IO – It is easy to disagree with a lot of what U.S. President has to say, but one thing we can wholeheartedly agree with is Trump’s describing the Countering America’s Adversaries Through Sanctions Act, or CAATSA, as ‘seriously flawed’.
The legislation–which was passed in 2017 by the U.S. Congress–allows for, amongst other things, the United States to punish individuals and countries doing business with the military and intelligence agencies of Iran, North Korea and Russia. While this sounds fitting for those who believe those three countries constitute a kind of axis of evil and a pose an existential threat, it does have some serious weaknesses.
Take the case of India, one of America’s most important allies in the entire Indo-Pacific region. For many years New Dehli has been a major buyer of Russian military equipment, and therefore could easily be considered as being in violation of Section 231 of CAATSA and subject to sanctions.
And so it came to pass when, just days after the Indian government signed a US$5 billion deal with Russia to buy the S-400 missile defence system, the Trump administration warned India that punitive sanctions would be triggered once a payment for the defence system was made.
What happened next is both intriguing and reflective of the drawbacks of CAATSA. Reportedly U.S. officials visited the Indian defence ministry shortly thereafter and offered a deal where India could avoid any sanctions if they agreed to buy F-16 fighter jets.
Such a quid pro quo raises suspicions that the U.S. is using the CAATSA as a means to strongarm countries into buying American-made military products. In the mind of a businessman, this might make sense, but in the world of defence and foreign relations, it does not necessarily make for good policy.
For India, the threat of sanctions poses a major challenge to its military. More than half of the weapons the Indian military has fielded come from Russia. Defence ties between India and Russia go back as far as half a century. Expecting New Dehli to cut off those ties using CAATSA as leverage is not only unrealistic. It also threatens to damage the U.S.-India relationship at a juncture in time when Washington needs to cooperate closely with their Indian counterparts to meet the challenge of a growing Chinese naval presence in the Indo-Pacific.
The same argument could be made about plans by Indonesia to move ahead with the purchase of eleven Russian Sukhoi Su-35s, which until recently was delayed. Now Indonesia has announced, in addition to the Sukhoi deal, that it is looking to acquire two squadrons of the new F-16 fighter jets.
For Indonesia, another critical regional ally of the U.S.A. and which has a policy of diversifying its military purchases to ensure it doesn’t become overly-reliant on a single source of supply, buying both Sukhois and F-16s makes sense.
Washington should place itself in Jakarta’s shoes and realize that not giving its ally a waiver on CAATSA–which is allowable under Section 231–would be a major mistake. The acquisition of Sukhois by Indonesia neither poses a direct threat to U.S. strategic interests, nor does it offer Russia tangible gains in its relations with Indonesia that could be construed as a loss for American interests.
Indeed, in the case of, say, North Korea, CAATSA makes perfect sense. And in the pursuit of its Iran policy, at least from the American perspective, CAATSA is a natural extension of Washington’s objective to contain Tehran. But in other cases, especially with Indian and Indonesian purchases of Russian military equipment, CAATSA not only makes little sense, it is also counter-productive.