Brookings: Topics - Transatlantic Relations

Challenges and Opportunities: Aviation Emissions and the European Cap and Trade System

Joshua Meltzer — Tue, 21 May 2013 11:42:00 -0400

Editor's Note: This article was originally published in the Winter/Spring 2013 edition of the Georgetown Journal of International Affairs: The Future of Energy.

On January 1, 2012, the European Union extended its cap and trade system, the Emissions Trading Scheme (ETS), to include CO2 emissions from all airlines arriving in and departing from EU airspace. The EU has claimed that this unilateral action was in response to the slow progress towards reaching a global deal. However, the EU remains committed to reaching a global solution to the problem of aviation emissions and hopes that including international aviation in the ETS will spur action.

These additions to the ETS led the EU to take positions on a number of important policy issues that remain unresolved in the international climate change negotiations. These include issues such as how to attribute CO2 emissions from aviation to countries and how to operationalize the environmental principle of common but differentiated responsibilities (CBDR) – the notion that developed countries will do more to reduce their CO2 emissions than developing countries. Moreover, as many of these issues are also applicable to the broader UN climate change negotiations, the success or failure of the ETS approach to international aviation could affect progress in the wider climate change negotiations.

This article outlines how the EU has designed its system to address these challenges. It also provides an overview of the challenges to reaching a global deal on regulating CO2 emissions from international aviation. The final part of the paper considers the current state of international negotiations over avia- tion emissions and suggests pathways forward.

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Authors

Joshua Meltzer

Publication: Georgetown Journal of International Affairs

Image Source: © Darren Staples / Reuters

Turkish Prime Minister Erdoğan's U.S. Agenda

Kemal Kirişci — Thu, 16 May 2013 10:46:00 -0400

Editor's note: On May 17, 2013 Brookings hosted Prime Minister Erdogan for an event on U.S.-Turkish relations.

Turkish prime minister Recep Tayyip Erdogan is visiting Washington this week and will meet with President Obama today. This is his first visit to the United States since December 2009. But the world and the Middle East have changed dramatically since then. Thus, the agenda for Erdogan’s talks with Obama will be a very crowded one. Four topics in particular are likely to stand out.

1. The Situation in Syria

Erdogan arrives in Washington at a time when there is growing pressure on the Obama administration to change its course on Syria. Secretary of State John Kerry has already taken some steps to increase nonlethal support for the opposition in Syria while putting growing pressure on the moderate opposition to tighten their ranks and distance themselves from radical Islamist groups. These measures are unlikely to satisfy Erdogan. He has long been a vocal critic of the international community, the United Nations Security Council and the United States for idly “watching the tragedy” unfolding in Syria.

He is likely to remind Obama quite loudly that the butchery of civilians by the Assad regime has reached levels that makes it unethical not to respond to and that, as the car bombs that exploded in Turkish border town of Reyhanli last weekend demonstrate, Turkish national security is being directly affected. He will also offer facts and figures to show how the humanitarian situation is fast deteriorating and becoming untenable with an ever expanding flow of refugees and displaced people. He will not miss the opportunity to share with Obama the evidence collected from refugees arriving in Turkish hospitals that the Syrian regime is using chemical weapons. Erdogan may go as far as to push Obama to support the idea of creating a no-fly zone along the Turkish border.

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Authors

Kemal Kirişci

Publication: The National Interest

Image Source: © Larry Downing / Reuters

Obama’s Mexico Trip: Putting Trade and Investment at the Top of the Agenda

Diana Villiers Negroponte — Thu, 02 May 2013 09:00:00 -0400

President Obama recognizes that security is a pervasive problem in the bilateral relationship between the U.S. and Mexico. But in his April 30 press conference prior to setting out for Mexico, Obama highlighted the U.S.-Mexico trade relationship:

“A lot of the focus is going to be on economics. We’ve spent so much time on security issues between the United States and Mexico that sometimes I think we forget this is a massive trading partner responsible for huge amounts of commerce and huge numbers of jobs on both sides of the border. We want to see how we can deepen that, how we can improve that and maintain that economic dialogue over a long period of time.”

Beyond the statistics of expanding trade, what more should the presidents discuss?

Total two-way trade reached $494 billion in 2012, which according to Mexican Ambassador Medina-Mora means more than $1.3 billion per day; almost $1 million dollars per minute. In absolute terms, Mexico is America’s third largest trading partner, and in 2012 U.S. exports to Mexico were $216.3 billion. According to Medina-Mora this is more than the combination of U.S. exports to all the countries with which the United States has a trade agreement in place – except for Canada. Surprisingly, it is more than U.S. exports to Japan and China combined, that is $180.6 billion.

We agree that exports to Mexico both maintain and create jobs in the United States. The U.S. government estimates that each additional billion dollars in new exports supports more than 6,000 new jobs. According to the U.S. Chamber of Commerce, almost 6 million U.S. jobs rely on trade with Mexico, the consequence of which is the potential creation of 107,000 new U.S. jobs.

Furthermore, individual states benefit from exports to Mexico such as Arizona, California and Texas which hold Mexico as their main export destination. Mexico is also the second destination for exports from 20 other states and is ranked among the top five export destinations for 34 states.

Investment flows are also mutually beneficial. According to the U.S. Trade Representative’s office, sales of services in Mexico by majority U.S. owned affiliates were $34.4 billion in 2010. Sales of services in the United States by majority Mexico-owned firms were $4.8 billion. According to the U.S. Embassy in Mexico, the United States currently provides 41 percent of all foreign direct investment in Mexico, benefiting more than 21,139 companies.

Beyond the numbers, the reality of trade and investment is that the United States and Mexico compete together in the global economy. Production and supply chains in North America are deeply integrated with the U.S. content of Mexico exports to the United States estimated at 40 cents on the dollar. This compares to 25 cents for Canadian exports to the United States and 4 cents for China and 2 cents for the European Union, according to a Wilson Center report. In short, there exists a growing integrated manufacturing platform that takes advantage of geography, time zones and cultural affinity.

The challenge ahead is how to build on that integration for the forthcoming Trans Atlantic Trade and Investment talks with the European Union. The development of common standards and regulations will impact both Mexican and Canadian industry. Therefore, they need to be either at the table, or close to the negotiations. How close will the consultations with the Mexican trade delegation be? Ideally, the Mexicans would like to be at the negotiating table, but that is improbable. More likely is a commitment from President Obama to consult closely with the Mexican delegation. This could include both pre-talks and post-talk briefings, reinforcing Obama’s call “to maintain the economic dialogue over a long period of time.” On the European side, Turkey wishes to have a close consultative arrangement with the EU negotiators. This creates a balanced need for consultations with immediate trading partners.

Related to the growth in two-way trade is the need to facilitate movement of trucks across the U.S.-Mexico border. Despite an increased use of pre-clearance procedures, Mexican trucks must line up several kilometers from the border while they wait their turn to reach the fast lane that leads up to and through the U.S. border. Public-private partnerships are needed to construct the access roads some 10 kilometers from the border so that pre-cleared vehicles can move rapidly through the border zone. Currently, GPS vehicle trackers are used to link the sending and receiving manufacturers with U.S. Customs and Border Patrol (CBP). Before the truck even reaches the border post, CBP will know the content and value of the merchandise, as well as specifications on the cab and its driver. Only if tampering is detected will CBP stop the truck for secondary inspection, otherwise the truck sails through the border and onto its final destination. The Mexican private sector has demonstrated interest in constructing those access roads, but it needs presidential mandates from both governments to support the projects, as well as Mexican government purchase of necessary land.

Increasingly, the economies of both the U.S. and Mexico depend upon each other. There is much for the presidents to discuss and many challenges lie ahead, including productivity and education in both our countries. As President Obama begins his second term, it is constructive for him to put energy and political will into deepening that economic relationship.

Authors

Diana Villiers Negroponte

Image Source: © Kevin Lamarque / Reuters

Don't Forget Free Trade with Turkey

Kemal Kirişci — Mon, 15 Apr 2013 00:00:00 -0400

Last month, both the U.S. and the European Union (EU) took important internal steps to prepare the ground work for negotiations to establish the Transatlantic Trade and Investment Partnership. TTIP would create the largest integrated market in the world, bringing together half of the world’s GDP and 30 percent of world trade. If it went beyond eliminating already low-level tariffs and succeeded in aligning regulatory standards on both sides of the Atlantic, it also could generate more than 3 percent GDP growth. Beyond bilateral effects, TTIP could also spill over to global-trading trends and serve as a tool for strengthening the Western economic order. But in its current form TTIP would leave Turkey, currently the sixteenth-largest economy in the world, and a long-standing transatlantic ally, out in the cold.

Turkey has been deeply integrated within the EU’s internal market since the establishment of a customs union in 1996. Turkey is in membership negotiations with the EU and has therefore already adopted a number of the EU’s internal regulations.

But under current rules, Turkey must negotiate its own agreement with countries the EU signs preferential trade agreements with. This puts Turkey at a significant disadvantage, as the EU-Turkey Customs Union is structured to allow these countries to access Turkish markets without having to reciprocate by opening their own markets. As long as these agreements were signed with countries that had smaller economies, the cost to Turkey was negligible. But the EU has recently begun negotiating and signing trade agreements with countries that have relatively large economies and high volumes of foreign trade, including Canada, Japan, India, Korea and Mexico. Most of these countries have exports that compete with Turkish ones. Thus, it’s a “lose-lose” situation: Turkey faces greater competition in the EU as well as in its own domestic market without enjoying preferential access to these other markets.

Along with other grievances, this asymmetry helps to explain Turkish prime minister Recep Tayyip Erdogan’s announcement in February that Turkey should consider joining the Sino-Russian Shanghai Cooperation Organization (SCO) in favor of the EU. Even though he subsequently retracted this position, his economy minister, Zafer Caglayan, argued in early April that the EU Customs Union had become “an agreement of servitude” and that Turkey either had to renegotiate new terms or get out of the deal. Caglayan’s remarks may well be a bluff intended only for domestic consumption.

Nevertheless, the exclusion of Turkey from TTIP would only aggravate current grievances about the Customs Union, ranging from ground transportation quotas (which deny Turkey the possibility of exporting greater volumes of goods) to requiring Turkish businesspeople to obtain visas for travel to the EU while the goods they sell travel freely. To many in Turkey, such practices seem to be barriers that deny Turkey its full export potential to the EU market.

A study by the German IFO Institute lists Turkey among countries that are likely to experience a net loss of welfare from TTIP. Such an outcome would aggravate existing grievances and create additional pressures on Turkey to break away from the EU and the broader Western liberal order— an outcome detrimental to the interests of both the EU and the United States.

Turkey was a participant in the formation of the global economic order at the end of the Second World War and has remained a part of it in spite of occasional ups and downs. The EU’s engagement with Turkey, first through a Customs Union and then through the pre-accession process, has bolstered revolutionary political and economic reforms. This contributed to massive economic growth in Turkey, and it became a source of stability in a region that has long suffered from entrenched conflicts. Now a model for economic and political transformation in its neighborhood, Turkey has become a major player in integrating the Balkans, the southern Caucasus and the Middle East into the world economy.

Yet in the last few years, as accession negotiations with the EU stalled, Turkey has looked for other economic opportunities in its immediate neighborhood and beyond. This period has also seen the quality of Turkish democracy decline alongside setbacks in earlier political reforms, particularly freedom of expression. TTIPing Turkey would reengage it with the West.

The instability in the Middle East, as well as growing recognition in Turkey of the economic and security advantages that come with the West, have been gently pushing Turkey back toward Europe. The EU is reciprocating with efforts to revive the accession process. In addition, the recent apology by Israel to Turkey will help deepen cooperation with the United States. And the truce announced by the leader of the separatist PKK is opening the prospects of finding a political solution to the Kurdish problem in Turkey, which in turn should help improve the quality of democracy in the country.

While U.S.-EU negotiations on TTIP are going to be challenging, this should not be an excuse for excluding Turkey from the partnership. The EU must rise to the challenge of recognizing Turkey’s concerns. This year marks the fiftieth anniversary of relations between the EU and Turkey. But the EU has not shown any concern for the interests of its long-standing partner. The TTIP impact report prepared by the European Commission makes no reference to Turkey or how TTIP would impact on the customs union. At least a member of the European Parliament has asked the European Trade Commissioner to consider this question, which may be a step in the right direction.

The United States also should avoid to the temptation to reap the benefits of access to Turkish markets without opening its own market to Turkey. The benefits of involving Turkey in TTIP far outweigh the costs resulting from the additional burdens of the negotiation process. TTIP would create more jobs for Americans and Europeans, not just Turks.

Close economic integration between Turkey and its neighborhood means that a Turkey in TTIP would also benefit countries ranging from Armenia to Ukraine—and even countries like Iraq and Syria, once they achieve some stability. Turkey under TTIP would motivate other countries to join the Western economic order and support the values associated with it. Such an outcome would be win-win for the EU, the United States, Turkey, and a Western economic order under challenge from other parts of the world.

Editor's note: This article was originally published by The National Journal.

Authors

Kemal Kirişci

Publication: The National Interest

Image Source: © Murad Sezer / Reuters

Democracy, Human Rights and the Emerging Global Order

Ted Piccone — Wed, 10 Apr 2013 15:12:00 -0400

The Brookings Institution’s Managing Global Order project convened a two-day workshop to discuss emerging trends in international support for democracy and human rights and the increasingly complex drivers shaping foreign policies. Bringing together policy makers and experts from emerging and established democratic powers at Greentree, the workshop identified areas of convergence and divergence in foreign policy priorities, methods, and discourse, and extrapolated implications for the evolving global order.

On the first day, participants explored the concepts of democracy and human rights and their promotion within the context of competing national interests. On the second day, the focus shifted to international cooperation on issues of democracy and human rights, especially as seen through the lens of the Arab uprisings and the Responsibility to Protect (R2P), and the politics that guide the foreign policies of democracies. The discussions, which were held on the basis of the Chatham House rule of non-attribution to specific speakers, are summarized here.

The conversation was predicated on a working definition of democracy as a liberal, representative political system as articulated in various international instruments like the Warsaw Declaration of the Community of Democracies, UN General Assembly Resolution 56/96 of 2001, and the Inter-American Democratic Charter. While recognizing that it takes different forms in different contexts, democracy in this sense reflects such core principles as the separation of powers with checks and balances, civil and political rights, freedom of the press, universal suffrage in free and fair elections, and civilian control of the military. Although participants disagreed to what extent social and economic rights should be emphasized in the expression of democracy, they agreed that all human rights as defined in the Universal Declaration of Human Rights are interdependent and mutually reinforcing and deserve protection.

Global Governance

In an era when the gap between the demand for and the supply of global governance is growing, it is increasingly urgent that established and emerging democracies find common ground on norms and delivery of global public goods, especially on democracy and human rights issues. There is cause for optimism: Rising democracies like India, Brazil, South Africa, Indonesia, and Turkey are embracing democracy and human rights at home and to varying degrees promoting them in their neighborhoods. But they are not yet stepping up to address the gap on these and other issues in global governance internationally.

Simultaneously, the rules-based system under which international relations take place is in flux, providing an opportunity to reshape and redirect the global order. Emerging powers emphasize the importance of democratization both domestically, where they are grappling with their own internal processes of reform, and multilaterally, where they question whether actions of established powers are commensurate with their principles, argue for universal application of rules and norms, and insist on a greater voice at the decision-making table. They have the opportunity to shape the future of global governance as leaders and are proving themselves important players in global affairs, but this shift has been more marked at the level of regions and neighborhoods. The results of multipolarity in the global sphere have been more ambiguous and it remains to be seen whether the liberal world order persists or a new framework emerges with rising powers at the helm of a more elastic set of norms. While it appears certain that human rights will remain a durable legacy of the era of Western hegemony, the cause of enlarging democracy stands on less solid footing.

The Democracy Advantage and its Place in Defining National Interests

In the modern era, peace generally reigns amongst democracies. Democracies also perform better than non-democracies at economic development, and democracy, economic development, and regional integration work hand-in-hand to promote peace and stability. Non-democracies are more likely to be failed states spawning internal or external conflict. It would be expected, therefore, that democracies would identify the spread of democracy as in their national interests and would partner on certain issues, such as support for democratic transitions, human rights and rule of law. A state’s designation as a democracy or non-democracy, however, is not necessarily a good predictor of foreign policy alignment. While there is strong convergence on the fundamental principles of human rights, emerging and established democracies favor very different methodologies for addressing threats to such core values, resulting in divergence of policy, politicization and stalemate, as in the case of Syria.

There was consensus that democracy cannot be imposed by external actors, but rather must be pursued organically by a population. It is a path, not a destination. Similarly, countries formulate and express democracy differently based on their unique histories; there is no single model of democracy. Aspiring democratic countries seeking advice from other democracies are increasingly turning to states that have undertaken their own transitions more recently, and they, in turn, are responding positively if and when asked to assist. In fact, the “twinning” model of pairing newer democracies with transitioning states is being prototyped by the Community of Democracies through its project pairing Poland with Moldova, and Slovakia with Tunisia. The G8 has arranged similar pairings through the Deauville Partnership with Arab Countries in Transition, which links leaders in aspiring democracies with G8 partners to build institutional capacity, promote knowledge sharing, and strengthen accountability and good-governance practices. In addition, rising democracies like Indonesia and South Africa have been key players in establishing and utilizing multilateral fora like the Bali Democracy Forum and the African Peer Review mechanism to share experiences and best practices in this domain.

Although participants agreed that democracy must be demand driven, disagreement emerged regarding the universality of democracy promotion. Some felt strongly that countries on the path of democracy have a responsibility to assist those who seek the same path. Others noted the negative connotations associated with democracy promotion and its perceived application as a post-hoc, faux justification for military intervention aimed at regime change, as with U.S. involvement in Iraq. Some also pointed to its selective application, especially when energy security interests take precedence over influencing, punishing, or removing repressive regimes, as with U.S. passivity in Bahrain and Saudi Arabia.

Some in the global South interpret democracy promotion as a U.S. agenda rather than a universal aspiration and wish to construct a unique brand of support for democracy in contrast to the U.S. and E.U. model. Rising democracies seek their own identity (also referred to as strategic autonomy) in an effort to avoid being seen as tools of more established powers. In one respect, this attitude has prompted emerging powers to act timidly with regards to democracy promotion, hiding behind the fig leaves of sovereignty and non-intervention when asked by the international community to act outside their neighborhoods.

Nonetheless, such powers have actively promoted democracy in their regions through both bilateral and multilateral mechanisms. Indonesia, for example, was a key player in leveraging ASEAN to encourage Myanmar to undertake political change and in drafting the first ever ASEAN Declaration of Human Rights. However, emerging powers have been as complacent as established powers in indirectly suppressing democracy when other national interests take precedence, as with India’s less than decisive response to the political crisis in the Maldives, or Brazil’s uncritical support for Cuba. In response to the Arab Spring, rising democracies are for the first time being expected to grapple with the notion of democracy promotion beyond their own regions, an expectation many find difficult to fulfill. The prevalence of extremist ideologies and xenophobia, the increased threat of the tyranny of the majority, and the free and fair election of leaders the international community may dislike all posed significant red flags for emerging (and established) democracies and reinforced their reticence regarding democracy promotion. Other national interests like trade relations, energy dependence, migration and diaspora population concerns present roadblocks to greater international engagement on this issue.

The emergence of other domestic political and economic actors with their own interests and values plays an important role in shaping national interests, especially in emerging democratic powers. Some disagreement concerned which actors had the most influence over the definition of national interests. In Brazil, for example, the private sector may be notably more influential than other domestic players, which complicates a truly national definition of priorities. Parliament plays an uneven and unpredictable role in formulating foreign policy, although legislators in emerging powers have begun taking greater interest. For example, Brazilian congressmen and senators recently joined a coalition with NGOs to hold the foreign minister accountable on human rights issues. While recognizing the important role legislators can play in inserting human rights into foreign policy, some acknowledged that their contribution could also be a mixed blessing due to nationalist, religious or ethnic political motivations.

Much conversation also involved the balancing of interests that sometimes conflict with human rights, such as national security and the economy. Some argued that human rights and democracy support must be managed in a way that does not jeopardize other national interests or relations with key trading partners like China. In this respect, constant calibration between interests and values is vital. Rising democracies will continue to define their own pace of democratization at home and support for democracy and human rights abroad, leading many observers to predict a continued period of inertia and inaction in responding to or preventing democratic breakdowns or mass human rights violations. The international community is thus tasked to advance a mutually respectful collaborative approach that appeals to both emerging and established powers and that achieves results. To successfully reach such a compromise, it must identify approaches the global South feels comfortable employing and develop strategies to bring those tools to bear in new and challenging contexts.

The Arab Uprisings and the Responsibility to Protect

Although the Responsibility to Protect (R2P) is embraced as within democratic principles, its primary purpose is not democracy promotion. R2P’s mission is atrocity prevention, though it is difficult to operationalize the concept. The application of R2P in Libya through military intervention authorized by the UN Security Council and the subsequent failure to exercise it in Syria as of yet has revealed many challenges inherent in current understandings of R2P. It also provided an important venue for conversation between established and emerging powers about humanitarian intervention. It is clear that a fundamental shift has taken place regarding humanitarian intervention and that more and more states embrace the broad values expressed by R2P. For example, most of the 118 states that mentioned Syria at the UN General Assembly in 2012 expressed concern about the population, up from less than a third who invoked Kosovo and East Timor in 1999. In addition, the IBSA Dialogue Forum sent a delegation to Syria, as did Turkey, a new rallying of emerging powers to address threats to human rights both inside and outside their own neighborhoods. This level of attention and the unprecedented advocacy of a policy of intervention by rising powers can be attributed at least in part to the improved quality of democracy in the rising democracies.

With the support of emerging powers like South Africa, UN Security Council Resolution 1973 authorized the use of force in Libya, but elicited rancor from some parties when it resulted in the overthrow of Moammar Gaddafi. Suspicions were voiced that Resolution 1973 had acted as cover for regime change, and because it was couched in the language of R2P, states began questioning the concept. In response to this breakdown in consensus, Brazil proposed the Responsibility While Protecting (RWP) principle, which emphasized the sequencing of measures to ensure all options were exhausted before using force, and called for greater accountability and reporting to the Security Council. Participants disagreed as to whether RWP served as a useful basis for conversation between the North and South, or if it represented a counterproductive Brazilian political move that merely inflamed rhetoric. Some of the good will engendered by RWP has begun to disintegrate as the situation in Syria continues to fester with no coordinated international response.

Admittedly, Libya and Syria are very different countries, especially in terms of the roles they play in the strategic interests of key actors. Nevertheless, the application of R2P in Libya but not in Syria highlights the phenomenon of selectivity, a topic of debate throughout the workshop. Participants agreed that crisis situations should be examined on a case-by-case basis, but at the same time many reinforced the global responsibility to support all states that are unable to adequately prevent mass atrocities. Some suggested that selectivity is the principled application of R2P but called for transparency in decision making to better understand a state’s motivations for supporting or denouncing intervention as an option. Others argued that universalizing the concept to make responsibility an obligation at all times in all cases is a fundamental challenge that the international community should pursue. At the very least, discourse must recognize that all states engage in some form of selectivity in order to advance the conversation.

It was pointed out that international responses to the Arab uprisings have been uneven not only in atrocity prevention but also democracy support. Emerging powers hesitate to lend support to the application of R2P in Syria lest it be used as a mask for regime change, as some perceive to have been in the case in Libya. However, established and emerging powers alike have not exercised leadership in universally supporting calls for democracy in countries of the Middle East because of overarching security concerns like energy and relations with Israel. And although emerging and established powers share an interest in energy security, they still differ on methodologies; a country may have leverage in a situation short of intervening militarily which might result in strategies that are most cost effective in money and lives. For example, South Africa resisted intervening militarily in Zimbabwe in response to democracy and human rights crises, despite international calls to do so, but was able, in their view, to improve elections there through alternative means. Likewise, it refused to intervene militarily in Sudan, instead employing a triangulation strategy that led to secession. Similarly, Turkey initially prioritized dialogue and consultation with the Assad regime, relying on the relationship it had cultivated with Syria over the last ten years to exhaust all potential peaceful solutions. IBSA also sent a high-level diplomatic mission to Syria to try to negotiate a peaceful solution to the conflict and thereby ward off military intervention.

The Arab uprisings have fundamentally challenged the Western idea of the separation of church and state, and Arab democracy demands a redefinition of secularism that allows religious values, but not rules and regulations, to take root in society. Discussants will continue to have to confront this new reality as the conversation continues regarding democratization in the Arab world.

Current understandings of preventive diplomacy tools like R2P – especially how they relate to and affect emerging democracies – must be improved. The discussion prompted by the Brazilian proposal of RWP highlights the need for further conversation or clarification about R2P as a tool. There is still fear that R2P provides a blank check to pursue national interests rather than prevent atrocities. Therefore, a refocusing on R2P’s purpose and intentions is needed, and may reduce objections to its proper application. In addition, a multilateral coalition must be built and maintained to address mass atrocities such as in Syria. This requires ongoing messaging with all partners and the public to maintain support and communicate expectations and mission objectives.

Tools for International Cooperation on Democracy and Human Rights

Recent events show a clear incapacity of international mechanisms to effectively address major threats to democracy and human rights. While established democracies are quicker to pursue coercive tactics and emerging democracies strongly prefer dialogue and reconciliation, a variety of tools are available and being tested on the world stage. Indonesia seeks to make democracy and human rights foundational concerns at existing institutions like ASEAN, its new Commission on Human Rights (AICHR), and the G20. Indonesia’s leadership in the adoption of the ASEAN Declaration of Human Rights and the establishment of the Bali Democracy Forum underscore this commitment. The Community of Democracies creates issue-based working groups to involve government and civil society and maximizes technology through the LEND network, connecting key leaders in transitioning countries with those in transitioned countries.

Another key tool touted by many participants is reliance on regional bodies as antenna in noting potential problems and as early movers in response to crises. The AU and SADC both have provisions to suspend any country that experiences an unconstitutional interruption, ECOWAS recently suspended Mali’s membership in response to a coup, and UNASUR recently exercised a similar provision against Paraguay. These and other multilateral mechanisms are critical because they reflect regional ownership without the presence of Northern powers and because such a coalition is less likely than a single nation to create further problems or receive pushback from local actors.

Participants discussed in depth the merits of democracy-inclusive forums and democracy-exclusive forums for discussion of important transnational issues. For example, the Community of Democracies reformed its invitation and governing council selection process in 2010 to ensure leadership consists of staunchly committed democracies while expanding participation at ministerial meetings to include countries at incipient stages of democracy. The Bali Democracy Forum, however, invites a broader base of participants, including China and Vietnam, in an effort to establish a conversation with more parties. While it was agreed that both style of forums are necessary and beneficial, participants lacked consensus as to when democracies should and should not include others in policy conversations.

Most participants with a global South view asserted that for any country to retain credibility in international cooperation on human rights and democracy, a strong human rights record at home is a vital requisite. Otherwise, the rules-based system that governs behavior is weakened by the perception that great powers write the rules but are not necessarily committed to following them. In this respect, emerging powers emphasize the importance of addressing human rights challenges domestically. For example, Brazil recently established a truth commission to investigate human rights abuses under the military dictatorship and passed a freedom of information law to increase transparency. It has also engaged in international efforts to combat violence against women and encourage open government initiatives, key concerns within Brazil and essential to advancing its own democracy. No consensus was reached on the means by which accountability can be increased on the global level, although the need was clearly articulated. Emerging democratic powers are increasingly held to account by vibrant civil society organizations and media that feature voices from victims of violations and question government’s actions abroad. Decision makers have noted this democratization of foreign policy and it continues to shape their processes and actions.

Words of caution tend to outweigh prescriptive solutions in discussing tools for international cooperation. According to some participants, limiting discussions on transnational issues to an exclusive club of democracies is a false dichotomy that discourse must move past. Engaging with imperfect democracies (like Venezuela and Bolivia) is crucial to encourage their continued development on the path of democracy. The regional dimension of democracy and human rights support should also be strengthened so that neighbors hold each other accountable for advancing democratic practices. Trade and regional economic integration can also be considered as a potentially effective tool for promoting values. States should also leverage their private sectors, which engage in new and different ways with civil society when investigating potential investment opportunities abroad, to take advantage of new avenues for dialogue. In addition, they should encourage business leaders to prioritize their obligations to protect human rights and sustainable development. Finally, the international community must better coordinate its efforts to avoid overwhelming target populations, as has occurred with countries rushing to Tunisia’s aid in its transition. It must also ensure that such aid is voluntary and in no way coercive.

The Politics of Foreign Policy in Democracies: The Human Rights Dimension

In the last session, participants articulated the tactics that facilitate action at the global level and the factors preventing further progress, with suggestions for improvement. Agreements at the UN Human Rights Council and other similar international fora are often reached by isolating extremists and working effectively with the middle. Diplomats are also successful when they can effectively navigate their governments in capital to alter a country’s position on an issue. Therefore, personalities of the diplomats at the UN, the Human Rights Council, and other relevant bodies can play important roles in shaping the course of negotiations. Similarly, personal priorities of government leaders can influence how much importance is placed on human rights. U.S. Secretary of State Clinton has prioritized women’s human rights and LGBT human rights, but Dilma Rousseff, President of Brazil, is a technocrat who prioritizes economic growth and social protections. The foreign policies of the countries reflect these priorities.

Many factors, including the realpolitik interests of emerging powers, resource constraints, political dynamics, personalities and what is politically and procedurally possible at international bodies all combine to explain why more action is not taken on human rights issues at the global level. For example, to highlight the importance of human rights in foreign policy, one European expert shared that the human rights section of the foreign ministry receives the highest number of parliamentary questions on foreign policy, while about half of the daily statements from the ministry spokesperson pertain to human rights. However, budget constraints and the current state of the economy prevent more robust action at this time. Another participant from an established democracy shared that internal bureaucratic politics limited the policy options available to diplomats which slowed action at the Human Rights Council and limited that country’s opportunities to lead. Conversely, domestic politics forced India to change its vote at the Human Rights Council regarding a resolution calling on Sri Lanka to address human rights abuses. India had long resisted such resolutions, but thanks to overt pressure from a coalition partner, it became more active. This represents an unusual but important example of domestic politics prompting rather than impeding action on human rights at the international level.

Emerging democracies face major challenges in addressing their own human rights deficits at home. They largely lack a domestic constituency for a more human rights-oriented foreign policy, meaning the few NGOs advocating for these issues have a small pool of support on which to draw. As a result, economic growth and private interests are usually prioritized over accountability. In Brazil, much of civil society has not been actively engaged on these issues, and in Indonesia, the discussion has traditionally been dominated by think tanks. This has begun to shift and influence on foreign policy has begun to diversify, but in many of the emerging powers this change is still in the nascent phases. In some cases, emerging democracies still struggle to maintain a high-quality representative system. The process of decentralization in Indonesia has led to a growing oligarchy which threatens the protection of minority rights – especially religious minorities but also women. Turkey has experienced serious backsliding regarding freedom of the press while continuing to wrestle with its own minority rights challenges. Overall, civil society engagement on foreign policy in emerging democracies has been limited but is improving. Attention should be paid to framing the discussion on a case-by-case basis to bring these issues into the public consciousness in the relevant countries.

Despite these challenges, most participants agreed that civil society and NGOs have an enormous role to play in shaping foreign policy regarding human rights. When governments refuse to act on important issues, civil society can apply pressure to prompt action. For example, when South Africa hesitated to broach LGBT rights at the Human Rights Council, South African civil society held the government accountable by bringing public attention to the prioritization of human rights codified in the 1994 constitution. This shamed South Africa into leading on this issue. However, many participants asserted that civil society and NGOs must be more creative in approaching governments. While the foreign ministry is often the lead on foreign policy regarding human rights, many other ministries have equity in these crosscutting issues and shape (or block) the debate. Civil society and NGOs should approach other ministries – ministries concerned with the economy, education, and security, for example – to apply pressure and enact change. In addition, they can call upon leaders in the executive branch with a personal interest in democracy and human rights matters to apply pressure. For example, in Brazil, NGOs approached an attorney general who had previously worked in the human rights field to question the foreign ministry about an upcoming vote on North Korea. By invoking Article IV of the 1988 Brazilian Constitution, which codifies a commitment to human rights, the attorney general and NGOs were able to elicit a change in Brazil’s vote.

While these recommendations may help civil society and NGOs bolster their impact, they must be prepared for pushback from governments. While governments in the global North revert to funding constraints and domestic pressure as motivations for their action or inaction, governments in the global South might rely on arguments that South-South cooperation should be emphasized over naming and shaming tactics and that the system operates under a double standard. Civil society and NGOs should accept and support South-South cooperation, but not complacency. They must demand leadership from their governments to ensure the safeguarding of the global democracy and human rights order.

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Authors

Ted Piccone

Image Source: © Ho New / Reuters

Shanghai Blues, the European Union and John Kerry’s Turkey Visit

Kemal Kirişci — Wed, 27 Feb 2013 11:30:00 -0500

Secretary of State John Kerry is visiting Europe and Turkey at a time when EU-Turkish relations are at a stalemate and in desperate need of revival. U.S. efforts will be critical to breaking the stalemate at a time when Turkey out of frustration is actively looking for alternatives including the idea of joining the Shanghai Cooperation Organization (SCO). The U.S. could highlight the strategic value of Turkey to the West especially in economic terms and introduce the idea of including Turkey in an eventual Transatlantic Trade and Investment Partnership (TTIP). The current picture is in some contrast to Bill Clinton’s visit to Turkey in 1999, where the U.S. played a critical role in contributing to the political process that announced Turkey as a candidate country for EU membership later that year. Subsequently, the engagement of Turkey by the EU culminated in unimaginable political reforms but also economic growth and transformation in Turkey’s foreign policy. However, soon after actual accession negotiations for membership started in 2005, relations began to turn sour between the two sides. Technically, for Turkish accession to be completed, 33 chapters representing the EU acquis, the corpus of EU laws and policies, have to be negotiated and closed. Croatia, which started accession negotiations at the same time as Turkey, completed them in late 2011 and will become a fully-fledged member of the EU in July this year. In Turkey’s case, so far only 13 chapters have been opened while eight chapters were suspended in December 2006 by the European Council. Another nine chapters are being blocked largely by France and Cyprus but also by Germany and Austria. No new chapters from among the three left have been opened since 2010, leaving Turkey’s EU accession process in a complete state of suspension. The causes behind this state of affairs are numerous, ranging from a deadlock over the failure to unite the island of Cyprus under the Annan Plan in 2004, to outright objections in Austria, France and Germany to the very notion of Turkish membership on the grounds that “Turkey is not in Europe”.

This has provoked a deep sense of cynicism, mistrust and resentment on the Turkish side. In an opinion survey published last month by the Istanbul based Center for Economic and Foreign Policy Studies (EDAM), only 33 per cent of those surveyed thought Turkey should persist with membership in the next five years. It is not surprising that against such a background, an MP from the governing party, who is also a constitutional law professor, chose in protest to declare that the most recent European Commission Progress Report critical of Turkey’s democracy should be thrown in the trash during an October 2012 live TV debate program in full view of the whole country. Similarly, the Minister responsible for relations with the EU argued that since Turkey was now doing so much better economically than the EU, Turkey did not need the EU any more. However, he added, if the economically crippled EU wanted, they could apply to join Turkey as a member. More recently, the Turkish Prime Minister, complaining about the very long years that Turkey has been kept waiting in front of the gates of the EU, exploded and revealed he had asked the Russian president if he could help with Turkey’s admittance to the Shanghai Cooperation Organization and that he was ready to give up on EU membership. This Shanghai Blues state of mind is particularly understandable considering that September 2013 will mark the 50th anniversary of the signing of the Ankara Association Agreement between the then EEC and Turkey, which promised membership to Turkey in due course. As much as these reactions curried favor with the public at large, particularly the remarks of the prime minister, they were also received with considerable concern by many businessmen, columnists and experts in Turkey who questioned the wisdom both economically and politically of distancing Turkey from the EU.

What can the Secretary of State do? During his trip across Europe and Turkey, there are a number of arguments that Kerry could bring up to try to break the stalemate in EU-Turkish relations. The first one is the traditional line that the U.S. has used since the issue of Turkey’s EU membership was taken up by the Clinton administration back in the 1990s: Turkey’s strategic importance. This is an argument that many in Europe have traditionally felt uncomfortable with and have even resented the U.S. for bringing it up. Here Kerry would need to tread his line softly not to turn the Shanghai Blues into a big requiem, as a European diplomat recently noted. However, compared to the past the strategic argument has changed in two important ways that might well make it more palatable to European tastes. Firstly, the balance in world affairs has changed tremendously, and not always to the benefit of those who have advocated a liberal economic and political world order. A Turkey that drifts away from the EU and gets closer to the SCO would surely impact this balance, not to the advantage of the West. Secondly, since the 1990s Turkey has become an important economic player precisely at a time when the EU is caught in a deep recession. In 1999, when Turkey was recognized as an EU candidate, its GDP, at just below 250 billion USD, was the 9th largest among EU member countries after Belgium. By 2012, Turkey’s economy had more than tripled to 783 billion USD, surpassing Belgium, the Netherlands and Sweden to become the 6th largest economy in the EU. Excluding Poland, Turkey’s economy is now almost larger than all the new member countries’ economies combined. Re-engaging Turkey on the path of membership will undoubtedly benefit the Turkish economy but possibly for the first time in EU-Turkish relations, would also benefit the EU itself. There would also be visible benefits to the EU in terms of employment and expanded Turkish FDI, especially in Bulgaria, Greece and Romania, but also in terms of enabling EU companies to reach markets in Turkey’s neighborhood and beyond.

In this particular context, it is of paramount importance that Kerry involves Turkey in the discussions concerning the negotiation of an EU-U.S. free trade area which are likely to be high on his agenda. The U.S. is uniquely positioned to help, although seating Turkey as an additional actor at the negotiating table for TTIP would be unrealistic. The U.S., however, could convince the EU to at least recognize Turkey’s grievances concerning free trade agreements such as TTIP, which the EU signs without consulting Turkey. This is critical because the customs union with the EU requires Turkey to take on all the obligations associated with such agreements, without binding third parties to extend any trade privileges to Turkey. Excluding Turkey from TTIP would not only be a sure way to exacerbate the already poor relations between the EU and Turkey, but would risk further nudging Turkey closer to the SCO with all its negative strategic consequences. On the other hand, if Turkey is allowed to participate in TTIP, its economy will grow, which will in turn increase the amount it imports from the EU as well as the U.S. Furthermore, a Turkish economy that continues to grow would also be an economic engine for its surrounding neighborhood. In addition, the more Turkey’s liberal market grows, the greater the demands for the consolidation of democracy and the rule of law in Turkey would be. Engaging Turkey in TTIP would have a positive impact equal to the opening of all the suspended and blocked chapters. It would also significantly heal the deeply entrenched mistrust Turkey has towards the EU, and for that matter the U.S. as well.

Beyond the revised traditional U.S. strategic argument in support of reviving EU-Turkish relations, Kerry should also point out that the manner in which France and a number of EU member countries are unilaterally blocking the opening of negotiations on a number of chapters is undermining both the letter and spirit of pacta sund servanda, a principle central to western liberal values. At a time when much of the emerging world is increasingly facing a choice between those who advocate state capitalism and sovereign democracy on the one hand and the Western market economy and liberal democracy on the other, the EU’s reluctance to live up its own values and discriminate against Turkey on thinly veiled cultural grounds is likely to backfire on the EU. This is especially important in terms of the EU’s credibility with respect to the post-Arab Spring Middle East’s transformation towards adopting more liberal economic and political values.

Finally, while in Turkey, Kerry must remind the Turkish side of the very complex nature of the challenges which face Turkey and its neighborhood and also add that Turkey must avoid policies that play into the hands of “naysayers” in the EU to Turkish accession. Turkey is much more likely to continue to be an inspiring example for economic and political transformation in its neighborhood if it reengages the EU rather than drifts away from it. Kerry can also point out that sheer numbers and economic logic speak for themselves. The economies of the EU and the U.S. put together are at least three times bigger than the economies of SCO member countries. A more important point for Turkey to see is that a Middle East which has just experienced the Arab Spring in the name of greater freedom, prosperity and rule of law, is not going to be impressed by a Turkey that chooses to associate itself with an organization whose members disregard such values. With these arguments, Kerry may be pleasantly surprised to find that he is not alone in Turkey. The painful events of 2012 in Syria, the difficult and increasingly precarious transformation process in Egypt and Tunisia (not to mention Iraq and Afghanistan), has once more reminded many in Turkey that an EU struggling with a recession may still be able to provide a much more stable economic and political security than any other arrangement. There is also growing recognition that some of the challenges of democratic reform Turkey faces have intensified since the weakening of EU-Turkish relations. In fact, when a survey conducted by EDAM asked experts in Turkey if the country should persist with EU membership, 87 percent of the 202 respondents polled said “yes” it should. This may also explain why early in February, both the Turkish President, while hosting his Serbian counterpart, and the Prime Minister, while visiting the Czech Republic, felt the need to unequivocally state that relations with the SCO cannot been seen as an alternative to EU membership. Indeed, by subtly raising his voice to break the EU-Turkish stalemate, Kerry could help to clear the Shanghai Blues state of mind and revitalize a process from which the EU, the U.S., Turkey and Turkey’s neighborhood would benefit. This of course does not mean that Turkey cannot develop economic ties with SCO members.

Authors

Kemal Kirişci

Image Source: © POOL New / Reuters

The European-American Dream

Javier Solana — Tue, 26 Feb 2013 13:26:00 -0500

Today, three European countries are among the world’s seven largest economies. Ten years from now, only two will remain. By 2030, only Germany will still be on the list, and by 2050, none will remain. Indeed, by then, the United States will be the only representative of the West in the top seven.

What this means is that the European states are too small to compete separately in the world of the twenty-first century. It’s as simple as that. By 2030, according to the World Bank, there will be two billion more people, mainly Asians, in the middle class. The pressure on the planet’s resources, commodities, water, and food will be huge, making a global rebalancing practically inevitable. And in a world marked by interdependence and constant change, Europe will find that unity is strength.

Indeed, unless Europeans work toward integration, they may find themselves surpassed by emerging countries in terms of technological development, job creation, production costs, talent, and creativity.

The European Union is still the place where economic and social institutions assure a better quality of life. In this sense, the demand for a European voice in the world is clear – Brazil’s former president, Luiz Inácio Lula da Silva, spoke of the EU as a “singular international heritage” – because it guarantees the values that represent humanity at its best.

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Authors

Javier Solana

Publication: Project Syndicate

Obama's Pivot to Europe: Forget China. An EU trade deal would be the real game-changer.

William A. Galston — Wed, 20 Feb 2013 00:00:00 -0500

At a time when everyone in Washington wants to talk about making a “pivot” to Asia, both economically and politically, it would be tempting to dismiss President Obama's decision, announced in his State of the Union address, to pursue a United States-European Union free trade area. It would also be a big mistake. The fact is, the U.S. and the EU have it in their power to enact a potentially game-changing policy that could boost economic growth on both side of the Atlantic, help the transatlantic allies deal more effectively with a rising China, and fill the void left by the collapse of global trade talks.

The focus on China’s surge during the past decade has obscured the continuing strength of Europe and the United States, and their continuing importance for each other. In 2011, the transatlantic economy represented about half of world GDP and $5 trillion in total commercial sales. Taken together, the EU and US account for 25 percent of global exports and 32 percent of global imports. And despite their recent travails, transatlantic consumers retain enormous purchasing power. GDP per capita is about $50,000 in the US and $32,000 in the EU, compared to about $9,000 in China.

To be sure, as trade with Asia has surged, the share of global trade represented by flows across the Atlantic has declined. But the absolute amounts have not, and the numbers are huge. According to a study by Dan Hamilton and Joe Quinlan of Johns Hopkins’s Paul H. Nitze School of Advanced International Studies, the U.S. exports three times as many goods to the EU as to China, and the EU exports twice as much to the U.S. as to China. U.S.-EU merchandise trade totaled about $650 billion in 2012, up 68 percent from the beginning of the century. In addition, the US and EU are the world’s two leading services economies. In 2011, 38 percent of total U.S. service exports went to the EU, and 41 percent of its service imports came from Europe. Between 2001 and 2011, U.S. services exported to the EU more than doubled, from $102 billion to $225 billion, and despite the recent slowdown in Europe, US exports there continued to rise in 2012. .

Despite the surge in exports to China, 45 out of 50 U.S. states still export more to Europe than to China, typically by wide margins—eleven times as much for Florida, nine times as much for New Jersey, four times as much for Texas (the leading state exporter to the EU), and three times as much for Illinois. Even the famously westward-looking state of California exported twice as much to Europe as to China..

Moreover, the United States and Europe overwhelmingly favor one another as locations for foreign direct investment. Since 2000, the share of total FDI going from the U.S. to Europe has remained steady at 56 percent. European investment represents a remarkable 71 percent of total FDI in the United States. The growth of the Chinese economy has not fundamentally changed this calculus. Since the turn of the century, the U.S. has invested 14 times as much in the Netherlands as in China, and 11 times as much in the UK. .

Relatively small gains off this huge base could have a big impact. In recent years, trade talks have been divided between negotiations that are too big to succeed and agreements that are too small to matter. With the failure of the Doha round, the old post-war model—fully global trade treaties—has all but collapsed. Bilateral treaties with countries such as Panama, Columbia, and South Korea have proven to be achievable in recent years. But whatever economic boosts those deals provide are not large enough to produce noticeable gains in U.S. economic growth and jobs. The EU-US talks are obviously different. .

Although tariffs between the EU and the U.S. are comparatively low, a study by the European Centre for International Political Economy estimated the gains from a transatlantic zero-tariff agreement at between 0.99 and 1.33 percent of GDP for the U.S., and somewhat less for the EU. Another estimate by ECORYS Nederlands BV, which modeled the impact of a broader FTA agreement convering non-tariff barriers as well as tariffs, placed the increase in overall US exports at 5.7 percent. Encouragingly, the impact on job creation and real wages is projected to be positive for both skilled and unskilled workers. .

Of course, that leaves the question of whether an agreement is likely to emerge from the negotiations. From a U.S. domestic political standpoint, prospects for progress appear reasonably good. Because European labor, environmental, and regulatory standards are on a par (at least) with ours, the kinds of objections that have slowed the ratification of bilateral treaties with developing countries are much less relevant. At this point, the AFL-CIO seems willing to go along. And the fact that nearly all the states have substantial skin in the EU trade game suggests the potential for a broad coalition in Congress. .

Still, significant obstacles remain. Agreeing on an approach to regulation won’t be easy: Brussels and Washington approach this sphere with very different aims and norms. Because Europe’s government contracting is more open to foreign firms than is ours, procurement reform is likely to encounter U.S. opposition, especially among defense contractors. .

Agriculture will be especially challenging. Michael Froman, Obama’s advisor on international economic affairs, described it as the “elephant in the room that we can’t ignore.” Not only is Europe’s agriculture subsidy regime even more distortive than ours; the EU virtually bans genetically modified crops, which have become increasingly important in U.S. agriculture, and it doesn’t much like hormone-treated beef or chlorine-sterilized chicken either. In the hyper-polarized Washington atmosphere, there is agreement across party lines on one point: an EU-U.S. agreement that does not open up Europe to American farm products will be dead on arrival. .

In that sense, the greatest impediment to a deal may prove to be France. While Germany’s Chancellor Angela Merkel is gung-ho for a treaty, the French finance minister has been much cooler, describing his country as “open but vigilant.” France has more to lose from agricultural changes than does any other country, and it will resist intense pressure to relax the regime of cultural protectionism that irritates American producers of films and TV shows. On the other hand, France’s exports have fallen by 8 percent since 2008, 5 percentage points worse than Germany’s performance during that period, the economy is stuck in neutral (GDP declined by 0.3 percent between the third and fourth quarters of 2012), and French unemployment has risen by nearly a percentage point, to 10.3 percent, since 2011. If Europe’s other major economic powers can agree to put growth first, Francois Hollande may decide that he cannot afford to stand in the way of an agreement. .

But first, Obama will need to show that his commitment to a deal is more than just a matter of rhetoric. While Europe’s negotiating team is in place and ready to get started, the American side is much less settled. It’s hard to see how such detailed and wide-ranging talks could be run out of the White House; Obama will have to select a strong, credible figure as the next United States trade representative, do what it takes to get his nominee confirmed in a timely fashion, and then make sure the USTR has the staff and resources needed to conduct the negotiations. .

A policy that commands support across international borders as well as domestic party divisions and promotes long-term growth without spending scarce public dollars sounds too good to be true. And maybe that’s what it will turn out to be. Still, thanks to changing circumstances and quietly effective preparatory work, the chances of agreement appear brighter than in decades. Obama’s endorsement of U.S.-EU negotiations reportedly was a last-minute addition to the State of the Union. It might just turn out to be the speech’s most significant sentence..

Authors

William A. Galston

Publication: The New Republic

Image Source: © Kevin Lamarque / Reuters

Europe's Foreign Policy: Emerging from the Crisis

Tue, 12 Feb 2013 11:00:00 -0500

Event Information

February 12, 2013
11:00 AM - 12:30 PM EST

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

The European Council on Foreign Relations (ECFR) and the Brookings Institution recently released the 2013 edition of the European Foreign Policy Scorecard, an annual assessment of Europe's performance in dealing with the rest of the world, in particular China, Russia, the U.S. and the Middle East. The systematic report, conducted by a team of more than 35 researchers, has been described by Foreign Affairs as "a pioneering experiment in foreign policy analysis." In spite of the euro crisis, this edition of the Scorecard shows timid signs of stabilization and even resilience in Europe's foreign policy over the last year. From greater assertiveness vis-à-vis Russia on energy issues to the slow but steady development of the European External Action Service, Europe fared better externally than internally. Massive challenges remain, however, before Europe reaches the role it aspires to, and its internal divisions—including a possible exit by the United Kingdom—put these results in question for the future.

On February 12, the Center on the United States and Europe (CUSE) at Brookings and the Heinrich Boell Foundation hosted a discussion of the results of the latest Scorecard and Europe's place in the world. Panelists included Kristen Silverberg, former U.S. ambassador to the European Union; Mark Leonard, director of the European Council on Foreign Relations; and Ana Palacio, former foreign minister of Spain. Senior Fellow Justin Vaïsse, CUSE director of research, presented the findings. Senior Fellow Fiona Hill, director of CUSE, provided introductory remarks and moderated the discussion.

Re-Betting on Turkey

Kemal Kirişci — Fri, 08 Feb 2013 00:00:00 -0500

During his second term, President Obama has the opportunity to re-invest in the U.S.-Turkish relationship, focusing on a long-time U.S. ally. Kemal Kirişci wrote this memorandum to President Obama as part of Big Bets and Black Swans: A Presidential Briefing Book.

Why is Turkey an important cornerstone in establishing the liberal global order?
Can Turkey set an example and help spread democratic values to neighboring countries?
How can the Transatlantic Free Trade Agreement (TAFTA) boost the U.S.-Turkish relationship?

Download Memorandum (pdf) | Download the Presidential Briefing Book (pdf)

TO: President Obama

FROM: Kemal Kirişci

Turkey is a country that has been a long time ally of the United States with a major stake in the liberal world order. During your first term, you rightly recognized the nation as a Big Bet--paying your first official visit in Europe to Turkey and becoming only the second U.S. president, after Bill Clinton, to address the Turkish Parliament. Turkey was offered a model partnership with the U.S., and great hopes were invested in the relationship. However, reality evolved somewhat differently and a number of Black Swans intervened. The 2010 Turkish vote at the United Nations Security Council against sanctions on Iran accompanied with deteriorating relations with Israel as well as the EU and persistent anti-Americanism among the Turkish public have all led to fears that Turkey is “shifting axis” and being “lost”. Yet, this is only part of the picture.

Your Big Bet on Turkey fostered the development of a close rapport with Turkish Prime Minister Tayyip Erdogan, and you made the most of this connection by frequently consulting with one another on world and regional affairs. Turkey cooperated closely with the U.S. on Afghanistan as well as in Iraq. Both countries adopted similar approaches towards the Arab Spring even if Erdogan expressed some virulent frustration with the U.S. for not supporting the opposition against the Assad regime in Syria more forcefully and decisively. There were also modest but important gains made in bi-lateral trade that had constantly been falling in relative terms since the end of the Cold War. This was coupled with field oriented pragmatic cooperation to assist reform in the Arab and Muslim world.

Recommendation:

Clearly, much more could have been achieved and highlighting a more ambitious agenda for U.S.-Turkish relations for your administration is critical. Turkey itself is still a Big Bet if the global liberal order in Turkey’s neighborhood and Turkey’s own membership to that order is going to be ensured. That would also help keep the multitude of Black Swans from getting in the way of realizing the grander Big Bets or for that matter Turkey itself becoming a Black Swan.

The time to double-down on Turkey is especially ripe, and a delay could be costly. As Turkish President Abdullah Gul reaffirmed in the January-February issue of Foreign Affairs, “from a values point of view we are with the West”. This opportunity coincides with a time when there are increasing signals from Turkey to reinvest into its relations with the West.

Background:

It is often forgotten that Turkey was a participant in the making of the global liberal order at the end of the Second World War, albeit of course a very junior one. Yet, it was this experience that set Turkey on the unusually long path of becoming a multi-party democracy with a liberal market economy. Indeed Turkey’s transformation was a slow and painfully one with lots of ups and downs. All U.S. administrations from Harry Truman onwards played a role in this process but the most critical one was probably the Clinton administrations. They played a particularly central role in nudging Turkish democracy and economy a little closer to European standards and helped Turkey first to sign a customs union with the EU in 1995 and then eventually become a candidate country for EU membership in 1999 followed by the beginning of accession negotiations. These policies were Big Bets that handsomely paid off. Both President George W. Bush in 2004 like his successor in 2009 recognized Turkey’s economic and democratic success and hoped that Turkey could set an example for its neighborhood, particularly for the Arab and Muslim worlds.

Actually, some of their hopes can be said to be materializing. Turkey has both economically and politically become deeply integrated with its neighborhood. Turkey’s Gross Domestic Product in 2011 was greater than all of its surrounding eleven neighbors economies put together excluding Iran and Russia. This economy is increasingly becoming an engine of growth for these neighboring countries even if modestly. Turkey’s trade with these countries increased from 10 percent of Turkey’s overall foreign trade in 1991 to 22 percent in 2011 while its trade with the EU and the U.S. has dropped from 50 and 9 percent to 41 and 5 percent respectively. An ever growing number of Turkish companies are investing in most of these countries while Turkey is fast becoming an immigration country and a source of remittances for labor migrants of the region. This kind of economic engagement is having a transformative impact and helping to integrate this neighborhood into the global markets. Turkish government and civil society are also modestly involved in projects and programs assisting political transition and reform. However, Turkey’s both economic and democracy gains remain fragile. Turkey runs an important current accounts deficit and needs to raise its savings levels as well as research and development budgets. The Arab Spring has adversely affected its trade and economic relations with the Middle East. There are also growing concerns about an erosion of the democratic gains achieved in the recent past particularly with respect to freedom of expression and rule of law. The Kurdish question still constitutes a major challenge to long term domestic stability. The constitutional reform process appears to be stuck too.

Conclusion:

At a time when Turkey’s neighborhood is filled with vital challenges, it is of paramount importance that your second administration recognizes the importance of securing Turkey’s commitment to the global liberal order and its potential bearing on the America’s capacity to realize regional foreign policy objectives. There are many ways in which this could be achieved, but the most effective one may well arise from associating Turkey with negotiating a Transatlantic Free Trade Area (TAFTA). This is critical because the free trade agreements that the EU signs with third parties have long been a major source of resentment and grievances for Turkey. This is because the customs union requires that Turkey take on all the obligations associated with such agreements without binding third parties to extend any trade privileges to Turkey. So far the EU has not been very responsive to Turkish calls to rectify this situation.

The U.S. is uniquely positioned to help. Seating Turkey at the negotiating table for TAFTA would be unrealistic. However, the U.S. could convince the EU to at least involve Turkey in a consultation process and ensure that as Turkey opens up its markets to the U.S. Turkish businesses can also enjoy better access to U.S. markets. The logic behind why this would be an effective Big Bet is quite straight forward. The more Turkey can participate in TAFTA, the more its economy would grow. The more it grows, the more it can import U.S. as well as EU goods and services. Furthermore, the more Turkey’s liberal market grows, the greater the demands for the consolidation of democracy and the rule of law in Turkey. In turn, with an economy equaling the 6^th largest in the EU and 15^th largest in the world, Turkey’s economic force would benefit the neighborhood as well. In this way not only would Turkey be tied to the liberal global order, but it would also become an even more effective conduit for disseminating liberal economic and democratic values to a neighborhood still struggling to transition from the legacy of command economies and authoritarian political systems.

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Authors

Kemal Kirişci

Image Source: © Umit Bektas / Reuters

European Foreign Policy Scorecard 2013

Justin Vaïsse, Susi Dennison and Hans Kundnani — Fri, 08 Feb 2013 00:00:00 -0500

The European Foreign Policy Scorecard is an in-depth annual assessment of the performance of EU member states and EU institutions in meeting foreign policy challenges and promoting European interests, ideas and ideals abroad. Published by the European Council of Foreign Relations and led by Brookings Senior Fellow Justin Vaisse and ECFR fellows Susi Dennison and Hans Kundnani, the Scorecard is the result of the collective work of more than 35 researchers. It is divided in six chapters: relations with China, Russia, the US, Wider Europe, Middle East/North Africa, and performance in multilateral issues and crisis management. Within these geographic and functional areas, European performance is evaluated on 79 specific foreign policy issues. The authors ask three basic questions to assign a grade. Two are about policies (Were Europeans united around clear objectives, and did they devote adequate resources to meeting these objectives?) and one is about results (Did the outcome conform to the objectives?).

The 2013 edition of the Scorecard examines the implications of issues such as:
• The continuing euro crisis and efforts to contain it;
• The sustained leadership of the UK in many policy fields, despite emergence of strong eurosceptic sentiments in Britain and the distinct possibility of a "Brexit";
• The less dynamic Franco-German motor;
• And the increasing efforts by smaller member states to contribute to the common efforts.

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Introduction

In the introduction to the first edition of the Scorecard, we wrote that in 2010 Europe had been distracted by the euro crisis. In the introduction to the second edition, we wrote that in 2011 Europe had been diminished by the crisis. By the end of 2012, the crisis had become less acute but still not been solved – far from it. In fact, for the third year in a row, European leaders continued to devote more time to worrying about Europe’s financial health than its geopolitical role. Europe’s image and soft power continued to fade around the world (though this is difficult to quantify), while its resources for defence and international affairs kept eroding. But European foreign policy did not unravel in 2012. In fact, the EU managed to preserve the essence of its acquis diplomatique as the EEAS, which did not even exist two years earlier, continued to develop and consolidate its role.

The Scorecard’s granular assessment of European foreign-policy performance in 2012 shows timid signs of stabilisation and resilience. Across the range of issues that the Scorecard assesses, Europeans generally performed better than the previous year (see Figure 1). Europe improved its score in relation to Russia (from C+ to B-) and to China (from C to C+), and continued to perform solidly in other areas (United States (B-) and Multilateral issues (B), and adequately in the Wider Europe (C+) and the Middle East and North Africa (C+). Thus, although the EU had no high-profile successes comparable to the military intervention in Libya in 2011, it put in a respectable performance in its external relations – especially given the deep crisis with which it continued to struggle. In particular, it seemed to perform better when it continued to implement policies for which the foundations had been laid in previous years.

Figure 1: European Performance on the six issues in 2012

ISSUE IN 2012	SCORE	GRADE	IN 2011	IN 2010
Relations with China	9.7	C+	8.5 C	9 C+
Relations with Russia	11	B-	10 C+	9.5 C+
Relations with the US	11.7	B-	11 B-	11 B-
Relations with Wider Europe	10.3	C+	9.5 C+	9.5 C+
Relations with the Middle East and North Africa	10.3	C+	10 C+	-
Multilateral issues and crisis management	12.6	B	13 B	14/11 B+ (Multilateral issues) /B- (crisis management)

Clearly, whether the EU can turn a positive year against the odds into an upward trend in foreign-policy performance will depend to a large extent on whether it can overcome the crisis and restore growth and therefore increase its economic power. In that sense, European leaders are right to focus on solving the crisis even at the expense of a focus on foreign-policy issues. But it will also depend on whether Europeans can overcome their internal divisions and improve coordination and coherence in foreign policy. In particular, it will depend on whether Europe can turn the EEAS into an effective diplomatic service as envisaged in the Lisbon Treaty that is able to convert the EU’s huge resources into power.

The eurozone, the EU, and the neighbourhood

In 2012, the eurozone was stabilised. In June, following an inconclusive election a month earlier, the Greek people elected Antonis Samaras as prime minister. Mario Draghi showed bold leadership after he succeeded Jean-Claude Trichet as ECB president at the end of 2011. The new Long-Term Refinancing Operation (LTRO) programme he launched as soon as he took over – in effect, an injection of liquidity to European banks – went a long way to reassuring markets about their solvency. The Outright Monetary Transactions (OMT) programme he initiated in the summer – a promise by the ECB to step in and buy unlimited quantities of certain bonds on the secondary market – turned the ECB into the kind of lender of last resort for which many in Europe and beyond had been calling. In late June, European leaders also agreed on the creation of a banking union, which they confirmed in December – a further positive step in guaranteeing European banks. Thus the crisis became less acute in the second half of 2012 than it was in 2011.

However, while positive, these steps taken in 2012 do not yet go far enough to solve the crisis. As the crisis became less acute, European leaders – including German Chancellor Angela Merkel – seemed to become less determined to create a genuine economic and political union and even watered down proposals for a banking union. Moreover, it is not clear that even the limited steps that the eurozone has taken are sustainable. In particular, while OMT was seen as a breakthrough by many in Europe and elsewhere in the world, it was seen as a defeat in Germany. Since the June summit, there has been a backlash, expressed most powerfully by Bundesbank President Jens Weidmann, who even implicitly compared Draghi to the devil in a remarkable speech in Frankfurt in September. Germany may now have reached the limits of debt mutualisation under its existing constitution. In order to move further towards economic and political union, as the eurozone must, a referendum may be needed in Germany as well as in other member states. The steps taken in 2012 to stabilise the euro crisis may therefore have produced a temporary respite, with further turmoil to come, rather than a lasting solution to the crisis.

Furthermore, in the process of stabilising the eurozone in 2012, the EU itself now faces difficult questions. A three-tier Europe consisting of the inner core of the eurozone, pre-ins such as Poland, and outs such as the UK is emerging from the crisis. This raises huge institutional questions for the EU, which may take years and require treaty change to resolve, though European leaders are understandably reluctant to create the further uncertainty that would involve. In addition, a British withdrawal from the EU looks increasingly possible. If 2011 was the year of the “German question” – that is, the debate about Germany’s role in and commitment to the EU – 2012 was the year that the “British question” emerged. Whether or not the UK decides to leave the EU – a step that we think would be disastrous for both Britain itself and for the EU as a whole – the emergence of a three-tier Europe will have huge consequences for the single market and for European foreign policy.

Meanwhile, as Europe struggled with these complex problems, its neighbourhood also remained challenging in 2012. Though an Israeli military strike against Iran did not materialise ahead of the US presidential election in November, there remains the possibility of such a strike in 2013. The conflict in Syria became the focal point of a broader regional struggle for influence along a sectarian Shia–Sunni faultline. In November, as tensions with Gaza increased, Israel launched Operation Pillar of Defence. Meanwhile, the transitions in post-revolutionary North Africa remained fragile and renewed protests late in the year in Egypt forced President Mohammed Morsi to annul a decree granting himself new powers ahead of a constitutional vote. Although enlargement continued as Croatia was set to become the twenty-eighth member of the EU and Serbia became a candidate, the environment in Europe’s eastern neighbourhood was difficult, especially in the Western Balkans.

A surprisingly good year

However, against this background of a challenging internal and external environment, Europe performed surprisingly well in its foreign policy in 2012. Russia was a case in point. Relations with Moscow deteriorated, but Europe’s unity and the coherence of its policies towards Russia improved. The EU did not depart from its cooperative attitude, having been instrumental in getting Russia into the WTO, which it formally joined in August. But it was more attentive to protecting its interests and norms, and more assertive – threatening, for example, to use the WTO dispute-settlement system when Moscow announced new protectionist measures in late 2012. The European Commission launched an antitrust probe against Gazprom, while continuing to orchestrate efforts at enhancing gas interconnections so as to decrease Europe’s energy dependency on Moscow. Europeans did not shy away from criticising human-rights abuses during the crackdown on demonstrations that accompanied the election season and the re-election of Vladimir Putin as president in March.

There were also signs of modest improvement in relations with China, even though unity among member states continued to be in short supply, thereby undermining European leverage. Germany, which accounts for nearly half of European exports to China, seemed at times to speak for Europe in China. But even if Berlin does not want to replace the EU, its voice is naturally louder than others, and Beijing has become adept at cultivating it. In some respects, Germany was a leader on China in 2012, but Merkel also undermined the European Commission when it launched an anti-dumping case against Chinese solar-panel manufacturers. Still, Europeans in general became more assertive overall in their trade disputes with Beijing and in their criticism of human-rights violations. The panicked approach of 2011, when Europe was both hoping for and fearing massive Chinese investment in the continent to relieve the euro crisis, was replaced by a more restrained and balanced relationship.

Europeans also slightly improved their performance on the United States, especially in their cooperation with Washington on regional and global issues, which helped them further their own goals while having the US respect their red lines – for example, in sanctions on Iran. Finally, the only issue on which Europe performed worse in 2012 than in 2011 was multilateral issues and crisis management (the overall score out of 20 went down from 13 to 12.5, or a B). New CSDP missions were launched – something that had not happened in the last two years – and European policy towards Somalia grew more coherent. But the EU was rebuffed by Russia and China in the UNSC with two vetoes on Syria and by the United States on the arms-trade treaty; they failed to make an impact on the UN vote on Palestine; and the G20 was still dominated by the euro crisis as in 2011.

In the eastern neighbourhood, European performance was mixed. Europeans continued to struggle in the Western Balkans in 2012 (B, the same grade as in 2011), with political instability and economic difficulties from Bosnia and Herzegovina to Serbia and Montenegro, although the EEAS managed to make good progress on relations between Serbia and Kosovo. The EU also got mixed results in the Eastern Partnership countries (C+). Its results were good in Moldova, and to some extent in Georgia, and it had a firm, coherent approach towards Belarus, but Europeans struggled to pursue a united approach to Azerbaijan and Ukraine. Lastly, Europeans continued to struggle on Turkey (C), with a muddled situation on bilateral relations and frustrating developments on foreign policy.

Europe’s southern neighbourhood was dominated by the conflict in Syria. Europeans could not break the frustrating diplomatic gridlock or prevent the bloody tragedy that worsened as the year went on. Europe’s overall performance in the region remained fairly constant (the overall score was 10.1 last year and 10.3 this year, or a C+). Member states were generally united in their initiatives towards Iran and North Africa but, beset by the economic crisis, they couldn’t move beyond limited programmatic support to the transitions and struggled to make a positive political impact with governments and to construct collective relations with newly politically engaged parts of society in the region. They were still split on the Israeli–Palestinian issue, though to a lesser degree than in previous years, as demonstrated by the November UNGA vote on upgrading Palestinian membership.

We gave Europe four A grades – the same number as last year – for its performance on specific components of European foreign policy (see Figure 2). Overall, it appears that, where the EU made progress in 2012 – in particular, in regions such as China and Russia, on enlargement in its neighbourhood, and on the E3+3 process with Iran – it was where a policy had been developed in previous years and member states worked together with the EU institutions to implement it. In these cases, there was less need for innovation than in some other cases such as Syria, but a strong demand for member-state unity behind a pre-agreed strategy. On these types of areas, the euro crisis did not seem to undermine European performance.

Figure 2: Most successful policies in 2012

MOST SUCCESSFUL POLICIES FOR 2012	UNITY	RESOURCES	OUTCOME	TOTAL	GRADE
37 - Relations with the US on Iran and weapons proliferation	4	5	8	17	A-
35 - Relations with the US on the Syrian conflict	4	4	8	16	A-
41 – Kosovo	4	4	8	16	A-
48 - Relations with the Eastern Neighbourhood on trade	4	5	7	16	A-
12 – Relations with China on climate change	4	5	6	15	B+
27 – Relations with the US on trade and investment	4	4	7	15	B+
55 – Tunisia	4	4	7	15	B+
69 – European policy on human rights at the UN	4	4	7	15	B+
74– Drought in the Sahel	4	4	7	15	B+
78 – Somalia	4	4	7	15	B+
13 – Trade liberalisation with Russia	5	4	5	14	B+
33 - Relations with the US on the Arab transitions	4	4	6	14	B+
39 - Overall progress of enlargement in the Western Balkans	4	4	6	14	B+
60 – Lebanon	4	3	7	14	B+
70 - European policy on the ICC and international tribunals	4	3	7	14	B+

Figure 3: Least successful policies in 2012

LEAST SUCCESFUL POLICIES FOR 2012	UNITY	RESOURCES	OUTCOME	TOTAL	GRADE
54 - Security sector reform	2	1	2	5	D+
11 – Relations with China on reforming global governance	2	2	2	6	C-
7 – Relations with China on the Dalai Lama and Tibet	2	3	2	7	C-
26– Reciprocity on visa procedures with the US	2	2	3	7	C-
34 – Relations with the US on the Middle East Peace Process	2	3	2	7	C-
43 – Bilateral relations with Turkey	3	2	2	7	C-
44 - Rule of law, democracy, and human rights in Turkey	3	2	2	7	C-
45 - Relations with Turkey on the Cyprus question	3	2	2	7	C-
58 – Algeria and Morocco	2	2	3	7	C-
66 – UN reform	2	2	3	7	C-

Figure 4: European performance on cross-cutting themes

CROSS-CUTTING THEMES* IN 2012	SCORE OUT OF 20	GRADE	2011	2010
Trade liberalisation, standards and norms – "low politics"	14	B+	12.5 B	13 B
Iran and proliferation	13	B	13 B	16 A-
Energy policy	12.5	B	12 B-	10 C+
Relations with Asia	12.5	B	N/A	N/A
Climate change	12	B	14 B+	12 B-
Balkans	12	B-	13 B	12 B-
Afghanistan	12	B-	10 C+	10 C+
Issues of war and peace – "high politics"	12	B-	11 B-	11 B-
Arab transitions	11	B-	12 B-	N/A
Visa policy	10	C+	10 C+	12 B-
Euro crisis	10	C+	8.5 C	N/A
Israel/Palestine	10	C+	8.5 C	9 C+
Protracted conflicts	9.5	C+	8 C	10 C+
Human rights	9	C+	9 C+	8 C
Relations with Turkey	8	C	N/A	N/A

An analysis of European performance on “cross-cutting themes” (see Figure 4) illustrates the type of issues on which Europeans did well in 2012 and those on which they did less well. It appears that Europeans tended to do well in those components of foreign policy in which the EEAS or the European Commission plays a strong coordinating role, for example on trade issues, in negotiations with Iran, and in the Balkans. However, this pattern should not be overstated: Europeans also performed relatively well in 2012 on components relating to the euro crisis and Afghanistan – issues on which member states are to a large extent in the lead.

The big three and “coalitions of the willing”

In the last edition of the Scorecard, we identified a trend towards the “renationalisation” of European foreign policy in 2011. Perhaps the most striking finding in our categorisation of member states in 2012 was the drop in the leadership by the big three: Germany, France, and the UK. In 2011, Germany led Europe in 19 components of European foreign policy, France in 18, and the UK in 17. In 2012, Germany led only 12 times, and France and the UK 11 times (see Figure 5). In 2011, Sweden also emerged as one of the most frequent leaders in European foreign policy, particularly on multilateral issues and crisis management. Although in 2012 it led on 10 components of European foreign policy compared to 11 in 2011, this time that made it almost as much of a leader as the big three. Like France and Germany, Sweden was categorised as a leader in at least one aspect of each of the chapters of the Scorecard, which indicates that it is engaged across the spectrum of European foreign policy and not simply in regions of specific interest. The Netherlands also punched above its weight.

Figure 5: “Leaders” and “slackers” among EU member states

TOP 'LEADERS'	TOP 'SLACKERS'
Germany (on 12 components)	Greece (on 5 components)
France (11)	Latvia (5)
United Kingdom (11)	Romania (5)
Sweden (10)	Spain (5)
Netherlands (8)	Lithuania (4)
Poland (5)	Portugal (4)
Czech Republic (4)	Cyprus (3)
Denmark (4)	Slovenia (3)
Finland (4)	Austria (2)
Ireland (4)	Bulgaria (2)
Austria (3)	Czech Republic (2)
Belgium (3)	Estonia (2)
Estonia (3)	France (2)
Italy (3)	Germany (2)
Bulgaria (2)	Italy (2)
Hungary (2)	Malta (2)
Luxembourg (2)	Belgium (1)
Spain (2)	Denmark (1)
Latvia (1)	Hungary (1)
Lithuania (1)	Luxembourg (1)
Romania (1)	Netherlands (1)
Slovakia (1)	Poland (1)
Cyprus (0)	Slovakia (1)
Greece (0)	UK (1)
Malta (0)	Finland (0)
Portugal (0)	Ireland (0)
Slovenia (0)	Sweden (0)

In 2012, the UK’s relationship with the EU made headlines as Eurosceptic sentiment within the UK grew and a withdrawal from the EU became a real possibility. Prime Minister David Cameron came under increasing pressure from the UK Independence Party (UKIP) and, at the beginning of 2013, promised an “in/out” referendum on British membership of the EU by 2018. However, the Scorecard shows that, even as it was marginalised within the EU, the UK continued to play a constructive role in European foreign policy – often by example-setting. In particular, the UK played a leading role in the UN context – for example, in the debates on a post-Millennium Development Goals framework for development aid – and in smaller coalitions such as the E3+3 process on Iran. Even where it did not lead, it was broadly supportive of the development of EU foreign policymaking, and was a “slacker” only once in 2012 (on an EU–China investment treaty to enable reciprocity in access to public procurement).

Of the big three member states, France underwent the most obvious change in 2012 after François Hollande took over from Nicolas Sarkozy as president. In some areas, such as a reframing of the relationship with “Françafrique” in political terms, there was a conscious effort to mark a departure from the previous administration’s policy. In particular, the Hollande government was much more active in the second half of the year in efforts to gather international support for an African-led intervention in northern Mali and, as the French military intervention in Mali in January 2013 showed, this will clearly continue to be a priority as the year progresses. On other issues, such as the early indication of support for the Palestinian bid for observer status at the UNGA in November, the new government followed a similar line to its predecessor. France and the UK have both played leading roles in developing contacts with and supporting the Syrian opposition, although this does not appear to have been closely coordinated either with each other or with other EU partners.

Within Europe, the political affinity between Merkel and Sarkozy was replaced by a more difficult Hollande–Merkel relationship. Together with Italian Prime Minister Mario Monti and Spanish Prime Minister Mariano Rajoy, Hollande pushed for greater emphasis on growth in solutions to tackle the euro crisis. As a result, Merkel sometimes found herself in a minority in the eurozone in 2012 – something that had not happened in 2011. Germany was also criticised on foreign policy – in particular in relation to the emerging “special relationship” between China and Germany. However, Germany also frequently led Europe in foreign policy – in particular through a new assertive approach towards Russia. Overall, Germany was again the most prolific leader in European foreign policy. It led on 12 components, often by taking initiative, and was also often an active supporter – that is, a cheerleader rather than a bystander.

However, what is clear from the Scorecard’s findings is that the Franco-German axis did not operate as a central driver for foreign-policy initiatives in 2012. With the exceptions of the E3+3 process on Iran and efforts to persuade Russia to take a tougher line on Syria at the UN (both of which were part of more formal processes), none of the significant smaller “coalitions of the willing” in European foreign policy this year included both Germany and France as leaders. Where Germany and France did work together as leaders, usually as part of much broader coalitions, this was often as sponsors, for example on tackling the food crisis and drought in the Sahel and on financial support to the MENA region, rather than as initiative takers.

However, there was also a drop in the number of “slackers”, which suggests that member states were not quite as disruptive of coherent collective action as they were in 2011. The top “slackers” were Greece (which we identified as a “slacker” two times less than in 2011), Latvia (once more than in 2011), and Romania and Spain (the same number of times as in 2011). Cyprus (which held the rotating presidency in the second half of 2011), Italy, and Poland were “slackers” four times less than last year. (In the case of Italy, this suggests that Monti and his foreign minister, Giulio Terzi, were successful in re-launching Italy’s international engagement.) This trend towards greater cooperation is particularly clear on Russia, where we found no “slackers” (and in fact very few leaders apart from Germany). In other words, member states did not invest heavily but were supportive of the overall EU effort.

The challenge for the EEAS: technocratic Europe and power Europe

Whether the trend towards the renationalisation of European foreign policy that began with the euro crisis will continue in the years ahead will depend in part on whether the overall machinery of European foreign policy becomes more efficient – in other words, to what extent Europeans are able to apply the various instruments that they have at their disposal. In particular, it was hoped that the Lisbon Treaty and the creation of the EEAS would help Europe become more effective in bringing together in a coherent way the economic, diplomatic, and military resources of the member states on classical foreign-policy issues and the external competences of the European Commission on issues such as trade and aid. Reconciling these two Europes that interact with the world – the “technocratic Europe” and the “power Europe” – is the main challenge for the EEAS. The official review of its development that will be carried out in 2013 will offer an opportunity to test its record in this regard.

As the Scorecard illustrates, the EEAS plays very different roles in different policy areas. It interacts with national diplomacies in various ways, from full responsibility to shared competence or sometimes marginalisation – usually high-level UN diplomacy or military crises such as Libya in 2011 or Syria in 2012. But the EEAS can also support the big member states, for example by directly negotiating with Iranians on the nuclear issue. It can help deliver strong European policies, for example by helping to convince reluctant member states to diversify their energy supplies in preparation for sanctions against Iran or by minimising disagreement in order to avoid paralysis, as in the Kosovo–Serbia negotiations (five EU member states do not recognise Kosovo). It can powerfully represent Europe’s collective decisions, as it did with the opening of an office in Burma in 2012 – a prelude to the opening of a full-fledged EU delegation in 2013.

In other cases, the EEAS is able to be more assertive in exercising EU leverage, for example in visa policy towards Russia and the Western Balkans. It can also take initiative independently of, but coordinated with, national diplomacies, as it has done in developing policy towards and organising financial support for the transition states in North Africa and coordinating it with the United States. But for all the progress on this front, European foreign policy still functions most effectively when there are engines – often the EU3 or “coalitions of the willing” including other member states such as Italy, the Netherlands, Spain, Sweden, and Poland. The role the EEAS plays is also different in different parts of the world: in Washington, the EU delegation finds itself working with more powerful and often much larger embassies from all 27 member states; in countries where the EU gives out large amounts of aid, the EU delegation is often de facto the most important Western diplomatic representation.

Thus assessing the performance of the EEAS is a complex task. The Scorecard suggests that, after a difficult first two years marked by high expectations, the euro crisis, and the Arab Awakening, the EEAS began to function better in 2012, although it is far from having reached its full potential. It is undoubtedly still preoccupied by organisational problems, Indeed, one of the main objectives that High Representative Catherine Ashton has given herself is to establish a full-fledged and functioning diplomatic corps during the course of her five-year term in office. But the EEAS is structurally slowed down by the fundamental imperative of coordination between the 27 member states, which imposes a heavy constraint on its agility (even when it succeeds). Whether in Brussels or in the major EU delegations, the EEAS is all about coordination, while modern diplomacy in the digital age requires ever-greater responsiveness and velocity.

Within these constraints, the diplomatic culture of the EEAS seems gradually to be changing for the better. Initially, it was mostly staffed by EU civil servants working for the European Commission, with a culture of implementing programmes and managing only certain issues such as trade and the environment. However, the substantial infusion of diplomats from member states has brought a culture of power relations, emergency, and crisis management – in short, a diplomatic culture. As a result, relations with member states, including between EU delegations and embassies across the world, have improved markedly. A positive change in attitudes towards the EEAS in the large machineries of the biggest member states is also taking place as diplomats realise they will have to serve in it at some point in their careers.

The Scorecard suggests that the lack of a consensus among member states does not necessarily prevent the EEAS from playing a useful role on a given issue, even if it means that it must play a different and reduced role than it can when there is consensus. But the danger is that the “technocratic Europe”, largely led by the European Commission, will be increasingly cut off from the “power Europe” of member states. In the Middle East and North Africa, EU task forces were created to help bridge this gap. Unfortunately, a lack of clarity across the EU about the objectives of this policy tool meant that, while they were successful as investment conferences and in developing lines of communication with broader sections of society than classic government-to-government relations allowed, they did not succeed as an EU initiative to support political reform in countries such as Egypt, Jordan, and Tunisia.

As the EEAS develops and feels more confident that it has the backing of the member states’ diplomatic services, it may begin to innovate more and develop effective mechanisms, diplomatic practices, and policy itself. There were some examples of this in 2012, such as the joint visits by the Bulgarian, Polish, and Swedish foreign ministers to Lebanon and Iraq, and the inclusion of an EEAS representative in the Danish foreign ministry’s team for a visit by a senior Chinese delegation. Spanish diplomats were also housed by the EU delegation in Syria and Yemen after the Spanish embassies were closed and the EEAS represented Bulgarian citizens sentenced to death in Malaysia in October. However, many member states are still expanding their bilateral representation and continue to take the EU presidency very seriously. While the EEAS became a much more significant actor in 2012, member states are a long way from investing in it to the extent that it is able to realise the full potential range of roles that it could play and from reconciling “technocratic Europe” and “power Europe”.

Internal and external challenges

The near horizon is marked by serious challenges – any one of which could undermine the modest recovery in European foreign-policy performance in 2012. There are already indications from key strategic partners that they are beginning to see the euro crisis as the “new normal” – in other words, that they are planning for a future in which European power continues to decrease. Europe’s lack of a collective defence strategy, and its declining investment in its defence capacity, is also a serious obstacle to continuing global influence as a security actor. This makes it even more important that the EEAS is able to bring together CSDP with wider foreign-policy efforts. These matters are daunting enough with the EU’s current structure. But the impact of a British withdrawal from the EU on these and numerous other questions would be potentially huge.

Europe will also have to deal with these challenges at a time when the United States is increasingly becoming what Michael Mandelbaum has called a “frugal superpower” and is “pivoting” towards Asia. In January 2012, President Barack Obama outlined a new defence strategy based on the idea of a “leaner” military and a shift of focus towards Asia. In the future, as this strategic rebalancing becomes a reality, the US presence in Europe’s eastern neighbourhood may become more intermittent and low-cost. As it supplies its own energy needs, it may also have less of an automatic interest in the southern neighbourhood and aim instead to “lead from behind” in the Middle East. Although the US will not leave Europe altogether – in particular, Iran and Syria may continue to pull the US back in 2013 – it is likely to work with others as well as Europeans as part of what Secretary of State Hillary Clinton has called a “multi-partner” strategy.

This long-term shift in US foreign policy will further increase the pressure on Europe to deal with its own neighbourhood. Although the EU has become more effective towards Russia this year, tensions have, if anything, grown and may continue to do so in 2013. Insecurity in the Sahel, which was already a growing concern in 2012, has in the first month of 2013 led one EU member state to go to war in a region not far off the EU’s doorstep. Europeans are likely to be dealing with the fallout of the attempted takeover of Mali by Islamist rebel groups this time next year and feeling the consequences for years to come. Despite the euro crisis, the EU foreign policymaking machine has continued to function in 2012 and indeed has been moderately successful. But getting by for a second year is unlikely to be enough to deal with the challenges that 2013 looks set to present.

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Authors

Justin Vaïsse
Susi Dennison
Hans Kundnani

Publication: The Brookings Institution and the European Council on Foreign Relations

Dealing With the Real Putin

Fiona Hill and Clifford G. Gaddy — Mon, 04 Feb 2013 00:00:00 -0500

The Obama administration has decided it’s time to “reset the reset” with Russia. The reset was one of the administration’s first foreign policy initiatives in 2009 and certainly reduced bilateral tensions for a period. But President Obama now faces Vladimir Putin as Russia’s president instead of Dmitri Medvedev, and the entire premise of U.S.-Russia relations will have to be reviewed.

After 12 years at the top of Russian politics, Putin should be a known quantity. But policy makers and pundits are constantly diverted by the images that proliferate inside and outside Russia — from the action man tranquilizing tigers and flying with cranes, to the cruel anti-American autocrat who exploits orphans to undermine U.S. human rights legislation.

For the Obama administration to chart a new course in relations with Russia, it needs to be clear about who Vladimir Putin is and what he wants.

Putin is a man fixated on the survival of the Russian state, not just his own survival. In his first two presidential terms he worked to restore and consolidate the strength and independence of the Russian state. He did so primarily by channeling windfall revenues from the oil boom to pay off the colossal debts accumulated by his predecessors, Mikhail Gorbachev and Boris Yeltsin. He then proceeded to build up Russia’s financial and material reserves.

Putin now believes it is time to concentrate on strengthening Russia internally. In his annual “Message to the Federal Assembly” (the Russian equivalent of a State of the Union Message) in December 2012, Putin barely mentioned the outside world. The international system, he suggested, is fraught with risk for Russia, not opportunity. Russians, Putin commanded, need to turn inward. They should look to patriotism, not Westernism; to solidarity, not individualism; to spirituality, not consumerism and moral decay. He touted Russia’s historic roots and traditional values as the basis for its future trajectory.

Putin’s priority for 2013 is to reduce Russia’s exposure and vulnerability to external shocks. He is not interested in foreign policy adventures, especially not a confrontation with the United States. Putin firmly opposes U.S. policy toward Syria and the threat of force against Iran. But his opposition stems neither from anti-Americanism nor a desire to back the Iranian mullahs or Syria’s Bashar al-Assad in their struggles with the West. It is rooted in his obsession with stability. Helping Tehran secure a nuclear weapon and keeping Assad in Damascus are not Putin’s goals. But an Israeli or U.S. attack on Iran’s nuclear sites, and NATO or the United Nations intervening in Syria to forcibly remove Assad, would increase global volatility.

Putin wants Russia to be left alone, unencumbered by liabilities and obligations. He wants Russia to hunker down in its Eurasian neighborhood and not embark on further integration with an embattled West. Putin has never seen the West as a model for Russia. Now, he is not even interested in joining it as a partner. The euro zone crisis has convinced him there is no need for Russia to pursue a “common European home” (an idea he picked up from Gorbachev and Yeltsin early in his presidency).

Although he championed Russia’s entry into the World Trade Organization, Putin saw this as a long-denied right, as well as a rite of passage into the “big boys club.” In his annual address, Putin promised he would ensure there is a “demand” for Russia in the world, both for the Russian economy and for a Russian role in geopolitics. Putin’s goal is to make sure the ailing West knows it needs Russia and its vast territory and resources more than Russia needs the West, even if that is an overreach.

Where does this leave the reset? The reality is this: There are no big deals to be had with Putin. Outside the traditional U.S.-Russian bilateral realm of arms control, there is no great opportunity for the Obama administration in Russia. The only quid pro quo Putin would likely strike with the United States is one no administration could (or would) contemplate — where Moscow agrees not to make life too difficult for Washington, as long as the U.S. ignores Russian domestic developments and human rights abuses.

On Iran and Syria, Putin will calibrate his moves to reduce Moscow’s exposure and increase its leverage. Meanwhile, Putin’s perceptions of U.S. meddling in Russian politics will remain the sore point in the relationship. When he considers the Russian state insulted or challenged in any way on this issue, Putin will be quick to respond.

For Putin very little is off-limits in getting his message across, as the recent ban on U.S. adoptions makes clear. Even when the myths are dispelled, the real Vladimir Putin is difficult to deal with. Putin is a man who knows what he wants. Only once the administration is clear about what that is can it begin to figure out its own message and limits in dealing with Putin’s Russia.

Authors

Publication: The New York Times

Image Source: © POOL New / Reuters

Cameron’s Speech Raises More Questions Than Answers

Thomas Wright — Thu, 24 Jan 2013 15:00:00 -0500

British Prime Minister David Cameron’s speech on the future of Europe promised a referendum on Britain’s membership of the European Union but it left more questions than answers.

Cameron says the referendum will take place after a renegotiation of Britain’s terms of membership and that he will lead the yes campaign. But, this leaves a rather gaping loophole. If the renegotiation fails to deliver a satisfactory result, will he hold a referendum anyway and campaign for an exit? Such a promise was missing from the speech. If he does not intend to hold a referendum if renegotiation fails, then the rest of Europe is heavily incentivized to do nothing. After all, refusing to renegotiate means no referendum whereas renegotiating means a vote with a chance of British exit. In the coming months this will become increasingly apparent and Cameron will be under pressure to commit to leading an exit campaign if the renegotiation fails. Promising to lead an Exit Campaign if his demands are not met will significantly up the ante.
British leverage in the renegotiation comes from the prospect of exit. The uncertainty gives Britain bargaining power. Therefore, the Cameron government has an incentive to make exit a credible threat and to deliberately increase uncertainty. He will have to develop real and substantive plans for a British withdrawal. He may also have to mobilize public opinion against the status quo. If he avoids these steps, how does he propose to gain leverage in the negotiations? How will investors react to a strategy designed to unleash Euroskepticism and can the genie be put back in the bottle after a messy compromise?
Cameron’s speech ensures that Britain’s efforts will be dedicated to repatriating powers rather than shaping the next steps of European integration. Britain has traditionally been a powerful voice in favor of markets, competitiveness, and a strong alliance with the United States. How will Britain’s absence from the debate on further integration affect the direction Europe takes? The repercussions could be felt on everything from a Tobin Tax to the arms embargo on China. A related question pertains to Britain’s legitimate interest in protecting itself from the risk that Eurozone integration will damage the single market. It remains to be seen if this interest will be advanced or damaged by his referendum promise.
Cameron intends to fight the next election on his referendum promise. Will Labour take him up on his offer or, if Cameron’s position proves popular, will its leader Ed Milliband move closer to the Conservatives and promise a referendum of his own? Press reports over the past 24 hours suggest that Labour is divided and has not yet made up its mind. If Labour is backed into a corner and promises a referendum of its own, the conservatives are highly likely to end up on the exit campaign, thus exponentially increasing the risk of Britain leaving the European Union.
How will the United States react? In recent weeks, the Assistant Secretary of State for Europe, Philip Gordon has made clear that the Obama administration favors Britain remaining in the European Union. Will the Obama administration go a step further and show that a British exit would damage the special relationship? Will it put some pressure on Germany and France to meet the British halfway? Finally, the British referendum may occur after President Obama leaves office. Republicans have traditionally been much more skeptical of the European Union. Some Republicans, like John Bolton, have openly rooted for the collapse of the Eurozone. If a Republican succeeds Obama, will he or she seek to give Britain a lifeline outside of the European Union, thereby increasing the likelihood of an exit?

David Cameron’s much heralded speech was somewhat half-baked. It raises new questions and it is not clear Cameron has the answers. He will come under pressure to clarify his position. Others also find themselves in the spotlight. The answers provided in coming months could dramatically escalate the standoff that now threatens to define European politics for the next four years.

Authors

Thomas Wright

Image Source: © Pascal Lauener / Reuters

Over Time, Obama Has Come to Appreciate Europe

Fiona Hill — Fri, 18 Jan 2013 00:00:00 -0500

Editor's note: In a wide-ranging interview with Europolitics, Fiona Hill assesses the developments in the European-American relationship during President Obama’s first term and looks forward to the changes that may come in his second term.

Europolitics: Have Europeans’ high expectations of Obama when first elected in 2008 been met?

Fiona Hill: The biggest expectation about him was that he was going to go back to multilateralism and working through the United Nations, as opposed to the ‘coalitions of the willing’ or the ‘you’re either with us or against’ mantra of his predecessor, George W Bush. He did do quite a good job at repairing alliances on the symbolic level, but there wasn’t a lot of real substance in Obama’s multilateralism and that’s where people have been disappointed.

Europolitics: What has been their biggest disappointment?

Hill: Firstly, the Middle East peace process. There was an expectation that Obama would step up to the plate and do something differently. But his strategy for bringing the two sides to the negotiating table didn’t work. Several things happened to prevent that, which were not the fault of the Obama administration, such as the blow-up of Israeli-Turkish relations and the Arab spring. Obviously, Obama’s personal relationship with [Israeli Prime Minister Benjamin] Netanyahu has been flawed. The second thing has been climate change. When he came to office, Obama was acknowledging that climate change was a problem. But the expectations that there would be major legislation in the US were thrown out the window early on because he decided instead to champion health care legislation.

Europolitics: Where has he been most successful in repairing relations with the EU?

Hill: At the end of the Bush administration the relationship was not that bad. Between the first and second Bush administrations we had moved away from this divisive talk about old and new Europe and Bush was paying a lot more attention to the transatlantic relationship. There was a lot of criticism at first of the Obama administration that it was paying less attention to Europe. Since then, the administration – in particular Hillary Clinton – has paid a lot of attention through the frequency of her trips, her embrace of Catherine Ashton and the very good relationships she has established with other leaders. One area where there has been change has been hitting the reset button in relations with Russia. Europeans had had a sense of discomfort at the way US-Russian relations had deteriorated [under Bush]. While there was concern among East Europeans, especially Poles, that the reset button policy was against them, Obama has managed to dispel those concerns.

Europolitics: What can we expect from the second Obama presidency?

Hill: More of the same. His nominations for State and Defence, [John] Kerry and [Chuck] Hagel, are confirmed transatlanticists and are likely to continue the same approach that Hillary Clinton had. In some respects, they are even more pro-European. For example, Hagel has been chair of the Atlantic Council. As for Kerry, there were all those jokes about him speaking French when he was a presidential candidate, but actually that’s a very good asset for an international diplomat. But it will still be Obama who will set the tone.

Europolitics: What is the single biggest thing Obama could do to promote the relationship?

Hill: Prioritising the transatlantic free trade agreement. Kerry could be the type of person who could carry this forward because a lot of it will have to do with relations on Capitol Hill and he is steeped in that background. Vice-President Biden could help too. Given that lack of progress on other issues – climate and the Middle East – if Obama could deliver on the free trade agreement, it could have a concrete impact at a time of economic crisis. Trade is the one area where we really still do have a good relationship.

Europolitics: Where does the danger lie for drift or deterioration?

Hill: If the US starts to get bogged down in Asia by getting embroiled in territorial disputes going on in the South China Sea. If the US’ new focus on Asia becomes less visionary and more mundane, it could become as mired in Asia as it currently is in the Middle East. Then there would be a real danger of deterioration because the relationship with Europe needs cultivating, needs a new focus and expression. The old alliance of NATO is not sufficient to describe where the US and EU are together.

Europolitics: Does Obama really care about the EU?

Hill: When he came into office, ‘fixing Europe’ was not his agenda. He was paying more attention to the rise of Asia. But over time, he has come to appreciate Europe. For example, he really appreciates the EU’s role in Iran where the stepped-up European sanctions have arguably been more effective than American ones. It wasn’t all that long ago that there was a great deal of fear in the US at the prospect of a United States of Europe. That seems so far-fetched now. The US views the EU as an asset and is concerned about the prospect of the EU’s disappearance. We see this in the recent statement by [Assistant Secretary of State] Phil Gordon that the US wants to see the UK stay within Europe. So Obama does care now about what happens to the European Union.

Authors

Fiona Hill

Publication: Europolitics

Big Bets and Black Swans: Foreign Policy Challenges for President Obama’s Second Term

Thu, 17 Jan 2013 00:00:00 -0500

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Eurozoned Out

Justin Vaïsse and Thomas Wright — Thu, 17 Jan 2013 00:00:00 -0500

The euro crisis has been ongoing for three years and the European Union is beginning to get its act together to build a sustainable monetary union. But risk of failure still remains and in turn could be devastating to the U.S. economy. Justin Vaïsse and Thomas Wright wrote this memorandum to President Obama as part of Big Bets and Black Swans: A Presidential Briefing Book.

How can the United States shape EU fiscal policies without being a member?
Why should the United States encourage the U.K. to remain a member of the EU?

Download Memorandum (pdf) | Download the Presidential Briefing Book (pdf)

TO: President Obama

FROM: Justin Vaïsse and Thomas Wright

The Eurocrisis has been ongoing for three years and the European Union is beginning to get its act together to build a sustainable monetary union. But, the euro is not out of the woods yet. Real dangers remain. The underlying causes of the crisis have not been addressed. The politics are pulling in a different direction from that required for a solution. Populations on the periphery are suffering from austerity measures and see no end in sight. Those in the so-called core (Germany, Northern Europe) feel exploited. The Eurozone is building new structures but they may not be sufficient to protect it against a future major crisis.

As long as an optimal solution remains elusive, the risks of failure will remain. If failure occurs, it could be devastating to the U.S. economy, surpassing the crisis of 2008. Some estimates project that the collapse of the euro would cause an immediate 10 percent loss of GDP for the global economy, with unemployment in the European Union reaching 20 percent and spiraling inflation on the EU’s periphery. The United States and European Union are the two largest economies in the world and they are inextricably linked with each other through trade, foreign direct investment (FDI), and financial markets. For instance, 50 percent of U.S. FDI abroad goes to the European Union while 62 percent of FDI into the United States originates in the European Union. The rest of the world would also be adversely affected, particularly the Middle East and China, the world’s second largest national economy, both of which require robust growth to maintain domestic political stability.

A secondary but related danger is that the construction of a new Eurozone could lead to the fracturing of the European Union through a British withdrawal. The United Kingdom is extremely concerned that further integration in the Eurozone will damage its interests as an E.U. member. Public opinion also favors a renegotiation of the United Kingdom’s terms of membership even though such a renegotiation would be strewn with difficulty and would likely fail. In this scenario, the Eurocrisis would remove America’s most reliable European ally from the EU and lead to a weakening of Europe’s capacity to act as a coherent unit in world affairs.

Recommendation:

The United States can neither compel the Eurozone to adopt particular structures nor do much to protect the Eurozone from a political backlash in austerity-stricken countries. However, the United States can perform an important service in two respects. You should task your administration with analyzing the risks associated with the EU’s plans for financial and fiscal integration and share these assessments in confidence with the EU’s leaders. If necessary, senior administration officials could go public to shape opinion in the financial markets and in European states. In the 1990s, Europeans built a flawed monetary union. Eurozone 2.0 may have new structural weaknesses that will be exposed by the next crisis, whenever that occurs. These weaknesses will undoubtedly be the result of political constraints in the member states. The United States has an important role in raising awareness of these risks so Eurozone 2.0 is as effective and robust as possible.

Second, you should take a position opposing the withdrawal of the United Kingdom from the European Union. The United States can work with the United Kingdom and other members of the European Union to head off this possibility. Most importantly, the United States should emphasize the importance it places on having the United Kingdom inside the European Union, acting as a transatlantic bridge and strengthening Europe’s voice in world affairs. You should avoid any statements or policies that lead Britons to believe that an exit would result in a closer relationship with the United States that would offset any loss in influence. You should also consult closely with your European counterparts to ensure that the appropriate steps are taken to encourage the United Kingdom to remain a full member of the European Union.

If the black swan of a collapse of the Eurozone does occur, the risk of contagion in the global economy will be extremely high and it will be necessary to return to full crisis mode, as experienced in the fall of 2008, to do what is necessary to protect the financial system. This will be even more difficult than after the fall of Lehman Brothers because the collapse of the euro would create a shock of much greater scale and because the U.S. Congress may be reluctant to help foreign governments, even though it would be necessary to protect the U.S. financial system. Nevertheless, it will be your only viable option.

Background:

To understand the risks of a Eurozone collapse in the next four years, it is necessary to distinguish between the first phase of the crisis that concluded in 2012 and the second phase that has just begun. In the first phase, European governments had to decide whether to keep the euro intact or not. The key question amid market turbulence was whether the Eurozone would construct the mechanisms necessary to keep the periphery four (P4) — Greece, Ireland, Portugal, and Spain — inside the single currency. These mechanisms were expensive and politically difficult. But, this is exactly what the Eurozone decided to do. With bailout mechanisms like the European Stability Mechanism and the Stability Treaty and bold action by the European Central Bank under the leadership of Mario Draghi, the Eurozone mitigated the most destabilizing elements of the crisis. This happened for a simple reason—every leader calculated that the risks of a fragmentation of the Eurozone massively outweighed any benefits.

The second phase of the crisis is different. The question of whether EU leaders want the Euro to remain intact has been settled. But, they now face two crucial challenges. First is the danger that political and economic accidents related to the current crisis will threaten the survival of the Euro. It will take some time to build a new Eurozone. During this period, much of the European Union will be in recession or experience stagnation. Member states will disagree strongly about the future course of action. Elections are likely to be fought on these issues and they could bring to power radical parties with rejectionist policies. The result may be a political crisis that leads to an inadvertent fracturing of the Eurozone followed by contagion and a disorderly collapse.

The issue of UK membership is a related component of this first challenge. Although it is not in the Eurozone, the United Kingdom feels threatened by further European integration. Both of the U.K.’s leading parties, the Conservatives and Labour, appear on track to offer the British people an inor- out referendum, following an attempt to renegotiate the UK’s terms of membership.

The second challenge is that the Eurozone’s new structures may be insufficient to cope with a future crisis. European integration is the art of what is politically possible. But economies are not rewarded for trying hard. Their institutions need to function effectively under conditions of extreme duress. Monetary union without fiscal union was justified as the best that could be done given the political constraints and we know where that led. New structures bring new risk of design flaws, particularly in banking union, but also with respect to the perceived legitimacy of European institutions. A lack of democracy and accountability could lead to a political crisis down the road, especially if parts of the Eurozone are stagnant.

Conclusion:

A healthy global economy is a core interest of the United States. A stable and prosperous European economy is integral to that interest. For three years now, you have lived with the possibility that the collapse of the Eurozone could wreak havoc with the U.S. economy. You have also had to live with the fact that the United States has few options and no silver bullets. Quiet diplomacy and support has been your hallmark and it has been reasonably effective. You should not radically depart from this path but you should ensure it evolves to cope with the second phase of the crisis as outlined above. You should direct your administration to identify the potential vulnerabilities of reform proposals and to work with European governments, and others if necessary (public diplomacy aimed at the markets, multilateral efforts through the G-20), to prevent new failures of design. You should also use American influence to ensure that the United Kingdom remains within the European Union. These actions will reduce the probability of a black swan in Europe.

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Free Trade Game Changer

Mireya Solís and Justin Vaïsse — Thu, 17 Jan 2013 00:00:00 -0500

Over the next four years, President Obama should advocate forcefully for ambitious free trade agreements with our partners in Asia and Europe. Mireya Solís and Justin Vaïsse wrote this memorandum to President Obama as part of Big Bets and Black Swans: A Presidential Briefing Book.

Can President Obama overcome erosion of support for free trade agreements in Congress and among the American public?
How will China react to the Trans-Pacific Partnership?
What are the benefits of a new free trade agreement with the European Union?

Download Memorandum (pdf) | Download the Presidential Briefing Book (pdf)

TO: President Obama

FROM: Mireya Solís and Justin Vaïsse

Pursuing and signing free trade agreements (FTAs) with both the Asia-Pacific region and Europe during your second administration will yield considerable economic and political benefits. World trade is expected to have stalled at a mere 2.5 percent growth in 2012, down from 13.8 percent in 2010. Protectionism is on the rise everywhere, especially in the form of non-tariff barriers. The Doha Round is essentially dead. At the same time, the United States and Europe need to stimulate their economies without resorting to fiscal spending. Furthermore, the United States needs to establish a broader and deeper economic presence in Asia, the world’s most dynamic economic region. Achieving both a Trans-Pacific Partnership (TPP) and a Trans-Atlantic Free Trade Agreement (TAFTA) is the most realistic way to reclaim U.S. economic leadership and make progress towards your promised goal of doubling U.S. exports. Moreover, signing both the TPP and TAFTA would have deep strategic implications. Both deals would reaffirm liberal norms and a leading U.S. role in setting the global rules of the road. The TPP would help define the standard for economic integration in Asia, without necessarily antagonizing China. TAFTA would give American and European businesses an edge in setting industrial standards for tomorrow’s global economy.

Recommendation:

• Pursue both TPP and TAFTA simultaneously. Conclude negotiations in close succession to gain momentum in international bargaining, reap the benefits of emulation (through setting rules and standards of global applicability), and increase your leverage domestically;

• Start the process to secure Trade Promotion Authority (TPA) early in 2013 by reaching out to Congressional leaders in unison with an aggressive public awareness campaign on the benefits of free trade, led by the White House, which seeks to allay some of the concerns about opening U.S. markets.

• Set October 2013, the time of the next APEC leaders’ meeting in Bali, Indonesia, for the conclusion of negotiations. This will provide a focal point for leaders of TPP countries to bridge differences at the negotiating table;

• Launch TAFTA talks as early as possible in 2013 after the U.S.-EU high-level working group makes it recommendations, with the objective of concluding negotiations before the next U.S. midterm elections in 2014.

Background:

Free trade was not a priority in your first administration. It is, however, an indispensable component of a long-term growth strategy to rebound from the 2008-2012 recession. It is also a necessary part of the response to the significant redistribution of power in the international system. The pivot to Asia and to the emerging world in general cannot be based on political and military initiatives alone. It needs to be backed by rejuvenated American leadership in trade and investment.

While the time has come to launch new initiatives in these spheres, the erosion of support for FTAs in Congress and among the public is likely to hamper this effort. Contrast, for example, the fact that Congress continuously renewed fast-track authority between 1975 and 1994, but in the post-NAFTA years it was only extended during the 2002-2007 period. Public skepticism of the value of FTAs is also on the rise, according to polls. It will fall on you, Mr. President, to advocate forcefully for these ambitious agreements.

TPP

The TPP is the most ambitious trade initiative currently under negotiation. In essence, it promises to do what no other FTA has done before: to liberalize without exemptions and to tackle systematically vexing non-tariff barriers by generating trade disciplines in areas such as intellectual property, regulatory convergence, and state-owned enterprises. With the TPP, your administration can shape an Asia-Pacific economic integration platform with the potential to generate substantial economic and political payoffs. According to reliable estimates, a TPP 13 (one that includes Japan and South Korea) would generate annual income gains for the United States in the neighborhood of $78 billion dollars. Furthermore, an expansive TPP can also achieve the important political benefit of disseminating highquality trade and investment rules through a ratcheting-up effect. Other trade initiatives will then feel compelled to raise their standards to remain competitive (e.g. ASEAN’s Regional Economic Partnership) and more countries will seek TPP membership, perhaps even China in the future. Indeed, you should explain to your Chinese counterparts that this is by no means the economic equivalent of a containment strategy; it is rather an enticement strategy that recognizes the benefits of a strong Chinese economy in an interdependent world, and aims to codify best practices on international trade and investment rules that could help China deepen its market reforms.

TAFTA

TAFTA is equally ambitious. If achieved, it would offer the United States and the European Union a new opportunity to define the industrial standards and norms of tomorrow’s economy, especially vis-à-vis the Asian giants, rather than competing against one another. EU leaders seem very eager to move forward. American labor and environmental activists will have fewer objections to a deal with Europe than with other regions, given the generally higher standards prevalent there. Tariffs between the two sides of the Atlantic are already low (around 2-3 percent on average), but the scale of the potential payoff makes an investment in this initiative worthwhile. The volume of trade and investment between the United States and Europe is huge – much larger than that with China. The benefits of an agreement for both sides would be substantial if common standards and norms can be adopted and regulations harmonized in crucial sectors like pharmaceuticals, electric cars and cloud computing. Sweden’s National Board of Trade predicts that trade of goods and services between the United States and the European Union could jump 20 percent, or more than $200 billion annually, and the American Chamber of Commerce estimates that growth on both sides of the Atlantic could be boosted by 1.5 percent annually.

There are potential obstacles and pitfalls:

• Negotiation failure: TPP nations have not yet overcome differences in important areas of the market access negotiations (e.g. sugar, dairy, textiles) and in the rule codification effort (e.g. intellectual property and the state-investor dispute settlement). In the case of TAFTA, major problems will arise on the EU side concerning agricultural and food standards(e.g. Europe’s ban on genetically-modified organisms or the use of artificial growth hormones in beef production). On the U.S. side, there might be problems involving access to public markets by EU firms because American states have legislative authority on this issue and often have “buy American” rules.

• Ratification failure: The lack of TPA, the divisive public debate on the benefits of free trade, and the unprecedented scope of these trade agreements augur at best an arduous ratification fight.

• Parochialism: There is a danger that negotiations on each FTA will yield idiosyncratic rules that fail to generate global standards, and instead compartmentalize the world economy.

• Polarization: Depending on the geopolitical climate, there is the risk that the TPP could antagonize China and polarize the Asia-Pacific region further rather than promote its integration.

Conclusion:

The benefits of these two FTAs make the effort required to secure them worthwhile. Your administration can avoid potential pitfalls with creative solutions and political investments. You should shore up U.S. negotiating credibility by securing TPA, strike the right balance between ambition and flexibility at the negotiating table, advocate global rules and norms, and reassure China of the benefits of a deeper economic relationship based on higher trade and investment standards.

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In Response to Sanctions, Russia Aims to Bar U.S. Adoptions of Russian Children

Fiona Hill — Thu, 27 Dec 2012 00:00:00 -0500

Editor's note: In the wake of the U.S. Senate’s passage of the Magnitsky Act, the Russian government has banned Americans from adopting Russian orphans. In an interview with Ray Suarez of PBS’s NewsHour along with Lauren Koch, Fiona Hill explains the internal politics that have led Russia to take this step. Read an excerpt below.

Ray Suarez: Fiona Hill, is this even about adopted children at all, or is this about a more confrontational stance towards the United States?

Fiona Hill: Well, sadly, it is now about adopted children, which, of course, the story makes very clear.

But it's come out of really campaign politics on both sides of the United States and in Russia. Mr. Putin faced, actually, a rather surprisingly bruising campaign to become president again, in spite of the fact that everybody saw him as a shoo-in.

And as part of that campaign, he really did ratchet up anti-American sentiment. He blamed protests that took place around the elections for the Russian parliament and around the presidential elections that brought many thousands of people out in the streets in Moscow and elsewhere, he blamed all those on U.S. support.

He's taken a lot of punitive action against U.S. NGOs. He's declared many non-governmental organizations in Russia that receive foreign funding, especially funding from the United States, to be foreign agents. People now under a new legislation have to register themselves as foreign agents. And, unfortunately, this is also part of that.

Suarez: So, by ratcheting up anti-American sentiment, does this kind of thing play well where with the Russian public, keeping the orphans inside the country, rather than letting them go to the United States to live?

Hill: Well, certain amounts of punitive action against the United States does play particularly well.

Part of the story is also the Magnitsky bill, the legislation that's just gone through the Congress that the president signed last week. And this is seen in many respects as sort of a tit for tat.

The U.S. always, in the Russian view, applies a double standard. It is always taking punitive action and applying sanctions against Russia. So this does play well.

However, as I think as we saw from the clips at the very beginning, there's been some soul-searching on the part of many Russians about this particular bill, because this is a disproportionate action. This is something that actually hurts Russian children, as well as ordinary families. So this is really sort of taking things in a very different angle.

Authors

Fiona Hill

Publication: PBS NewsHour

The Internationalization of Law

Tue, 18 Dec 2012 17:30:00 -0500

Event Information

December 18, 2012
5:30 PM - 7:00 PM EST

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue, N.W.
Washington, DC 20036

Ninth Annual Raymond Aron Lecture Featuring Professor Mireille Delmas-Marty and Justice Stephen Breyer

On December 18, the Center on the United States and Europe at Brookings hosted Professor Mireille Delmas-Marty to deliver the ninth annual Raymond Aron Lecture. A leading French legal scholar, Dr. Delmas-Marty is professor emeritus at the Collège de France and a member of France's Académie des Sciences Morales et Politiques. After a prestigious career in academia, including visiting professorships in major universities from the Americas to Asia, and advising the French government on constitutional and legal reform, Dr. Delmas-Marty has focused her work at the Collège de France on the internationalization of law.

Dr. Delmas-Marty delivered remarks on how national bodies of law are increasingly being reshaped by transnational forces, including universal human rights norms, economic integration, and global risks, and the challenges this presents in terms of accountability, legitimacy and predictability. She discussed how direct dialogue among the world’s top jurisdictions, such as the U.S. Supreme Court and the European Court of Justice, has also changed conceptions of self-contained national legal systems; and suggest how cross-country comparisons and understanding the evolving nature of international law can help make sense of the rapidly changing legal landscape.

Following Dr. Delmas-Marty's remarks, U.S. Supreme Court Associate Justice Stephen G. Breyer offered a response. Justice Breyer was nominated to the Supreme Court by President Clinton and took his seat in 1994. A former law clerk to Justice Arthur Goldberg, he held many prominent offices in both the executive and the judicial branches of the federal government, and was also a professor of Law at Harvard University, a visiting professor in various universities, and the author of numerous books and articles.

Brookings President Strobe Talbott provided introductory remarks and Brookings Senior Fellow Benjamin Wittes moderated the discussion. After the program, panelists took audience questions. The Raymond Aron lecture series, named after the renowned scholar of post-war France, annually features leading French and American scholars and statesmen speaking on critical issues affecting the transatlantic relationship.

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U.S. and Europe: A Revitalized Global Partnership - A Statesman’s Forum with Secretary of State Hillary Clinton

Thu, 29 Nov 2012 13:30:00 -0500

Event Information

November 29, 2012
1:30 PM - 2:15 PM EST

Online Only
The Brookings Institution

A Statesman’s Forum with Secretary of State Hillary Clinton

For decades, Europe has been an essential partner working with the United States to confront a wide range of challenges around the globe. From Afghanistan, Libya and Iran, to issues such as counterterrorism, climate change and economic recovery, the Transatlantic Partnership remains critical to achieving common strategic objectives.

On November 29, the Center on the United States and Europe at Brookings hosted an address by Secretary of State Hillary Clinton on U.S.-European relations titled, "The U.S. and Europe: a Revitalized Global Partnership." Secretary Clinton was sworn in as the 67th Secretary of State of the United States in January 2009, after nearly four decades in public service as an advocate, attorney, First Lady, and Senator. During her tenure in the Senate, she served on the Armed Services Committee and worked to launch the government’s Vital Voices Democracy Initiative. She was also a Commissioner on the Commission on Security and Cooperation in Europe.

Brookings President Strobe Talbott provided introductory remarks.

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