Dear mr bush, we Europeans, as you know, have our doubts about a Bush presidency. We knew Al Gore and he knew us, while you have never set foot in Britain, France or Germany. You cancelled a pre-election tour of Europe. And some of your comments during the campaign-for example that Europe should send peacekeepers to Kosovo, when we already provide 80 per cent of them-made us wish that we could vote in your election.
However, your (probable) victory has not made us frantic. We got to know and respect your foreign policy team during your father's presidency. So long as you keep them close at hand when you need to take a crucial decision, we shall feel comfortable. And we even think that you will try harder than Al Gore would have done to re-start the world trade round.
Nevertheless, deep down we have some big concerns, and they have nothing to do with you and your advisers. (Most of what follows could be addressed to the Gore camp as well.) Two trends are creating strains in transatlantic relations. One is that the US is becoming increasingly unilateralist-less and less willing to work within a multinational framework of global rules and institutions. The second trend is that Europe is becoming a power in its own right, rather than a collection of squabbling nation states. The EU has long been a unified force in trade negotiations. It is now becoming one in monetary and security policy.
These changes are secular, not cyclical. And they raise the question of whether Europe and America will drift apart or whether the alliance can renew itself as a more balanced partnership. The next four years could be crucial in determining which path we take. If you handle the Europeans with sensitivity the second, more benign outcome is more likely.
European leaders are not seriously worried that America is becoming "isolationist," in the sense that it will withdraw from its post-second world war engagement with the world. But now that the US is the sole superpower, it seems-from a European view-to have less use for international organisations and treaties. It can more easily get its way through dealing with countries on a one-to-one basis, sometimes bullying them to accept its goals.
Of course, there is exaggeration and hypocrisy in this European argument. In the WTO, the EU's record of implementing panel decisions-for example on bananas and beef hormones-has been abysmal. Meanwhile the US continues to play a constructive and useful role in many international bodies, for example the OSCE, Nato and the IMF.
Nevertheless, there is some truth in what the Europeans say. Over the past few years, the US has been reluctant to accept the authority of a number of international conventions and organisations. The US Senate has not ratified the Kyoto protocol on global warming or the Comprehensive Test Ban Treaty-despite appeals from European leaders to do so. The US has refused to accept the authority of the International Criminal Court, which is designed to bring war criminals to justice, and has often treated the UN with contempt. Many Americans appear unconcerned that plans for National Missile Defence (NMD) endanger the Anti Ballistic Missile (ABM) treaty between the US and Russia. You need to reassure your allies that the US is committed to a multinational system of global governance, even if there may be cases when it chooses to opt out.
Psychologically, it is far easier for Europeans to promote such a multilateral system because they have to accept restrictions on their sovereignty on a daily basis in the EU. The American people need to be told that they too benefit from a multilateral system. For it is not self-evident to them. After all, the US is very powerful, most other countries are weak, and most global organisations can in practice do very little without US support. But it is worth reflecting a little on the nature of US and European power and how each of them may evolve over the next few years.
america's military might, measured against its allies and potential foes, is growing. The "revolution in military affairs" (RMA), based on the application of the latest information and communication technology (ICT) to weapons systems, is a one-country revolution. Only the US has the willingness, the resources and the expertise to integrate the latest technology into the conduct of warfare. Should any country (for example, China) seek to challenge US military supremacy in a particular area, such as space, the US has the wherewithal to counter and defeat that challenge. In military terms, America will remain the sole superpower for at least two decades.
However, military might is of limited use in the daily conduct of foreign policy. When dealing with problems such as beef hormones, anti-dumping rules, protection of the ozone, the status of Jerusalem, a financial crisis in Brazil, Nato enlargement, or even rebuilding Kosovo, the fact that the US has B-2 bombers is unlikely to help it to win the argument.
In a world that is broadly at peace, the use of "soft power" counts for as much as hard power. The soft power that a country can exert depends, to some extent, on the quality of its ideas and on how many friends it has. It also depends on economic strength. And America's dominance of the global economy will diminish. The more that it diminishes, the more the US will benefit from an effective system of global governance.
The formula for America's economic success-prudent monetary and fiscal policy, a vibrant equity culture, tax cuts, deregulation and rapid take-up of the internet-is not that hard to imitate. Britain was perhaps the first to follow the US model. And now France and Germany, spurred on by the competitive pressures of the euro, are starting to introduce many of the same economic reforms. Economic growth and job creation have picked up on the continent. The French economy has been creating about 400,000 jobs a year since 1997, ten times the rate of the 1980s.
It is unlikely, within the next ten years, that any European defence company could match Lockheed Martin, Raytheon or Boeing in their mastery of high-tech military and space technologies. However, within that time, it is much more likely that a European or Asian information technology company could match or surpass the Microsofts or Cisco Systems. ICT is less secret, expensive and hard to copy than military technology. Europe already has a lead over the US in mobile phones.
When the EU enlarges into the starting-to-boom countries of eastern Europe, its rate of economic growth may surpass that of the US. It already has a slightly larger economy than America. Over the next ten years there is not much doubt that other regional economic powers or groupings-China, India, Mercosur and Asean-will grow at a faster rate than the US. America's share of global output is set to shrink.
Thus in policy areas where the application of force is not especially relevant, the US will require both allies and international organisations in order to achieve its objectives. It will need the WTO to push the EU to reform its farm policy. It will need international agreements-and the co-operation of many governments-to prevent nuclear proliferation. And it may even find that global environmental conventions are the best way to prevent countries like India, Russia and China from destroying the planet.
If the US took a more positive attitude to global norms, it would set off a virtuous circle: its allies would be reassured, other countries would be impressed, and American ideas on reform of the UN and other global clubs would carry more weight.
And what of Europe? The EU is getting stronger. Its internal disputes, and its complex institutional procedures-on display at the Nice summit-often disguise the fact the EU is becoming a kind of superpower. At any rate it has started on the long road towards becoming one. One mark of that is the creation of the euro, which-because of the new currency's weakness in its first two years-few Americans take seriously. But do not be too sanguine. In the long run, the euro will strengthen and become a widely-used alternative to the dollar for international investors. In 1998 Fred Bergsten, director of the Institute for International Economics, predicted that portfolio diversification by international investors would lead to between $500 billion and $1 trillion shifting into euro assets. He is right, though no one can be sure of the timing.
Such a shift will make the US uncomfortable, particularly when-as now-it has a huge current account deficit. The dollar's status as sole global currency has allowed the US to build up massive international liabilities at lower interest rates than it would otherwise have had to pay. As Bergsten has written, "the euro may make it costlier for the US to borrow the huge amounts of foreign capital needed to finance our chronic international imbalances."
Furthermore, when the euro does rival the dollar it will not be so easy for the US government to manage the dollar's exchange rate to suit domestic circumstances. The EU will develop a more coherent exchange rate policy through its Euro Group. Faced with the likelihood of a volatile dollar-euro exchange rate, the relevant people and institutions on either side of the Atlantic will have to learn the habit of talking to-even negotiating with-each other.
These financial shifts are gradual, and may not attract much attention for a few years. Very soon, however, your administration is likely to be concerned about the emerging Common European Security and Defence Policy (CESDP). The EU's member-states have not given up sovereignty on foreign and defence policy, nor are they likely to do so. If Britain or France cares strongly about some world issue, it may pursue its own interests without much regard to Brussels. Nevertheless, the EU governments are making real efforts to co-ordinate their external policies more effectively than in the past. The appointment of Javier Solana as "High Representative" for foreign policy is one reflection of this. So is the decision to create a European Rapid Reaction Force of 60,000 troops by 2003.
Some Americans regard a more coherent European foreign policy as a threat to US power. Europe certainly has some foreign policy interests which differ from America's, notably in Iran and Iraq, but these are mostly in areas where the Europeans are divided too. There are not many examples of a united EU position that is markedly different from the US position-the middle east peace process and relations with Cuba being obvious exceptions. It is not so surprising that American foreign policies are often similar to those of the EU. We share common values and many common interests. On Russia, for example, we all favour the establishment of market capitalism and liberal democracy. In China, some of the Europeans may be keener to earn a fast buck, but there are few fundamental differences. In Indonesia, we all want President Wahid to hold the country together and make a success of reform.
So you should welcome a more effective EU as a useful partner in helping the US to sort out the world's problems. Imagine another Gulf war situation: you would surely want more support from Europeans than your father got. In any case, if you speak out against a more unified Europe it will be counter-productive. It will strengthen the hand of those-notably in France-who see the CESDP as a means of helping Europe to stand up to the US. They are currently a minority in the EU. Do not help to turn them into a majority.
You should be both sceptical and relaxed about Europe's military ambitions. Sceptical, because with defence budgets stable or falling in most European countries, the Europeans will find it hard to make serious improvements to their military capabilities. And relaxed, because even if they do fulfil their ambitions, the capabilities gap between Europe and the US is going to grow, not diminish. The truth is that for the foreseeable future the Europeans will be able to do little in the military sphere without the US.
The US must of course insist that Nato is not harmed. But Americans often forget that most EU nations do not share the Gaullist view that Europe should try to rival the US. Even many Gaullists no longer share that view. Very few Frenchmen want the EU to duplicate what Nato does; they know that European defence budgets don't allow it. The US has many friends in the EU and you should leave them to argue the case for sensible arrangements.
The more that Europe's foreign and defence policy succeeds in its ambitions, the more Nato will become a European organisation. More senior command positions, for example, will be held by Europeans. Again, you should not worry about this. If the Europeans see Nato as a European organisation, rather than one in which the US bosses its allies, they are more likely to invest energy and resources in ensuring its continued success.
The division of labour that already exists within Nato is likely to deepen. The US provides high-tech weaponry and logistical support, because it has plentiful supplies of both and the Europeans are reluctant to spend money on either. The Europeans have large armies (relative to their populations) which are good at peacekeeping, and the US is reluctant to commit men and women on the ground.
This division was evident during the Kosovo air campaign of spring 1999 and during the subsequent Nato deployment there. The conventional wisdom, particularly in London and Paris, is to oppose this division, arguing that the US should always participate in important peacekeeping missions, and that the Europeans should improve their capabilities. Otherwise, it is claimed, policies will diverge on either side of the Atlantic, as happened over Bosnia in 1992-95, when we had troops there and the US did not.
But, if truth be told, the US is not very good at peacekeeping. As anyone who has spent much time in Bosnia or Kosovo knows, America's concern to minimise casualties has prevented its soldiers from getting out onto the streets. British and French soldiers are better at getting involved, picking up intelligence and helping to prevent flare-ups. In Bosnia, US troops have usually declined to take part in the arrest of indicted war criminals. And in Kosovo, US troops have stayed out of tense areas such as Mitrovica.
So the US should recognise that this division of labour is, in some respects, good for America. The Europeans should provide most of the troops for peacekeeping in Europe. And the US should be generous with the provision of logistical support, high-tech weaponry and intelligence.
Meanwhile, Nato enlargement is returning to the agenda. Try to keep this process gradual. Each time that Nato lets in a new country with meagre military capabilities, such as the Czech Republic, its military effectiveness suffers. Enlargement is a desirable process, but you should work for a slow enlargement, with just one or two countries joining in the next round. And do not push for Nato to admit the Baltic republics. The British, French and German governments believe that this would be a provocation too far for the Russians. You should remind everyone that the Baltic republics have the right to join Nato, and that one day they may do so. But for now tell them that EU membership should be their priority.
finally, no single issue has the potential to damage transatlantic relations as much as National Missile Defence (NMD). Public opinion in the US supports it. But your European allies, Russia and China all agree that if you deploy such a system, the world will become a more dangerous place.
The biggest European concern is that US plans for NMD will kill the ABM treaty. Europeans regard that treaty as a cornerstone of international arms control. They also fear that China will expand its force of nuclear missiles-it now has only about 20-to counter NMD, and thus set off an Asian arms race.
European scientists say that the Clinton administration's plans for interceptors to strike ballistic missiles outside the atmosphere, destroying them with kinetic energy, will not work. They also say that their friends in your own research establishments agree. Most basically, Europeans do not share US perceptions of the risk of ballistic missile attack. Even British policy-makers who have seen some of the US intelligence do not fret about North Korea or Iran launching missiles. They say that even if rogue states could lob missiles at the EU, they would not do so.
Public opinion in Europe is unconcerned by the threat of missiles. This is probably because many Europeans-unlike most Americans-have had to live with the threat of terrorist attacks for years. The Europeans have responded to terrorism with a mixture of political engagement, surveillance operations, threats of retaliation and sheer stoicism. They regard your faith in high-tech solutions as na?ve.
However one-sided and exaggerated these European views may be, they are not going to change in the foreseeable future. As a newly-elected president, you are well-placed to challenge conventional wisdom on NMD. You should, of course, continue to invest in anti-ballistic missile technology. But for now you should defer deployment. Such a policy would liberate defence dollars to spend on other good military causes; make Putin grateful for a foreign policy success; and greatly improve America's relations with China. Deferment would also remove a major source of tension in transatlantic relations.
To conclude, the slow emergence of Europe as a power in its own right is a fact that you will have to accept. Look on benignly, and Europe will be more likely to develop in ways that suit the US. Although the transatlantic relationship will become more equal, the US will remain the senior partner, at least in foreign and defence policy. The development of the EU, the evolution of other regional groupings, and the increased economic clout of countries like Russia, China and India will, in the long run, make it harder for the US to influence events through bilateralism or unilateralism. Working within a multilateral framework, however tiresome it may be at times, will often serve the US national interest. You need to explain that to the American people.
Yours sincerely,
Charles Grant
