NATO Expansion and its Implications for U.S.- Russian Relations

[Deb Palmieri on Russia Table of Contents]

The following article was published in the Russian Commerce News, March-April 1997. The Russian Commerce News is the official publication of The Russian-American Chamber of Commerce®.

NATO Expansion and its Implications for U.S.- Russian Relations

In this issue you will find a special focus on issues pertaining to the debate over NATO expansion and its implications for U.S.- Russian relations. You will also find analysis and discussion about the upcoming G-7 summit meeting in Denver and how Russia is expected to participate and define its objectives and priorities. What is striking is that when you step back to examine the meaning and context of both these sets of issues, what emerges is a picture of a curious dynamic at work.

On one hand, in the realm of economic cooperation and the development of business ties between the U.S. and Russia, a "full-speed ahead" mindset on both sides is driving the relationship forward in positive ways - encouraging investment and trade; promoting scientific and technological cooperation; encouraging Russian integration into the global economy by embracing Russia into major institutions - the IMF, WTO, OECD, G-7, etc. Earlier Cold War barriers that stymied commercial expansion - restrictive export controls, trade inhibiting legislation and social disapproval - have given way to the enthusiastic pursuit by American companies to explore Russia's business frontiers with an ever increasing degree of optimism, boldness and confidence.

But on the other hand, in the realm of military affairs, particularly with a focal point on the traditional NATO alliance system, trouble is brewing. The U.S. has taken the lead to promote the expansion of NATO to include former Warsaw Treaty Organization (WTO) countries of Eastern Europe, particularly Poland, Hungary and the Czech Republic for starters. Russia has cried out in alarm over the move, with a range of responses from ultra-nationalists, who threaten dire results, to more moderates, who don't like it, but will push for the best positioning of Russian border and national security interests in the context of the new system.

Americans tend to forget what a thorn NATO is with Russians. The Soviets have long viewed it as a primary instrument of American domination rooted in Cold War conflict between East and West. [NATO was formed in April 1949 as a defensive alliance against what were perceived to be offensive expansionist moves by the Soviet Union.] Russians today have a high degree of anxiety over NATO's future. They don't want to be locked out of a Western security regime; they don't want to be perceived as an outcast or pariah. They crave legitimacy and recognition as a serious global player whose first order of preference is a balance of power alignment with the West. But they want such an alignment on their own terms and certainly based on agreements that don't go counter to their own national security. If that's not possible, it's not inconceivable that they'll shift their loyalties elsewhere (e.g. China or select Third World nations).

We need to fully comprehend how disruptive the NATO issue can potentially be to our cooperative relations with Russia. We should start asking probing questions about the meaning and purpose of NATO expansion. Do we view Russia as a partner or adversary as we move into the 21st century? Do we fear a Russian variant of revanchism - a future resurgence of Russia's military might directed against our security interests? How do we want to develop a long-term partnership in realms of business and economics, politics and foreign policy and security and military affairs?

One thing is for sure. We cannot move ahead with significant economic cooperation and at the same time engage in conflict over international security issues. History teaches us that the root of the Cold War in its very essence was a fundamental conflict between incompatible concepts of national security. Remember the types of issues that fueled the Cold War, even following a remarkable period of Soviet-Allied wartime cooperation against the fascists? Over the time span 1945-1953, those issues were primarily military-related disagreements, e.g. the formation and expansion of NATO, the Truman Doctrine, the disposition of nuclear weapons and disarmament issues, the Baruch Plan, the Berlin Blockade, the outbreak of war in Korea and so on.

Disagreements over mainly military, but also political, issues resulted in the absence of any semblance of normal economic ties between the Soviet Union and the West until the mid-seventies. They caused the disruption of business dealings that had developed during the 1920s and 1930s with companies including Ford Motor, General Electric, Westinghouse Electric, U.S. Steel and DuPont in areas like the acquisition of licenses and technical assistance, and equipment delivery. Such U.S. equipment and technical assistance was instrumental then in building the Gorki Auto Park, the Stalingrad Tractor Plant, the Yaroslavl Plant and many others. But then, minimal trade, investment and joint venture activity between the U.S. and Soviet Union followed as a result of the Cold War, with a host of anti-Soviet trade barriers erected in this country and exclusion of the U.S.S.R. from key international economic institutions, e.g. the Bretton Woods system and GATT. Isolation, autarky and non-participation were the norm for the almost non-existent involvement of the Soviet Union in the global economy from 1945 to the 1980s.

The opening of business ties that we have witnessed in the nineties cannot be taken for granted. The potential exists that disruption can take place and companies could experience investment loss due to political events beyond their control. Conflict and confrontation over NATO expansion, if that is the direction the debate and outcome will take, will absolutely and in significant ways erode gains that have been made in business cooperation. It could thwart the investment process significantly.
(continued on page 30)

Relations of cooperation and integration between the West and Russia must proceed on all fronts if indeed we genuinely perceive Russia as a partner and not an adversary. If instead we perceive Russia as an adversary, whose aims, objectives and motives are simply an extension of old Soviet imperialism and expansionist tendencies, then we will doggedly and indiscreetly plunge ahead doing our thing with NATO regardless of what the Russians think or feel, and despite the direct or indirect, intended or non-intended consequences such actions will cause. There will be guaranteed negative business impacts if this route is followed.

The American business community cannot leave the debate over NATO expansion to the military generals. Our vested interests are high enough so that business people who have staked their money and investments in Russia must have input on an issue that easily constitutes the number one political risk factor that could potentially negatively impact U.S. trade and investment flows with Russia.

A no-win for Russia on NATO is a no-win for American business interests in that marketplace. A first step companies should take is becoming educated on the NATO debate and its importance and seriousness, and then becoming actively involved in the national debate.

Deborah Anne Palmieri
Russian Commerce News, March-April 1997