Hands Across the Atlantic

It's high time for a free trade agreement between the United States and Europe. In fact, it's exactly what our economies need.

Like Don Quixote's pining for his princess Dulcinea, the generation-long quest for a U.S.-EU free trade agreement has been mostly an affair of fit and fantasy -- that is, until now. In the last year, leaders across Europe have increasingly pushed for a new trade pact with the United States, their top trading partner, and a diverse constellation of special interests -- from the business-minded U.S. Chamber of Commerce to the AFL-CIO, America's biggest labor organization -- have shown support. Earlier this month, a high-level working group, established in 2011 by EU and U.S. officials to study the feasibility of a trade agreement, signaled its intention to launch formal trade negotiations. And early next week, EU Trade Commissioner Karel De Gucht will travel to Washington to complete a long anticipated joint EU-U.S. report outlining likely objectives for such an accord.

The economic argument in favor of a free trade agreement is compelling. According to recent estimates by the International Monetary Fund, the United States will grow at less than 3 percent next year and the European Union will grow at less than 0.3 percent (assuming Greece and the other periphery countries remain part of the union). A free trade agreement would immediately improve growth prospects for both. Most large European companies operate in the United States, and collectively they employ more Americans than any other country -- just as U.S. multinationals employ more Europeans than even important upstarts like Brazil and China. But plenty of impediments complicate transatlantic trade -- from tariffs to conflicting governmental regulations -- even when a company deals with its own affiliates. Removing these impediments, some economists predict, could add as much as 3 percent to both EU and U.S. gross domestic product.

Despite the obvious benefits, there may not be enough institutional capacity on either side of the Atlantic to close a deal. Even as European leaders have vocalized support for trade talks with the United States, the continent's foreign economic policy has been cannibalized by the eurozone crisis and member state disputes on financial reform. Likewise, in the United States, resources to capitalize on the FTA opportunity are limited, despite the fact that domestic special interests have aligned in favor of a deal. The Obama administration has directed its diplomatic energy towards fast-growing Asia and the surging Pacific Rim, leaving Europe a relative backwater by comparison. Consequently, any proposed deal will not only have to be sufficiently rewarding to focus the attention of distracted political leaders, but it will also have to help bridge and engage an increasingly "post-Western" world of rising powers and states.

Given these impediments, there are three key ingredients for realizing a transatlantic FTA. Above all, any accord will have to be ambitious. Now is as good a time as any in the postwar period to tackle subsidies in sectors like agriculture since cash-strapped governments are looking for ways to trim fat. The focus, however, should be on regulatory coherence. In today's global economy, technical regulations on issues like food safety and environmental standards impede trade more than most tariff barriers, even between partners like the United States and the European Union that have similarly high levels of regulatory supervision. A free trade agreement laying out common standards or a process for recognizing equivalent regulatory regimes can help minimize these distortions.

Second, and closely related, negotiations on regulatory coherence should take the opportunity to extend beyond food, labor, and the environment to additional sectors like financial services. Varying interpretations and asymmetric implementation of international best standards -- from the G-20 agenda for derivatives to the Basel III capital regulations, designed to stabilize the financial system and prevent banks from failing -- have occasionally led to cross-border recriminations that undermine growth and increase uncertainty. A free trade agreement should embrace transatlantic coordination in financial rulemaking and outline a flexible but thoughtful framework for synching cross-border administrative processes.

Finally, a transatlantic deal should be as much a global accord as it is a bilateral one. Both the European Union and the United States have a habit of concluding FTAs that aren't so much free as they are preferential. As such, they tend to exclude non-participants, forcing them to come up with their own alliances. But as the global balance of power shifts eastward, and as trade negotiations increasingly tackle non-tariff issues, this exclusionary approach is becoming increasingly untenable. Washington and Brussels must ground a transatlantic free trade agreement in core principles of nondiscrimination. Other countries should be allowed improved access to U.S. and EU markets if they can demonstrate that they meet the regulatory standards that Europe and the United States advocate. In that way, emerging markets can be incentivized to adopt, instead of undercut, the best practices laid out in the transatlantic free trade agreement.

This last requirement, in particular, reflects the reality that a close transatlantic relationship not only makes good political sense, but is also smart global economics. An EU-U.S. trade agreement can bolster Atlantic as well as global growth; it can also allow the United States and the European Union to export standards and policies in addition to goods. Yet the finalization of a transatlantic free trade agreement is far from assured, perhaps, as Don Quixote rightfully remarked, because "not everyone is sufficiently intelligent to be able to see things from the right point of view."



Is America Training Too Many Foreign Armies?

Events in Mali show why it’s time to take a fresh look at the Pentagon’s military assistance programs.

Gen. Carter Ham, the head of the U.S. Africa Command (AFRICOM), made an unusually blunt admission last week regarding the failure of U.S. military training to instill respect for human rights in a Malian army now accused of massacring Arabs and Tuaregs as it fights its way north into rebel-held territory. "We didn't spend probably the requisite time focusing on values, ethics, and a military ethos," Ham acknowledged, saying that most U.S. training for the Malians focused on tactics, strategy, and "technical matters."

Since 1985, the United States has sponsored approximately 156 Malian military officers and non-commissioned officers at U.S. professional military schools and given them training focused on professionalizing the military forces. Over the past three years, this funding has reached at least roughly $400,000 annually, and it is possible U.S. intelligence agencies have also funneled in support as well. Sadly, Mali is hardly an isolated case of U.S. military assistance programs operating with dangerously little oversight and lacking a compelling central rationale. There are many examples of successful U.S. military training programs, but lots of headline cases that have gone badly wrong over the years -- from training Indonesian troops that carried out atrocities in East Timor to the billions poured into the Egyptian military to the scores of tainted graduates from the School of the Americas that ran riot in Central America during the 1980s.

In looking at the patterns of U.S. military assistance the question is not who gets American military aid, but who doesn't. In 2012 the United States delivered bilateral security assistance to 134 countries -- meaning that every country on Earth had about a 75 percent chance of receiving U.S. military aid. Once you weed out places like North Korea and Vatican City, you are pretty much assured of receiving military aid no matter how large or small your country, no matter how democratic or despotic your regime, no matter how lofty or minimal your GDP.

At a time when not a day goes by without Beltway handwringing about the impact of a potential sequester, there has been almost zero discussion of how to better focus U.S. military assistance around clear objectives and direct it to countries where it can make a lasting difference. And these aren't insignificant sums when taken together. The administration requested $9.8 billion in security assistance funding for fiscal year 2013.

Much of this military assistance -- through programs like Foreign Military Financing; International Military Education and Training; Nonproliferation, Antiterrorism, Demining, and Related Programs; International Narcotics Control and Law Enforcement; Peacekeeping Operations; and the Pakistan Counterinsurgency Capability Fund -- is supposed to be overseen by the State Department with the Defense Department doing the heavy lifting of actually delivering aid and training.

The rationale on paper for such assistance is straightforward and usually receives uncritical congressional support. U.S. military aid helps train security forces, finance the purchase of military equipment, bolster the ability of law enforcement to tackle the illegal narcotics trade, and shape cooperation on nonproliferation issues. But more than anything, the Pentagon has always insisted that spreading military assistance so broadly is all about building relationships with fellow militaries -- a cost effective way of establishing contacts who will pick up the phone in a ministry of defense when needed. For those who say U.S. dollars propped up an autocratic military in Egypt, other argue that it was the senior flag relationships between the Pentagon and Cairo that kept the military from opening fire on democratic protesters during the Arab Spring.

But U.S. military aid looks much better on paper than in practice, in large part because it is often delivered as if on autopilot without a reasoned discussion of its merits. The State Department largely offers rubber-stamp approvals, and the Foreign Service currently lacks personnel with the expertise needed to engage in a rigorous debate with the Pentagon about who deserves aid and why. As Gordon Adams of the Stimson Center has argued, the State Department's "internal capacity to plan, budget, and manage these programs needs to be seriously strengthened." This, combined with the general tendency of Congress to treat military spending requests as something just short of a papal writ, has meant that U.S. security assistance programs receive very little oversight.

Equally troubling, military and economic assistance are treated as quite different creatures. For economic assistance, the United States has increasingly insisted that aid recipients at least demonstrate some marginal commitment to democracy and open markets. Not so on the military side, where concerns about corruption, the rule of law, and human rights are treated as something we are too polite to ask about. Indeed, we probably would offer military training to everyone if it were not for the minor restrictions imposed by Senate Democrats like the Leahy Law, which prohibits U.S. military assistance to known thugs and war criminals that violate human rights with impunity. Yes, having military-to-military contacts through U.S. military training and aid is often useful and can build important relations and lasting trust. But it is equally true that the list of U.S.-trained officers that have led coups against their sitting governments is a lengthy one in countries ranging from Honduras to Haiti to the Gambia. Contrary to what Ham's remark suggested, a few months spent studying tactics and logistics in Kansas or Georgia rarely seems to slow down a power-hungry colonel when he is hell bent on toppling the elected government that just threatened to cut his budget.

Underwriting security assistance to countries with autocratic leadership or nations that are of little strategic significance doesn't make much sense. U.S. military aid and training should be concentrated in a far fewer countries rather than being sprinkled all around the globe like fairy dust in hopes that good relations result. Nations should be chosen to receive such military aid and training based on their commitment to reform -- both within the military and within the broader structures of democratic governance, free markets, and respect for human rights. Such aid should be a reward for high-performing countries, not a party favor dispensed at the door.

General Ham sounded genuinely surprised that American-trained officers were up to nefarious deeds. But the accusations of indcriminate killing should not come as much of a surprise. A U.S. trained captain led a coup against the government of Mali just last March -- the first incident that led Ham to think that we might need to take a second look at training.

Take the fun quiz: which of the nations below were slated to receive U.S. military assistance in 2012:

Czech Republic
The Bahamas
Costa Rica
Cape Verde
The Gambia
Sao Tome and Principe
Trinidad and Tobago

Well, all of them, of course.

Note: This article has been updated to reflect the full context of General Ham's remarks.

The U.S. Army/Flickr