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Brussels’ Balancing Act: Sanctions, Potash, And Politics

  • The EU imposed another set of sanctions on Belarus, targeting the Lukashenka regime for rerouting dual-use goods to Russia for its war effort.
  • Major EU decisions, including sanctions on Belarus, were influenced by the concerns of the Global South, particularly the import of Belarusian potash – a key fertilizer component.
  • The final sanctions were the product of political bargaining within the EU, with various nations using the Post-Cotonou Agreement and other levers to influence the outcome.
EU

When the European Union officially imposed another round of restrictive measures on Belarus on August 3, it put an end to one of the longest-running sanctions sagas in the bloc in recent years.

The new measures were the first targeting the regime of Alyaksandr Lukashenka since the summer of 2022. While early sanctions on Russia following the full-scale invasion of Ukraine in February 2022 were to a large degree imposed on Belarus as well, further EU sanctions on Moscow were not applied to Minsk. That was largely due to the belief in Brussels that Belarus's role in the Ukraine war couldn't be compared to Russia's.

Then a new problem appeared: Many of the sanctioned components that Russia requires for its war effort -- in particular, dual-use goods that can be used for both civilian and military purposes -- were being rerouted via Belarus. The latest round of sanctions on Belarus is partly meant to address this problem.

The original proposal from the European Commission, seen by RFE/RL, suggested measures such as a ban on EU companies providing IT, consulting, and polling services to Belarus; a ban on the export of luxury goods to the country; and a prohibition on the import of Belarusian gold and steel.

The final agreed-upon package, though, was a good deal watered down, with EU export bans on firearms, ammunition, and materials used in the aviation and space industries, along with restrictions on potential dual-use items, such as drones, semiconductors, and computer hardware. The rest from the original proposal was left out.

To understand why the final sanctions were weaker than originally envisioned, and why they took so long to come to fruition, it is helpful to understand two considerable drivers of EU policy. The first is the importance of the so-called Global South -- countries with growing political and economic clout in Asia, Africa, and Latin America. The second is classic Brussels horse-trading on political issues that are, at best, only tangentially linked.

Deep Background: The main reason for the delay in agreeing a new round of sanctions on Belarus -- apart from all the loopholes that needed to be closed -- was a proposed derogation, or exception, that would allow for the import of Belarusian potash, a key ingredient in fertilizers that the EU had already sanctioned as it is one of Minsk's main sources of income. A derogation on Russian potash exports had been agreed by the EU in December 2022, but a similar exception for Belarus was seen as being a little trickier.

Allowing the import of Belarusian potash would mean unfreezing the assets of the Belarusian tycoon Ivan Halavaty -- the CEO of Belaruskali, one of the biggest fertilizer producers in the world -- and those of Russian billionaire Mikhail Gutseriyev, who is building a potassium-chloride mining and processing plant in Belarus.

Crucially, allowing Belarusian exports of potash would mean the shipments being transported via Lithuanian ports, something which is deeply unpalatable to most Lithuanian politicians who tend to be the fiercest critics of the Lukashenka regime.

While Vilnius's refusal to agree on any potash derogations was backed by Estonia, Latvia, and Poland, there was a bigger group within the EU -- led by Portugal and other European countries with large ports -- that was pushing for the potash derogations.

This wasn't just a case of countries looking to secure vital income streams but also concerned issues of food security and allegations -- often stoked by the Kremlin -- that EU sanctions have led to food shortages in the developing world.

Drilling Down

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  • The EU has not sanctioned food exports, neither from Russia nor Belarus. However, those in favor of the potash derogation have argued that some countries, notably Brazil, a former Portuguese colony, have suffered because they have had to import alternative fertilizers for their agricultural sectors.
  • Diplomats with knowledge of the matter but who are not authorized to speak on the record told me that Lisbon drove a hard bargain on the derogation issue because UN Secretary-General and former Portuguese Prime Minister Antonio Guterres is particularly sensitive to the concerns of the Global South.
  • Recent developments in Belarus have given new urgency to the sanctions issue. First, there was the signing of an agreement in May to allow the deployment of Russian nuclear warheads on Belarusian territory; and then, making the situation even more acute, Wagner troops moved to Belarus from Russia under a deal to end the mercenary group's June rebellion led by its leader, Yevgeny Prigozhin.
  • The deal started to come together at a summit of the EU and the Community of Latin American and Caribbean States (CELAC) in Brussels at the end of July. With Spain now holding the rotating presidency of the Council of the European Union, where ministers from EU countries convene to coordinate policies and adopt laws, Madrid was keen to show its partners -- including many of its former colonies in South America -- more than just goodwill.
  • To show it meant business, Spain pushed for the EU to green-light the Post-Cotonou Agreement -- a pact between the EU and 79 African, Caribbean, and Pacific countries that had been only provisionally agreed upon. The first Cotonou Agreement -- signed in 2000 in the largest city in the west African country of Benin -- created the foundation for Brussels to strike deals with these countries, covering areas such as trade and migration, and was hailed as a groundbreaking development in the EU's relations with the Global South.
  • The updated agreement, which would set the framework for EU relations with these countries for the next two decades, had been blocked by Hungary for the last three years. Hungary's reluctance to sign off was likely less to do with any objections to the pact but more about its tendency to bargain with the EU. Budapest made its support for the Post-Cotonou Agreement conditional on getting money from the EU budget that was still being withheld by the European Commission due to concerns about the rule of law in the country.
  • While Budapest eventually came on board, Poland introduced its own veto. Warsaw also used the Post-Cotonou Agreement as a bargaining chip, noting the desperate situation of its own farmers in an attempt to get the 100 million euros ($110 million) promised to Warsaw by the European Commission to compensate for financial losses incurred due to Ukrainian agricultural imports. The commission, in turn, said it would not release the compensation until Poland implemented a Brussels-brokered deal that would allow Ukrainian agricultural products to pass through EU territory once again.
  • While Poland received the money earlier this summer, Warsaw still blocked the Post-Cotonou Agreement, using its support as leverage to get the Belarus sanctions over the line before the EU's August break.
  • After some intense horse-trading, the Post-Cotonou Agreement finally got the thumbs up on July 20, and the new Belarus sanctions were agreed without any exceptions for potash. The sanctions, however, were more limited in scope than the original European Commission proposal and came with a commitment to look into their possible impact on food security in the fall. The commission also made a pledge to explore further sanctions on Belarus going forward.

By RFE/RL

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