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The Russian Meeting Part II -- On to the G20

If the Russian government was attuned to public relations, and there is a fair amount of evidence that they are not, they would be very happy with the events now in Egypt: it gets Snowden and the cancellation of the pre G-20 Moscow meeting between Obama /Putin meeting off the front page.

But front page or not and regardless of Snowden, what makes the U.S./Russian relationship more complicated is not the lack of chemistry between Obama and Putin, but the lack of any real financial or economic links between the two countries.

Of all the major economic/political players in the world, the U.S. has by far the smallest and almost non-existent trade relationship with Russia. Unlike China, there are no major economic constituencies or lobbies on either side pushing for a continuation of the so-called 're-set.'

As an example, the EU is our largest trading partner and based on 2012 figures, we sold to the EU, $265 Billion worth of products, 21% of all US exports.

The U.S. exported $110,483 billion worth of products to China and imported $425,578 billion. Although the import numbers from China greatly outweigh the export numbers, the import numbers also influence American jobs and investments. Whether it is Wal-Mart, Apple, Nike or warehousing and transporting Chinese steel in Long Beach, California, the import numbers, like the export numbers, represent large constituencies and lobbying efforts both in Washington and Beijing that smooth over the relationship.

U.S. exports to Russia on the other hand were only $8.3 billion worth of merchandize; under 1% of our total exports and the imports from Russia were $29 billion. In terms of customers for U.S. products, Russia is about the same size as Thailand or Indonesia.

Hindering the ability to negotiate with Russia further is the apparent misreading/misunderstanding of modern western culture by Putin and his people.

It is very difficult to move forward on any number of issues, whether it is nuclear arsenal reduction or the mid east, with someone whose mind is at best parochial, but appears more likely trapped in a cold war or even a 19th century view of power.

Tip O'Neil's famous quote that "all politics are local" is probably rule number one for any government in the world. And often times in following this rule many governments overplay the populist tune.

But Putin's anti gay legislation is not only similar to the early Nazi-like restrictions on people, it is a clear demonstration of how isolated and parochial his thinking has become. It appears that he does not understand or want to understand the power and importance of global social media and globalization. Putin has become trapped in his own world view; surrounded by cronies whose interests reinforce a mindset that any problem can be handled either by intimidation and threat, by the FSB (the successor of the KGB) or by the politically controlled Russian judiciary and prosecution system.

If one could set aside the human rights issue involving the Russian anti gay legislation for the moment, which is of course difficult, Putin's political calculation could only make sense to someone who is isolated in the Kremlin.

If Putin truly understood the power of social media, if he understood how the anti gay legislation will resonate outside Russia and how it could severely jeopardize any positives that would come out of his prized Sochi Olympics project, he wouldn't have pushed the legislation. The tradeoff is just not worth it.

This myopic read of events carries over internationally as was shown in the Snowden affair, where instead of acting like a global power, Russia acted like a small irrelevant dictatorship playing petty spite politics.

So although Russia matters to the United States for the various reasons I wrote about in the first Russian meeting piece, and although President Obama will be meeting President Putin at the G-20 meeting in St Petersburg, maybe it is the time for the United States to put the relationship on hold, to have a policy towards Russia of benign neglect. Russia matters to the U.S. but for the moment not in any immediate way, and surely not for any economic reason.

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