This is an opinion piece by Professor Sandeep Gopalan, Pro Vice-Chancellor for Academic Innovation and Professor of Law, Deakin University. The author's view and opinion may not imply or reflect Deakin Law School's view.
Conflict is brewing between the Trump administration and some of America’s closest allies — India, Saudi Arabia and the United Arab Emirates among them — over their decision to make significant arms purchases from Russia. Tensions also are likely to escalate with India because of that country’s decision to continue trading with Iran in defiance of U.S. sanctions.
So, what’s all this tohubohu about?
India, Saudi Arabia and other countries are running afoul of the Countering America’s Adversaries Through Sanctions Act (CAATSA), which the president signed into law on Aug. 2, 2017. Congress passed CAATSA with the objective of imposing sanctions on Iran, Russia and North Korea for reasons including support for terrorism, ballistic missile proliferation, cyber attacks and human rights abuses.
Section 231 of the law states that the president shall impose sanctions on any country that knowingly engages in “a significant transaction with … the defense or intelligence sectors of the Government of the Russian Federation.” The president can waive sanctions by submitting a statement to the appropriate congressional committees that a waiver is in America’s “vital national security interests” or “will further the enforcement” of CAATSA.
India — the world’s largest arms importer — purchased the S-400 Triumf advanced air defense systems from Russia in 2016 in a deal worth about $5.5 billion. The missile system is designed to strike down hostile air targets up to a range of 400 kilometers. India’s immediate rival, China, also has the Russian missile system.
Given India’s non-aligned status during the Cold War, and America’s support for neighboring Pakistan, the country came to depend on the Russians. It now finds itself in a peculiar position in a changed world. Although India has shed its socialist baggage and moved closer to Washington, the foreign policy establishment has not adapted fully and its dealings with Russia and Iran continue.
Saudi Arabia and Turkey also have purchased S-400 systems from Russia. Turkey, consistent with its recent aggressive line, has said that the “I will impose sanctions” approach will not affect its decisions. Turkish President Recep Tayyip Erdogan has dismissed Western concerns about the $2.5 billion arms deal with Russia, and resolving the situation with Turkey will not be easy.
Although India’s rhetoric is not heated, foreign minister Sushma Swaraj echoed similar sentiments when speaking about U.S. sanctions in relation to the oil trade with Iran: “We only recognize U.N. sanctions. We do not recognize any country-specific sanctions,” she said, adding that, “We don't make our foreign policy under pressure from other countries.” These statements likely were aimed at domestic audiences and not reflective of India’s actual behavior.
Nonetheless, issuing them blanket waivers under CAATSA to allies such as Saudi Arabia, India and Turkey for their dealings with Russia would violate the law’s intent. It would undermine the goals sought to be achieved by sanctions and create a patchwork of exemptions for select countries. Other countries would seek waivers, severely debilitating the sanctions regime and compromising larger international goals.
Despite these conflicting pressures, President Trump has a chance to turn CAATSA into a positive job-creating vehicle. There is no reason for allies such as India, who pose no threats to the United States, not to become bigger customers for U.S. armaments and technology. The United States could create jobs by manufacturing arms and displace Russia as the largest supplier of Indian arms imports. Using CAATSA, the president could grant India a waiver from sanctions for reducing its Russian purchases over a defined time frame.
President Trump already has boosted arms sales to unprecedented levels. The United States had 34 percent of the global arms trade in 2017, an increase of 25 percent over the previous five years. Russia’s share fell 7 percent during that period. The Middle East buys almost half of total U.S. arms exports, showing there is room for growth in exports to India. And, acquiring more weapons from the United States would make strategic sense for India, since its most dangerous rival, China, is unlikely to get the same technology.
If Trump can use his relationship with Prime Minister Narendra Modi to reorient India’s defense industry and bring about less dependence on Russia, he could generate manufacturing jobs in the United States. That would be an ideal way to deploy CAATSA, preferable to imposing sanctions on close allies.