the RFE. Initial steps could be the inclusion of the US in the list of states with a simplified e-visa access that already allows citizens of 53 states to visit the RFE for 8 days. It would encourage American tourism flows, and entrepreneurs to know better of opportunities and challenges. It would be also work for Saint Petersburg and Leningrad region, along with Kaliningrad and its outskirts due to the same national law. In fact, Saint Petersburg Economic Forum is already attractive for American business.

A visit of the official US delegation to the EEF in Vladivostok would boost economic and political improvement. The example of Japan is illustrative: it is already in the e-visa list, is one of top three investors to the RFE, and the Japanese leader Shinzo Abe constantly attends this event for 5 years, having a positive effect on the overall level of Russo-Japanese relations. Mutual agenda is increasing: Japan has joined natural resources development in Russian Arctic, thus boosting the Northern Sea Route as a trade corridor, is considering to operate Trans-Siberian railway to connect Japan and Europe through the Russian soil, and also established few direct flight lines, spanning Japan and the RFE. Around 40% of all ventures (more than 200 approved) encompassing the Eight-Points Cooperation Plan between Russia and Japan proposed in 2016 by PM Abe is under way at the RFE.

The EEF annual forum has proven its viability by increasing both representatives and FDI. The 2019 forum also showed its capacity to discuss relevant issues of global agenda in a narrower circle of state leaders in addition to the main goal of the forum, the development of the RFE. It could serve as a venue for discussion of other potential areas of cooperation between regional powers.

Beyond the Indo-Pacific: the Arctic

The Arctic, although it is not a part of the Indo-Pacific, is at the crossroad and its importance for the latter is growing significantly. There are several factors: firstly, there are direct borders between Russia and the US, as well as Canada; secondly, for the first time, China has formed its position for the Arctic formulated in its 2018 Arctic Policy1, and through its initiative, the Arctic (Polar) Silk Road, Beijing becomes an active actor, promoting economic interconnectivity between the Indo-Pacific and the Arctic, accessing Europe and the Americas. The region has both opportunities and challenges of achieving practical cooperation, primarily between Russia and the US, with the potential to attract China in the future.

The US current posture emphasizes the internalization of the Arctic, security matter, interests in developing trade routes, as well as negative rhetoric about regional activities of Moscow and Beijing. Regarding China, it looks a little far-fetched, due to the lack of direct access and the relatively recent start of activity in the region. Washington also shows its consistent policy against the Chinese BRI (nothing indicates a change in stance). Russia, according to the US, limits the passage of vessels in Arctic waters, increases its military presence. In fact, the US vis-a-vis China approaches the South China Sea in a similar manner.

Unlike the SCS, the Arctic has its management system based on several levels: international stands for the UNCLOS 1982, regional with bilateral and multilateral agreements, and national is on the laws of states. It promotes peaceful coexistence and building cooperation between all Arctic nations, despite the claims of the US.

Historically, the Arctic is a region of low tension. However, taking into account the posture of the United States towards Russia, there is a possibility to reinforce either rivalry or cooperation. Both states are full-fledged Arctic states represented in the Arctic Council (AC), a fulcrum platform for discussing issues of non-military cooperation, comprising 8 permanent member-states2 and 13 observer-states, including China, and various organizations. At the same time, it is precisely here there are potential flashpoints for increasing confrontation between the US and Russia that affect their western and eastern borders respectively; they are a de facto Russia-US maritime boundary agreement (Washington fully agrees with the provisions, but Moscow does not, which may cause a border review, although the probability is extremely small), and freedom of navigation (FON).

The United States, being the only non-party to the UNCLOS among the Arctic states, is capable to challenge the FON vis-a-vis all Arctic states. For example, the US contests the position of Russia and Canada on the regulation of shipping in the Arctic. The Northern Sea Route (NSR) and the Northwest Passage (NWP), passing through the territorial waters of Russia and Canada respectively, are recognized by them as national transport arteries with their full state control and regulation.3

In fact, there are similarities in the posture of Washington and Beijing in the field of navigation. While, on the one hand, China recognizes the jurisdiction of the Arctic states to regulate shipping in the Arctic, on the other hand, the FON should be guaranteed, correlating with the US posture. Such proximity could become the basis for rapprochement and joint contest of such rights together with America in the future (e.g. if the potential deterioration of Sino-Russian relations happens).

Comparing with East Asia, Moscow has a stronger position in the Arctic. Russian objectives here are clearly defined: there are intentions to make the NSR operational, to promote cargo turnover, economic and infrastructure development, expand the military presence. While Washington, in turn, is also interested in transportation, it is deprived of its own maritime corridor: either cooperation with Russia or Canada, or a potential Trans-Polar route represented international waters passing through the center of the Arctic, however it is the hardest passage.

The world attitude towards the Arctic is changing in various fields (e.g. political, economic, environmental). Due to climate change, there is an exploitation of natural resources and the promotion of trade routes from the Indo-Pacific to Europe and vice versa through the Arctic that are cheaper and faster than the Southern Sea Route. The example of China impels other Asian nations. Japan, South Korea, Singapore, and India are already showing interest. Such activity on the part of Asians allows to consider the Indo-Pacific as the key to the Arctic development. The US and Russia, being at the crossroad of the regions, could play a leading role.

Russia can now be called the largest beneficiary receiving funding for the development of its economy and infrastructure in Siberia and the RFE, since China has access to the Arctic largely due to Moscow. However, Russia's increasing excessive economic dependence on China threatens to pursue an independent foreign policy that could serve as a motivation for seeking diversification of assets. Beyond the frames of Russo-Chinese cooperation, Beijing has achieved mixed results with the Arctic Eight. Together with the US, Canada and Sweden deny the possibility of signing agreements on the Polar Silk Road in the near future. Others seems more neutral, albeit there are also some difficulties.

A poor developed Eastern sector of the Russian Arctic makes the Russian Government to consider the expansion of the FPV for investors in these territories. It is likely that all initiatives able to attract FDI would be promoted on all relevant venues, including the EEF in Vladivostok and the International Arctic Forum (IAF). The latter is not assigned to a specific city and could combined with other events. Russia chairs the Arctic Council in 2021–2023, so Moscow could set up agenda and propose new initiatives to discuss, evaluate and implement.

In fact, the holding of three Arctic events in Vladivostok would attract more Asian participants, introduce its European partners to opportunities in the RFE, promoting Russia's engagement in both the Indo-Pacific and the Arctic. Building cooperation between Russia and the United States in the Arctic could have a positive effect for each. For Moscow, most tangible results could be safeguarding its boundaries and diversifying assets. For Washington, they could be gaining access to shipping, joint exploitation of resources. The US could send an official delegation to the AC summit, and schedule meetings within the EEF and the IAF, where the American business community could join as well.

Russia, already having great experience, in navigation, transportation and use of icebreaker fleet, could initiate a dialogue on practical cooperation with the US in the Arctic and North Pacific. An increased activity in the Arctic certainly calls to ensure non-traditional security (e.g. in the field of ecology, rescue) and traditional military one directly affecting interests of Russia and the US. The recent accident in Norilsk (Russia) and the subsequent offer of US assistance to Russia in its liquidation are evident.

Moscow's focus on economics and security issues with Washington would allow to deviate from the Arctic Council’s dominant climate change agenda that causes a split largely due to the US stance. Avoiding climate change issues, it could bring the US and Russia closer, paving the way for practical cooperation. Thus, regular informal meetings of the Arctic's Chiefs of Defense Staff suspended in 2015 could be restored. In 2017, such a proposal was not approved, and in 2019 the issue was not on the agenda. At the same time, “hard” security issues, being out of the AC, could prompt both states to tackle them through reforms of the AC, considering changing regional environment, or/and approach these issues in a bilateral format.

The US Coast Guard increased its role in the Indo-Pacific, and in the Arctic due to the US Coast Guard Arctic Strategy. Given that there are the Arctic Coast Guard Forum and the North Pacific Coast Guard Forum4, Moscow and Washington have relevant venues to address security issues and be engaged in practical cooperation (e.g. sharing information, joint exercises to search and rescue). Operating along the borders, strengthening ties between the coast guards could serve as the basis for deeper cooperation in both traditional and non-traditional fields of security at the crossroad of the two regions. Such a move from Russia and the US seems reasonable and quite possible.

References:

1 - The Arctic posture of China advocates inclusiveness for all states, instead of the current exclusivity (the Arctic Five (Russia, US, Canada, Denmark, Norway) has the greatest weight). China intends to promote the governance there, to develop and implement new international rules of conduct in the Arctic, to guarantee the rights of all states. Read more at USA–China: the Struggle of Two Strategies and Practices of World Leadership [in Russian] / L. Vartazarova, I. Kobrinskaya, eds. // Moscow, IMEMO, – 2018. – P. 56-60.

2 - They are as follows: Canada, the Kingdom of Denmark, Finland, Iceland, Norway, the Russian Federation, Sweden and the United States.

3- The US does not recognize the priority rights of Russia and Canada to regulate shipping in Arctic, and believes that the right of peaceful passage should be applicable within the territorial sea and it cannot be forbidden, the FON should be guaranteed within 200 miles of the EEZ, and the Arctic Straits (both the Russian Arctic and the Canadian Arctic archipelago) are international straits with the right of transit passage that is equally applicable to both civilian ships and warships. Read more at USA–China: the Struggle of Two Strategies and Practices of World Leadership [in Russian] / L. Vartazarova, I. Kobrinskaya, eds. // Moscow, IMEMO, – 2018. – P. 56-60.

4 - The current membership includes agencies from Canada, China, Japan, South Korea, Russia, and the United States.

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