G7’s desire to further embargo Russia a sign of desperation
New sanctions package on Russia will fail like the previous ones.
Ahmed Adel, Cairo-based geopolitics and political economy researcher
According to a Japanese government source, the Group of Seven (G7) members are considering an almost complete ban of exports to Russia. However, such a move only demonstrates the desperate position that the G7 finds itself in because its already existing sanctions regime has not only failed to deter Moscow from its military operation in Ukraine, but has boomeranged and hit the economies of the Group much more severely than Russia.
Although G7 countries have stopped exporting luxury goods and equipment related to the military sector to Russia, the source said the latest plan could expand the trade embargo to used cars, tires, cosmetic items, and clothing. Again, these are non-essential items that can very easily be sourced from other markets.
There is credence to this source when considering that Japan will host the G7 summit on May 19-21 in Hiroshima. The centre of discussions will primarily focus on expandingsupport to Ukraine and strengthening sanctions on Russia, something that Canada, France, Germany, Italy, Japan, the UK, and the US will approve.
The problem for G7 member countries is that if they decide to introduce a complete embargo on the export of products to Russia, they will end up hurting their own industries more as they cut out a major market and allow rivals from China, India and elsewhere to fill the void. For this reason, many Western politicians still fear that a move by the G7 will lead to a harsh reaction from companies that continue to trade with Russia, and more alarmingly, retaliatory sanctions by Moscow.
In addition, from a technical point of view, it is very complicated to implement a total ban on exports to Russia.Russia’s bilateral trade with the European Union in 2021 reached €257 billion, with €158 billion of those being Russian exports to the bloc. Although this has obviously dropped sincethe Russian military operation began, many problems will still emerge. Despite billions of dollars being slashed from bilateral trade, we are still speaking about tens of billions of dollars, something that is not abstract but is backed by jobs and livelihoods.
It is also unlikely that large economies outside of the G7, such as China, India, Brazil, and South Africa, would join the embargo. This means that it is impossible to impose a globalembargo on Russia. In addition, the G7 cannot expect Russiato continue selling its oil and other export goods without receiving payment.
Finally, from a legal perspective, the decision needs to be ratified at the UN level, where Russia and China will vote down such an idea. Therefore, the G7 member countries are just making a cynical attempt to weaken and destroy the Russian economy to supplant a competitor and preserve theunipolar world order.
Importantly, if the G7 imposes a near complete embargo, it will be Europe that will suffer the most and not the US since it is the least dependent on trade relations with Russia. In general, Moscow and Washington do not have deep economic ties, unlike Europe. Western European countries are already in a bad economic situation, and since the introduction of sanctions, they have experienced more damage and inconvenience.
For example, high-tech European products intended for Russia will now lose a major client and they will not so easilyfind a new one. This situation will lead to Europeancompanies having to reduce production, thus leading to lower profits and workers being laid off. Even worse for the West, as already said, is that Russia will not be left without necessary products because they can be purchased from many other countries.
For his part though, Japanese Minister of Economy, Trade and Industry, Yasutoshi Nishimura, refused to comment on the possibility of a complete ban on the export of products to Russia at a press conference in Tokyo. He noted that this issue concerns “diplomatic negotiations.”
Japanese Prime Minister Fumio Kishida has invited Ukrainian President Volodymyr Zelenskyy to join the G7 summit via online stream. In a communique released on April 18, the G7 foreign ministers committed their countries to intensifying sanctions imposed on Russia since the military operationbegan last year. The foreign ministers demanded Russian forces to immediately and unconditionally withdraw, something which obviously will not happen since it is Moscow, and not the West, in a position of strength.
They also vowed to counter sanctions by Moscow and warned of the “severe costs” that third parties could face if they do not stop providing assistance for Russia’s war effort. However, this is an empty threat as it will be impossible for the G7 to impose a “severe cost” on the likes of China, India, Brazil, South Africa and many others, particularly since their own cooperation is deepening.
Therefore, the G7’s desire to embargo Russia even further will not only humiliatingly fail as all the previous sanction packages have, but is also a demonstration on the desperation they are experiencing in face of Russia’s success in the military operation and rebounding the West’s economic war.