MICHEL MARTIN, HOST:
In its first months in office, the Trump administration is breaking with decades of U.S. policy toward Russia. The president and other members of his administration have talked about economic and geopolitical deals and opportunities in Russia. So what does Russia want out of this relationship, and is there anything the U.S. could gain? For some answers, we've called Elina Ribakova. She's a senior fellow at the Peterson Institute for International Economics. That's here in Washington, D.C., and it's a nonpartisan think tank focused on strategies for global economic development. Good morning, Miss Ribakova. Thanks so much for joining us.
ELINA RIBAKOVA: Good morning. Thank you for having me.
MARTIN: So how would you characterize the economic relationship between the U.S. and Russia now?
RIBAKOVA: Well, it is a very harsh reality of almost no relationship. The trade between Russia at the moment is about 3 1/2 billion per year. It is a tiny amount. It used to be closer to 20, and Russia used to have a deficit, by the way, in terms of trade with the U.S. But the relationship is very difficult. However, we have seen the current administration wants to have a restart. It is not the first restart between the U.S. and Russia in terms of warming up of the relationship.
MARTIN: So what would it mean for Russia if it could trade more with the U.S.?
RIBAKOVA: For Russia, the most significant objective is to have the approval of the United States for it to do what it needs to do in its sphere of influence. Russia wants to be acknowledged by the U.S. as a global power in this multipolar world. And the most significant economic benefit it could get is to have sanctions lifted, and that's what we have seen Russia lobby heavily already with the current administration.
MARTIN: So that would not mean more trade with the U.S. It would likely mean more trade with Europe and other parts of the world. Is that right?
RIBAKOVA: Absolutely. You're going straight to the point. For Russia, Europe is the - we used to be the most important partner, and Russia exports, let's not forget, mostly natural resources. Sixty percent of Russia's exports is oil and gas, and then another 25 or so are metals and mining and other natural resources - basically, almost entirely natural resources. And a big chunk of that it used to send to Europe, particularly energy. Europe bought more than 40% of Russia's energy, while for oil, Russia could divert away to China and India after the war started this time around with Ukraine. But for gas, it is struggling. You need to have a very expensive pipeline, and China is not interested in financing it.
So, yes, for Russia, most importantly, it's to regain the relationship with Europe. And it's hoping that the U.S. will help push down on Europe, in a way, to restart the relationship, or at very least will lift sanctions, which will allow Russia to restart that relationship.
MARTIN: So I do want to get to the - sort of the broader geopolitical question. But just - if I could just ask you about the - sort of the narrow question because this administration seems very focused on that. Is there a specific U.S. economic interest in normalizing or at least warming relationships with Russia?
RIBAKOVA: Narrowly focused on macroeconomics - I fail to see that because the trade used to be very small. It used to be always in deficit, and with now this current - this administration is not happy about countries with trade deficits with the U.S. Russia exported some commodities to the U.S. - oil products - especially when there were issues, say, with Venezuela. But then it's imported most of everything else. Maybe it will be car imports, semiconductors, you know, and other anymore complicated products. So it's hard to see what would be specific macroeconomic benefits for the U.S.
MARTIN: So what would be the benefit to the U.S.? Because it seems very clear that this administration, at least President Trump in particular, seems to have a keen desire to normalize relations with Russia. So what would be the benefit?
RIBAKOVA: Judging from the statement from the administration, I think the key benefit they see - it would allow President Trump to have the deal where there would be either ceasefire or maybe hopefully more permanent truce or peace deal in Ukraine. So that, to me, seems to be more broader geopolitical objective, rather than any specific macroeconomic benefit to the U.S. From trade was relatively small country, especially when U.S. is actually also an oil producer, and not only a producer and also potentially an expert of oil and gas. Let's not forget that U.S. and Russia are in direct competition in terms of selling, for example, LNG to Europe.
MARTIN: Exactly. So before we let you go, we only have a couple of seconds left here. So I am curious about what you see as the opportunity for warming. What might we be looking for to see whether there is actual progress here? As you mentioned earlier at the beginning of our conversation, there have been numerous kind of resets and setbacks in this relationship over the last decades. So what might we be looking for to see if there's an actual change?
RIBAKOVA: I would see what Russia has to gain from it. Russia wants to have sanctions lifted. So if we hear anything about the financial sanctions being lifted or the threat of secondary sanctions being removed, I think that is the key indicator. I think the truth - it's unlikely to happen soon.
MARTIN: That is Elina Ribakova. She's a senior fellow at the Peterson Institute for International Economics. That's a nonpartisan think tank here in Washington, D.C. Miss Ribakova, thanks so much for joining us.
RIBAKOVA: Thank you so much for having me. Transcript provided by NPR, Copyright NPR.
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