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tv   Panelists Discuss Russia Sanctions Legislation  CSPAN  August 15, 2017 2:51am-4:32am EDT

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7:00 a.m. eastern tuesday morning. join the discussion. >> tuesday, a look at government efficiency and reorganization. the heritage foundation hosts speakers talking about their experience in the office of management and budget. watch live at 11:00 a.m. eastern here on c-span, online at, and streaming on our free c-span radio app. earlier this month, president trump signed a bill imposing new sanctions on russia. next, the center for the national interest hosts former officials from the george w. bush and obama administrations for a discussion about the impact and implications of those sanctions. this is an hour and 35 minutes.
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>> thank you, everyone, very much for joining us today. why don't we get started. i am paul saunders, the executive director of the center for the national interest. we're pleased to see such a big group in the middle of august in washington. the traffic led me to think that the city was a little bit depopulated, but attendance clearly demonstrates otherwise and we appreciate all of you taking the time to come and be with us. we appreciate all of you taking the time to come be with us. i think we will have very interesting conversation today onut the new u.s. sanctions russia. we have a couple of highly experienced speakers who will give us some perspective on that and we are quite grateful to them for taking the time out of
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their day to be with us. to my right we have dan russell, the president and ceo of the u.s.-russia business council. diplomatformer career who was deputy assistant secretary of state responsible for russia, ukraine, moldova, belarus, and other matters. during the previous administration, the obama administration, he was also the deputy chief at the u.s. embassy embassyw and the u.s. in cause extent in addition to a number of other important posts. george, who is senior director for -- director for intelligence programs at the
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center for the national interest. george was a career u.s. intelligence professional who led the russia analysis unit at the central intelligence agency. he was an advisor on russia to vice president dick cheney during the bush administration. he was also the president of a data analytics firm called behavior matrix. we are very pleased to have both of them with us today. we will start with dan. i have asked each dan and george to speak for about 10 minutes. dan: thank you. i will try to hold it to 10 minutes. this is a complicated piece of legislation and i don't know what justice i can do to it in 10 minutes but i will try.
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this is largely from a business community perspective because i think george can speak to the other. i think it is worth spending a minute to talk about how we got 2014 at look back to the sanctions regime put in place by the obama administration through a series of executive orders. if you look at those sanctions, and there were really two key elements. one old and one new. the old element was the to abandon entities ban. travel so americans were banned from financial transactions with the individuals and entities put on so-called national lists or fdn's in sanction-speak. reallymas sanctions were sanctions that were something
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new they had not been before. rather than an outright man, what you had were limited sanctions particularly on the sector.l and energy on designated financial institutions you had a threshold on new u.s. debt or equity of already days. and on designated energy companies, you had a maturity threshold. on also had a prohibition the delivery of goods and services for technology for the exploration and production of shaleepwater, offshore or projects that had potential to produce oil. i think there are three features of the obama administration are probablyt worth highlighting here. first, in terms of intent. as aanctions were targeted
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specific policy response to russia's incorporation of crimea and corporate separatists in the conflict and eastern ukraine. as the white house said from the outside, was a set of sanctions that were flexible, scalable, and reversible depending upon russia's response. specifically with regard to the fulfillment of the minsk agreement. thing i would flag is the coordination part with america's allies. the sanctioned design was really developed and coordinated as part of a multilateral package with european union's and other partners like canada. i think we certainly saw unprecedented cooperation with europe over the past three years on this front. this is predicated on the idea that the only effective
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sanctions would be multi-lateral ones. europe's response was largely supported and largely the sanctions organization has held together for the past three years despite what a lot of folks thought. russia's primary response to the sanctionsnistration was a series of counter sanctions of its own. basically banning food and agricultural products. in terms of the impact on russia's economy, with the benefit of 20-20 hindsight we can say it was pretty limited. if you are looking for a data point, i would look at the world bank gdp forecast for russia last year that looked at alternate scenarios with sanctions against russia. 0.8% for onlyof one year because russia's real economic problems are structural
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reforms that need to be addressed. and, i think that major impact on america business, international business, came largely from the oil price drop and the devaluation. sanctions and that way were more a catalyst for the downturn. the effect was of course disproportionate on smaller businesses. corporations, really the task of the day was to cut operating expenses and postponed whatever expansion plans you have. few major players left the russian market. conversely, you had few new entrants into the market during this time. so i wanted to give us a frame to talk about what we have now. sanctions and hr
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3364, countering america's sanctions, it was signed into augustthe president on two. this is a very long, complicated piece of legislation even if you just look at the russia part. it is almost 90 pages in title to. a few ofighlight those. first and foremost, it was caught up by the existing sanctions and law. the existing sanctions from the obama administration area on ukraine related sanctions plus two more on cyber security. the second major thing is it reviews a congressional of sanctions-related actions. basically, the president cannot really do much in terms of trying to wave or ease sanctions
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without consulting with congress without at least a 30-day. . i think the third most important thing is it expands the scope of existing sanctions and imposes new mandatory sanctions, notably , financial, security sectors. it also emphasizes discretionary sanctions in rail and mining as well as energy pipeline. there are some key sections there which we can get into of .eople want in the q&a i think two other sections i would highlight our export pipelines and hybridization. both of these have caused some concern in the business community. the export pipelines are
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discretionary. the one on privatization is mandatory. so like i said, we can talk more about provisions of the bill i think if we want in the q&a. i think, as you all know, passed with overwhelming support in both houses. thevote was for 19-3 and on original bill, 98-2. i would make a comment as someone who used to work on capitol hill a long time ago and this is not limited to this bill but we had a very truncated legislative process and i would like to see a return to regular order, where you have traditional hearings. open and closed markups and you certainly have input from stakeholders and the public. but we really did not have that on this bill. of looking atnd
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the same things i tried to do on the obama administration sanctions, looking at intent i think you have to look at the statements that a been made by key congressional leaders. house speaker ryan said the bill both planes the screws on our most dangerous adversaries to keep america safe and the senate minority leader schumer said " passing the bill on a bipartisan basis is a strong signal to the white house that the kremlin needs to be held accountable for meddling in last year's elections." the senate committee relations chairman bob corker said that violatedan government the sovereignty of ukraine, aggregated syria, and destabilize democracies around the world. this amendment makes clear we will not tolerate such actions. i think it is interesting he added this amendment is an important step as we continue
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efforts to reassert congressional authority. i think when you look at this, clearly you have russian actions plus challenges to the executive of thethat are targets administration. on design, this is certainly a more comprehensive approach. much less targeted in terms of scope. not as clearly linked to straightforward russian actions that could result in lifting sanctions. ishink coordination certainly an issue, particularly .ith america's allies that has been a real issue and i think again if you look at the reaction in europe, you will get a pretty good idea of where people are. the president of the european theission said that european commission reserves the right to take adequate measures affect them,ions
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they are ready to take actions within days. he said they would take steps to support their economic. they said they reserved the right to consult with e.u. countries before implementing sanctions and inserted the wastioned help quite openly pursuing economic interests and they did not think it was acceptable. quite a different view there. in terms of the impact, i think this is a refrain you will hear throughout the session, the biggest concern is about implementation. the bill is not clear. it has many different timelines. many different pieces. implementation is truly going to be key. i think from the -- i have
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looked in terms of initial reactions -- i could give you the range. standard & poor's and moody's have both taken a look and come out with contradictory views. p is a global rating and set after the bill was passed not expectid sanctions to have significant negative consequences for their outlook on the russian economy. but nonetheless noted that the new sanctions raise uncertainty in european gas lines will stop -- gas lines. moody's said expanded u.s. sanctions may have a negative effect on russia's credit outlook because it would likely deter further investment and exacerbate tension between russia and the west. that is the range. i think the business is ideal with, their big concern which go back to the original senate bill
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are about how to affect the fact america's competitiveness. asianw does it affect he counterparts? i think those are the biggest issues. i think we all plan to work with the trump administration to try implementation leaves a level playing field for american businesses in russia. paul asked me to focus on the question of whether these new sanctions will affect russian behavior. there is a fairly short easy answer to that question. that is, yes it will. the bad news is that will
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probably not affect russian behavior in the ways we hoped. to belikely counterproductive. i want to walk through my reasoning behind that conclusion. the first is the nature of deterrence and how you deter adversaries. tore are two aspects deterrence that are important. the first is punishment has to be credible. if the person you are looking to deter does not believe you will follow through with punishment, if he thinks it is a bluff, he has little incentive to comply with your demand. with these the case sanctions. the russians know very well they will be punishment. so credibility of punishment is a box we can check off. but there is a flip side. you are the person looking to dieter also has to believe if he complies with your demand that you will not follow through with the punishment and that is a big problem with this particular piece of legislation.
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it provides lots of opportunities to escalate punishment, so it is flexible according to that flexible, scalable, reversible. it is flexible and scalable going up, but the reversible part of this, the de-escalation provisions are quite lacking. in fact, i think for the domestic political purposes that dan alluded to, congress wanted to make it very difficult or the president to relax or lift the sanctions. now, what that does is creates some perverse incentives. goingssians are probably to believe that they are going to be nursed regardless of their behavior. that incentivizes them to defy us on this particular issue. and, part of the reason for that is history. the russians understand very well the history of the amendment passed in 1974.
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its target was to impose economic penalties on the soviet union because it was not relaxing restrictions on jewish emigration. but those economic penalties remain on the books until 2012. long past the point when moscow was restricting any jewish immigration. and even after the russians did a number of very positive things in the wake of 9/11 when they provided intelligence and the just ask support to our counterterrorist operation. they closed down there intelligence facility in cuba, shut down the naval facility in vietnam. all designed to send a positive signals about their willingness to cooperate. and, at a time when president bush was overwhelmingly popular domestically, the republican party controlled both houses and senate on capitol hill, we still do not live those restrictions. the conclusion i think in moscow
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of all of this is, these sanctions are going to have a generational duration at least. they will be a constant in the u.s.-russian relationship going forward for decades from russia's point of view. that is a very problematic thing when it comes to deterring bad russian behavior on our part. the second variable here is not the sanctions themselves but the context in the broader u.s.-russian relationship within which the will be implemented. this is not conceived as a .ingle response it is not just the full extent of our punishment of moscow for bad behavior. it is one element that is part of the package that is likely to include several other steps such as the reports that the u.s. is
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seriously considering. ukraine. lethal aid to the washington post reports that president obama, priority leaving office, had authorized the u.s. cyber community to implant what it called "cyber and critical russian infrastructure that could be detonated in the future at some point. the pressures on capitol hill to step up with the u.s. military information operations against russia. to retaliate for their propaganda activities and eight united states. united states. these are things likely to come down the road pretty soon. the cumulative impact of all of these steps is likely to condition how russia response to the sanctions. the russians cannot do a whole lot in the economic area which
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would not also hurt their own economic interests. i expect them to do a few things in the economic area in retaliation but they can do some things asymmetrically. the initial russian reaction to the passage of the sanctions took the shape of a foreign ministry statement and then an interview that president gave on national television a couple days later. both of those alluded to some things that russia could do asymmetrically that could impose some pain in the united states. i will just run through a list of some of those things right likely to think are materialize in the next several days. in the economic area we would probably see some limited counter sections. in the intelligence area, i think we will see an escalation
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of the ongoing intelligence war that is really going on between our respective intelligence services. this will not just be expelling intelligence officers. there is likely to be in an increase in harassment. some of you may have noticed there was a cnn report a few u.s. persons in cuba being attacked through acoustic weapons. this is the kind of retaliatory step that i think we might see more of. not just an moscow but and other capitals around the world. thing,be a very serious and injuring our personnel. these cyber area, if in fact we follow through with that cyber weapon report that we saw in the washington post, i find
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it very unlikely that the russians would sit by passively. there is very likely to be some our of cyber retaliation in infrastructure. which i think is even more vulnerable than russia's infrastructure. the last thing and the one that is most serious is in ukraine. i think if we do follow through with providing lethal weaponry to the ukrainian government, the russians are likely to retaliate with and ukraine and elsewhere. two errors where i think we ought to be very careful would be north korea and iran. i could easily see the russians not just stepping up with diplomatic support for those regimes but it is easy to anticipate a military response of some kind. for example, providing defensive iranns to pyongyang or
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that would be justified in russia's mind as proportional twonsive weapons provided countries they think have the right to do that. whose possession of such weaponry i think would align with russia's own interest and how they would like to see those situations handled. the last thing, dan mentioned differences of opinion between some of our european allies and the united states over how to handle russia and the sanctions issue. this is an area where i would fully expect the russians to exasperate and exploit tensions between european capitals and washington on this issue. i think we provided an opening for them to do that and i would expect to see moscow take full advantage of that.
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>> thank you very much, george and thank you, and dan. before we open up to questions let me do something i should've done at the outset, which is to show all of you this beautiful new issue of our magazine "the ." ional interest this is the september-october issue and i highlighted because we have a symposium with a variety of different perspectives on the u.s.-russia debate which should be in newsstands quite soon. i think some of the pieces are already online on our website. as i open up to questions, let me ask each of you as i call on you please to identify yourself to our speakers and also raise your hand so that my microphones are
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able to find you and ensure we can all hear your question. let's open it up. who would like to go first? sorry, if i could ask you to reach for the microphone. neither one of you sound terribly enthusiastic about sanctions. pessimismthe apparent and given quite frankly the track record of sanctions anyrally's taking getting regime, let alone the russians, to change behavior the way we would want them to change behavior, this sounds like a net negative with a huge downside risk and very little upside. so why are we bothering to do this? [laughter] that first? to take >> we are probably not the
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person you should be asking is to mark tracks and i have a follow-up after. >> well, russia's perspective on this is that this is being done largely for domestic political and i find it hard to disagree with that. >> i mean, i think if you look at it from a business perspective, if you look at the nota air -- businesses do -- but the obama kaushik was very understandable, very specific. this does not have the same field. the administration went out of its way to try to work with companies to make sure they had designedable sanctions both in theupport united states and europe. i am not sure this bill at least
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at this point, meets that test. question flip that around it away and get both of differentct to a question. russia has engaged in all kinds of egregious conduct. -- seized crimea, supported rebels and ukraine, intervened in syria, interfering in the u.s. elections, harassing andpersonnel in moscow elsewhere. i could make a very long list. what is the united states supposed to do about that? how do we respond to conduct mighthat in a way that affect russian conduct? u.s. interests, which
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is our ultimate objective. >> if i can start on that, an excellent question. there is not a short answer. the first thing we need to do is understand very clearly what our own interest are. within those interests, what is vital. in other words, what would we go to war to protect? and, what is of secondary importance to us? that list of priorities. if you do not understand that first, then you will not know where your red lines really are drawn and where you can afford to compromise. where you can find common ground. if we do that and understand and whatritical to us is of lesser importance, then you can put together a comprehensive approach to
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defending those interests and andncing your priorities understand where does you can actually engage in that diplomacy with russia. where does you have to drive very tough lines and where you can negotiate and find ways to accommodate their interests and all of this. i think if we were to do that, we did find a much more productive way forward than the path we're on right now which is going to be really a difficult one to control with real risks of escalation spirals. dan: i would agree with what george said. i think part of it has to be more policy. some of us have argued for a the time on ukraine that united states should've been more aggressive in trying to play a role in stopping the killing her. i read that having -- was largely a european-driven
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process. i think if you're looking at ukraine, certainly more targeted high-level diplomacy. we really wanted to try to deal with that. it was probably the right area. i would come back to appoint george made about knowing your own interest. dividing the united dates and --ope is certainly not united states and europe is certainly not in our interest. >> i think i have five or six or seven people on my list. we will start right here. >> you mentioned deterrents. the other part of our national assurance.licy is your last comment on russia exploiting our allies in particular, when you take a look
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at europe right now, how much assurance of these sanctions that could be negative to them economically and politically, as countries with russia playing very strategically and syria. i see it as a weakening of assurance. >> i agree. assurance for our allies is very important. i think this is an issue where we need to understand our own interest very clearly. sometimes temptation in dealing with partner countries, some of whom are treaty allies. some are friends who do not have treaty obligations that come into play. there is sometimes a temptation
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to equate their interests with our own. they naturally want assurance we will do the kinds of things that advance their interests. those things don't always go inside with our own. we need to be careful in assuring friends and allies that we keep our own interests foremost. you could get into trouble and get the tail wagging dogs where we have no treaty obligations. stake not have a lot at to succeed in shaping u.s. responses that are not advancing our own priorities. >> anything you would like to add, dan? no? >> thank you very much to the panelists. i think it is important to, as you did recall why he these sanctions were imposed in the
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first lace. it is a long list of egregious behavior. of setting the whole national rules-based order we have relied upon. there were serious grounds for doing it. sanctions were the second-best rather than war. i think they were reasonably effective. hard political statement but also to impose a real cost. i think most importantly they did deter the russians from escalating further. instead of going further and deeper into ukraine. i think the reason why we now have this legislation is a worse that the congress had no confidence that the trump administration was prepared to hold the sanctions or the rules-based order. incentive across party lines.
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rumors of a unilateral lifting congressnctions so needed to step in a hand force the original intent of the sanctions. russians are right because wehat way don't know if the administration can be trusted to maintain the sanctions. as written. and i think they do have the right based on experience, with other historical episodes, that these will never be lifted. that is where the administration needs to see the opportunity not just to talk about the infringement on presidential authority but to see this as an opportunity to come up with an effective strategy working with the europeans as legislation urges to take advantage of the very capable diplomats to come up with a strategy that holds out a clear path for easing and lifting of sanctions if the russians are address the reasons the sanctions are put in place.
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that is an opportunity to work with europe. i hope the administration will do that. the negotiations today have lacked u.s. involvement, so there is an opportunity here which could actually ease the wider tensions we had with russia today. we certainly should try, though the odds may be low. as far as european reaction, they continue to react to the original version past by the senate rather than the final bill, which was improved, emphasizing some of the new sanctions were up to the discretion of the administration but they should only be considered after consultation with allies of the united states. so the europeans also have an opportunity to work with the
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administration, and they need to remember why the sanctions were imposed and see the opportunity to shape a continuing strategy that can produce results with russia withdrawing from ukraine. i think some europeans have indicated that they see the improvements in legislation. german electoral politics make it difficult to join that chorus, but remembering why the sanctions were posted in the first place and the common goal of trying to restore ukraine's sovereignty over its own territory and ease tensions with russia, there is an opportunity to not react too hastily. we will see if the administration acts on that to
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leverage improvements with russia. paul: any response? >> i agree with everything you said. i think that is exactly the way we ought to handle it. i have nothing more to add to that. paul: i agree with you, sandy. i glad to see this position to have a chance to try to do something with it. the europeans, there were certainly changes made, positive ones from the original senate bill 22. -- 722. that part at the beginning about urging the need to cooperate with america's allies is a good thing. there are other pieces in the legislation that the europeans do not like. i do not think they are wrong. there is out and out stated opposition to nordstrom to on basis.hem on any
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you have legislation that is long and is kind of -- yeah, there is a lot. you can argue the european energy securities away, they are is their call,t not ours. >> let me perhaps pursue this a little bit further. i know there was a comment on this point also, but the question has come up of sanctions versus going to war. are there military options for the united states that fall between those two poles? we are talking general cody mentioned reassuring our allies, the united states is taking a variety of steps now actually to do that. are there other things that we
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could or should be doing on that front? >> i think certainly there are. a lot of the steps that the obama administration took militarily in europe to try to assure our allies of our commitment and capability to defend them against russian military activity was necessary. if handled in the right way, they can be an important support to our diplomatic efforts with russia. if handled the wrong way, you can cross that line from assurance and prudence and toughness into provocation.
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and that is the balance we have got to handle there. so coordinating diplomatic arms and military steps that you have got so they reinforce each other and produce good outcomes is our challenge. daniel russell: i agree with what george said. another piece has to be the strategy against russian people. that needs to be part of this as well. paul: ambassador bert, you also had a comment on this point. we have the mic coming. >> and i agree largely with what sandy said. i think this legislation represents actually the trump administration's loss of control of its russia policy. and i think for the very reasons i think that sandy and others have suggested the lack of trust and capacity of the administration to pursue for different reasons the republicans and the democrats what they think is the correct strategy. i think the democratic dimension here, the party's dimension was
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that thein the sense toted states wanted handing thea for to donald trump and was responsible for hillary clinton's defeat. and many republicans, particularly mccain's camp, feel that they could not understand trump's continuing softline towards putin. but the problem with sanctions, and here i somewhat disagree with sandy, they are very, very blunt instruments. while a group like this, this bunch can think politically and about this language in the legislation -- it does not say consult with u.s. allies, it says coordinate. when you talk to sanctions lawyers, they say that doesn't
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mean anything. they say that language has no meaning, and this law, the president now has the ability as he chooses to undertake these sanctions which are going to affect european economies and companies. they are going to do so through mechanisms of so-called secondary sanctions. and that is, you can have some political language that sounds good, but it does not change the decision congress has taken about what the u.s. president can do if he decides to.
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and in the case of the europeans, these companies have general counsels who have to make decisions based on risk. they make investments based on risk, not on politics. the discretionary language had an impact, and is working. we will feel it. one way or another in terms of e.u. retaliation. >> thank you very much. we have robert.
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>> rob with the american conservative. i would like to ask a question that comes off of paul's question as amplified by the ambassadors, in which you gave a litany of the russians. the russians are in a position to, from their perspective, raise the same kind of questions about us. with the border involvement in ukrainian affairs, which is traditionally a part of their sphere of influence. we had a vice president go to georgia and practically invite them to join nato. very incendiary military action . other things of this nature. looking at it from the kremlin perspective, they see encouragement on the part of the west. my question is given that an given what georgia was saying about the reaction, what are the prospects that we have reached the point of no return in u.s.-russian relations? it seems to me what ambassador bert was saying, taking away the prerogative of determining russia relations in the united states, which is not an ordinary thing to happen, every four years, pretty significant
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development. if that does not exist, we have these sanctions and reaction to the sanctions and the current state of sentiment in congress. not the country, but in congress. aren't we going to reach a point where there is no easy return? >> i don't think we have reached a point of no return yet, but we are very close to it. >> [indiscernible] >> yes, it is. yes, it is. i think the dangers are very great that we can end up in the spiral where the domestic political factors in both washington and moscow will
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reinforce retaliatory steps and get us into a crisis that will be very hard to control. doing it at a time when the white house has, to a great degree, lost control over russia policy and where congress is ill-suited to be the management of those situations. it is not designed to do that sort of thing. i think we need to be very careful right now in talking about the kinds of steps that we might take and the kinds of things russia has done, how we approach all of this from a policy point of view. one big rentable we have got to keep in mind is the hippocratic principle. first do no harm. we are injuring a situation
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where the harm can be very grave. >> no. >> all right, wayne. >> no relationship to robert. i sure wish there [laughter] >> i would like to invite the thoughts of both speakers on one capacity for sanctions busting in two substitution. one of the most interesting activities is sanctions busting. i was recently in russia and was camembert forme --. i was at moscow. certainly a number of countries including china have made it clear helping the russians to avoid sanctions will not just be an opportunity for them but also a priority for economic and political reasons.
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on the substitution, the kremlin has trumpeted the sanctions will allow it to free itself from full dependence on western technologies, agricultural and so on and so forth. those of us who live in russia know the capacity of that system to resist reform is extremely extraordinary unless they come under foreign pressure. their ability to sacrifice the foreign is a limited. i would like to get your thoughts on what sectors, what places in the russian economy you think will genuinely oversee the five to seven year period be damaged by these sanctions, and will we be more or less untouched and which may actually benefit? >> that is a tough one, wayne. [laughter] >> i don't think import substitution really works. i think with the russians, the sector they will trumpet the
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most, is agriculture. you have got growth in 3% to 4% range. that is year on year growth from 2015, so you have a pretty low base. what you have got when you try to get under the head of agriculture is you have producers using existing capacity to meet demand inside russia. and they are not investing a lot of money, ok, in new production lines, exports, which they are capable of doing, particularly pork and chicken. they have a certain amount of uncertainty with geopolitical like other is is is. other
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i have not seen that this has worked in the way that ronald reagan did with harley davidson, where you protect an industry for several years to allow it to get on its feet. i have not seen that. what you need in russia is modernization. you need capital, you need technology and product management. the easiest place to get that internationally because it already exists rather than trying to develop it on your own. there are certainly a very significant percentage of the elite and business people who want to see further globalization. and they believe in some sectors they can be competitive. they could export auto-parts, for example, over time. there are some industries like pharmaceuticals where, yeah, you could produce certain generics, but you will not come up to world standards to have a world-class health care system.
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i think the answer is still a more open economy if you want to go forward over the long run. on sanctions busting, and i think that is one of the problems with sanctions designed today is the idea that somehow the united states in areas has exclusive technology that is unavailable elsewhere. the sanctions on the energy sector. i don't really think it is holding up to scrutiny. united states might have the best product management, but in today's world, there are lots of substitutes out there. when you impose something like that, what you are doing is allowing other people in the manufacturing world to take their place. you remember the embargo on the soviet union and the experience that caterpillar had. they had a very large percentage of the pipe laying equipment market in the soviet union, then they were frozen by the embargo.
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what happened is what most people call backfill from friendly countries who took over the market. it took a long time to claw its way back. this comes back to the idea of don't do harm to your own economy and industries while you implement this stuff. it occurs to me, don't sanctions busting and import substitutions actually directly contradict one another? by which i mean the sanctions busting produces the incentive for import substitution.
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i assume your belarus and camembert was really from france, someone sold it to belarus, put a sticker on it. you have got to have a substitute. >> if you are running an automotive assembly plant in russia, you want a local product, because they will be cheaper. the supply line, it works better. most of the foreign automotive producers, what they want is the russian government to give more subsidies and more incentives to the producers so they can be more competitive. but you need something, you need something. >> i am going to provide a leading answer which is different than a leading question. one of the areas i think we need to be careful about is the degree to which sanctions can incentivize bad proliferation behavior where countries seek out new markets among odious regimes when they are denied trade opportunities with the united states and the west.
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the recent report of the possibility that ukraine i have provided some missile engines to north korea is a case in point there. yes. >> all right, david mitchell. >> this is a question or both -- for both you guys, george and daniel. [indiscernible] is there any room left for cooperation? arms control, for example, do you see any opportunity where the governments will actually work together, or is this kind of like what bob was saying earlier with critical point where it is beyond the point of no return?
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>> i think one thing that has happened since 2014 that has not been good in intergovernmental cooperation was the obama administration's decision to cut off all of the working groups at the presidential commission and the day-to-day work between government agencies at the political level. i don't think that is going to be easy to reconstitute. i think it is going to be really hard. because right now you talk to people in the administration what you are asking, what are
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the conduits for u.s.-russia interaction, you will never get above three or four names. george: yeah, so in areas where we might be able to cooperate, there are areas in principle weather there is some coincidence, u.s. and russia interest where ordinarily you would say, those are areas where our interests align, we should be able to cooperate. the difficulty there is political environment in both capitals are going to make that very difficult. we could be overwhelmed with the prices of crisis management. the recent news reports of the united states that parts of our country are being overwhelmed by russian surveillance aircraft, oh my gosh -- that did not happen by accident of course. there are people in this country that don't like the existing arms control agreements. these flights have been going on under open skies for a long time. the transparency that regime provides is in our national interest as well as russia's
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national interest. the sort of thing that is eroding. a lot of the arms control framework we have do serve our national interest. we are starting to lose. those are areas will have to think very hard about going forward. >> thank you for your patience. >> i was wondering in your sweep of the tensions between the two countries if i can ask you about the importance or significance minsk sanctions and how they fit in.
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the moves between russia and iran, how they might, with scope you see for russia's continued existence in afghanistan and syria? >> i will do that. i was involved in implementation of that act. that act was quite different in that you had -- you are talking about a limited number of people who are involved. most of the people who were on the sanctions list, you can make a credible case in the u.s. court for that. no matter whether you liked the bill or not, the intent is very targeted and very, very specific. that is quite different than what we are talking about today. >> wait a minute here, dan. it is something that did ministration had to go along with. you had one sanction in place
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for way, way too long. the only way to get that listed was to agree to a new set of sanctions. dan is right they are targeted, but now you have global, so it has expanded beyond russia and the entire planet. magnitsky.e global you will have people naming sanctions for human rights abuses around the globe. once again, the congress is never satiated by voting sanctions. you will just keep doing this endlessly. it gives them great emotional satisfaction. >> so on your question about afghanistan and syria, there have been some press reports the russians had been providing
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weapons to the taliban. i don't know if that is true or but that is the kind of thing we could see more of for a couple of reasons. one is that it is an asymmetric eye poke to the united states, and the russians are trying to position themselves for the post u.s. period in afghanistan, and they want to have relationships with people who are likely to be in power if not nationally then regionally in the northern parts of afghanistan. i would expect the russians to step up their activity in afghanistan over time for no other reason. in syria, i'm not sure there is very much prospect for cooperation between the united states and russia right now largely for political purposes.
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i would expect both we and moscow would want to coordinate and communicate to avoid military incidents, for example, between our forces. >> george mason university. are we underestimating the importance of soft power with government sanctions? in two weeks, 150 first year students will be taking my class. do sanctions work? i anticipate the answer is no because most of my students -- i don't want to be stereotypical, but many think you post sanctions, find out they work. if they get five, you lift the sanctions. so we are getting this
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perception that if something is must work, it immediately. so we'll see if something is sufficient, it must work immediately. maybe we underestimate the prolonged self impact of the cold war, the fact result in the 1980's and early 1990's. one of my friends, a female, said she spent 16 hours going to london and back, two hours in the country there, and talks about wasting her time. i ask her why and she is buying proscuitto, etc.
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maybe that is the impact of business women, businessmen who see the complications and the annoyance and the inconvenience of the sanctions may be able to finally accumulate something more related. my question is, maybe we need to be more patient and see. it is not great, but it could impact that regime. >> i heard that theory about cuba all the years i worked in the state department, so i respectfully disagree. >> i think that sanctions can be ineffective -- an effective part is coordinated with other elements of u.s. power. and we have a very clear, well considered objective that is actually attainable. if your objective is you want the russians to surrender, turn over their country to the united states, sanctions will not be up to that task. they have to be proportional between the goal that you got, it has got to be achievable, and
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the tool you bring to bear have to have some prospect of achieving this goal. in this case, we don't have a strategy. we don't have the well-thought-out set of objectives on all of this. it was an emotional response. we are angry at the russians for all kinds of reasons, some of which are very legitimate. we want to do something to register our unhappiness. we have done that. if your objective is to register unhappiness, mission accomplished. if you want to get the russians to abandon crimea, i would argue the sanctions are not nearly up to that task. we need to understand what our objectives are. >> james. >> george, you have the idea we need to understand vital interest and national interest. i was hoping you would have that
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discussion. i see a couple redlines bumping up against each other. we have interfered an intervention on nato allies. russia -- i interpret their actions in georgia and ukraine -- have a redline. chunksll not allow big drawnir borders to be into the e.u. so any more enlightenment on what the redlines are for each of us, and [indiscernible] on their border able to join nato? is it a redline event, we have to have russia give a crime like -- give up crimea? i can't see sanctions, just redlines. [laughter]
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>> i agree. that is a discussion we have got to have. we don't really have the kind of debate over those things in this country we need to have. it is an important element of putting together an effective strategy to dealing with russia and advancing our own interests. i also agree with that idea that if our redline is that countries bordering russia ought to have the right to join nato, not just theoretically but in practice, we are going to bump up directly against the russian redlines. we need to understand those conflicts are not conflicts that can be resolved diplomatically. if we insist ukraine has to be a part of nato and russia says they cannot, the only way to resolve that is on the battlefield.
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we need to understand we can't approach that topic on the cheap. they are not going to back down and we cannot achieve our goals unless we are serious about putting the full might of u.s. military behind it. we ought to be very careful. really vital to us before we commit. >> george, let me press you a little bit on that because there are different ways to approach. because there are different ways natoproach ukraine's membership. one is we want ukraine to be a member of nato tomorrow. then another is we want ukraine to have the option to be a member of nato 30 years from now when there might be a totally
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different russian government, and when will any russian government inherently be opposed to that, or might there be some notional russian government of the future that would not establish that? george: well you can't rule it out altogether, but it is i think very, very unlikely any russian government in the conceivable future would be comfortable with ukraine being a part of the nato alliance. the question really is, will russia at some point be like sweden? really abandon its great power aspirations, see itself as great for its ability to provide a great standard of living for its people, and for all kinds of reasons which are very tied up in russian conceptions and
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russia's own history, it is not likely. we can see it stay intact. it is projecting power in the immediate neighborhood. it is unlikely scenario. >> over here, yes. >> washington post. with respect to red lines, i want to pull out this article with russian interference in the u.s. election last year. george, do you have any reason to doubt the conclusion of the intelligence community russia interfered with the intent to at least help donald trump -- maybe maybe they did not succeed, but the intent to help donald trump
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win the election? is that a red line? should we punish russia for that? where can they be punished, and what can they be deterred from doing in the future without the same thing we have been talking about before? is this an area in which we can enlist the help of the europeans to keep russia from interfering in their elections? this is something our intelligence professionals have unprecedented in the united states. it was the most successful covert operation in history some say.
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you get my point. i would like your thoughts on that. >> paul told me there would be no hacking questions today. [laughter] >> so on the question of the intelligence community's conclusion and what i think about them, there are three conclusions that were prominent in the intelligence community assessment that got published in january. one was that russian hackers were the ones who hacked the dnc server. one other was they did it on the orders of putin, and the third was to advantage trump and to undermine our democracy in the broader, liberal international order. i will address each of those points and tell you what i think. on the first point, russian hackers that hacked the dnc servers. i don't know. i have good deal of uncertainty about that. i am open to persuasion it was russian hackers. it probably was.
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but the case has not been made publicly. we have not seen the kind of evidence to go beyond the trust us, we are the u.s. intelligence agency and we know we are talking about. the second point, was it president putin who it? i am more skeptical, doubtful. for a variety of reasons, but from what i understand from the washington post reporting, there is a single piece of evidence that figured very prominently in the conclusion that putin ordered this. anytime you are relying on a single source for the conclusion of that magnitude, it better be
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very confident in the veracity of that source. automatically i am skeptical. and president putin does not decide everything that happens. it is a large country, large government, a lot of people do a lot of things. he has limited time and capacity for doing these things. if russian hackers were the ones that penetrated the servers, they probably did so without president putin saying, go do this as a part of this broader campaign. he was probably informed after the fact. the last conclusion the russians were trying to advantage president trump and undermine our democracy and liberal order, i am actually, i think there is very little evidence. that is the judgment i am most doubtful about. >> [indiscernible] you probably would not have recommended that the obama administration issue the package
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of sanctions december 29 in response to these actions? george: i think i would have recommended had i been asked my opinion -- the russians -- it is one thing to go to president putin and say, we have got the goods, we know you did wrong, and you will take this. the punishment is justified. the other way, you can say something happened that was wrong, and it should never happen again. you will agree it will never happen again because you agreed it was wrong without acknowledging you did it. i think that kind of approach was very doable. i think the russians have
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reasons of their own to want to agree essentially to a mutual nonaggression pact in the cyber world. vulnerable some very infrastructure of their own and they have booted the possibility of an agreement we will not attack each other's critical infrastructure. that kind of thing could be done. maybe the window of opportunity for that has passed. but how you approach that diplomatically has a big impact on the prospect for success. paul: we have ruth wedgwood over here, then david ignatius. >> just a quick little prelude. alexander the first is a personal hero, so russia has a very glorious past. long war andto the
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humanitarian efforts. they helped us with the civil war. but it almost seems like something for a psychiatrist rather than a strategist. we cannot ourselves cure the russian feeling of inferiority. intellectuallyt inferior. i wonder whether the personality in the white house is at issue with personality in the kremlin or because of the prior battles have not identified in a nice little package of topics which we can each be productive and cooperative. has justow this
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become this kind of battle. if you are suggesting a few things with the tonality of relationship being transformative, what would they be? >> the traditional playbook has been arms control. start of any the rapprochemente. because the way the united states and russia lineup on issues, i think the disagreements over the imf treaty and whether russia has violated that make that a hard starting point at this time. i would like to see something involving terrorism and countries usually have trouble with it as a good starting point, but experience in syria does not bode well for that. do you have a brighter idea? george: i do not, unfortunately. under different political circumstances in both countries, there would be opportunities for starting small with mutual interest and building trust over time through some success.
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but i think that chapter has ended in our relationship, and now we will quickly be in the crisis management mode here. depending on how the crises evolve, we may find ourselves in a situation or we start to realize we do need to do more to analyze the prospect of dangerous confrontation between our countries. we may need to start to rebuild some trust and get beyond where we are now. we are not there yet. >> in the olden days at yale, russia was a very attractive concentration. [indiscernible] it is almost as if we have
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wiped them off the map as a culture. paul: mr. ignatius. ok. let me briefly follow-up on this issue of trust because that is an issue secretary tillerson actually raised. how do we address -- is there a way to address? if there is not, what happens to this relationship? certainly there are good reasons for u.s. officials to mistrust their russian counterparts. i am sure their russian counterparts probably feel like there are good reasons for them to mistrust us. is there anything we can do about that? should we try to do anything? >> i don't know if you are back to the cold war playbook for you have to go small and smallest or
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start with something easy. the alternative is the crisis in north korea or something that, together, where you have to work together. that is a forced confidence building approach. those are the two ways that traditionally happen. >> it is a very good question and i wish i had a good answer. >> [indiscernible] can i follow up on this trust question? >> sure. >> i think i can address the issue of the u.s.-russian trust. that is our own domestic trust issue, and that is how does the trump administration regain the trust of the congress so that he can even conduct a policy towards russia? >> i leave that to you. [laughter] >> it is a very good point. linda and allen right here.
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i'm sorry. did you have anything? >> i think you asked the right ourselves to put together coherent approaches internationally and is compounded by a lack of trust between russia and the united states. a very serious problem and i don't know how you easily address that. i think it is a complex systems problem. there are a lot of of different components that interact with one another to produce the problem.
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if you address just one you don't solve it. you have to address multiple simultaneously to improve the atmosphere. that is a hard thing to do you -- to do. >> you were running through some of the new aspects of the legislation. one of the ones you did not an amendment to the that talks about sanctions being on offer for individuals in serious human rights positions by the russian federation. i just wonder if either of you have any comment on whether you
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think that was the specific intention of that. as i said it is a game changer for some small areas at any rate. crexendo go back to what george said about this being an emotional response. it has something for everybody in here. we have not talked about the other pieces about oligarchs, corruption, human rights. there are lots of things in this legislation that we are going to have to see how they are -- whatted or one the the trump administration chooses to do. the issue you raised is certainly one of them. >> we will come back to you.
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>> the potential for u.s. russian cooperation addressing arms control and so on. i suggested a couple of the areas where you might cooperation. buts not because of hangups rather because of hangups of the specific issues on the table to their is a lots of convergence of interest if we get past the rhetoric on each side. the russians clearly want the assad regime to stay in power but also recognize that regime is not going to control all territory. there will be some kind of negotiated settlement where most of the action right now is the process whereas we have been on the periphery. there is a set of realities if we got over the
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assad must go view. we saw that about the administration discontinuing the aid for anti-regime rebels. there was a lot of pushback from senator mccain and others. that is the barrier to u.s.-russian cooperation rather than the hangup with russians. nucleararer is the agreement. there is still a lot of common interest in making it work. the current entrepreneur in the white house is moving in a different direction for reasons that do not have anything to do with relations with russia but rather for other rations had -- reasons. i wanted to make that point. it is not the relationship but rather the baggage that goes
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with the issues. agree. one of the difficulties in syria is u.s. and russian national interests are not that incompatible. a been diagram shows a lot more divergence there. area where i is an think the white house faces very severe constraints on its ability to show flexibility. the ending of the program you talked about. not without controversy in and of itself to there is fairly formidable domestic forces they're starting to be alarmed about the direction we might be going. with a greate that suspicion of a lot of people have here about the trump administration's willingness to make some sorts of deals with moscow, i think that sharply
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circumscribes our possibility in syria. in iran i think there is a real divergence between russia's perceptions of iran and its role in that region, and the white house's perception of iran and its roles in the region. that is where there may actually be serious differences between preferenceemlin might be and what the trump administration might be. the prospects for cooperation there. back to you. come back to the question of do we have a strategy or don't we? i don't think we do. that is not entirely fair. sanctions are not going to be the magic wand that helps us overcome the differences in the relationship.
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it would be counterproductive i agree. relationship will remain competitive because it is conflicting worldviews and russia's. only be a great power by dominating its neighbors, projecting power. we have a fundamental difference we have to manage. hopefully measures can be revived but even that russians don't seem too interested. that is a different discussion. sanctions can address one problem which is the you cane prices -- ukraine crisis. the bulk of the sanctions enacted by obama relate to ukraine and if the trump administration is skillful in using them as part of a strategy , not only de-escalation but implementation of the withdrawal --russian troops and doxies
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proxies. ukraine agreeing to autonomy, special status. you could see a finite step away it would give basis for a continued unity. that it is not only using sanctions believe but also for the escalation is actions. theprovisions leading to intelligence sectors lead the possibility of secondary sanctions on countries to continue to buy russian arms which are not european allies. they cannot complain about that one. it does potentially impose cost on revenue over time area india, china, purchasers from russia. we might be able to hurt the russians using this instrument
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if efforts of diplomacy to solve crisis cane -- ukraine art bust. what we could do with sanctions and not despair that these are aimless, misdirected message -- weapons that are not achieving any perspective. the issue of nato will come up area i believe we should never give up the right of a country to seek nato measures are -- membership. all of these things, they signed up for this. under what conditions it happens is another question. if russia is interested in a real solution we can find some way to address that issue while preserving ukraine's rights in the long-term. oppose somedid
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punishment. onmade it wiser to focus reducing our own vulnerability, to future hacking of the local process. you have to derive -- deprive them from having a strategic path and not expect them to give us assurances that we would be able to count on even against critical infrastructure. they pledge not to attack it until they do. focus on increasing invulnerability and assuming the russians will do the same. fromst comment or question our president and then i will give each of you a chance to respond weekly. >> i basically agree. it is very clear the reason we are discussing actions against
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russiations against because there is little russian can do economically. there options are limited. i think we are discussing sanctions against russia because overall dynamics of the relationship, most of us agree that we need to step away from the brink. you may correct me if i am wrong, you also deal the need to step away from the brink. deterring russian actions, which we consider disagreeable. this is a very curious matter. what concerns me most is not this particular deal. there are a lot of elements in
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the bill that makes elements on some specific grounds. everybody agrees with the sanctions, not because of what we needed to do because of russia but because of a fundamental distrust between the administration and congress it is very clear to me that the administration failed to correlate a coherent strategy. admiring is not a sound reason for u.s. russian. unless it is very clear the russians were denying the ,bvious and talking about trust before the campaign did not. to the ability to work together.
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hope is that we would address whoe choices in the state did not like this regime. very fast measures using sanctions to put pressure on the soviet union. capacity. defense unless we know how to defeat russia work together. at least on managing differences. >> a final word? >> ukraine sanctions can be a very important piece of based on -- strategy for managing and containing the problem is not solving it.
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arere skeptical that you about how coherent that strategy is to order of the reason is i am not sure what we want the russians to do that would allow the lifting of sanctions. is it to not move further westward? in their support for separatists in ukraine? to return crimea? some of those are doable, some i think are not. i am not sure we have a very clear idea in washington of what our objectives are to we need to >> i agree with you and i will not repeat what you just said. on the converse side sometimes i wonder how clear the russian strategy is for what they want in ukraine. >> they know what they don't want.
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>> there are two sides to this point. -- coin. the russians will not move off the land and a point we will have a little -- better understanding. this relationship is worth pursuing the other revenues we have sued in the past in terms of educational exchange, economic and commercial relations. try to build some sort of interaction while we have this deal political situation. >> thank you very much. [laughter] -- [applause]
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