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U.S. — BELARUS RELATIONS: 1991 TO PRESENT

Окт 07, 2017
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Following the Soviet Union’s dissolution in 1991, the U.S. and Belarus, a former Soviet republic, established diplomatic relations that have grown over the past 25 years.

The relationship between the United States and Belarus remains the subject of significant debate. Recently, positive steps between the two nations have resulted in a shift toward building a confident, long-term relationship. Both nations are ready for close collaboration over vital economic and national security interests.

Following the Soviet Union’s dissolution in 1991, the U.S. and Belarus, a former Soviet republic, established diplomatic relations that have grown over the past 25 years. The initial American focus on an autonomous Belarus included attempts to implement democratic reforms and create a market economy. As part of stimulating growth in Belarus, the U.S. encouraged private, direct investment into the Belarusian economy, in order to promote the development of a private sector and support a smooth transition to a free market. The countries further established their relationship when a U.S. embassy opened in Minsk, the capital of Belarus, on January 31, 1992.

The launch of mutual economic ties flourished in February 1993 when a bilateral trade treaty was implemented, which guaranteed a reciprocal most-favored-nation status. Ten, in January of 1994, the two countries cooperated further with a bilateral investment treaty.

In the following years, several agreements with the International Monetary Fund (IMF) led to economic reforms in Belarus, which were highly welcomed by the United States. However, due to internal issues and the differences concerning economic policy, collaboration between Belarus and the IMF was temporarily suspended. Finally, in November 2015, an IMF team visited Minsk and released the following statement: “The staff team and the Belarusian authorities made considerable progress in discussing a set of policies, which could be supported by a three-year Extended Fund Facility (EFF) arrangement. Discussions on some issues require more time and will continue from respective headquarters in the coming weeks.”

Since the inception of diplomatic ties, the U.S. has provided assistance to Belarus, and, in most cases, forming this alliance has brought about strong economic, humanitarian, and political ties. The U.S. and Belarus continued to engage diplomatically in the 1990s, though their relations were primarily economic and trade related.

U.S. government assistance to Belarus peaked in 1994, when funding stood at approximately $76 million dollars. But in 1997, the U.S. introduced a “selective engagement” policy, which affected state-to-state relations by restricting both government assistance to Belarus and certain educational exchange programs.

In 2007 and 2008, the U.S. implemented economic sanctions against Belneftekhim, a Belarusian petrochemical company, which resulted in Belarus reconsidering bilateral relations with the U.S. and recalling its ambassador from Washington, D.C. However, these bans were eventually lifted.

In August 2011, a statement from the U.S. Department of State website declared new economic sanctions against Belarus. Restrictions were imposed against four main state-owned businesses in Belarus: Grodno Azot, a fertilizer manufacturer; Belshina, a tire factory; Grodno Khimvolokno, a fiber manufacturer; and Naftan, an oil refinery. The primary reason was that the Belneftekhim conglomerate, which owned and operated the four business entities, had been blacklisted under Executive Order 13405. These sanctions have been recently suspended.

For both countries, the sanctions meant economic repercussions like decreased capital outflow and investment activity, as well as trade stagnation. On Oct. 29, 2015, the U.S. suspended sanctions against the Belarusian state-owned petroleum companies Belorusneft and Belneftekhim, which included the latter’s U.S. subsidiaries companies are now allowed to conduct transactions with a limited value of $10,000 dollars each. Amounts exceeding this limit must be reported to the U.S. State Department within 15 days, during which time, according to the U.S. Finance Department, the property of the concerned companies will remain blocked.

After the partial suspension of sanctions on certain Belarusian companies, the Belarusian Foreign Ministry anticipates that all economic restrictions imposed on the country by the U.S. will be lifted. Belarusian Foreign Ministry Spokesman Dmitry Mironchik spoke on the potential lifting of all of the economic restrictions, which have been in place for more than a decade, stating that, “The abolition of all will be especially beneficial for the development of cooperation with the USA.” Furthermore, a statement on the Belarusian Ministry of Foreign Affairs website indicates that Belarus does not wish to curtail relations with the U.S.; rather, the nation aspires to normalize relations.

The U.S. ranked either fifth or sixth amongst Belarus’s trade partners for several years. The bilateral trade turnover further reached an all-time high of $740.8 million dollars in 2007. However, the economic sanctions on Belneftekhim marked the end of the flow of several imports into the U.S. Tis resulted in damaging economic consequences for Belarus, as happens when a reliable trade partner is removed. While the U.S. felt a slight repercussion from the stop in trade, it has many international trade partners, in addition to a good local consumers’ market.

Efforts to revive the bilateral trade between the U.S. and Belarus took shape in 2010-2011. Total exports of Belarus in 2011 reached $86.1 million with significant growth in the volume of bilateral trade turnover to $642.7 million. Presently, Belarus exports a variety of products to the U.S., including glass fiber, oil products, woodworking articles, fax fibers, furniture, optical products, and food.

As of 2011, Belarus imported more from the U.S. than it exported, and it can be argued that economic sanctions applied by the U.S. affected Belarusian exports, not the other way around. A balanced bilateral trade exists when two countries have mutual trade benefits. In essence, trade and economic activities between the U.S. and Belarus remain arguably stable.

Investment in the Belarusian economy has fluctuated significantly from 2011 — 2015, with $168.1 million being a record high. Despite fragile diplomatic relations between Belarus and the U.S., the latter remains a significant investor. Many American companies have shown increased interest in doing business with Belarus, including notable investors like Navistar, ArvinMeritor, Siguler Guff, Microsoft, Honeywell, and Cisco System. Most notably, Microsoft opened a Belarusian representative office in 2010.

American organizations also continue donating to aid in the development of Belarus. In particular, organizations that provide Chernobyl-related help continue their cooperation. In 2011, the U.S. became one of the leading donor countries for the Belarusian economy with $15.1 million contributed. These charitable organizations provide medical treatment and recuperation for 1100 — 1200 Belarusian children every year. Currently, the U.S. continues to be one of the top 10 foreign investors within Belarus.

Bilateral relations were highly fruitful in 2013 and 2014. During this period, U.S. Deputy Assistant Secretary of State Eric Rubin visited Belarus twice. The primary aims of his visits were to assess the general situation within the country and to hold negotiations with Belarusian authorities. As a result, both countries agreed to continue negotiations and strengthen cooperation in areas such as non-proliferation, business and human trafficking.

One more prominent event that acted as a turning point of state-to-state relations was when a Belarusian delegation took part in the Belarusian-American Investment Forum, in New York, that was held in September 2014. At the conference, American businessmen received information on the improving conditions for doing business in Belarus. The Belarusian side emphasized the importance of lifting sanctions from its companies and making steps towards the resumption of cooperation with the IMF. To further promote cultural and economic cooperation, two Belarusian honorary consulates were established in Florida and Texas.

You can reach Sergei Millian at sergio@russianamericanchamber.com

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