March – June 2018

Positive: +26

Negative: -6

Overall: +20

TRUMAN Index: +1.0

UPDATE

The latest quarter was a kind of test of the strength of the dialog established between Kyiv and Washington since the start of the Trump Administration. Many of the efforts by the Ukrainian side came under serious risk of being leveled. Despite optimistic forecasts in Kyiv, changes in the leadership of the US National Security Council and the State Department have not brought the anticipated results. With a new team in place, Donald Trump began to take an independent line, including on an aspect that is critically important for Ukraine: US support for the country’s territorial integrity and its maintenance of a unified transatlantic position towards Russia. Against his statements about returning Russia to the G7 and about where Crimea belongs, the arrival of the much-anticipated Javelins lost a lot of its shine.

In this last quarter, the Department of State was the main driver of dialog between Ukraine and the US. Two US visitors came to Ukraine, Special Envoy Kurt Volker and Assistant SecState Wess Mitchell, and two Ukrainians visited the US: Interior Minister Arsen Avakov and Speaker Andriy Parubiy. State Department adopted a more pro-active position and supported it with the necessary declarations from its spokesperson regarding the cancellation of mandatory e-declarations for anti-corruption activists and then with regard to setting up the Anti-Corruption Court.

Much more so than under Obama, there is a distinct impression that there are two American policies towards Ukraine: that of the US itself and that of the US President. It looks like the Ukrainian side needs to be prepared for a bit of a roller-coaster ride under a Trump presidency in relations with the US, as positive decisions and statements are replaced by negative ones.

TIMELINE

POLITICAL DIALOG

In this last quarter, political dialog between Ukraine and the US at the highest level noticeably slowed down. This is primarily tied to the fact that the current US president has other foreign policy priorities, such as the Iran deal, North Korea and so on. Still, the question of Ukraine came to the fore when the White House confirmed its intentions to hold a summit between Trump and Putin in mid-July.

During this reporting period, the US National Security Advisor and Secretary of State were both dismissed. The appointments of John Bolton and Mike Pompeo to replace them clearly confirmed certain assumptions: Trump wants to adapt his advisors to suit his politics, and not his policies to suit his advisors. Some experts who are familiar with Bolton’s approach said right from the start that, for him, the most important objective was not to impose his own agenda on the Oval Office but to gain Trump’s trust in this new position and to implement the president’s policies. This is despite the fact that the entire purpose an advisor is to advise the president, not just conscientiously carry out his demands. Over the last year, Pompeo has gained a reputation as someone who never contradicts the president. Many observers say that this is not the least factor that helped him gain Trump’s approval. In reality, the new NS Advisor and SecState could bring considerable added value to the issue of constraining Russia, if they were to cooperate with Secretary of Defense Jim Mattis and coordinate their efforts to constrain Trump. In other words, to contain Russia, someone first has to contain Trump on the issue of Russia.

In Kyiv, both appointments were met calmly and positively. The reputations as hawks that both Bolton and Pompeo had gained over the years, including vis-à-vis Putin’s Russia, was enough to draw the conclusion that they would not be worse than their predecessors, Herbert MacMaster, who understood and carefully monitored Russia’s hybrid threats, and Rex Tillerson. Moreover, Bolton was already an established contact as a fee-based participant at events sponsored by Viktor Pinchuk: the annual YES conference in Kyiv in September 2017 and a working lunch in Munich in February. It’s not that the Ukrainian oligarch was especially far-seeing, however, as the media began to talk about Bolton as someone slated for a key position in the Trump Administration within days of the presidential election, with the State Department being named specifically.

Pompeo, on the other hand, was nominated to the post of Secretary of State but continued to head the CIA and even made an unannounced visit to Ukraine in the spring, where he met with top officials responsible for security issues. Insiders say that, as the future top US diplomat, Pompeo wanted to get to know about the situation in Ukraine personally, including about the war in the east. Clearly, Pompeo prepared for his new post very seriously. In contrast to his secret visit to North Korea, about which the US press wrote extensively afterwards and President Trump tweeted vigorously, the Ukraine visit was not publicly made known. Only during the hearings in the Foreign Relations Committee of the House of Representatives in May did Pompeo admit that, while head of the CIA, he had had the opportunity to visit the Donbas, but he did not mention any details. One top Ukrainian official who met with Pompeo said that his American colleague had some interesting ideas about how to possibly regulate the situation in the Donbas. The head of a Ukrainian agency who also met with Pompeo stated, off the record, that since the appointments of Bolton and Pompeo, “we feel more protected.”

At the same time, the sudden change in key individuals in the Trump Administration forced Ukraine, and many other US partners, to keep investing time, resources and energy in rebuilding personal connections with White House officials who could easily be fired. The feeling was that no one ever knew who would still be in a job tomorrow and who would be off to a think-tank or university. Enormous amounts of time were devoted, among others, to build relations with SecState Tillerson. During the last high level visit between the US and Ukraine last January, President Poroshenko spent a fair bit of time explaining to Tillerson about the institutional boundaries of Ukrainian-American relations. Poroshenko reported that they had even agreed to hold a UA-US commission on strategic partnership in March. The last meeting within this framework took place back in 2011. The Ukrainian side still hopes to see this commission’s work renewed this year. However, the tendency in the Trump Administration to work according to non-standard templates, often bypassing diplomatic channels, does not engender optimism that traditional diplomatic mechanisms might be restored, let alone be effective.

For Ukraine today, what’s important is whether Defense Secretary Jim Mattis will hang on to his position, as he is possibly the main promoter of Ukraine’s interest in the current US Cabinet. Recent messages about Trump’s dissatisfaction with the pace of implementation of his policies on the part of the Pentagon are not very cheering in this respect. And even if Mattis manages to stay on for a while longer, his ability to influence the president is extremely limited at this point. Where earlier Mattis was de facto given carte blanche to deal with matters of a military and defense nature, right now decisions are being made unilaterally by the White House, such as the cancellation of US military exercises with South Korea. This kind of situation can only alarm Kyiv.

Yet another reason why the appointments of Pompeo and Bolton led to mostly positive responses in the corridors of Ukrainian power is because both of these men more security types than reformers. That is, they belong to those politicians for whom the issue of Ukraine’s security, especially in the context of Russia’s aggression, is more understandable and dearer to their hearts than implementing reforms or fighting corruption. Clearly, this could be yet another wrong signal for those members of Ukraine’s government who are annoyed by an approach to Ukraine that is based exclusively on the answer to the question: “Are they or aren’t they fighting corruption?”

Moreover, although the issues of reforms and combating corruption are low priorities for President Trump personally, not to mention for Ukraine as well, in the latest quarter the State Department’s position on reforms in Ukraine has been very loud and clear, especially on the matter of fighting corruption. State has placed especial emphasis on two issues: (1) dropping the requirement for anti-corruption activists to file e-declarations, which so far hasn’t happened and (2) setting up the Anti-Corruption Court in line with IMF recommendations. The US has actively worked, both bilaterally and within the G7 reform support group, and its efforts have been largely successful. A slew of sources have confirmed that the position of the US Embassy in Kyiv has also gained weight in Washington: public statements issued by the State Department often reflect its views, and there have been many of them on a variety of issues during this quarter (see Chronicle of events).

The fight against corruption has taken on new meaning in Ukraine. As was predicted in earlier issues of TRUMAN Index, even if this issue is not fundamentally important to the US president, he can use the lack of effort by Kyiv in this direction as a reason to refuse support or, at the least, to place such support under a question mark—and has already done so, if his pronouncements at the G7 summit are true. There, Trump used as an argument for the return of Russia to the G7 before western leaders that Ukraine was one of the most corrupt countries in the world.

A fairly new but nevertheless important area of cooperation with the State Department was the mediation of American diplomats to resolve a crisis in relations between Ukraine and Hungary. The need to engage American facilitators at the level of Assistant SecState Mitchell and even SecState Pompeo arose when Ukrainian diplomatic efforts had reached a dead end while Hungary continued to be determined to block dialog between Ukraine and NATO, especially at the level of the Ukraine-NATO Commission at the Alliance Summit in Brussels. Back in February, Mitchell met with Ukrainian FM Pavlo Klimkin and the Hungarian FM Peter Szijjarto. Diplomatic sources say that the American negotiators made it pretty clear how undesirable Budapest’s continuing blocking of Ukraine-NATO relations was and what it might do to Hungarian-American relations. Seems like Hungary only relented in May, after its FM talked with Mike Pompeo. Still, the Ukraine-NATO Commission wasn’t unblocked. Some sources say that the Ukrainian side has considered the possibility of engaging the US’s “facilitatory” potential if relations with Poland continued to deteriorate.

It’s worth noting that the US has done everything in its power to get Ukraine represented at the NATO summit in Brussels. In addition to resolving the issue of Hungary, it participated actively in drafting a new bill on national security in Ukraine, which was another informal condition from NATO in order to have the NUC meet in Brussels, and did everything they could to encourage its passage with all of NATO’s critical observations intact. In mid-March, the US Ambassador and the head of the EU Delegation, the head of the NATO office in Ukraine, and the head of the Consultative Mission of the EU in Ukraine signed a letter to Ukraine’s leadership that pointed out that a series of provisions in the bill on national security submitted by the president contradicted EU and NATO practice. More specifically, the letter stated, the bill did not provide for the Verkhovna Rada to oversee SBU activities.

Incidentally, during this reporting period, possibly for the first time US officials in the Trump Administration clearly stated the US position regarding support for Ukraine’s membership in NATO. “We support Ukraine’s aspirations to join NATO,” said US Permanent Representative to NATO Kay Bailey Hutchison, who visited Kyiv in April.

REGULATING OCCUPIED DONBAS AND CRIMEA

US mediation in resolving the conflict in eastern Ukraine slipped somewhat into the background during this quarter. One reason was the lack of response from the Russians regarding the proposal for a peacekeeping mission that Special Envoy Volker handed to Putin aide Vladislav Surkov at a January meeting in Dubai between the two. The Russian side had promised to give feedback in March and the Americans were expecting a response to come after the presidential election in Russia. When it became obvious that Russia intended to ignore the Volker mission and Russian strategists close to the Kremlin accused Volker himself of engaging in megaphone diplomacy, Volker openly announced that there had been no response from the Russian side.

During Volker’s latest visit to Ukraine, there was talk over a peacekeeping mission in Kyiv, but this time Volker did not focus on progress in regulating the conflict but on familiarizing himself with the humanitarian crisis in the Donbas. This was the first time that the Special Envoy devoted his time in Ukraine to the humanitarian aspects of the conflict.

In addition to the lack of response and political will in Moscow, the Volker mission on peacekeepers in the Donbas is complicated by the fact that skeptics about such a mission have appeared even on the US side. The new National Security Advisor, John Bolton, has long been known for his cynical position towards the UN in general and its peacekeeping missions in particular. In earlier interviews on the subject, he did nothing to hide his negative position towards the idea of such a mission in eastern Ukraine, saying it would just be a way to freeze the conflict, but not resolve it. According to some sources, US Ambassador to the UN Nikki Haley is also skeptical about the idea, together with the entire US mission to the organization. Without the support of the US representation, it’s hard to imagine that the UN will continue to develop this initiative in the manner that Kyiv had hoped. There’s little support even though the main idea of a UN peacekeeping mission had already turned into the more flexible concept of a peacekeeping mission under a UN mandate. This was evident to anyone paying attention to Kurt Volker’s statements.

In the last few months, US and European diplomatic and expert circles have been actively discussing the likely transfer of Volker to another position, possibly to a much higher level at the State Department. The possibility that his Russian vis-a-vis Surkov will be replaced has also been talked about in the press, with an entire list of possible replacements. So far, however, both men remain in their posts.

US intermediation has also faded somewhat as Germany becomes more engaged in regulating the Donbas. After a very long coalition process, the new Government has once again shown interest in resolving the conflict in eastern Ukraine, not the least because of the enthusiasm of the new Foreign Minister, Heiko Maas. Maas is particularly keen to see the Normandy format revived. However, it’s clear to both the US and Germany that other than lack of political will on the part of the Russians, there are also limits to compromises with the Ukrainian side, given that presidential and Verkhovna Rada elections come up in 2019.

During this latest quarter, while it has strengthened sanctions against Putin’s inner circle and provided lethal weapons to Ukraine, Washington is watching carefully how much this affects the behavior of Russia’s leadership in the Donbas. So far, the results are not cheering. It’s quite probably that Putin felt a weakening in the American position, and after Trump’s telephone invitation to a bilateral meeting, the Russian side is nurturing the hope that all the major issues will be resolved face-to-face, without the assistance of any special envoys. After Trump’s theatrical peacemaking at the summit with Kim Jong Un, concerns have grown that a similar show might be put on in relation to Ukraine.

Meanwhile, Kyiv is doing what it can to downplay the significance of Donald Trump’s statements about returning Russia to the G7 and his alleged statement at the G7 dinner regarding where Crimea belongs: the latter statement was shared by unnamed diplomats with BuzzFeed News and was neither confirmed nor denied by the White House. Foreign Minister Pavlo Klimkin stated that, as far as he knew, the US president’s words were taken out of context and that “there’s no point in spreading this nonsense.” Nevertheless, it’s worth noting that Trump had formed a pretty specific position as regards the annexation of Crimea already during his election campaign. On one hand, he openly stated his opinion that Crimeans really wanted to be with Russia—an underhanded way of justifying the annexation. On the other, he had been criticizing Obama mercilessly for several years for “allowing” Putin to annex Crimea. Even at his meeting with Poroshenko last year, witnesses say that he asked the Ukrainian president, “Do you agree that Obama gave Crimea away to Putin?” If all of Trump’s public and private statements on this subject are examined, the impression is that he would rather condemn Obama over the annexation of Crimea than Putin. Meetings between Trump and Putin are dangerous in that the Russian president can continue to impose his narrative about the statehood of Ukraine—or its inevitable demise—, Crimea and the solution to the Donbas conflict on the US president. Given that Trump has frequently demonstrated his willingness to believe Putin and that Putin, based on many indicators, remains a person of authority to him, this kind of discreditation campaign from Putin’s lips could have a seriously negative impact on Ukraine-US relations further down.

UKRAINE AND THE EU-US CONFLICT

Relations between the United States and the European Union were strained during this last quarter because Trump abandoned the Iran deal and slapped new import duties on steel, 25%, and aluminum, 10%, coming to the US. Any disruption in transatlantic solidarity since the start of Russia’s aggression against it has been a potential nightmare for Ukraine, threatening as it does a consolidated position in the West towards Russia’s actions in Ukraine and offering Putin plenty of room to maneuver.

Ukraine has found itself in a fairly difficult situation where it could be forced to choose sides between its two most important partners, the US and the EU. With regard to the Iran deal, Ukraine could simply avoid stating any position at all. However, the additional duty on steel and aluminum makes things more difficult, as Ukraine has also taken a hit from them since March. During an April meeting with Chancellor Merkel, President Poroshenko agree to coordinate positions on this issue.

Significantly, new restrictions affect 20-25% of Ukraine’s overall exports to the US over the last three years. During these years, Ukraine exported steel products worth US $119.6mn in 2015, US $89.7mn in 2016, and US $175.6mn in 2017. At the same time, Ukraine is not even among the top 20 countries exporting steel products to the US: it was only 24th in 2017 among all exporters, shipping 256,000 t of such products, a fairly pathetic amount compared to the nearly 6 mn tonnes that Canada exported or the nearly 5 mn tonnes that Brazil shipped to the US.

Given that the US president’s decision allows for possible exceptions or revisions to the size of the additional duty for individual countries that meet five specific requirements, Ukraine has been actively working on this. The first discussions to exclude Ukraine from the new import duties took place in Washington at the beginning of June. For now, Ukraine appears prepared to follow the example of Japanese Premier Abe, who, unlike some other world leaders, has been avoiding criticisms of Trump’s protectionist measures in order to preserve dialog on security with the US.

Events in Ukraine-US relations (March – June 2018). Point-based evaluation

Full version of the TRUMAN Index №7 (March – June 2018) read on the TRUMAN Agency website