ANDREW MORAVCSIK is Professor of Government and Director of the European Union Program at Harvard University. He has authored more than 100 scholarly books and articles on European integration, international organization, human rights, and transatlantic relations—including one CFR Task Force study. His commentary appears regularly in *Newsweek* magazine. Prior to entering academia, he served as a trade negotiator in the US Department of Commerce and held other positions in government and journalism.

WILLIAM E. ODOM is a Senior Fellow and Director of National Security Studies at Hudson Institute's Washington, D.C. office. He served as Director of the National Security Agency from 1985 to 1988, the Army's Assistant Chief of Staff for Intelligence from 1981 to 1985, and Military Assistant to National Security Advisor Zbigniew Brzezinski from 1977 to 1981.

ANDRZEJ OLECHOWSKI is Leader of the Polish political party, Civic Platform. He served as Polish Foreign Minister from 1993-1995, as Finance Minister in 1992, and as Economic Advisor to President Lech Walesa.

FELIX G. ROHATYN was U.S. Ambassador to France from 1997-2000. Prior to this role, Rohatyn was Managing Director of the investment bank Lazard Frères and Company in New York, which he joined in 1948. He has also served as Chairman of the Municipal Assistance Corporation (MAC) of the City of New York and as a member of the Board of Governors of the New York Stock Exchange.

BRENT SCOWCROFT is President and founder of The Scowcroft Group. He served as National Security Advisor to Presidents Ford and Bush. From 1982 to 1989, he was Vice Chairman of Kissinger Associates, Inc. He served in the military for 29 years, reaching the rank of Lieutenant General.

ANNE-MARIE SLAUGHTER joined Princeton University as Dean of the Woodrow Wilson School of Public and International Affairs in September 2002. Slaughter was most recently the J. Sinclair Armstrong Professor of International, Foreign and Comparative Law at Harvard University. She also serves as President of the American Society of International Law.

LAWRENCE H. SUMMERS is co-chair of the task force and President of Harvard University. He served as Under-Secretary of the Treasury, Deputy Secretary, and eventually Secretary of the Treasury in the Clinton administration. Prior to his service in the Clinton administration, he was Vice President and Chief Economist for the World Bank, and a Professor of Economics at MIT and Harvard.

DANIEL K. TARULLO is Professor of Law at Georgetown University Law Center. From 1993 to 1998, he was, successively, Assistant Secretary of State for Economic and Business Affairs, Deputy Assistant to the President for Economic Policy, and Assistant to the President for International Economic Policy. From 1995 to 1998, he was also President Clinton's personal representative to the G7/G8 group of industrialized nations.

LAURA D'ANDREA TYSON is Dean of the London Business School. Previously, she was Dean of the Walter A. Haas School of Business at the University of California, Berkeley. She was the National Economic Adviser to President Clinton and head of the National Economic Council. Ms. Tyson also served on the National Security and Domestic Policy Councils and was the first woman to become Chairman of the White House Council of Economic Advisers.

**STEPHEN M. WALT** is Academic Dean at the John F. Kennedy School of Government at Harvard University, where he holds the Robert and Renee Belfer Professorship in International Affairs. He has been a Resident Associate of the Carnegie Endowment for Peace, a Guest Scholar at the Brookings Institution, a consultant for the Institute of Defense Analyses, the Center for Naval Analyses, and the National Defense University.

## TASK FORCE OBSERVERS

**CAROLINE ATKINSON** is Senior Director of Stonebridge International LLC, an international strategic advisory firm based in Washington, DC. She served as Senior Advisor to the Secretary and Senior Deputy Assistant Secretary for International Affairs at the U.S. Treasury Department from 1997 to 2001. Before joining Treasury, she was a senior official at the International Monetary Fund.

**LEE FEINSTEIN** is Deputy Director of Studies and Senior Fellow at the Council on Foreign Relations. He was the Principle Deputy Director of the Policy Planning Staff at the U.S. State Department during the second Clinton administration. He co-directed the task force on *Enhancing U.S. Leadership at the United Nations* (2002) sponsored by CFR and Freedom House.

**BENN STEIL** is the André Meyer Senior Fellow and Director of International Economics at the Council on Foreign Relations. He is also the Editor of *International Finance* (Blackwell Publishers), a member of the European Shadow Financial Regulatory Committee and the Advisory Board of the European Capital Markets Institute. Until November 1998, he was Director of the International Economics Programme at the Royal Institute of International Affairs in London.

Draft III. July 14, 2003

Council on Foreign Relations Task Force, July 15, for

July 22, 2003 meeting

In dealing with the current crisis in transatlantic
relations and seeking a renewed partnership, the US and
Europe need first of all to recognize and accept the differences
between them -- cultural, social, political, security -- especially
in their views with respect to the rest of the world and how to
deal with it. North Americans and Europeans have more in
common on almost all of these matters than they have with

East Asians or citizens of the developing world, which is why we are natural partners even in the absence of an overriding security threat, but if the differences are not managed, they could dominate the relationship, and we seem to be moving in that direction. Next, the partners need to decide what they can agree on as a desirable and achievable future state of the world (primarily the rest of the world). They need to establish an agenda and priorities for a whole series of issues: access to resources and markets, trade and investment; what is the best achievable mixture of stability and movement toward a pluralistic civil society, political freedoms, liberal governance and democracy in the parts of the world that now lack all of those things; how to deal with rising powers -- China and

2

[lc]

India, in coming decades a revived Russia; how to deal with
radical Islam and with transnational terrorism; how best to
maintain or preferably tighten the partnership with Japan;
how to prevent genocide and provide humanitarian relief; how
best to assure peace between countries and equal political and
social rights within countries.

With those issues engaged, even if not decided, the
partners should then examine: (a) how to use and develop
existing institutions and structures to advance these ends; (b)
consider what new ones may be desirable; (c) how to assign
responsibilities to each side within those institutions.

3

[There should then be a discussion of economic, trade and investment issues.]

With respect to security and political relations, the following proposals make sense. First, we should arrange for observer status by each partner in the deliberations of the other. This is simply, although European reaction suggests not without considerable resistance, accomplished by giving the US observer status at EU meetings. The example of Russian observer status at NATO, even before that relationship developed into the NATO/Russia Council, NATO at nineteen plus one and now NATO at twenty, in a situation where the two sides had a good deal less in common in their

4

security interests than the US and Europe should have, is
instructive. An appropriate quid pro quo, European observer
status in US policy deliberations, will be necessary but is more
difficult to specify, in part because of the separation of powers
in the US system, in its own way almost as consequential as
the separation of countries within the EU.

It is difficult to see the UN, the P5 or the G8 as effective
ways of bringing European and US policy together if they are
not already so going into those forums. But those institutions
will have to be considered and dealt with in any renewal of the
partnership.

5

NATO should be agreed as the common security
organization for the US and Europe, as it has been for nearly
fifty years. US military operations, and those of whatever
military capability emerges in the EU, should make use of the
NATO structure wherever possible, even when some European
nations or the US choose not to use their own forces in a
particular situation. The NATO structure can be used outside
of the NATO security area, as it was in former Yugoslavia.

Indeed, employment even outside Europe is feasible given the
political will, as is now taking place in peacekeeping
operations in Afghanistan and prospectively in NATO support
of Polish forces in Iraq.

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It should be understood that for the foreseeable future (a decade or even two decades) the difference in US power projection capability as compared with those of any European force, even the French and British, will be such that any operation involving major combat with forces beyond the borders of the EU is likely to rely on US logistic, C4ISR and transport capability.

One way to approach the issue of division of responsibility is to ask who does the "first draft" of a policy proposal to be considered by the partners. The answers should vary depending upon the region involved. As between the partners, the US clearly has a predominant role in dealing

7

with the security issues of East Asia. And it shares global
interests with Russia, as for example in Central and East Asia,
as well as the nuclear balance. So the US probably does the
first draft for each of those situations.

Europe clearly has a principal role, for historic and
geographic reasons, in sub-Saharan Africa and the Magreb;
accordingly it should produce the first draft for issues in that
region. A similar argument applies to Eastern Europe aside
from Russia, for example the Ukraine and former Yugoslavia.
The southern Caucasus is a more uncertain case, but Central
Asia, which involves the interaction with both Russia and
China, is more clearly a case where the US should lead.

8

With respect to the Middle East and Persian Gulf, the US
has a clear predominance in the purely military security role
and is the only interlocutor with influence on and trust by
Israel, but the European dependence on the area as well as its
interests, economic weight, historic role (read colonial history)
and knowledge mean that an effective policy over the long term
can probably be developed only by the partners working
together. A successful cooperative effort to foster, perhaps
even impose, a solution to the Israeli-Palestinian conflict,
difficult as such an undertaking would be, would provide clear
evidence that the partnership has been renewed, is effective,

9

AUG 2 7 2003

Page 1 of 1

Jessee Incao

From: CKupchan@cfr.org

Sent: Tuesday, August 26, 2003 4:32 PM

To: beverly_sullivan@harvard.edu; julia_topalian@harvard.edu; lawrence_summers@harvard.edu; jincao@kmaglobal.com; tcimino@kmaglobal.com

Cc: jfly@cfr.org; ckupchan@cfr.org

Subject: CFR Task Force Draft Report

Dear Henry and Larry,

Attached please find a rough first draft of the CFR Task Force Report. With our September 30
manuscript review session fast approaching, I thought it important for us to have a working draft in
hand. I think we should circulate the draft report to the Task Force around September 20, so that gives
us about three weeks to hammer this document into a form with which you are both comfortable.

I worked off Version II of the outline, which we discussed in our last conference call. I did my best to incorporate into the draft all of the suggestions that you made during that conversation. I look forward to your feedback on the broad thrust of the report as well as on the text itself.

Our next conversation is scheduled for this Thursday, August 28, at 3:30 pm. Talk to you then.

Best,

Charlie

8/26/2003

CFR TASK FORCE ON TRANSATLANTIC RELATIONS

DRAFT REPORT

Diagnosis


The transatlantic partnership, the anchor of the international system since World
War II, is currently at risk. America and Europe have recently parted company on a
series of issues – the Iraq war, the Kyoto Protocol on climate change, and the
International Criminal Court most prominent among them – raising the prospect that
successive decades of transatlantic cooperation could give way to mounting rivalry.

Indeed, the divide that opened over the Iraq war was a stark affirmation of the degree to
which the Atlantic Alliance has already corroded. That traditional allies like France and
Germany sought to thwart the United States on a matter Washington deemed to be of
vital interest made clear the serious and unprecedented nature of the ongoing crisis in
Atlantic relations. The current sense of estrangement should not be dismissed as just
another friendly quarrel. On the contrary, the rift runs deep and, if left unattended, has
the potential to erode the foundation of mutual trust and sense of common destiny on
which the transatlantic partnership rests.

The underlying causes of these strains in Atlantic relations are structural in nature.
The dissolution of the Soviet Union removed the principal threat that bound America and
Europe together. A Europe at peace no longer depends upon the United States for its
security and the maturing institutions of the European Union (EU) give its citizens a
greater sense of self-reliance. As a result, Europe is no longer willing to assume the role
of junior partner and always follow Washington's lead. Meanwhile, America's role as
Europe's pacifier and protector has come to an end as the strategic priorities of the United

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States have shifted to the Middle East and East Asia. The U.S. military presence in Europe will shrink accordingly, with the forces that remain tasked primarily with rapid deployment to non-European missions.

With their common aims in the Atlantic zone largely attained, much of the transatlantic security agenda now focuses on the Middle East – where U.S. and European approaches have traditionally diverged. The most acute threats to Atlantic solidarity have historically emerged from the developing world – the Suez Crisis, the Arab-Israeli conflict, and the Vietnam War. During the Cold War, the pressing mission in Europe prevented these differences from threatening alliance cohesion. Today, there is no ready glue to provide this function. After the attacks of September 11, observers on both sides of the Atlantic ventured that terrorism could potentially serve as the new unifying threat. But as has since become clear, America and Europe have different perceptions of the terrorist threat as well as different strategies for dealing with it, setting the stage for the split that opened over the war against Iraq.

Changes in the geopolitical landscape have also affected Atlantic relations by elevating the impact of domestic politics on the conduct of foreign policy. During the Cold War, geopolitical imperative disciplined politics on both sides of the Atlantic, keeping at bay differences of both substance and style. This constraint no longer operates, are accrued in Europe providing the latitude for a more contentious diplomacy to take hold. American officials have too often opted for a unilateralist and confrontational tone, costing Washington much good will across Europe. European policymakers have too often embraced anti-American sentiment for political gain, urging that the EU emerge as a counterweight to the United States. Such matters of tone and style have politicized the rift and intensified

2

the acrimony on both sides, complicating the task of shoring up an Atlantic partnership already buffeted by potent structural forces.

A final challenge to the integrity of the Atlantic partnership arises from the ongoing changes in political identity taking place in America and Europe. During the Cold War, the Atlantic democracies enjoyed a shared identity, fostered to a large degree by the presence of the Soviet "other." That communal identity is in the midst of breaking down, in part because of the collapse of communism, but also because the political rift across the Atlantic is having broader social implications. Especially after the Iraq war, Americans and Europeans have begun to see each other more as "other" than as "self." In today's charged atmosphere, differences in political culture that have existed for decades — over the death penalty, the penchant for using military force, or the appropriate scope of the welfare state, for example — are gaining saliency. Seeking to contrast U.S. militarism with European pacifism, one observer has popularized the notion that, "Americans are from Mars and Europeans are from Venus."¹

Demographic change is contributing to the transformation of communal identities. Younger Americans and Europeans — those who are coming of age after the fall of the Berlin Wall — will not embrace the same Atlanticist spirit as those who lived through World War II, the rebuilding of Europe, and the Cold War. As America's population becomes more Hispanic and Europe's more Moslem, the ethnic dimension of the Atlantic bond will diminish as well.² The passage of time is thus likely to make even more challenging the maintenance of a communal identity that spans the Atlantic.

¹ Robert Kagan, *Of Paradise and Power: America and Europe in the New World Order* (New York: Alfred A. Knopf, 2003), p. 3.
² Americans of European extraction will fall below fifty percent of the population by mid-century. Hispanics will represent one-quarter of the U.S. population by mid-century, and one-third by the end of the

Stakes
---

The deterioration of relations between the United States and Europe has induced policymakers and opinion leaders on both sides of the Atlantic to question whether the preservation of a transatlantic partnership is desirable, even if it is feasible. Some Americans have become openly dismissive of Europe, portraying it primarily as a hindrance to U.S. efforts to provide global leadership. Some Europeans have become openly hostile toward the United States, portraying it as the main threat to international stability. Extremist voices on both sides of the Atlantic tend to provoke and strengthen extremist voices on the other. This dynamic risks fueling a broad-based attitudinal shift in which Americans and Europeans no longer sense that they share a common destiny.

If this unwelcome outcome is to be avoided, leaders on both sides of the Atlantic need to step back from their specific disagreements and rediscover the common interests that are currently at risk. America and Europe over the second half of the twentieth century were able to accomplish a rare feat – the establishment of a zone of stable peace in which war became unthinkable and balance-of-power dynamics muted, if not eliminated. The success of the Atlantic democracies in setting aside great power politics represents a dramatic advance in the international system, replacing suspicion and endemic competition with trust and regularized cooperation. To allow this Atlantic zone of peace to unravel would constitute a major historical setback and potentially clear the way for the return of a balance-of-power system reminiscent of the pre-World War I era. With America and Europe together representing over fifty percent of global output, the return of geopolitical rivalry across the Atlantic would also imperil the global economy.

century. The percentage of Moslems in Europe's population will be affected by future decisions on immigration policy. Estimates suggest that Europe will be twenty percent Moslem by 2050.

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The spread of democracy and interdependence may well ensure that geopolitical competition between America and Europe never returns. Even so, both sides of the Atlantic have compelling reasons for preserving more than just amity. American primacy may be uncontested, but the United States still needs allies. America required little help in its recent military campaigns in Afghanistan and Iraq. But it is very much in need of international assistance to bring stability to both countries. Much of America's global effort to combat terrorism relies on close cooperation among the intelligence and law enforcement agencies of many countries. Washington also faces a host of longer term challenges – stemming the proliferation of weapons of mass destruction (WMD), stabilizing and liberalizing the world economy, promoting political and economic reform in the Islamic world, fighting the AIDS crisis in Africa – that can be effectively addressed only if the United States works in union with others.

In similar fashion, Europeans are deluding themselves if they believe that the European Union will be better off if it steers clear of the United States and charts its own course. Within Europe itself, many critical tasks still require U.S. engagement, including preserving peace in the Balkans and consolidating reform among Europe's new democracies. In other quarters of the globe, where the EU's military and diplomatic muscle remains limited, Europeans continue to look to the United States to keep the peace.

Despite their recent differences, the Atlantic partners still need each other. As America and Europe look for consistent and loyal allies, they will find no better option than one another. The two sides of the Atlantic have a long and successful history as partners, share democratic traditions, and still have common interests even if they at

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times differ as to how best to pursue those interests. Whatever the objective, it will be
more easily attained if America and Europe work together. Both parties have every
reason for making the rejuvenation of their partnership a top political and diplomatic
priority.

The repair of Atlantic relations will not occur of its own accord. America and
Europe do share common values and enjoy robust and mutually beneficial economic ties.
But neither concerned citizens nor policymakers should place false confidence in the
ability of common values or commercial linkages to preserve a healthy transatlantic
relationship. The recent series of disputes across the Atlantic makes clear that America
and Europe can go their separate ways despite democratic traditions. And history
provides numerous examples of the ease with which the competitive instincts of strategic
rivalry can overwhelm the cooperative incentives stemming from economic
interdependence.

If the Atlantic partnership is to be rejuvenated, Americans and Europeans must
establish a new foundation for cooperation. To do so, they must recognize that the old
order is gone for good, articulate a new vision of the transatlantic community, and map
out a strategy for realizing that vision.

## Objectives and Vision

A vision of a transatlantic partnership for the future must aim at locking in the
three historic achievements of the post-World War II era: 1) the establishment of a
democratic and integrated Europe; 2) the creation of a zone of stable peace between
North America and Europe; and 3) the forging of a transatlantic partnership aimed at
promoting global stability and managing an open international economy.

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The first objective is proceeding apace; democracy and prosperity have taken root in Europe's west and, in step with NATO and EU enlargement, are in the midst of doing so in Europe's east. The second objective has been attained for now, but both the United States and Europe must ensure that an Atlantic zone of peace does not unravel and give way to geopolitical rivalry. The third objective – continued Atlantic partnership – will be the hardest to sustain and is the one that will require the most innovation and determination.

In pursuing these objectives, the Task Force endorses a vision of a transatlantic relationship that is much looser, but also much broader in scope, than that of the past. It will be looser because formal alliance is giving way to ad hoc coalition; absent the Soviet threat, America and Europe will no longer move in lock-step on matters of security. It will be broader because the Atlantic democracies now face a wider, even if more ambiguous, array of threats from terrorism, weapons of mass destruction, and instability and impoverishment in the developing world.

The new strategic landscape will mean not just a looser partnership, but also one in which transatlantic unity will be strained by the geopolitical forces pushing America and Europe toward a geographic and functional division of labor. In geographic terms, Europe is focusing its primary attention and core military assets on consolidating peace on the European continent while America is increasingly concentrating its capabilities on promoting stability and meeting threats in other parts of the world. In functional terms, America brings to the table its war-fighting capability, while Europe's main contributions to international peace fall in the areas of nation-building and peacekeeping.

7

Although this division of labor takes advantage of the complementary nature of American and European strengths, it does represent a strategic separation between the United States and Europe. This strategic separation is to some extent unavoidable; it is a logical consequence of the changing threat environment and Europe's limited ability to project power beyond its own neighborhood. Nonetheless, such a division of labor could prove politically divisive over time, with Americans complaining that they shoulder far greater risks and burdens than their European counterparts, and Europeans feeling as if they have been relegated to an ancillary "clean-up" role.

It is precisely because transatlantic unity will no longer be driven by geopolitical imperative that both America and Europe must now work harder to sustain their partnership. The United States should ensure that it remains engaged in Europe even as it focuses its attention on other quarters. The EU should more regularly backstop America's global engagement by increasing its involvement in war-fighting, nation-building, peacekeeping, and conflict prevention in areas outside Europe. As Europe's institutional and military capacities evolve over time, the EU could down the road become a more complete partner of the United States on a global basis. The risk of strategic separation also reinforces the need for America and Europe to cooperate closely on a host of non-military fronts, including managing the global economy, disrupting terrorist networks, expanding democracy, and promoting health and economic growth in the developing world.

If a new transatlantic bargain is to emerge along these lines, the United States must reassure Europe of its commitment to the habits of consultation and cooperation that are the foundation of partnership. America's international dominance remains

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unchallenged, making it both possible and necessary for the United States to wield its power with restraint, adhering to the practice and spirit of multilateralism in order to win the consent of others. In the words of Tony Blair, the United States should lead through persuasion rather than command, building coalitions on the basis of its moral authority and legitimacy rather than its coercive potential. Washington should also resist efforts to exacerbate intra-European divisions, instead welcoming a more unified Europe – provided that the EU does not adopt an anti-American identity and cast itself as a counterweight to America.

In return, even as Europe focuses on consolidating a peaceful continent, it must do more to recognize the new strategic environment and help address new threats. In particular, the EU should seek to forge with the United States a common approach to the new security agenda, updating both practice and principle to the challenges posed by terrorism, the proliferation of weapons of mass destruction, and the potential need for preventive war.

By granting Europe more voice, America is likely to find in Europe a partner more willing to share the burdens associated with international stability. By more readily working with Washington to meet new international threats, Europe is likely to find in America a brand of leadership more to its liking. Nonetheless, differences of approach will no doubt continue to emerge, necessitating that both parties learn how to tolerate disagreement more effectively and prevent it from compromising a broader sense of amity and common purpose.

## Strategy

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To realize this vision and preserve the three historic achievements of the post-
World War II era – a democratic and integrated Europe, an Atlantic zone of peace, and a
transatlantic partnership – the Task Force recommends a three-pronged strategy aimed at
*adapting the U.S.-European relationship to the evolution of European unification,*
*preserving transatlantic comity, and renewing the transatlantic partnership.*

Adapting to the Evolution of European Unification

The United States has generally supported European unification as it has evolved over the past five decades. Washington has viewed the process of integration as a vehicle for democratizing and pacifying Europe, for expanding international trade and investment, and for creating a more effective partner on the other side of the Atlantic. The United States has reaped considerable benefit from the success of European integration.

Americans no longer need to stand guard on the continent to keep Europe's great powers at bay. They benefit from Europe's prosperity, with transatlantic commerce reaching $2.5 trillion per year and employing directly or indirectly some 12 million workers on both sides of the Atlantic.³ And a more unified Europe has more often than not backstopped U.S. efforts to liberalize the global economy and provide effective international leadership.

Amid its steady support for European unity, however, the United States has
maintained quiet reservations about a Europe that could become too strong, challenging
U.S. leadership as its growing power leads to a desire for more autonomy. This concern
became more pronounced over the course of the past decade due to Europe's diminished
strategic dependence on the United States and the EU's efforts both to build its own

³ Joseph Quinlan, *Drifting Apart or Growing Together? The Primacy of the Transatlantic Economy* (Washington, D.C.: Center for Transatlantic Relations, 2003), p. 3.

Rapid Reaction Force and to further centralize decision-making on matters of foreign and
security policy.

In the weeks preceding the Iraq war, the potential for a strategic divide between
the United States and Europe turned into reality, with France and Germany taking the
lead in opposing U.S. policy. The Bush administration reacted by seeking to capitalize
on differences of opinion within Europe. It succeeded in building a supporting coalition
led by Britain, Spain, and Italy, and joined by a host of smaller EU members as well as
most Central European countries. In the aftermath of the war, those countries that backed
U.S. policy have enjoyed much closer relations with the United States than those that did
not. The rift over Iraq has understandably prompted Washington to reconsider the
desirability of further European unity, particularly in the realm of defense.
What partial
consequence?

The pace and scope of European integration are matters that are the domain
primarily of Europe's own citizens. Nonetheless, developments inside Europe affect U.S.
interests and U.S. policy can have a direct impact on the trajectory of European
integration. Both sides of the Atlantic would thus benefit from a common understanding
of U.S. policy toward the evolution of the EU. The Task Force recommends the
following guidelines.

The United States should as a matter of principle support both a deeper and a
wider Europe. A deeper Europe ensures the irreversibility of union and could potentially
lead to an EU that becomes a more effective partner of the United States. A wider
Europe ensures that peace, democracy, and prosperity will continue to spread eastward.
Deepening and widening are thus both in America's interest.

U.S. support for continued European integration should be contingent, however, on the purposes to which the EU directs its increasing power and collective character. Should the EU cast itself as a counterweight to the United States, Washington would be justified to withhold support for deeper integration – and indeed to seek to dilute the union. Should the EU, as it has done historically, instead apply its energies toward working with the United States on a common agenda, Washington should welcome deeper union for Europe.

Both sides of the Atlantic have an important role to play in channeling the EU's power and purpose in the appropriate direction. Europe's leaders must cease adopting anti-American positions, which they have been doing with increasing frequency both to win votes and to build popular support for European integration. Touting the EU as a counterweight to America, even if more rhetoric than reality, risks becoming a self-fulfilling prophecy by fueling transatlantic tension and ensuring that Washington looks askance at deeper union. For its part, Washington needs to show greater sensitivity to adverse changes in perceptions of the United States among European publics. Opinion surveys reveal a sharp upturn in anti-American sentiment in many European countries – one of the reasons politicians have embraced it for political gain. More effective U.S. diplomacy is needed if younger Europeans are to retain the affinity for America that has helped sustain decades of partnership across the Atlantic.

Washington can also afford to be relatively relaxed about the challenge posed by a rising Europe; for the foreseeable future European weakness will present more of a threat to the transatlantic relationship than European strength. The EU falls far short of speaking with a single voice on matters of foreign policy and its military capability,

[Y]

despite recent reforms, remains quite limited. The impending entry of ten new members will absorb considerable attention and resources in the next few years, making it unlikely that the EU will make substantial progress on forging a common security policy and acquiring the assets needed to back it up. Europe's shortcomings on this front are one of the main reasons that a strategic separation is taking place across the Atlantic.

From this perspective, a more collective and capable Europe, provided that the EU throws its weight behind rather than against U.S. leadership, is an important ingredient to putting the Atlantic link on a more sound foundation. So too should the planned appointment of a single foreign minister for the EU go at least part way toward providing Washington the single point of contact for which it has often asked. The key issue for now is not whether the U.S. should welcome such developments, but whether Europe will in fact follow through with its plans for a more common and capable defense program, putting in place the building blocks of what could become a more mature and effective partnership with the United States.

## Preserving Comity

As the United States and Europe seek to put their relationship on a new foundation, they must first ensure the preservation of an Atlantic zone of peace and prevent backsliding toward balance-of-power competition. Indeed, Americans and Europeans need to take urgent measures to arrest the tearing of the Atlantic community's fabric and build barriers against the return of geopolitical rivalry. Reclaiming comity is a necessary step on the way to renewing partnership.

Meeting this challenge entails revisiting the founding principles and ordering architecture that have guided the Atlantic democracies since World War II. The end of

13

the Cold War and the events of September 11 have compromised the relevance of certain
principles and the institutions that embody them. In this sense, the international
community has arrived at a historical intersection every bit as fundamental as the turning
points that emerged after World War I and World War II. International norms and
institutions need to be adapted accordingly. The Task Force recommends two key
initiatives in this respect: 1) Update transatlantic institutions to reflect new conditions; 2)
Revise the rules of the road that guide U.S.-European relations.

*Updating Transatlantic Institutions.* The institutional infrastructure of the transatlantic relationship has become obsolete. NATO remains an important institution, but its centrality and cohesion have been diminished by the end of the Cold War and the changing security agenda. Many of the new issues requiring transatlantic cooperation fall outside the traditional realm of defense. Accordingly, NATO is not suited to continue serving as the primary institutional bond between America and Europe. Nor are other institutions picking up the slack. Official contacts through the U.S. mission to the EU and the EU mission to the United States remain quite circumscribed and are largely commercial in nature. Regular U.S.-EU summits continue, but they remain more ceremonial than substantive. Meanwhile, high-level contacts have fallen off precipitously. During the 1990s, the U.S. Secretary of State on average traveled to Europe once a month. In contrast, Secretary of State Colin Powell traveled to Europe six times in 2001 and only three times in 2002.⁴

The Task Force recommends establishing a Transatlantic Cooperation Council (TCC) to serve as a new oversight body for the Atlantic community. The TCC would be a small standing council of high-level U.S. and European officials. It would have a broad

⁴ Ivo Daalder, "The End of Atlanticism," *Survival*, vol. 45, no. 2 (Summer 2003), pp. 153-154.

[Y]

purview, covering diplomatic, defense, and commercial matters. In design and function, it might resemble the EU Commission, seeking to provide the same oversight and initiative for the transatlantic community that the Commission has provided for Europe. The TCC would help coordinate U.S. and European policy on a day-to-day basis. It would serve as a vehicle for improving joint management of emerging crises, perhaps convening contact groups similar to those that have recently proved valuable in dealing with conflict in the Balkans and Middle East. The TCC would also provide a regular forum for a longer term dialogue about updating the norms that are meant to define what constitutes legitimate action in the international arena.

Although this last function could prove to be the TCC's most challenging, it would perhaps be its most important. If transatlantic comity is to be preserved, the United States and Europe must sustain adherence to a common set of legitimating principles and procedures. This objective can by no means be taken for granted, as the tortured diplomacy over the Iraq war made amply clear. Although defining the parameters of legitimate action is a matter for the entire international community, a U.S.-European dialogue is an appropriate starting point. A broader revision of guiding norms will be much easier to achieve at the UN – perhaps through the formation of an informal "Caucus of the Democracies" – if agreement is first reached among the Atlantic democracies.

The agenda for a transatlantic dialogue on revising the rules of the road should include, but not be restricted to, the following issues:

*The Legitimate Use of Force.* Prevailing international norms, as enshrined in the UN Charter, generally treat the use of force as legitimate only when such action takes the

15

[v]

form of self-defense against aggression or is approved by the UN Security Council. In practice, such norms have become obsolete. The threats posed by terrorism and the proliferation of weapons of mass destruction to rogue nations may under some circumstances necessitate preventive war or preemptive action. And as the Atlantic democracies recently found in Yugoslavia, they may feel compelled to take military action despite the absence of UN authorization. Europe and the United States should engage in a constructive dialogue about preventive war, preemptive action, and the appropriate role of international institutions in authorizing the use of force. Recent planning documents adopted by the EU call for a more robust strategy of intervention to address threats from terrorism and WMD, suggesting that the two parties might find more common ground than initially presumed.⁵ Amity across the Atlantic is far more likely to be preserved if both parties search for a common understanding than if they simply tolerate the continued divergence of practice from principle.

*The Role of Institutions and Multilateralism.* Different approaches to the appropriate role of international institutions have been one of the main sources of transatlantic tension. Opposing positions on the Kyoto Protocol and the International Criminal Court contributed substantially to the polarization that characterized Atlantic relations well before the falling out over Iraq. Europe's embrace of multilateralism arises from its own success in using institutions and attenuated sovereignty to build a continent at peace. America's ambivalence toward multilateralism stems from its primacy as well as from a political culture that has historically attached great weight to sovereignty and freedom from external constraint.

substantive
disagreement

⁵ See, for example, “Basic Principles for an EU Strategy against Weapons of Mass Destruction,” Council on Ministers, June 2003, 10352/03; and Javier Solana, “A Secure Europe in a Better World,” Council of Ministers, June 2003, SO138/03.

16

Despite these contrasting approaches, both parties have compelling reasons for reclaiming common ground. Europe will find international institutions much less effective if the world's only superpower steps away from them. And even though the United States might prefer to wield its primacy in unfettered fashion, it suffers a loss of popular support abroad when it is seen as acting unilaterally, making it harder for Washington to find willing allies and achieve its objectives. In addition, many U.S. goals — fighting terrorism, stemming the proliferation of WMD, managing the global economy — can be effectively pursued only through multilateral efforts.

The outlines of a new bargain may well emerge amid a transatlantic dialogue about adapting institutions to geopolitical realities. Should Europe agree to craft institutions that better meet the challenges of the day, the United States would be more likely to work within those institutions, reaping the benefits of their enhanced utility and restoring confidence abroad in the character of U.S. leadership.

*Dealing with Disagreements.* In the absence of the Soviet threat and in the face of a wide array of new challenges, America and Europe will disagree more frequently than they did during the Cold War. They must therefore map out new rules of the road to ensure that such disagreements do not undermine transatlantic comity. It is particularly important that the United States and Europe avoid directly blocking or undermining each other's initiatives. Opting out of joint military action, rather than directly opposing such action, provides one potential option. The nineteenth-century Concert of Europe offers a useful model in this respect.⁶ The TCC would also provide a valuable forum for

⁶ Concert members often used abstention from participation in joint action as a way of containing disagreements. In 1820, for example, following a liberal uprising in Naples, Austria, Prussia, and Russia wanted to intervene to squash the uprising and reverse the threat it posed to conservative political forces. The British opposed intervention and refused Metternich's suggestion that they participate in suppressing

[Y]

addressing how to handle longer term disagreements, such as those surrounding the
Kyoto Protocol and the International Criminal Court.

The overriding goal of this broad dialogue would be to build a stable floor
beneath the success of the United States and Europe in carving out an Atlantic zone of
peace. That success may well be jeopardized unless the two parties jointly map out
common understandings and update the international system's guiding principles to a
changed world.

Renewing the Transatlantic Partnership

Locking in a democratic and integrated Europe and ensuring comity between the
EU and the United States – the top two priorities of a new Atlantic dialogue – are well
within grasp. If attained, these two objectives would then provide the foundation for
pursuing the more ambitious goal of reestablishing a close Atlantic partnership as the
anchor of the international system. The Task Force's recommendations for renewing the
Atlantic partnership fall into two areas: *recasting the traditional defense partnership,*
*and defining a new agenda for global cooperation.*

Recasting the Traditional Defense Partnership

NATO's Continuing Relevance. A Europe at peace and America's shifting
strategic priorities have deprived NATO of its former centrality. Nonetheless, NATO
continues to fulfill important functions and the interests of America and Europe alike
would suffer if the alliance unravels. As this Task Force recommends, a new
transatlantic institution with a broader mandate is needed and should be high on the
transatlantic agenda. In the meantime, however, NATO remains the primary institutional

the revolt. Rather than risk comity among the great powers, however, Castlereagh ultimately assented to
the operation even though Britain opted out of participation.

18

[Y]

linkage across the Atlantic and the most appropriate forum for U.S.-European consultation on the full range of security matters. Unless and until a new institution emerges, it would be prudent to preserve NATO's role as the Atlantic community's main deliberative body.

It is also the case that NATO continues to perform essential military tasks. Although the bloodshed has ended in the Balkans, there remains much unfinished business in the region and the alliance continues to preserve an uneasy peace. Even as the EU gradually assumes from NATO increased responsibility for peacekeeping in Bosnia, Kosovo, and Macedonia, the alliance must stay engaged to prevent backsliding and help address residual political and territorial issues.

Although Europe's lack of power projection capability has diminished NATO's relevance to America's new security concerns outside Europe, the EU's capacities in peacekeeping and nation-building have proved crucial to backing up America's war-fighting capacity. NATO's integrated military structure provides a valuable vehicle for making the most of the complementary nature of European and American capabilities. NATO is now in command of peacekeeping operations in Afghanistan, may well become more involved in Iraq, and could potentially play a major role in facilitating a peace settlement between Israel and the Palestinian Authority.

Finally, NATO remains an important institution for encouraging reform and integration in Europe's periphery, particularly in Turkey, Russia, and Ukraine. Turkish membership in NATO has helped strengthen Turkey's westward orientation. The NATO-Russia Council has given Moscow a sought-after voice in the alliance and contributed to a new level of concrete cooperation between Russia and the United States.

19

[Y]

The allure of potential NATO membership as well as activities carried out under the auspices of the Partnership for Peace program have helped promote reform in Central Europe, Ukraine, and other countries in Eastern Europe. As the United States focuses its primary attention on the struggle against terrorism, NATO continues to facilitate the quiet consolidation of peace in Europe's east and south.

*Adapting NATO to New Conditions.* As NATO continues to fulfill these essential functions, it should also seek to increase its relevance by pursuing several key reforms. First, as mentioned above, an undeniable strategic separation is taking place across the Atlantic, with Europe no longer enjoying its pride of place among America's strategic priorities. As a result, primary responsibility for managing European security is likely to shift, albeit gradually, from America to the EU. This shift necessitates that Europe step up its defense reforms and its defense expenditure, with 2.5 percent of GDP (the current level of spending in the UK and France) a reasonable spending target. As Europe's defense responsibilities evolve, NATO-EU links must be deepened and regularized to ensure transparency and prevent institutional rivalry. And the United States, even as it draws down the number of troops deployed on the continent, should maintain a presence sufficient to preserve both interoperability and the sense of collective purpose that arises from the integrated military structure. The opening of new U.S. bases in Central Europe should not come at the expense of the quality of military-to-military contacts with traditional allies in Western Europe.

Second, NATO must find the appropriate balance between a new emphasis on out-of-area missions and its traditional focus on European security. NATO's continued relevance to the United States will in part depend on its engagement in areas outside

20

Europe. On the other hand, seeking to turn the alliance into a vehicle for global force projection would likely be its death-knell, confronting Europe with demands for which it has neither the military resources nor the political appetite. To fashion an appropriate compromise, Washington should agree to keep a hand in the management of European security and traditional NATO missions. In return, Europe should agree to maximize NATO's involvement in peacekeeping out-of-area. NATO members would be wise to adapt force capabilities accordingly, investing in strategic lift as well as in training for nation-building tasks such as peacekeeping and policing. They should also expand alliance activities in Central Asia and the Caucasus, areas of growing interest to both the United States and Europe due to the struggle against terrorism and NATO and EU enlargement.

In the context of NATO's broadening role outside Europe, it is essential for both the United States and EU members to secure the alliance's involvement in stabilizing Iraq. Bringing peace and order to Iraq is now at the top of America's strategic priorities. Washington's future assessments of how much to invest in NATO's well-being may well turn on the ability of the alliance to contribute to the mission in Iraq. Both the United States and the EU thus have an overriding interest in brokering a compromise at the UN, one would that preserve unity of command but also enhance the UN's authority to a degree sufficient to clear the way for NATO's engagement on the ground. NATO should also expand its peacekeeping role in Afghanistan, where stabilization and reconstruction, although progressing, require additional resources.

Third, NATO must face the reality that many future missions are likely to be carried out by coalitions of the willing, not the alliance as a whole. As a result, NATO

21

should consider changing its unanimity rule to facilitate effective decision-making, especially with membership growing to twenty-six. The alliance should standardize procedures for allowing individual members to opt out of specific missions, reducing the likelihood that disagreement cause paralysis. NATO members should also put a premium on pre-war consultation as a means of avoiding open and acrimonious stand-offs of the type that occurred over the Iraq war. Even if the alliance chooses not to engage in a specific operation, a respectful and judicious deliberation prior to conflict will make it more likely that NATO engage in post-conflict stabilization and reconstruction.

## Defining a New Agenda for Global Cooperation

With Europe enjoying an unprecedented level of peace and prosperity, many of the challenges which America and Europe must address together lie outside both the traditional realm of security and the Atlantic zone. Formulating a joint strategy for dealing with these challenges will enhance global stability and at the same time serve as a pragmatic means of breathing new life into the transatlantic partnership.

*The Global Economy.* The United States and the EU remain the engines of global growth and the stewards of the international economy. Their commercial relationship remains healthy and mutually beneficial. Although commercial ties alone are insufficient to serve as the foundation of a broader strategic partnership, they certainly provide strong incentives for both sides of the Atlantic to resolve their political differences. The United States and the EU should develop a new agenda for economic cooperation consisting of the following steps.

* Help stimulate the global economy by stimulating growth at home. For the United States, this entails implementing a fiscal stimulus while taking responsible steps to avoid a ballooning budget deficit over the long term. For

22

Europe, this means liberalizing its financial services and labor markets, reforming pension systems, and easing fiscal constraints.

* Further liberalize U.S.-EU trade and work toward successful completion of the Doha round of world trade negotiations. Eliminating tariffs on and subsidies of textiles and agricultural goods is of particular importance because of the benefit to developing countries.

* Take steps to insulate U.S.-EU commercial relations from political rivalry. Political tensions have affected trade only at the margins, but they do have the potential to spill over into the commercial realm. Both sides should avoid the talk of boycotts that emerged amid the Iraq war and pursue gestures of good will, such as settling differences over U.S. tax subsidies for U.S. firms operating abroad and European restrictions on imports of genetically modified foods.

* Enhance U.S.-EU efforts to make the G-8 a more effective forum for managing the global economy.

*Non-Military Aspects of Counter-Terrorism and Counter-Proliferation.* Much of the struggle against terrorism and the proliferation of weapons of mass destruction entails political cooperation rather than military action. The United States and Europe should address a number of fronts.

* Deepen intelligence, law enforcement, and financial cooperation on disrupting and dismantling terrorist networks.

* Tighten and make more intrusive counter-proliferation regimes, both to make them more effective and to build U.S. support for multilateral efforts.

* Close ranks on dealing with Iran, the next potential source of transatlantic discord in the Middle East. The notion of contingent engagement could provide considerable common ground. The United States should agree to soften its policy of isolation, provided that Iran agrees to cease its nuclear weapons program. Europe in turn should agree that its strategy of engagement would be substantially curtailed if Iranian cooperation is not forthcoming. ended

*The Middle East Peace Process.* The greater Middle East will continue to present the most pressing and imminent threats to the common interests of the United States and Europe. Bringing about a peaceful settlement of the Israel-Palestine conflict is a critical component of addressing these threats. With violence threatening to imperil the road map, the United States and Europe must step up efforts to coordinate their diplomacy.

23

* Expand the use of the Quartet to develop and monitor joint initiatives.

* Work to diminish European claims that the United States is too pro-Israel and Europe too pro-Palestinian by developing a common set of standards by which to judge Israeli and Palestinian adherence to the road map.

* More effectively use EU financial assistance to the Palestinian Authority to promote political reform and enhance its ability to crack down on militant groups.

*Economic Growth and Political Reform in the Developing World.* The United States and Europe need to develop a long-term strategy for fostering economic development and political liberalization in the Middle East and Africa. Otherwise, they will continue to find themselves struggling against the adverse symptoms of illiberal regimes and failed states rather than attacking their root causes. Specific elements of a U.S.-European "Marshall Plan" for the developing world should include the following:

* Eliminate trade barriers with developing regions in order to promote growth.

* Build on the Bush administration's Millennium Challenge Account and secure better coordination of U.S. and EU assistance programs.

* Expand the Bush administration's efforts to tie aid to good governance and harmonize conditionality with the EU.

* Increase available funding for HIV/AIDS prevention and treatment.

* Deepen cooperation to improve education and health care systems. At relatively low cost, the U.S. and Europe have the potential to markedly expand access to education and basic health care, both of which are critical to social and economic development.

* Map out new rules of the road for humanitarian intervention in Africa and help develop indigenous African peacekeeping capabilities to prevent and halt civil wars and ethnic conflict.

* Work toward a new regime for meeting environmental challenges that encompasses both the industrialized and the developing world.

*East Asia.* The United States remains the dominant extra-regional actor in East Asia. Nonetheless, through the Asia Europe Meeting (ASEM) and less regularized channels, the EU is enlarging its diplomatic and economic engagement in the region. This development provides an opportunity for enhanced U.S.-European cooperation in

24

[Y]

the region, but also a new arena for competition. Guidelines for facilitating transatlantic cooperation in East Asia include:

* Trade liberalization in the region should move forward multilaterally and not favor either the United States or the EU.

* Although the EU is not represented in the six-party talks aimed at dismantling North Korea's nuclear weapons program, the EU should be consulted and encouraged to backstop the negotiations and contribute to prospective aid packages.

* As they did in clearing the way for China's entry into the WTO, the United States and Europe should map out a joint strategy for promoting political reform in China and drawing the country more fully into international markets and institutions.

## Conclusions

In issuing this report, the Task Force hopes to make two main contributions to ongoing deliberations about the state of the transatlantic relationship. First, the group concludes that the U.S.-European partnership faces grave challenges to its viability arising from fundamental geopolitical changes. As they seek to repair their relationship, Americans and Europeans will be best served if they acknowledge the gravity of the crisis in Atlantic relations, understand its deeper structural origins, and appreciate that more than cosmetic efforts are required to adapt their partnership to new realities.

Second, the Task Force offers both a conceptual framework and a concrete agenda for putting Atlantic relations on a more sound foundation. It identifies three main objectives for the Atlantic community – locking in a democratic and integrated Europe, preserving comity between the United States and the EU, and renewing the transatlantic partnership. It endorses a vision of a new transatlantic relationship that is looser but broader than that of the past, and lays out a set of policy recommendations for realizing this vision. The Task Force exhorts policymakers and concerned citizens in the United

25

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CFR Task Force on Transatlantic Relations

July 22 Speaker Bios

Rt. Hon. Gordon Brown MP

Gordon Brown has served as the United Kingdom's Chancellor of the Exchequer since May 1997. He has been MP for Dunfermline East since 1983.

Mr. Karsten D. Voigt

Karsten D. Voigt has been the German Foreign Office's Coordinator for German-American Cooperation since January 1999. He previously was a member of the Bundestag for twenty-two years.

Ambassador Wolfgang Ischinger

Since July 2001, Wolfgang Ischinger has been the Federal Republic of Germany's Ambassador to the United States. From 1998 to 2001, he served as State Secretary in the German Foreign Office.

Ambassador Jean-David Levitte

Jean-David Levitte has served as French Ambassador to the United States since December 2002. He previously was French Ambassador to the United Nations and Senior Diplomatic Advisor to President Chirac.

Ambassador Richard N. Haass

Richard N. Haass is President of the Council on Foreign Relations. He has held several government posts, most recently that of Director of Policy Planning for the Department of State.

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Gordon Brown was appointed as Chancellor of the Exchequer on 2 May 1997. He has been MP for Dunfermline East since 1983 and Opposition spokesperson on Treasury and Economic Affairs (Shadow Chancellor) since 1992.

Mr Brown was born in 1951 and educated at Kirkcaldy High School and Edinburgh University where he gained 1st Class Honours and then a Doctorate. He was Rector of Edinburgh University and Chairman of the University Court between 1972 and 1975. From 1976 to 1980, Mr Brown lectured at Edinburgh University and then Caledonian University before taking up a post at Scottish TV (1980 - 1983).

After becoming an MP, Mr Brown was the Chair of the Labour Party Scottish Council (1983 - 1984). Before becoming Shadow Chancellor he held two other senior posts on the Opposition front bench - Shadow Chief Secretary to the Treasury (1987 - 1989) and Shadow Trade and Industry Secretary (1989 - 1992).

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Curriculum Voigt

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Auswärtiges Amt

Homepage: The Federal Foreign Office : Organisation and Tasks : Tasks of the Directorates-General : Curriculum Voigt

Karsten D. Voigt
Coordinator for German-American
Cooperation

Federal Foreign Office, Werderscher Markt 1, 10117 Berlin,
Germany

Postal address: 11013 Berlin, Germany

Tel.: 0049-1888-17-2870

Fax: 0049-1888-175-2870

E-mail: KO-USA-Vz@auswaertiges-amt.de

Date and place of birth: April 11, 1941, Elmshorn (Germany)

1960 - 1969 Studies of history, German philology and Scandinavistic at the universities of Hamburg, Copenhagen and Francfort

1969 - 1976 Member of the Board of Directors and Deputy Director of Frankfurt Community College

1969 - 1973 Chair and Deputy Chair of the German Young Socialists Organisation

1976 - 1998 Member of the German Federal Parliament (Bundestag), Member of the Foreign Affairs Committee of the Bundestag and Deputy member of the Defence Committee of the Bundestag

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1984 - 1995 Member of the Executive Committee of the SPD

1985 - 1994 Member of the Executive Committee of the Social Democratic Parties of the European Union (SPE)

1992 - 1998 Chairman of the German - Russian Parliamentarians' Group

since 01.02.1999 Coordinator for German - American Cooperation

1977 - 1998 Member of the Parliamentary Assembly of NATO

1989 - 1993 Chairman of the Defence and Security Committee of the Parliamentary Assembly of

Karsten D. Voigt
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Cooperation

http://www.auswaertiges-amt.de/en/aomt/aufgaben/ohteilungen/cv-voigt.html

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Wolfgang Ischinger, German Ambassador to the United States of America since July 31, 2001, was born in 1946 near Stuttgart in southern Germany and joined the German Foreign Service in 1975 with German law degree and a master's degree from the Fletcher School of Law and Diplomacy. He worked at the UN in New York and was posted to Washington, D.C., and to Paris. In Bonn, he served as special assistant to Foreign Ministers Genscher and Kinkel. From 1993 to 1998, Ambassador Ischinger served in various senior positions in the Foreign Ministry where he led the German delegations to a number of international negotiating processes, including the Bosnia Peace Talks at Dayton, Ohio, the negotiations concerning the NATO-Russia Founding Act, as well as the negotiations on NATO enlargement and on the Kosovo crisis.

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Embassy of France in the US - Ambassador Jean-David Levitte

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Draft Outline of Task Force Report

I. The Transatlantic Rift - Gravity and Causes.

* The current deterioration in relations is not just another round of irritation. The rift runs deep and jeopardizes decades of transatlantic partnership.

* The underlying causes of the rift are structural in nature.

  * The end of the Cold War and the disappearance of a common threat.

    * America no longer needs to remain Europe's protector.

    * Europe is less reliant on the U.S. for its security.

  * The evolution of the European Union as a more mature and collective polity.

  * September 11 and diverging threat perceptions.

* Leadership, rhetoric, and style are also contributing to the rift. The behavior of governments on both sides of the Atlantic has reinforced structural tensions, adding to the ill will. Matters of tone and style are not underlying causes of the divide, but they complicate the task of adapting and adjusting to new conditions.

* Europe and America do share common values and have robust economic ties. But policy makers should not place false confidence in the ability of shared values and economic linkages to keep the Atlantic bond intact.

* Restoring cooperative Atlantic relations should be a top priority for Europeans and Americans. The stakes could not be higher. The U.S.-Europe partnership has been the anchor of the international system for decades. Neither side can afford to let it atrophy.

* This report sets out a strategy for keeping the Atlantic link strong and vital.

II. Guiding Principles

* The Atlantic Alliance in its traditional form cannot be restored. Too much has changed.

  * Europe and America are no longer central to each other's security.

  * Generational and demographic change is proceeding on both sides of the Atlantic.

  * The two sides of the Atlantic no longer share a strong sense of common identity.

* A new type of Atlantic partnership is, however, both highly desirable and feasible. America and Europe still share common ends even if they at times differ on the means. If America and Europe work together, they are far more likely to realize these common ends.

* A new transatlantic bargain entails:

  * Europe must do more to recognize the new strategic environment and help address new threats. In particular, it should demonstrate a willingness to

engage the United States in a dialogue about how to advance the struggle
against terrorism and the proliferation of weapons of mass destruction. As
part of this effort, Europe must be willing to forge with Washington an
understanding on the principles and practice of preventive war. The new
security strategy recently approved by EU leaders is an encouraging first
step.

o The United States must seek to ensure that its international leadership is exercised in a multilateral spirit. While reserving the right to act alone when necessary, Washington must reassure Europe of its willingness to adhere to the habits of consultation and cooperation that are the foundation of partnership. In the words of Tony Blair, the United States must lead through persuasion rather than command.

o As the EU evolves, European leaders should articulate a vision of a Europe that retains vital ties to the United States even as it grows stronger and more independent.

o As it has since World War II, the United States should support the continued integration of Europe, including the EU's efforts to build a common defense policy, provided that the EU does not adopt an anti-American identity and cast itself as a counterweight to America. In this respect, Washington should welcome the institutional reforms proposed by Europe's recent convention.

III. The Future of NATO

Why NATO Remains Relevant

* A Europe at peace and America's shifting strategic priorities have deprived NATO of its former centrality. Nonetheless, NATO continues to fulfill important functions and the interests of America and Europe alike would be compromised if the Atlantic Alliance erodes.

* NATO remains the premier forum for U.S.-European consultation on security matters. It is within NATO that the United States and Europe should seek to forge a meeting of the minds on the full range of security threats.

* Although Europe's lack of power projection capability has diminished NATO's relevance to America's new security concerns, Europe's capacities in peacekeeping and nation-building complement well America's war-fighting capacity. NATO provides a vehicle for utilizing the complementary nature of European and American strengths.

* Although the bloodshed has ended in the Balkans, there remains much unfinished business in the region. Even as the EU gradually assumes from NATO increased responsibility for peacekeeping in Bosnia, Kosovo, and Macedonia, NATO must stay engaged to prevent backsliding and help address residual political and territorial issues.

* NATO remains an important institution for encouraging reform and integration on Europe's periphery, particularly in Russia, Ukraine, and Turkey. Even as the

2

United States focuses on the struggle against terrorism, it must not neglect the importance of consolidating peace in Europe's east and south.

## How NATO Should Be Adapted To New Conditions

* As the United States draws down its force levels in Europe, the EU must prepare to assume more responsibility for managing European security. As Europe's defense capacities evolve, NATO-EU links must be deepened and regularized to ensure continued transatlantic consultation.

* NATO must find the right balance between out-of-area missions and its traditional focus on European security. Washington should not seek to turn the alliance into a vehicle for global force projection. At the same time, NATO should maximize its contribution to ongoing operations in Afghanistan and Iraq.

* Future conflicts may well be fought by coalitions of the willing rather than a collective NATO. Nonetheless, Washington should maximize pre-war consultations within NATO in order to facilitate the involvement of the alliance in post-war stabilization and reconstruction.

* NATO should develop its capacities in the areas of military police and peacekeeping.

* [Perhaps include a reference here to coalitions of the willing and the potential reconsideration of NATO's unanimity rule? A possible formulation: As NATO continues to enlarge, reconsideration of the unanimity rule will be necessary to ensure effective decision making within the alliance.]

## IV. Trade and Finance

* The U.S. and the EU account for roughly 40% of global GDP. They remain the engines of global growth and the stewards of the global economy. U.S.-European partnership continues to be vital to global economic stability.

* Commercial relations across the Atlantic remain strong. Political tensions have affected trade only at the margins; matters of commerce tend to be compartmentalized from those of security. But this segregation also means that strong commercial relations will not on their own preserve robust security links.

* If political tensions across the Atlantic continue to mount, they do have the potential to spill over into the commercial realm. At a minimum, American and European trade negotiators will find it more difficult to pursue further liberalization of the global economy if they are operating against the backdrop of a transatlantic rift.

* Specific initiatives that the U.S. and Europe should pursue include the following:

  * Coordinate diplomacy to ensure successful conclusion of the Doha round.

  * To be determined (LS, Gordon Brown, etc.)

## V. The Global Agenda

* With the Atlantic zone enjoying an unprecedented level of peace and prosperity, many of the challenges which America and Europe must address together are in the developing world. Identifying these challenges and mapping out a transatlantic strategy for dealing with them will enhance global stability and serve as a pragmatic means of breathing new life into the transatlantic partnership.

* The greater Middle East will continue to present the most pressing and imminent threats to the common interests of the United States and Europe. As efforts to realize the road map intensify, the United States and Europe must step up efforts to coordinate their diplomacy. Similar convergence of strategy should be pursued toward Iraq and Iran. Specific steps include:

  * Expand the use of the Quartet in developing and implementing regional initiatives.

  * The United States and EU should close ranks on a diplomatic strategy for halting Iran's nuclear program.

  * Washington should enlist greater European involvement in Iraq, even if doing so entails a more prominent UN role.

  * Other initiatives to be determined.

* The United States and Europe also need to develop a long-term strategy for fostering economic development and political liberalization in the Middle East and Africa. America and the EU urgently need to map out a program that succeeds in maximizing their diplomatic leverage and speeding aid and trade. Specific steps include:

  * Eliminating trade barriers in the areas of agriculture and textiles.

  * Supporting local organizations and programs that promote the deepening of civil society.

  * Expanding the Bush administration's efforts to tie aid to good governance while harmonizing conditionality with the EU.

  * Enhancing cooperation and funding on HIV/AIDS prevention and treatment.

  * Enhancing joint efforts to prevent and halt civil wars and ethnic conflict in countries such as in Liberia, Sierra Leone, Cote d'Ivoire, and Congo.

  * Deepening transatlantic cooperation to promote basic education and health care systems. At relatively low cost, the U.S. and Europe have the potential to markedly expand access to education and health care, both of which are critical to social and economic development.

* Through the Asia Europe Meeting (ASEM) and less regularized channels, the EU is enlarging its diplomatic and economic presence in East Asia. This development provides an opportunity for enhanced U.S.-European cooperation in the region. Top priorities include resolving the crisis on the Korean peninsula and drawing China into international markets and institutions.

* Washington's decision to opt out of the Kyoto Protocol on climate change continues to sour transatlantic relations. To remove this irritant and to address looming environmental crises, the United States should come forward with its own set of policy proposals.

VI. New Institutional Initiatives

* In this final section of the report, we might take up some of the proposals for institutional reform that were discussed in the task force. These include:

  * The establishment of a standing Contact Group (Ash).

  * The formation of a caucus of democracies within the UN (Slaughter).

  * Other UN issues, such as reform of the Security Council or the General Assembly.

  * Changing the structure/composition of U.S.-EU summits, especially in light of the institutional changes likely to take in place within the EU at the upcoming Intergovernmental Conference. In this respect, if the EU is soon to have a single foreign minister and an elected president of the Council, the United States should prepare to deal more regularly with a collective EU rather than with its individual member states.

  * Should the report mention the dispute over the ICC?

Jessee Incao

From: ckupchan@cfr.org

Sent: Friday, July 18, 2003 8:15 PM

Subject: CFR Task Force on Transatlantic Relations -- July 22 Roster and Agenda

Roster.doc (46 KB) Notes.doc (133 KB)

This is a reminder that the third meeting of the Task Force on Transatlantic Relations will be held on Tuesday, July 22, from 12:00 to 6:00 pm at the Council's offices in New York (58 East 68th Street).

Attached, please find the agenda for Tuesday's meeting and the rapporteur's notes from the previous meeting on June 16. In addition, a recent op-ed by Timothy Garton Ash, Dominique Moisi, and Michael Mertes in the Financial Times is included below.

Please feel free to contact me if you have any questions.

Regards,
Charlie

(See attached file: Roster.doc) (See attached file: Notes.doc)

Copyright 2003 The Financial Times Limited
Financial Times (London)

July 11, 2003, Friday London Edition 1

SECTION: COMMENT; Pg. 19

LENGTH: 1110 words

HEADLINE: Only a club of three can bring European unity: TIMOTHY GARTON ASH, MICHAEL MERTES and DOMINIQUE MOISI:

BYLINE: By TIMOTHY GARTON ASH, MICHAEL MERTES and DOMINIQUE MOISI

BODY:

Germany, Britain and France are Europe's indispensable three. Their close co-operation is not a sufficient condition for Europe to have a serious foreign and security policy but it is a necessary one. As we saw over Iraq, if these three are divided, all Europe will be divided.

Today, the European Union faces a British problem, a French problem and a German problem. Each must be dealt with if the EU is to seize the unique opportunity of its eastward enlargement and build a new partnership with the US in the 21st century.

Europe's British problem is that, after 30 years of membership, the British still cannot make up their minds whether they really want to be full participants in the European adventure. Half-blinded by old prejudices, which are reinforced by a Eurosceptic press, they do not realise how European they have become.

Torn between Europe and their country's intimate ties with America, the British still harbour the illusion that they may best be served by an exclusive "special relationship" with the US. In the Iraq crisis, Tony

1

Blair had perfect pitch in Washington; but the British prime minister's Atlanticist and multilateralist policy, admirable in principle, fell down because of his failure to establish a single, strong, coherent European position in prior consultations with Paris and Berlin.

Europe's French problem is twofold: the French political and administrative elites tend to think naturally that what is bad for the US is good for France and they tend to transfer their sense of frustration with Washington to their relations with their smaller European partners, be they from "old" or "new" Europe.

It is true that what is good for the US is not necessarily good for Europe or France - but it does not follow that what is bad for America is good for France. France's widely shared frustration with some of the more unsavoury behaviour of George W. Bush's administration should not obscure the fact that no credible European ambition can be achieved in opposition to the US. And in Warsaw, The Hague or Riga, France will never be accepted on its own estimate as the regional equivalent of the US. It will take years for France to overcome the bitter legacy of President Jacques Chirac's comments to the prospective central and east European members of the EU: "They should have kept silent." True French ambition for Europe demands a sense of modesty and self-criticism.

Europe's German problem may be called "paradigm lost". The cold war reasons for German Euro-enthusiasm have disappeared. The Germans recovered national unity with their neighbours' consent. They are now living in a peaceful and prosperous environment of stable democracies, EU partners (present-day or prospective) and Nato allies. They no longer feel compelled to behave as model Europeans as a means of proving that they have stopped dreaming of hegemony over the continent.

Ten years ago people were anxiously asking whether Europe could cope with a united Germany. Today the question should be: can Germany cope with a united Europe? Will it continue to bring up the economic rear in the EU - or will it succeed in making a fresh start and pursuing new reformist goals as one of Europe's main driving forces? Last but not least, is it willing to increase its defence budget to advance the project of enhancing Europe's military capability?

So the British should be more European, the French should be more modest and the Germans should be bolder.

Europe will never be a serious political actor as long as its national leaders keep using foreign policy as a vehicle for their imaginary greatness, and as long as they decline to give Europe the means to realise its goals. For example, the new European "foreign minister" should have a strong staff, including EU career officials and the brightest and best from national ministries. His or her first task will be to formulate a European strategic approach to the challenges that confront the world, including rogue states, international terrorism and the proliferation of weap ons of mass destruction, as well as poverty, organised crime, drugs, people-smuggling and environmental destruction. The US should not have the monopoly on asking the right questions - especially if we think it does not always give the right answers.

Yet, with the best staff and analysis in the world, there will always be a tendency for the foreign policy of an EU of 25 and more states to remain vague and declaratory, based on lowest-common-denominator compromises. It is therefore essential that France, Germany and Britain come together in a systematic though not formalised way to ensure that European policy is substantial as well as common.

This should start with greater efforts to co-ordinate policy on the part not just of the foreign ministries in Berlin, Paris and London but also of the Bundeskanzleramt, the Elysee Palace and Downing Street. This operational trio, or "club of three", should be routinely extended to include a serious player in the White House (not just the State

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Department).

There might also be "contact groups" on the big new challenges facing Europe, such as Iran and the Israeli-Palestinian peace process. These would always include British, French and German representatives but also other relevant powers. In the case of the contact group for the Balkan wars in the 1990s, these were Russia and subsequently Italy. New groups might include Poland when the issue concerns eastern Europe, say, or Spain and Italy for North Africa. The groups would not be exclusive - but nor would they be open to all who just wanted a seat at the table for the sake of national prestige. Membership would have to be earned by proven competence, capability and seriousness.

Such proposals will immediately raise the hackles of other European states, who fear a directoire of Europe's big three. British, French and German officials sometimes like to suggest privately that a directoire is precisely what is needed, just so long as no one ever admits that it exists. Such dreams of a directoire are foolish. Our fellow Europeans know better and deserve better. But they should realise that if the only alternative acceptable to them is lowest-common-denominator mush and guff, nobody will profit. If the EU's influence in the world is close to zero, theirs will be even smaller.

Timothy Garton Ash is director of the European Studies Centre at St Antony's College, Oxford; Michael Mertes is a former adviser to Helmut Kohl and a partner at dimap-consult, a German think-tank; Dominique Moisi is senior adviser at the French Institute of International Relations

COUNCIL ON FOREIGN RELATIONS

58 EAST 68TH STREET • NEW YORK • NEW YORK 10021
Tel 212 434 9400 Fax 212 434 9880 www.cfr.org

Independent Task Force
On Transatlantic Relations
Session 3

July 22, 12:00 – 6:00 pm

Peter G. Peterson Hall
The Harold Pratt House
58 East 68th Street
New York, NY 10021

Council meetings are not-for-attribution, unless otherwise indicated. This means that participants are welcome to make use of information received at meetings, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant may be revealed; nor may one cite a Council meeting as the source of the information. Rapporteur notes may be posted on the Council's member website with the consent of the speaker and chair.

COUNCIL ON FOREIGN RELATIONS

**Chairs:**

Henry A. Kissinger
Chairman, Kissinger Associates, Inc.

Lawrence H. Summers
President, Harvard University

**Project Director:**

Charles A. Kupchan
Senior Fellow, Council on Foreign Relations

**Speakers:**

Gordon Brown
Chancellor of the Exchequer, United Kingdom

Karsten D. Voigt
Coordinator for German-American Cooperation,
Federal Republic of Germany

Jean-David Levitte
Ambassador of France to the United States

Richard N. Haass
President, Council on Foreign Relations

Independent Task Force on Transatlantic Relations

Session 2

June 16, 2003

I. From Diagnosis to Prescription

Kissinger

-Key issue: What weight should we give to structural conditions, to policy, to tone?

To what extent can the existence of a stronger Europe be influenced by American policy?

In Europe, political discourses are improving, but not analytical apparatus.

-Some of the policy questions that will be discussed: Whether or not to encourage a stronger Europe is not America's choice – how would we influence it anyway? This is a way of asking: what is the range in which America can act/have an impact?

Summers

-A central diagnostic issue surfaced in the last discussion: the extent to which the frictions are a reflection of a)deep underlying forces in the post Cold War period vs. b)policy choices the U.S. has made in recent years vs. c)tactics it has used in pursuit of policy choices.

-Without moving to the view that the U.S. should blame itself, must revisit the extent to which more successful handling of diplomacy on both sides over recent months may have led to more effective handling of the situation. The pessimism that comes from structural transformations might be overdone. A better capacity to manage disagreements on both sides is needed.

Kissinger

-2 types of structural change: 1) Collapse of USSR/nuclear proliferation; 2) Emergence of EU (challenge to policy-making on both sides).

How different would things have been if, for example, Stoiber had beat Schroeder? The underlying philosophical challenges that Europe is now posing to the U.S. would exist anyway, but perhaps not in so abrasive a definition.

Bartholomew

Epical changes in the strategic conditions that underlie the overarching structure:

-end of 400 year central problem to the international system: threat of single power dominance;

-end to centrality of European nations;

-1990s = decade when Europe turned inward, focused on construction with concomitant diminution of the sense of transatlantic community;

-baring of the enormous disparity of American power;

-emergence of a new threat.

These are fundamental changes in strategic conditions, to which it is hard to adapt;

Summers

-All of this is right (and was said last time). If this conversation had taken place in February 2002, it would have had an entirely different tone, even though all of Bartholomew's factors were already in place. There are also less fundamental tactical factors (that have the virtue of being more amenable to adjustment).

What would a conversation on these issues have looked like just 6 months after 9/11?

Joffe

Does this mean that structural reasons do not matter anymore? Rather, because of these
structural changes, events around the world were more dramatic. Fundamental change is that
Europe is less dependent on America strategically and America less willing to pay such high rent
for the strategic real estate Europe presented during the Cold War.

Are we willing to take note of these fundamental changes or are we going to say that all of this
could be overcome with good diplomacy? Would personalities like Clinton and Albright have
dealt with the situation differently?

Kissinger

It depends on what they did. If Clinton had wanted to go to war, he would have found the same
answers.

Summers

Must recognize that, in a difficult environment, how tactics are managed is important. One way
of posing the question (to separate importance of structural causes and tactics) is to ask: If this
discussion had taken place 6 months after 9/11, how different would it have been?

Is this crisis the result of a decision to have war, or of how that decision was managed + the
timing of that decision?

Perhaps the war could have been delayed until September 2003 with different consequences for
the relationship internationally.

Agree with the Kissinger proposition that the same actions with different language would have
been unlikely to change much. But this doesn't mean that the tactical realm is of little
consequence.

Kissinger

The problem is not only about policy disagreements, about how the U.S. has conducted the war
on terror. Also, how opposition has been justified in Europe – not just in policy disagreements,
but philosophical and even social gap between the U.S. and Europe that is largely independent of
policy issues.

Joffe

It has to do with balancing American power, and Europe as "un-America" -- sees its identity in
cultural, economic, identity opposition to the U.S.

II. Guiding Principles

Donilon

1) Important to put U.S.-European relations in a broader frame and examine how the U.S. manages hegemony. If you believe that institutions and alliances are key to enhancing U.S. power, then must put emphasis on U.S.-European relations. If you don't believe that's the case, then probably won't put emphasis.

2) Despite the fact that European and U.S.-EU policy are not central to U.S. foreign policy (fight on terrorism is what is central) or to European security policy (focused on integration), there are still important policy priorities, common threats and goals that must be addressed together:
- War on terrorism - not just defeating Al Qaeda, but denying safe haven, operational space intelligence sharing, financing etc.

- Combating WMD

- Ensuring continued flow of trade and investment

- Integrating Russia and Ukraine

- Key environmental and health challenges

3) Supporting or trying to inhibit integration. Is it in U.S. interest to help integrate Europe or should we try to divide and conquer?

Donilon bias: try to support integration and try to deal with a united Europe as much as possible – because always easier to put together coalitions when one has allies and hard + costly to assemble them ad hoc + cost of failure can be high. The Iraq coalition was costly both in terms of dollars and good will.

(Kupchan: Why does this mean we need a strong Europe?)

We shouldn't try to undertake new coalitions for each mission.

(Kissinger: We don't necessarily have to promote European integration, but shouldn't oppose it)

Would not undertake affirmative effort to impede integration. We would lose habit of cooperation and development of counterperspectives that come from constant dialogue. An effort to divide would cause more unity in Europe.

(Bartholomew: Does that mean we should seek to foster it?)

We get more value out of a united Europe. The currently stated policy of the U.S. government is to promote a unified and integrated Europe. If the U.S. doesn't try to divide and conquer, Europe won't seek to define itself as a counterbalance.

4) Before diminishing NATO (it has been in constant diminishment by this Administration), we must think hard about what we would replace it with. Walking away is a serious question.

5) Leadership, rhetoric and style matter in foreign policy - not just about states acting rationally:

- Leadership matters on both sides (Pew poll shows lowest levels of support for the U.S. are in countries where leaders actively opposed the U.S.);

- Rhetoric matters - in its first 8 months, the Administration took positions (on ICC and other issues) that were consistent on substance with Clinton or Congress, but incendiary because of style and rhetoric. They missed the concept of multiple audiences.

- Style matters - According to Ivo Daalder, in 2002, at a time when the U.S. was trying to build coalitions, Powell went to Europe only 3 times = statecraft mistake.

There are very difficult structural issues that emerged since the end of the Cold War and that exploded after 9/11 – strategic divergence re. war on terrorism. This needs to be managed by figuring out how to fit U.S.-EU relations into a strategic overarching framework. Style can exacerbate the moving of tectonic plates.

### Joffe

Would talking and "schmoozing" have kept Schroeder from running an anti-American campaign?

### Kissinger

The Schroeder campaign started ostensibly as a reaction to Cheney speech.

### Feldstein

France is a different case. Schroeder may have acted for short-term political gain. For France, this was not an unwelcome outcome. They "managed" the relationship because they wanted to establish a different relationship.

### Kissinger

France would have taken the same position regardless. Schroeder gave them the opportunity to bring in Germany. France understood that Schroeder feared isolation and would pay a price for helping to establish an "axis" in Europe (that France couldn't establish alone) so, at the end of January, turned to confrontation. This came as a surprise to Powell. Some of the Rumsfeld comments were in the context of NATO confrontation in which France and Germany objected to the transfer of Patriot missiles to Turkey - unprecedented step that he saw as offensive.

### Moravcsik

What do institutions like the EU give a politician? A certain amount of insulation from these short term give and take pressures - in EU, these things would have to be discussed, channels would remain open.

There is a soft pro-American majority in Europe on most issues. With a certain amount of give on the American side and institutional wherewithal on the European side, it could have been managed.

### Donilon

Preponderance of structural issues - would have played no matter who was in power on both sides of the Atlantic. Leadership, rhetoric and style could have an impact on how structural issues evolve and are managed.

### Ikenberry

How fundamentally does the Atlantic relationship need to be rethought? How deep and far-reaching is the rift? Can growing power disparities, differences in threat assessment, rising European identity all be consistent with an integrated and mutually acceptable Atlantic relationship?

This group needs to focus on damage limitation: containing conflict and adjusting to more conflictual relationship. Very different relationship would need to be drawn.

Are problems more contingent or contextual?

Western order= political and economic space created not just as a counterweight to the USSR but to prevent a return to the 1930s. This other agenda created a set of institutions that are still in place.

At worst, this caused power politics among democratic states where resort to force is unthinkable. Not as harmonious as during the Cold War.

Seeing something new - not return to something old. There is no historical parallel.

Is U.S. unipolar power consistent with multilateral, rule-based order?

Unsettled Atlantic relationship and larger global relations: This problem is broader than the Atlantic. Governments are worried about how a unipolar world will operate. More of an ad hoc process - not Kennan-esque, but more incremental and "seat of the pants".

Worry of a shift in international order from U.S. hegemonic order with liberal characteristics to U.S. hegemony with imperial characteristics.

4

The more the U.S. shows the world the first face, the more European allies will choose engagement over resistance.

Can the U.S. and Europe sustain and reinvent two old bargains:

-Security bargain based on realist ideas and grown out of the Cold War – U.S. provides security protection and access to markets in return for agreement by Europe (and Asia) to be a stable partner;

-Europe (and Asia) agrees to accept U.S. leadership in return for U.S. commitment to restrict that power through cooperation and multilateralism – benign power.

Do we need to move away from them? These bargains are becoming more problematic but not unsustainable – and better than the alternatives.

U.S. needs to signal to Europe that it wants this crisis to culminate in a new bargain. Not break out strategy to take the U.S. out of the system – but using power to push for new bargains based on new realities.

Rule-based order is in the interest of both sides.

Both sides opening themselves to compromises and agreements.

New European multilateralism. American traditional standard for multilateralism is great.

Can come together on this, but need to figure out new wrinkles, on issues like the use of force.

In exchange for providing public goods, these are options that allow the U.S. to opt out and reconcile its own traditions of sovereignty.

Need to focus on concrete issues.

## Ash

Whether the U.S. should want a strong or a weak Europe: the diplomacy of the Iraq crisis is a textbook case of bad diplomacy on all sides.

Part of the contribution by the Bush Administration was not just a failure to take France and Germany seriously, but already a notion in Washington that a strong Europe is not in its interest. This contributed to the French and German reactions. This reaction has strengthened the Bush administration's inclination to divide and rule.

It is useful to think what long term U.S. policy of encouraging a divided Europe might result in – not an economically weak Europe, but one weak vis-à-vis the U.S.

Shifting coalitions – would be reluctantly coalescing against or siding with the U.S. Why pursue that when there is the possibility of an enlarged Europe that is more Atlanticist than Gaullist – soft pro-American majority must be more attractive option for the U.S.

New bargain – new suggestion: if serious about strategic coordination of foreign and security policy between U.S. and EU, then there is a need for another group, like the old Contact Group.

It would be worth considering recommending that a new version of the Contact Group should be revived. If Germany, France and England agree on participation issue, then cannot have major fissures. And if U.S. agrees with them, there will not be major transatlantic fissures.

The Middle East is a big enough problem to keep us meeting – should suggest having a new "Quint" for the Middle East.

## Bartholomew

Italians and Spaniards would object. U.S. would be accused of seeking to divide and conquer.

Bereuter

Important relationship between the U.S. and Europe still persists - against common threats (terrorism, WMD, proliferation). United Europe is in the U.S. interest, but only as a partner, not a counterweight, not Chirac's vision of a multipolar world. Supporting his vision is not in the U.S. interest. Most European countries - including those aspiring to membership - have been supportive of the U.S.

Wouldn't make too much of "old Europe" comments. This is not being seriously considered by the Administration or on the Hill. But tone does matter. Bush as a candidate and early on was right to suggest that we be more humble. Some of his officials didn't take that to heart.

Appearing not to care about European views is going to push Europe to seek to define itself as a
counterweight.

Mathews

What do we want out of the relationship? If we want them to be allies, is it because of
terrorism/WMD, to help with regional conflicts, or for non-traditional security reasons? If so,
which things are they good at? Which of these things do they desire? What else do we want?

What about economic concerns?

What is their role in helping us be a good hegemonic power?

Once one determines what one wants out of the relationship, what tools does one use to get
there? Structural, strategic, tonal and tactical tools -- institutions, policies and other tools.

Kissinger

Must resist having America describe itself as a hegemonic power. Using that term creates an
unmanageable situation.

Hegemon is not an accurate term: we are militarily strong, but there is a finite number of issues to which we can apply military power unilaterally.

It is important not to become in our minds an imperial power because every problem becomes a
domestic problem: we have selfish reasons not to act like a hegemonic power.

Don't believe there is a settled view in the Administration on how to behave toward Europe.

We're reacting to "neoconservative" statements mostly coming from DoD civilians. Europeans use it as an example of the hegemonic tendencies of the U.S. The Administration's mistake has been not to settle these disputes. There is not a settled view in the Administration on the issues we're discussing.

Moravcsik

European position: If the U.S. is not willing to take the mantle of what needs to be done to consolidate military victory then it should think twice before going in.

Kissinger

If each member says "we'll only act in an alliance as our national interest dictates," then there is no need for an alliance. If some are ready to make too many concessions, this leads to hegemony.

Atkinson

If we do things issue per issue, without agreed structure of institutions and dialogue, then go
toward coalition of the willing.

6

Kissinger

See no problem with European self-assertion: must be free to oppose the U.S., but should start
from an assumption of parallel destiny.

Moravcsik

U.S. made Europe uncomfortable when not willing to strike bargains.

Atkinson

If there's no U.S. common position, creates problem for bargains and negotiations.

Kissinger

Agree with current Administration on theory of preemption, but disagree that we alone define cases in which preemption is used. Need to define principles of preemption.

Summers

50 year tradition of multilateral attempts is cast into question.

Reaffirmation that there is some fealty to some sort of multilateral framework is very much in
question.

Kissinger

No European statesmen tried to go to Washington to talk to White House: went straight to confrontation.

Donilon

There is a debate going on within the Administration. This task force should recommend that the
Administration articulate a clear policy toward Europe.

Joffe

Drift of this discussion has been to apply bandaids (=improve style), plaster casts (institutions) and physical therapy (teaches us how to emphasize what we should do right). What if there were a similar group in Europe?

Kupchan

-Question of interest – structure vs. tone. Preponderance of the problem is a structural issue.

Tone is critical to dealing with the issue (but not fundamental causal issue in rift)

-Should the U.S. support a strong Europe? America should continue to generally be supportive
provided that Europe does not emerge as a counterweight.

Batholomew

Europe is not going to emerge as a cohesive actor or a counterweight – but extremely valuable to
have its cooperation and costly not to.

Kissinger

Whether we support unification is not up to us and we should not give the impression that the
evolution of European unification is an American policy issue.

7

Bartholomew

European integration has been supported by the U.S. since the beginning. The future of Europe
is for Europeans to decide. In the unlikely case that Europe gets its act together, not necessarily
hostile.

Summers

The fact that Blair could take his positions was in the interest of the U.S. Depending on how Europe evolves, the capacity of a British Prime Minister to take such positions could be different in a decade. This is important for the U.S.

Brown

Depends on the issues. On trade and economic issues, a close Europe is good for us. Perhaps less so on defense.

Moravcsik

The British situation may not happen again. It is hard to imagine that an anti-American Europe
could successfully establish institutions that would constrain a pro-American England.

Tarullo

Can't duck posture toward strong or not strong Europe - have to know what default position is,
will affect all levels of policy decisions.

Kupchan

Presumption that if Europe is not anti-American it will agree with U.S. (interests are the same).
Need to figure out where we do agree, where interests are the same. Problem is not necessarily
manageable by good management.

Interests are not necessarily congruent. We continue to disagree about third areas.

Kissinger

We shouldn't paint the picture of a perfect agreement during the Cold War.

Ikenberry

Interests may be increasingly less congruent. Process could have unfolded differently.

III. The Future of NATO

Brown

Haass book, The Reluctant Sheriff: Sheriff has become less reluctant, but deputies and posse beginning to have doubts. NATO poses example of existing structure and question of whether it can adapt to the current situation. The "purpose" of NATO was once to keep Russia out, Germany down and the U.S. in: Russia is now "in," Germany has been "down" for a long time and poses no real strategic threat. The key question is: does Europe still see NATO as a way to keep the U.S. "in?"

NATO has been the principal transatlantic intergovernmental organization --was originally a political organization, became primarily military later.

What functions can it perform now that the original security imperatives have eroded?

What do the U.S. and Europe get out of it?

-U.S. gains assistance in anti-terrorism and anti-proliferation

-Europe can see it as a way to engage Russia. U.S. could engage Russia separately -- has similar world view. Geography makes Russia more understanding of the U.S. views than Europe is.

-Can help serve a purpose in intra-European issues (former Yugoslavia and other potential issues like EU-Ukraine border, North Africa etc. - until Europe can handle them on its own)

-Sufficient congruence of interests needed for U.S. to use it on behalf of European interests.

-For the U.S., provides some legitimacy for out of area security operations

-Provides forces: there is nothing like U.S. capabilities, but other forces can be used for more than high intensity combat - combat, policing, peacemaking, nation building etc. Europeans have capabilities at the end of that spectrum, where the U.S is demonstrably not as strong as it would like to be. NATO did function that way to some degree in the former Yugoslavia and is taking on post-war role in Afghanistan. Some policing in Iraq. Can probably do all of this better than the UN and the EU.

-Relationship with NATO gives the U.S. basing + transit rights for its forces and weapons. Most of our forces need logistic, basing, transit help that are met by the Alliance. The existing structure of the Alliance provides command, control, communications structure - allows coalition to become effective more easily and quickly than if it had to be put together each time.

How would new U.S.-EU bargain work? New bargain may be feasible:

-Involving sharing of tasks, depending on intensity and geography.

-Bargain will become more difficult in further out of area operations, especially the greater Middle East. NATO could operate in Middle East if Europeans were willing.

The EU + EU countries (individually) are unlikely to have the ability for combat out of their immediate areas for decades. Will try for greater efficiency through common procurement, cohesion and complementarity.

What kinds of changes might be useful to make NATO more suited to the present situation? Redeployment - forces should be able to move to where they are most needed. Most of DoD is pro-redeployment because U.S. would gain greater flexibility.

Does it make sense to move away from the nominal requirement for consensus before action? (EU is talking about abolishing unanimity requirement). This might ease some of the problems without having to rely on the fact that France is not part of decision-making structure.

NATO will continue to exist. Most of its original purpose is largely gone. U.S. preferences for unilateralism as U.S. security threats move outside of Europe. All of this raises questions. Ability to serve these functions will depend on how both sides of the transatlantic relationship develop. NATO won't be cause of fissure - it is a way of acting as a cast.

## Summers

Kissinger said he saw the merit in some parts of the Administration's position on preemption - but felt that the locus of judgement about preemption shouldn't be just up to us. What about the establishment of a doctrine around preemption?

Brown

Preemption is not going to be made in the military committee, nor in the NATO council – in the end it has to be made by heads of government.

Kissinger

Two of the two key issues of our time (proliferation and terrorism) can only be dealt with in the preemptive mode – cannot wait until it has actually occurred. It would be a helpful dialogue for us to indicate the concern of others on that issue. The French would probably say it has to go to the Security Council – in fact, that’s where we are.

Brown

Need to recognize that different heads of government in different countries are likely to require different standards of evidence. Don't see how we can drop into the international scene the proposition that we alone define the right of preemption.

Kissinger

On North Korea, we can involve China, Russia, Japan, South Korea. China doesn't want a nuclear country on its border (because this would encourage Japan), but is floundering as to what to do. Not the same issue as Iraq. It's something we can bring to a conclusion. Don't need Europeans on that.

Feldstein

Is it so far out of area that allies don't have to be consulted?

Brown

The only issue they would be involved in is if you go to what is now being suggested as an embargo/blockade: they would have to be involved to the degree that they would be willing to cooperate.

Kissinger

Timothy said that there used to be a Berlin Group that met at every NATO meeting (composed of occupying powers + Germany = inner group) that put general philosophy of what we were trying to do. The current Administration is very focused on selling specific policies, but not focused on selling evolving general concepts. We could deal with the north Korea issues within NATO if we had such an inner group to whom we could say "this is how we view the problem" - not asking for decision, but for understanding. Once that habit has been formed, will inspire greater reluctance for frontal attack.

Joffe

Conceptual groups like ours are supposed to sharpen issues. It's clear that preemption is a good, legitimate police tactic. Would have to give veto powers over American preemption to significant/medium lesser powers.

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Bartholomew

We ought to do a better job of expounding the reasons this policy is necessary and expound guidelines, including limits – but can't ask for agreement because most European governments would be forced to say no.

Moravcsik

Short of general principles, we should have a set of accepted criteria that could be invoked and discussed. Would it be possible and helpful to say, in the context of preemption, that NATO should also take account of matters like massive human rights violations? Would this lead to more forthright discussion?

Brown

Could probably get agreement on criteria, but each case would generate an argument.

Bartholomew

Most European governments questioning has been to *doctrine* of preemption, not *use*.

Summers

Anti-preemption position seems more tenable in particular cases than as general abstract.

Ikenberry

Kissinger is arguing that it's not just in the U.S. interest to have a new international principle that any state can decide on its own to resort to. It is in our interest not to deny ourselves the right in the final instance to act unilaterally. Should develop a mechanism of consultation + general consensus among major states that under certain circumstances it is legitimate and they won't go out of their way to prevent us from doing it. This is in our interest because: 1) we don't want Pakistan or China or others to use it against our interest; 2) process of consultation creates basis for more legitimate action if we do have to act.

Bartholomew

It wouldn't affect the policies of China or Pakistan. This is not what would make or break China action on Taiwan. Notion of preemptive war is such anathema in Europe that it is not discussible. And by starting a conversation would open a can of worms.

Kissinger

We still face this concern (Iran, North Korea) so shouldn't we at least pay enough respect to these concerns to offer to discuss our reasoning and their concerns?

Tyson

If we can't even discuss such a fundamental issue within NATO, then what's left?

Slaughter

Also a question of whether you call it preemption: the use of the term is a red flag. Can express it otherwise and will get a different reaction.

Donilon

The Strategic Concept has moved. The Council recently adopted a resolution saying that
terrorism is a top priority, that NATO would combat terrorism, WMD etc.

Summers

Is NATO the right forum for this discussion [about preemption]?

Feldstein

NATO is a closed door forum.

Joffe

For Europeans, none of this is necessarily the issue. The issue is to contain American power "Mr. Big", whose decisions have vast impact on all their lives and welfare. Their supreme strategic imperative is to get a handle on American power.

"Multipolarity" is a code word for putting constraints on America (opposite of the Melian Dialogue – weak don't do what they have to, but impose on the strong what they can)
All other players in the game want to have a say over U.S. power. Core issue is: how much veto power is the U.S. willing to give others?

Tyson

We have many common major security interests that are not overridden just because there are
some elements of European society that just want to contain the U.S. – everybody wants to
contain the U.S., not just the Europeans.

Tarullo

There is a difference between the need for the U.S. to be more accommodating of other countries with which it has shared interests, and multilateralism as a governance group that can stop one party from acting a certain way.

Ikenberry

Not just a question of the U.S. not wanting to be tied down and Europe trying to tie it down. Does the U.S. want to think about the exercise of its power in a way that allows it to build coalitions and stable relations? If so, need to signal intent by agreeing to operate in loose ways framworks that entail some restraints but also offer something in return – bargaining in return for which you can get cooperation + in the long term an order that sustains your power over generations -- not foregoing power, but using it through frameworks.

Summers

Coalitions are formed in part because of a sense of inevitability that things are going to happen whether the coalition agrees or doesn't. Sense that this was going to happen either way. So not really a question of giving away certain interests.

Bartholomew

Any American government is going to try to get maximum European support for major policy lines. No government thinks it's of no interest to have European support.

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In any negotiation, each party makes adjustments in its own position, but doesn't go so far as to denature its objective.

Can reach judgement that the price in return for support is too high – this doesn't mean mortgaging policy to that support.

Tyson

Kissinger raised two major issues (proliferation and terrorism): Preemption is the response. Should we discuss criteria, principles and conditions with the Europeans? Is there some value to having this discussion in NATO? Could this be a task force recommendation – that we engage with the Europeans in a serious dialogue about this?

Kissinger

Agree with Joffe analysis of what anti-Americans in Europe want to accomplish and that multipolarity is a code word for restraining American power.

If that prevails, Europe will have brought about the same thing on a global scale as after 30 years
War: a group of power blocks, where Europe will be one of the players, where everyone will try
to build coalitions of the willing. Will bring about opposite of what they think they're bringing
about.

The real issue is: does one favor multipolarity in the context of a power confrontation or a "family dispute"? Should reconstruct it as family dispute.

Public opinion/media in Europe is quite anti-American.

Must change the terms of reference of the debate: "here are some of the problems we've heard, we're prepared to discuss them, here is our reasoning."

All European governments are going through exercise of trying to prove that there is some community of Atlantic interests. Why are they doing it? There must be some reservoir of good will.

Summers

In sum, I sense in this conversation a broad agreement that there is an important continuing role for NATO as a crucial transatlantic grouping in the military and increasingly in the political sphere. This role includes matters on the physical periphery of NATO, and down the road, a very likely enhanced role for NATO with respect to the role of force (peacemaking, peacekeeping, policing etc.) The U.S. needs to be complemented in these areas and NATO is a plausible vehicle.

New threats (terrorism, WMD) compel a reflection on traditional notions of sovereignty, preemption, prevention etc.

It is incumbent on the U.S. to participate in a discussion of its views on these issues and NATO, by being the largest collection of like-minded states, is the likely vehicle for such reflection.
But don't envision the U.S. ceding crucial aspects of its sovereignty.

IV. International Institutions, Multilateralism and Societal Tensions

Slaughter

1) "*The U.S. has been distancing itself from multilateralism while the EU prefers to address virtually all issues through international institutions.*"

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Disagree with diagnosis, agree with Ikeberry: the U.S. is more multilateral than it is given credit for (even with Iraq, kept going back to the UN)

2) "Should the U.S. pursue reform of the UN?" - YES

"Change the composition of the Security Council?" - NO

"Change in Article 51 to address preventive war?" - NO, nothing that involves legal amendment of the Charter.

3) "Should the U.S. take steps to address European concerns about climate change and international justice?"

Not now. We're not going to change this Administration on the ICC. On Kyoto, no sense to start on what is already a hot button issue - makes more sense to take a separate project and go forward.

4) "Are European and American conceptions of sovereignty on divergent paths? If so, what can be done to encourage greater convergence?"

Maybe, but too abstract a way to conduct discussion.

5) "To what degree should U.S. policy-makers be concerned about societal tensions across the Atlantic?"

Values gap - nothing we can do about those either. We should be concerned, but there's not much we can do, especially this task force.

6) "What steps can be taken to moderate such tensions and enhance social contacts across the Atlantic?"

Need joint concrete project. UN reform is a promising project, but through the elaboration of principles, not an amendment of the rules. Discussion of what the principles should be, and the creation of an alternative grouping that can serve as a channel of legitimation when the Security Council doesn't work. Group should discuss what sorts of factors should trigger Security Council consultations, the kind of ground rules we want, but shouldn't specify exactly what cases.

Procedural side: Should join with EU to create caucus of democracies (U.S., EU countries, NATO countries + Community of Democracies) that can go to when Security Council is blocking.

Why would EU do it?

-Helpful to focus on having some rules. If old ones don't apply, need new ones

-Europeans are worried that we'll try to play "Old Europe" against new. U.S. and EU can do something high profile together or we default to playing some groups of Europeans off against others.

Why should U.S. do it?

-Because we get a lot out of multilateralism - U.S. playing by rules and adapting the rules.

-As Donilon said, there's been major structural change. One implication is that European governments can no longer say to their publics "we must support the U.S." - at the mercy of their publics (this is why style and rhetoric matter).

-Important for U.S. to "launder" its power, talk about common values with EU. This isn't panacea, but one suggestion for what we could do within UN.

(Clarification: In the Security Council, would discuss, in the wake of Iraq, what factors you consider in identifying a threat to the peace. Would raise discussion in the Security Council. Security Council should be able to talk not just about issues like WMD, but also about human rights).

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Feldstein

If you don't come out with formal agreement or document, how do you control the press?

Members could go out and make derogatory comments, question U.S. motives.

Slaughter

There is value in doing some part of this in the UN.

Summers

Wouldn't France and Germany see this as payback, as attempts to disempower them in wake of
Iraq?

Slaughter

France and Germany are the ones who want the U.S. to treat the EU as a partner - would want U.S. to say "we want to partner with the EU and do something in the UN."

Summers

2 different issues:

- Diplomacy of Brussels vs. Paris and Berlin - not inconsequential for intra-European dynamics for Brussels to start to be a major player in the UN.

-P5 have special status at the UN (veto) - may be eroded if such a caucus is set up
How will it make things better for Europe?

Slaughter

EU would not be a member of the caucus, but its member states would, individually.

Moravcsik

EU has the right to speak for member states on all non Security Council related issues, so in a caucus of democracies, the EU would have reasonable case to make that it would be representing Europe. This would corner the French (who opposed original Community of Democracies)

Summers

It would be in Germany's interest because they don't have a veto. Hard to see why France and
Russia would see interest.

Kissinger

What is the caucus of democracies supposed to do?

Slaughter

There are many things it can do, such as internal UN reform.

Bereuter

Sovereignty is one of the reasons we're on a divergent course with Europe - because members have been giving up some sovereignty. This is why they have more confidence in multilateral institutions. It also may well be a way for them to attempt to reduce the influence of the U.S.

The UN has decreased credibility in the eyes of the U.S. (Libya on Human Rights Commission).

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Would be a good way of addressing societal reforms. Would address Gulliver effect.

Kupchan

No major objection to the idea. But misfit between the diagnosis we've been sharing and Slaughter's prescription. There are serious problems in Europe toward the U.S. We may think we're being multilateral, but this is not what one hears in Europe -- wouldn't see caucus of democracies as the solution.

Slaughter

This is but one positive project. It won't solve everything. But it is concrete, as opposed to a general discussion - could help to reaffirm what we do have in common.

Joffe

Is the objective to create more permissive multilateral institutions? Why won't the Europeans see through that game?

Slaughter

Because Europe's only shot at having a say on the U.S. is to work through the UN

Kissinger

Why not strengthen NATO?

Slaughter

The two are not incompatible. But in the UN, the Europeans have a role and a veto. Make them serious about using the Security Council to address real security threats, or they will find other channels.

Tarullo

Is a threat implicit in this proposal - that the U.S. is going to go completely unilateral in form and substance if we don't get a reform of the multilateral approach? This isn't consistent with the view that we're trying to make friends with Europe again.

Summers

If we and Europeans are able to find a common project, will foster better relations, which will ultimately serve other objectives. Effort is not to dilute Europe's role, but to be doing something positive and constructive. Problem is that basic premise is that if U.S. is offering to fix UN and wants Europe to help is implausible basis for beginning rapprochement.

Slaughter

This factors in what the current Administration has said: we want a robust UN. Partnering with Europe in this offers a lot of incentive for both sides, and a lot of benefits.

Brown

Europeans would have to be convinced that this setup is more useful to their goals.

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Kissinger

How many nations and how could they ever reach a unanimous decision on a real security issue?

Can you bring it to a vote at all?

If we propose something like this, would look like an act of cynicism (neocons would probably love it!) Would require an additional stage.

Moravcsik

If much of the politics of sustainable intervention requires financing, aid, peacekeeping etc, then dealing with these soft security issues needs to be done in a forum other than NATO (i.e., UN).

Joffe

Are you saying that U.S. should say to them "we showed you what happened when you tried to block us - so you'd better come along with us?"

Slaughter

This assumes that we're going to get everything we want. In reality, if we do it, we'll give a little - but will give less than we get.

Ikenberry

APEC is an example of a soft multilateral forum where U.S. can encourage open markets and free trade and economic reform, can dialogue with East Asia, but not binding. Gives other member countries a forum to engage the U.S.

Joffe

Want some real ropes on Gulliver

Tarullo

If the U.S. default position is unilateralist, then can offer to renegotiate frameworks or ignore the ones that exist.

Kissinger

What if you launch it but do not include security issues right away (or would look too cynical)?

Ikenberry

Doesn't preclude a very live option: Process of consultation on use of force, WMD, preemption issues.

Feldstein

Would it be binding? Or would it have majority voting with the option of not going forward/opting out of some things?

Donilon

Have to be very careful with this proposal. Some people are pushing this to put final nail in UN coffin. Should be seen as an additional legitimating force but not as an alternative which would undercut Security Council. Essentially proposal to deal with Security Council and the "open admissions policy" of UN.

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(Slaughter: Could be vehicle for internal reform)

Kissinger is right to say that basing it on security would be a thrust at the heart of the Security Council. OK as an additional legitimating measure. The dysfunction of the UN is a piece of collateral damage of the deterioration of U.S.-EU relations.

Slaughter

Two parts are linked: 1) The substantive part - trying to establish rules with the Security Council; 2) Create the caucus of democracies independently.

Kissinger

Would have to go to allies first on decisions because wouldn't work if they disagree with the U.S.

Joffe

France and Germany worked hard to use the Security Council to constrain U.S. In light of that, 2 hypotheses on the table:

-They learned their lesson and will not go to the brink again

-In order for that not to happen again, can go to another forum that semi-outflanks the UN
Quai d'Orsay and German Foreign Office would not want this.

Slaughter

If it is set up to circumvent the Security Council, of course. But not if it is set up as an expansion of the existing community of democracies with the U.S. and UN to focus on certain important issues.

There are many issues in the UN where results are skewed because of the way the UN is set up.
Would have no legal status: Caucus (like Non-Aligned Mvt)

Kissinger

Would lead to question of to what degree regime change becomes the overriding objective and whether we are getting ourselves into a global 30 Years War - whether there are no limits to ones ideological pursuits. This is not a fashionable concept, but something that I am extremely worried about.

V. Trade and Finance

Feldstein

Economic issues are not central to the conflicts we've talked about today.

3 points

1) Trade

There is a clear mutual long-term interest in maintaining open trading system, but there are short
term interests that get in the way. Two issues illustrate the role of institutional frameworks. 1)
Foreign Sales Corporation/Extra Territorial Income Rules. Debate: can U.S have special tax
rules that help exporters? (like VAT for Europe) WTO= 1st international institution for giving
such an answer, and ruled no. Will show importance of WTO in being able to force a change
domestically. Success story in terms of the *process* of resolution.

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2) Agriculture: Should WTO be expanded to deal with agriculture? Hasn't been, though it is on the Doha agenda, but probably won't happen. Developing countries would like agriculture brought into WTO.

2) Monetary and Fiscal Policy

Role of monetary and fiscal policy in stimulating the global economy. Coordination with Europe or other G8 members is relatively unimportant.

If each side pursues domestic economic self-interest, will redound to the benefit of the other side - will stimulate demand and the other side's economy.

Monetary and fiscal stimulus are different. Cutting interest rates weakens the dollar and offsets favorable impact on European exports, and vice-versa (monetary stimulus). In contrast, fiscal policy stimulates the domestic economy, also increases interest rates and tends to strengthen the dollar so the Europeans win double (because we have a strong economy and the dollar is stronger than the euro).

Europeans tend to think more than Americans about the openness of the economy but the Euro area as a whole has about the same level of openness as the U.S.

3) Spillover of Economics into Political Arena

Separating political and economic issues

Danger that trade policy can be used to reward and punish others.

WTO mitigates danger of turning into an all out trade war.

Important exception is military trade (which is not limited by WTO rule), as seen in some of Washington's policy toward France. France is vulnerable to the U.S. ability to affect its weapons exports because it needs these exports to cover some of the fixed costs of its military activities.

Three ways the U.S. can affect France without violating rules:

-DoD could stop buying some of the things France sells to it

-Because they need some U.S. components in their weapons, also need U.S. authorization to export them

-U.S. can pressure potential buyers of French weapons to buy American instead

Better that this happen this way than through traditional trade because avoid risks of traditional trade wars while sending strong economic message to French industry that cooperation with the U.S. (or at least not opposing it) is a nicer strategy to pursue.

Summers

There is a lack of enthusiasm for extremes of U.S. policy on secondary boycotts/unilateral sanctions (Helms Burton) = irritant in U.S.-European relations. Proclivity to use unilateral economic sanctions in ways that have costs: not a great flowering of our policy.

Is FSC a case of Europeans looking for a chit against the U.S. – so took it to the WTO? More motivated by bargaining chip than by genuine concern – not a triumph of multilateralism. If WTO didn't exist, this probably wouldn't have happened – Leon Brittan needed a counterclaim.

Tarullo

Agree that economic concerns are not of huge importance in this report, given the nature of the questions we're addressing. Historically, economics tends to be the independent variable when determining how much power a country has, but tends to be the dependent variable when it

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Do we punish a country for disagreeing with the U.S.?

Different case when a country systematically lines up opposition throughout the world to us on
meaningful national interest issue - sets dangerous precedent.

Moravcsik

The Paris Air Show reveals attempt to constrain the retaliation to the defense realm.

Summers

Economic realm suggests itself as a way to retaliate for other problems (how else can we do it?)
The costs outweigh the benefits in terms of the example it sets and the behavior it legitimates.

Kupchan

What is U.S. dependence on imports of foreign capital/rising euro and does this need to be addressed?

Feldstein

Not issue. Neither side is really doing anything to deal with the problem. They are not going to suddenly take home their capital.

Moravcsik

With respect to the occupation of Iraq, responsibility for technically complex items like
economic reconstruction and restructuring was moved from Treasury to DoD, on the basis of
bureaucratic politics.

2 issues: 1) Broad concern of would we be better off with greater European participation in civilian reconstruction; 2) Bureaucratic politics: would that involvement lead to a more civilian-centered economic reconstruction policy on the part of the USG? These would be good and convergent policy objectives.

Summers

How cooperative should we be in the economic realm in the reconstruction of Iraq?

What about a major new economic partnership to salve transatlantic wounds?

For example the TABD, which didn't have much political significance. Should that type of activity be highlighted in the report?

Agreement around the table that it shouldn't be given too much emphasis in the report.

VI. Policies toward Russia, Turkey, the Middle East, Asia and the Developing World
Joffe

America's grand strategy has already changed, given profound changes in the international system.

What has disappeared and needs replacement is the Cold War policy of building permanent global and regional economic and security institutions. This was kept going by the fact that the U.S. was the key producer of public goods, put more resources in than it took out.

These institutions worked because some voting stock was distributed to lesser nations: that is virtually gone. Shifting coalitions.

Good news is that Russia, China and India have become partial members of the American orbit: critical strategic change.

"Wall Street 8" and Vilnius 10 countered French and German attempts to countervail U.S.

U.S. has lost some institutions which it used to dominate, has lost some friends like France and Germany. But has gained many new playmates – from the "new Europe" to China. This is critical to the lineup of American grand strategy. This has led to a strong temptation toward neo-Bismarckian policy (whereby grand strategy should be to maintain better relations with players than they have among themselves) and neo-British strategy (non-permanent engagement, but intermittent regional intervention with no permanent commitment – summed up by Rumsfeld: mission determines coalition)

Instead, should be neo-Acheson.

The question we have discussed today is: How much voting stock is the U.S. going to distribute?

The problem is that great powers don't like institutions they don't dominate (that's why the U.S. doesn't like the UN)

Strong realpolitik argument for institutions because permanent coalitions are cheaper and easier to mobilize

A democratic empire needs domestic legitimacy

Impetus for "neo-Achesonian" policy is strongest in the Middle East (where others, like France, can mess up the game more easily than elsewhere)

Iran: U.S. between engagement and containment.

Iraq: Clear instance of liberal imperialism because trying to change security and strategic problems through regime change. No nation can do this on its own.

Russia and China have to be bound more stably in the U.S. orbit.

This group has been talking about the meaning of Iraq. What has it taught us?

The moment is ripe. This group should strike the iron while it is hot. Chance for conceptual realignment (EU is modifying policy – no longer aiding Hamas etc.)

This group also needs to talk about domestic issues of grand American strategy.

## Mathews

Development and its potential place in the U.S.-EU relationship. It is an area of common commitment. U.S. and Europe lead the world in development assistance. Public opinion supports development aid (in U.S., even more so if development issues are specific)

This is where cultural differences come to play

For example, State of the Union $15 billion pledge: 1/6th of the funds go to abstinence (this is a place where Europeans see things differently)

Other example: Mexico City policy has been extended so that any entity that funds abortion cannot be funded in any way.

Other difference: We have more "tied" aid than Europe.

U.S. policy, especially the Millennium Challenge Account is a very bilateral approach.

There was hesitation by the U.S. before supporting the Global Fund.

Where are some areas where we can work together?

Question of development has become a strategic and security concern over time and thus potentially an area for cooperation

This will be an issue in the next G8. Might be a place for cooperation recommendations.

Working together. Need for friendly competition in assistance. Should reduce the burden on

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developing countries through harmonization of our requirements and focus on good governance and accountability.

How do we consider multilateral giving (like giving through the Global Fund instead of directly)? Europeans tend to favor multilateral giving. We should also give more multilaterally than bilaterally.

Bereuter

U.S. and Europe should cooperate on trade and agriculture. Our subsidies on exports damage developing countries more than our aid helps them. We could move on this area with the right outcome out of the Doha round.