U.S. GETS BACK AT RUSSIA FOR VENEZUELA


07.08.06
MOSCOW. (RIA Novosti military commentator Viktor Litovkin)

The sanctions imposed by the U.S. State Department on two Russian companies, Rosoboronexport and Sukhoi, for cooperating with Iran have nothing to do with such cooperation. Military analysts maintain that this is only a pretext not born out by the facts.

The Sukhoi aircraft maker has not sold a screw to Tehran in the last seven or eight years. "How can such a respectable agency as the State Department speak of our cooperation with Iran?" Sukhoi's management wondered.

In reality, the sanctions are an attempt to take revenge for the $3 billion in contracts for military-technical cooperation signed by Moscow and Caracas, Russian analysts say. This is also another example of unscrupulous competition on the global arms market and another chapter of the undeclared trade war the United States has been waging against Russia since the middle of the 20th century.

The Jackson-Vanick amendment, which the U.S. Congress passed in the early 1970s to punish Moscow for not letting Jews immigrate to Israel, is still in force, although it has been at least twenty years since Jews and all other ethnic groups have been able to leave Russia and return at will without attracting the attention of the authorities or law-enforcement bodies. Provided, of course, they are not involved in anything illegal.

Nevertheless, this crude amendment sill limits the ability of American and other firms to sell high-tech equipment to Moscow. It is not that Russian enterprises and research institutes suffer greatly. After all, high-speed computers and other equipment can be bought from countries other than the U.S., but the very fact of nominal trade restrictions on a nation Washington calls its "strategic partner" is alarming. So are the latest sanctions against Rosoboronexport and Sukhoi.

Of course, it will be a painful blow to Sukhoi, no matter what its management might say. These sanctions will not affect its exports of Su multi-role fighters to Algeria, Indonesia and Venezuela, which account for the bulk of the corporation's revenues yielding over $2 billion annually. But the halting of cooperation with Boeing, Hamilton Sundstrand, Honeywell and other U.S. companies involved in the work on the SuperJet 100, Sukhoi's new medium-haul passenger jet, will stall its development. Which means that the first plane will not take off in 2007, as provided for in the business plan. The delay may be a year or even two, depending on whether the Russian aircraft maker will have to look for new partners or wait for the State Department to change its mind and stop hindering U.S. firms from benefiting from lucrative international contracts.

The sanctions against Rosoboronexport will have a similar outcome. The company does not have direct contracts with U.S. companies. Recently, however, the American administration said it was interested in buying Russian small arms and special weapons for the Iraqi armed forces and police. There were good reasons to do so: Russian Kalashnikov assault rifles and submachine guns, as well as other weapons based on them, are respected in the region. They are also well known there, as Iraq bought a lot of Russian weapons under Saddam Hussein. Now the Pentagon will have to buy weapons from Bulgaria, Romania or Egypt. Rosoboronexport and the Izhevsk plant that produces Kalashnikovs will lose the promised $200 million. Moreover, assault rifles and submachine guns bought in other countries are unlikely to meet the high quality standards set by the original producer.

By introducing these uncalled-for sanctions, the State Department is creating other problems for American firms. One of them is related to titanium supplies to Boeing from the Verkhnyaya Salda aluminum plant. After all, 30-40% of the load-carrying structure in every Boeing airplane is made of metal supplied by Russia's VSMPO Aviasma. The multibillion-dollar contract between Boeing and the Urals-based company is to last for several years. There were even plans for a joint venture. However, the controlling stake in VSMPO Aviasma will be sold to Rosoboronexport in the near future. The State Department must be aware of that. The forthcoming deal has been widely covered by both Russian and American mass media. Now Boeing will have to look for other titanium suppliers, but there are not many of them on the global market. Moreover, the quality of Verkhnyaya Salda titanium is significantly higher than that of metal offered by other countries.

I will not discuss who will lose more from Washington's short-sighted trade policy, as this is obvious. It is equally obvious that Boeing can no longer hope to sell its long-distance airliners to Russia. Aeroflot has been drafting a contract to buy 22 Boeing 787 planes for $3 billion, but now, apparently, it will have to turn to its European partner, Airbus, whose A350 wide-bodied planes are in no way inferior to their American rival and are even superior in capacity and comfort.

Most probably, the undeclared trade war on Russia waged by the State Department, as well as some conservative politicians in the White House and the U.S. Congress, will not allow American firms to make it on the short list of Gazprom's partners in the Shtokman project. Yet this field in the Barents Sea, with its huge gas reserves and relatively easy production, could seriously reduce Washington's dependence on hydrocarbons from the Middle East and Venezuela.

Apparently, Washington's politicking on the international stage is becoming a problem not only for its foreign partners but also for its own businessmen and firms. Nothing can be done about it. Washington needs some time to realize that the world no longer revolves around the White House and Capitol Hill. Any short-sighted move by the administration, like the petty revenge on Russia for its military cooperation with Venezuela, will sooner or later backfire.-0-