The (Ex) Washington Realist

I'll be in New York tomorrow to be part of this panel at the Carnegie Council on Ethics and International Affairs. For those of you not in New York or not able to attend, there will be a live webcast.

It should be an interesting discussion--a continuation of the themes we've been exploring about shifts in the global balance of power and the "rise of the rest" and how this affects global business and security norms.


The Rise of the Rest: How the Ascent of Russia and China Affects Global Business and Security
Nikolas K. Gvosdev, Harry Harding, Flynt Leverett, David C. Speedie, Devin T. Stewart, Steven Weber
Tuesday, July 1, 2008 12:00 PM to 02:00 PM

I am grateful for the continued discussion over some of the themes raised in this past Monday's panel on U.S. foreign policy.

There is a further element, that arises out of Dan Twining's presentation--trusting what foreign leaders and pundits have to say about the United States and its role in the world. It's clear that a good deal of hedging is going on. But at some point, when a hedge has to become a choice, where will another country come down?

India's one of the best examples of the hedger. They cultivate the "democratic" side by talking about closer ties with the U.S., Australia and Japan; their foreign minister talks a different line when he is with his Russian and Chinese counterparts in Yekaterinburg.

The Gulf emirates say they want a greater and stronger U.S. presence but also invite President Ahmadinejad to their meetings and facilitate Iran's economic and business presence in the region.

Europeans come to Washington and talk about their fears about a resurgent Russia; the EU turns around to sing the praises of President Medvedev and proclaim that a new chapter has now opened up in Europe-Russia relations after the Khanty-Mansiisk summit.

Is this hedging going on because other countries don't trust America's staying power and are covering their bases, or because they see America as a dysfunctional power and want different options?

Whose opinion should I trust--what the European, Arab or Indian tells me here in Washington, or what I hear they might say in Moscow or Beijing?

Politicians, repeat after me: we have no right to energy.

We can trade for it, if we have insufficient supplies. We can reduce our consumption. We can find alternatives. We can try to bolster the case for others to produce more by revisiting some of our own decisions.

We also have to recognize the linkages between the spread of democracy and accountable governments around the world with a rising number of people entering the middle class (and expecting a certain lifestyle). In the old days, repressive dictatorships in countries with large numbers of poor people could tap things down. Today, find me an elected politician in India or South Africa or Brazil who is going to ask his constituents to give up the benefits of development because Americans don't like to pay $4/gallon at the pump. Even China is constrained, because the PRC derives its legitimacy from extending prosperity to increasing numbers of citizens.

An excerpt from Dan Yergin's testimony today before the Joint Economic Committee:

The United States is more integrated into the global marketplace than in years past, and yet it has less leverage over the market. Our oil imports today are twice what they were in the 1970s. Yet our share of world markets is less. In the 1970s, the U.S. represented 30 percent of world oil consumption. With economic growth elsewhere, the U.S. share is down to 24 percent. The balance is changing in other ways.

National oil companies—which vary greatly in their character and capabilities—control over 80 percent of world oil reserves. The five “supermajor” oil companies account for less than 15 percent of the world’s total oil production. China and India are now significant players in the market. The list of shifts goes on. The realities of the global markets and America’s integration into them emphasize the need for a cooperative, multifaceted approach to relations with both producers and other consumers and put a premium on how we manage, think through, and structure our relations with other countries.


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Premium on how we manage, think through, and structure our relations with other countries? Don't hold your breath.

I was a panelist at today's event held at the U.S. Institute of Peace on Foreign Policy and the Next U.S. Administration. A common theme was that there is no "reset" button in U.S. foreign policy. and that no matter who the next president is, there are challenges to be faced that will require adaption to the changes occurring underway in the international system--and the next president will have to be able to mobilize support and utilize his political capital to get domestic constituencies on board.

In recent weeks, I have been complaining about Congress' tendency to view agreements with other states as rewards granted by Washington. Right on cue, and sorry I missed it last week when it happened, Congresswoman Ileana Ros-Lehtinen of Florida did not disappoint. She called the proposed 123 civil nuclear agreement with Russia "a political reward bestowed by the U.S." which is why she opposes it.

Undersecretary of state John Rood for arms control and international security reminded the foreign affairs committee of the house that 123 agreements with other states "contains all the necessary nonproliferation conditions and controls that Congress has written into law." In other words, this agreement would bring Russia's nuclear industry into alignment with our regulations and controls, allow for more cooperation, and be a further step in helping to internationalize the nuclear fuel cycle, a key component to limiting the spread of enrichment capabilities to more countries. All positives for the U.S., but apparently not enough for some in the Congress.

UPDATE: Thanks to Justin Logan over at the Cato Institute, who passed along what happened earlier this week in the Senate Finance Committee, which approved an Iran sanctions bill that also contains language to block the 123 Agreement with Russia. Four Senators--Jeff Bingaman (D-NM), John Rockefeller IV (D-WV), Blanche Lincoln (D-AK) and Maria Cantwell (D-WA)--tried to remove this language, on the grounds that this jeopardizes efforts to isolate Iran.

Also, the bill has provisions for what many Europeans see as extra-territorial efforts to apply U.S. law to non-U.S. subsidiaries--and this at a time when Europeans are themselves showing more interest in sanctioning Iran.

China's deputy prime minister Wang Qishan and U.S. treasury secretary Henry Paulson are cautiously optimistic, at the end of their dialogue, that the path is open to a U.S.-China "financial pact" that would help to open up both U.S. and Chinese markets to the companies of the other side. The two also talked about a decade-long "framework" for dealing with energy security and climate change.

All of this is predicated on acceptance of a quid pro quo relationship, with both sides granting and receiving concessions.

What will be interesting to see is the reception the Chinese delegation receives on the Hill. My worry, as I've been expressing as of late, is that Congress tends to see agreements with other states not as win/win scenarios, with both sides engaged in give and take, but as magnanimous concessions of the United States.

Hopefully, a financial pact between Beijing and Washington could begin to bring political clarity to the economic relationship; for too long, both sides have allowed a major imbalance to develop where the economies are increasingly intertwined and interdependent but without a sufficiently robust political framework in which this relationship can be mediated.

The Acorn: The Indian National Interesthas a post today on the wonderfully contradictory messages the U.S. sends India that would be funny if it weren't so serious.

Hours before a cease-fire between Hamas in Gaza and Israel is set to go into effect, rockets were still being fired into Israel. A final fusillade?

The agreement is rightfully described as shaky because it depends on other groups in Gaza adhering to what Hamas has signed. So far, organizations like Palestinian Islamic Jihad say they will abide by the "lull", as it is being termed, but also reserve the right to re-start operations if they feel Israel is violating the terms. So we still don't have a single command-and-control for the Palestinian side, which makes it easy for spoilers to decide whether they want to launch an attack. Hamas can deny responsibility, and then Israel has to decide how to respond.

In turn, how might Israel's commitments to lessen the blockade of Gaza be interpreted? Presumably, Israel is not going to throw open the floodgates and will be cautious--so could this be used by PIJ or one of the other groups as a cause for restarting the fighting?

If the "lull" works, reasonably so, it will strengthen the argument of those who say diplomacy means having to talk with one's enemies. If it fails, those arguments are weakened.

Also put to the test is whether Hamas is finding that its inability to deliver on economic matters is hampering its ability to rule--a delayed test of the "pothole theory" of democracy?

So maybe the PLA and Kazakh officers were discussing this? Kazakhstan's Senate yesterday approved a bill, now awaiting President Nursultan Nazarbayev's signature, on Kazakhstan's participation in joint military exercises with other members of the Shanghai Cooperation Organization.

Yu Bin addresses the Kober challenge, writing: "Russia may have to realize that China is no longer willing to purchase from Russia a large quantity of air and naval armaments based on Soviet research and development unless Moscow is willing to elevate China to the level of India in military sales and technology transfer."

The Indian-Chinese tango continues: China, an observer in the South Asian Association for Regional Cooperation (SAARC), wants to play a bigger role at this year's summit in Sri Lanka. Meanwhile, China's assistant foreign minister He Yafei signaled that China "would like to see India as a member" of the SCO.

The SCO is also a sponsor of this year's Harbin Trade Fair, which opened this past weekend.

But breaking headline: Britney Spears won't be prosecuted on charges of running over a papparazo's foot! That makes me feel much more secure. Hat tip: the BBC.

A bit late but still of interest.

Last week, the Russian Embassy held its annual reception for Russia Day (when Russia declared its "sovereignty" from the USSR back in 1990). The Washington Post style section covered the "vodka at noon" angle, including the giant ice sculpture of a bear holding vodka bottles.

Some of the things I saw that perhaps were a little less glib ...

--A large Venezuelan delegation attended, including a number of military officers, an admiral among them I believe.

--The Brazilian ambassador who had a circle of people around him as he made his way through the room. By the way, "sovereign democracy" does have an appeal down south (as this example demonstrates).

--Idle chit-chat between the Chinese and Kazakh military officers? Perhaps just the standard DC diplomatic chatter.

A reception can sometimes just be a reception--but sometimes what happens does mirror what happens on the world stage too.

Does Ireland become the "Rogue Island" of early 21st century Europe? Will the other EU members essentially route the Lisbon treaty around Ireland, or could Ireland even be asked to downgrade its association with the EU, back to the level of being an associated power? (Or will the Irish be told to vote again?)

Or will the EU now accept that as the EU of 27 this is as close of an association as one can get? This might spur the Euro-core countries that would like greater integration to move ahead. This could then "solve" the other problematic questions facing Berlin and Paris--seeing their policies constrained by "New Europe".

One of the themes in Secretary Rice's essay, the subject of yesterday's post, and a theme sounded by so many other American commentators on foreign policy, is that the rest of the world wants "American leadership."

I am prepared to concede the following points: that the rest of the world does not want to empower another power to serve as a global hegemon (e.g. replace Washington with Beijing); and that the U.S. is still seen as the key component (but not the only one) to the maintenance of the current international order. But I am less sanguine that the rest of the world is not going to take the opportunity to limit or hem in U.S. power. I think that the process will continue where countries bypass and route around the U.S. when it is in their interests to do so. I don't see January 2009 as some sort of "reset button" for international affairs.

For instance, are our key European allies going to be receptive to Senator Biden's statement yesterday, in discussing energy exports from Eurasia, when he asked, "Do we have the right pieces in play to confront the Russian position?" I don't know that there is much interest in CONFRONTING Russia. Some diversification, yes, but not much beyond. And contrast the worrying tone about sovereign wealth funds on the Hill the day before with Peter Mandelson, the EU trade commissioner, calling SWFs "saviour wealth funds" because of their ability to inject large amounts of capital resources that benefit the West's businesses and banks. Don't think you'll find many U.S. politicians willing to use similar language.

I think we'll be in for rough waters ahead.

So what's not to like in the Secretary of State's essay ("Rethinking the National Interest: The New American Realism"). Make strong and rising powers stakeholders in the international order, encourage weak and failing states to reform and democratize. Have Moscow and Beijing as our partners; increase the number of new democracies. Something for everyone in the "realism" and "idealism" camps.

But moving on this agenda--that is still not apparent to me after reading the piece. I'm glad that she endorses, for instance, the creation of a more permanent northeast Asian regional forum to build on the six-power talks, something that former Korean foreign minister Choi Sung-hong, former Japanese foreign minister Yoriko Kawaguchi, and Ian Bremmer proposed in TNI back in 2005.

I don't get a sense of what we are putting on the table, what are the "good enough" outcomes, what are possible trade-offs. There is a lot of referencing to the need to "balance" various competing objectives, ideals and interests. But I don't leave with a clear understanding of how the balancing takes place, and whether is it reactive to events, or flows from a long-term grand strategy.

I am still trying to get my thoughts around a comment that C. Uday Bhaksar made earlier this week, about new ways of thinking about foreign relations in the 21st century. He suggested that policymakers take a page from the sciences, specifically quantum computing. Unlike in traditional computing, based on a binary system--something is either a one or a zero, quantum computing works from the model that you can have a one, a zero, or a quantum superposition of the one and zero simultaneously.

Bhaksar argues that in foreign policy governments and analysts have to become more comfortable with balancing competitive and cooperative approaches simultaneously with the same country in terms of the bilateral relationship. It is a further reminder that we are moving away from a system where the assumption that if states cooperate on one set of issues, they will cooperate on everything else is no longer operative. And the fact that a country may have very serious competitive issues with another will not remove the obligation and the need to cooperate on other issues which are of vital interest to both.

It also challenges then the assumptions that serve as the foundation of traditional alliances. It also means, and let's be frank, that future administrations will have to pay a great more attention to questions of diplomacy and statecraft.

It's an idea I think should be explored in greater detail--and I submit it to TWR readers for comments.

President Bush and Chancellor Merkel held a press conferencetoday following their talks. Reading it, it becomes clear, that even if not explicitly discussed, some choices have been made--and as a result, priorities have emerged.

Merkel said, "if Iran does not meet its commitments, then further sanctions will simply have to follow. We again said we want to give room for diplomatic solutions."

Some of the conclusions that flow:

--any thought of using Iranian gas to fill the Nabucco pipeline is now completely off the table; this effectively makes the project unviable, leaving the Russian-backed routes in place;

--the UN Security Council is not going to be bypassed, and later Merkel referenced the need to have Russia and China play active roles.

On a related note, some observations from Ted Carpenter from his recent visit to China which suggests some problems Merkel may encounter in Beijing.

The concept that there are trade-offs and consequences to choices just didn't seem to penetrate the "debate" on energy we had on Capitol Hill today.

Countries may or may not choose to develop energy resources for sale to the market for a variety of reasons--and this is not only true of the United States. When the United States chooses not to bring some of its own domestic energy resources online, that is a conscious choice--and other producers are not obligated to relieve us of the burden or responsibility for that choice.

Speculators can often drive up the price of a commodity. But speculators don't operate in a vacuum. If Congress wants to leave "all options on the table" vis-a-vis Iran, then that creates an opening for speculators to take advantage of perceived uncertainties.

I wrote on this question last month but nothing in today's "debate" indicates that any of these points was under serious discussion.

And I'm not holding my breath either.

In some ways, the essay I published in the June 2, 2008 issue of the American Conservative has been overtaken once again by events. At the time it was written, Tibet had emerged as the central issue of the Beijing Olympic games. But, not surprisingly, once Tibet went off the headlines and the torch "went away", the focus shifted, yet again. First it was general human rights, then it was Burma, then it was Sudan, then it become Tibet. Now, as with this essay as an example, environmental and climate change issues are taking center stage--although there was also calls made to return the focus to the fate of Chinese dissidents.

Will be interested in reactions to my sense that the president made his bargain with Beijing on the Olympics last year, as well as whether or not the government ought to let American civil society take up such issues.

When it comes to matters like the expansion of NATO, I fully agree that no country which is not a member of the organization should have a veto right over who is allowed to join.

What I don't understand is the logic that says that anyone who wants to join ought to, or that letting a country join the alliance is how one demonstrates that another country has no veto power.

Let's examine the logic of the statement, which I heard repeated yet again this past week in various meetings: any country that wants to join NATO ought to be able to do so. Now let's rephrase it as follows: Anyone who wants to come to the United States ought to be able to do so (unrestricted immigration). If you support the first, you should logically support the second. Right?

A country ought to join NATO or any other such organization if the existing members feel they gain some benefit. A country may want to join NATO, but that does not automatically mean that NATO ought to accept them. What do they bring to the table, what benefits, what liabilities? That's how decisions ought to be made. Right?

The debate over Ukraine's future in the EU and NATO

The first thoughts on Russian foreign policy as it takes shape under the Medvedev/Putin tandem

I am up in New York to attend the national conference of the Council on Foreign Relations, and here is my thought for the day

We have no problem articulating all sorts of "best case" scenarios in foreign policy. What we seem to be less comfortable with is outlining "good enough" outcomes-when the end state may fall short of the ideal but may represent an acceptable compromise.

When holding out for the best case may prove unrealistic or prohibitively expensive, can we articulate a series of "good enough" outcomes we can live with? This seems to be a common thread when assessing options in Iraq, vis-a-vis Iran, and so on

With all of the attention on whether or not the tandem of Putin/Medvedev can work in Russia, and whether or not there should be an Obama/Clinton tandem for the Democratic party, it might be useful to extrapolate some principles from other tandems (Nehru/Patel, Blair/Brown, Mao/Zhou, the "cohabitations" in France):

1) The two must generally respect each other (affection may or may not be required);
2) They should both be in general agreement about the overall course they wish to pursue;
3) They should have clearly delineated spheres of responsibility;
4) Following Dirty Harry's maxim that a "man ought to know his limitations", each member of the tandem should be aware of those areas his/her partner has superior ability.
5) Equality in the tandem as a general principle, but there needs to be one who is at least slightly superior than the other (the "elder" sibling).
6) Means for dispute resolution if the pair cannot come to an easy agreement on an issue.

So I would say this bodes well for Medvedev and Putin, at least in the short run, to 2010. Probably less so for Obama and Clinton.

By the way, sorry to be professorial, but to point out one fact: tandems were somewhat the norm in Russian political life in the 17th century, so for those to say this is unprecedented in Russian political culture, that's not quite accurate. Those tandems:

Patriarch Filaret/Tsar Mikhail (father-son); generally worked well
Patriarch Nikon/Tsar Alexis (spiritual father/spiritual son); worked well in the beginning but ended badly for Nikon when Alexis "outgrew" his mentor
Regent Sophia/Prince Golitsyn--could have started a more evolutionary modernization of Russia but overthrown by Peter
Peter and his brother Ivan: Peter handled military affairs, Ivan took care of the ceremonial aspects

So the path is clear for the negotiation of a new Partnership and Cooperation Agreement between Russia and the European Union. How these talks turn out will be quite interesting as a test of the following:

1) Europe's ability to formulate and sustain a common position as the EU-27 when dealing with Russia;
2) Russia's ability to pursue its own strategy of accommodation and integration with Europe on its own terms;
3) The ability of "New Europe" to sustain its own Russia-skeptical approach and to argue for the EU to adopt positions closer in line with American skepticism about Russia

France, which is taking over the EU presidency, wants an agreement ready by the end of 2008.

Moscow seems to want a broad quid pro quo arrangement that would culminate in free access of Russian goods to the European market and visa-free travel in the EU for its citizens. The EU major powers want not only guarantees of stable energy supplies from Russia but free access for European firms to Russia's energy sector. Some compromise would seem to be in order.

Various EU countries have other issues--such as linking a PCA to ratification of the energy charter, greater Russian cooperation on solving frozen conflicts in Moldova and Georgia, etc. Moscow argues that the PCA should deal with the large issues while separate EU-Russia agreements could be talked about for other ones. But some EU countries worry that they would lose leverage, because Russia could start talks but never see them through to the conclusion.

On the other hand, what happens if Russia were to make some new breakthrough proposals? What would be the reaction if, say, when he is in Germany, Medvedev outlines the parameters of a settlement for Georgia: full reintegration of all separatist regions, full recognition of the country's territorial integrity, combined with the neutralization of Georgia--no foreign forces, Russian or anyone else's, on its territory, and Georgia, Armenia and Azerbaijan declared as neutral states separating Russia, NATO (Turkey), and Iran? I think that such an offer would get dramatically different reactions in Europe--and certainly not be welcomed in the U.S.--but then it could shift the debate over Georgia from "Russia and the West" to an intra-Western debate. Certainly Putin tried to stoke such feelings during his visit to France.

Sometimes, Congress reminds me of the Qianlong Emperor in its attitude toward treaties and diplomacy; that whenever the U.S. enters into an agreement with another state, we are generously giving up something of benefit to us out of the goodness of our hearts. The notion of an arrangement meant to benefit both parties? Preposterous!

Watching the fate of two 123 agreements--these are the treaties drawn up under the terms of Section 123 of the Atomic Energy Act--I have to wonder.

These agreements are critically important both for U.S. national security--because of the safeguards they build into nuclear cooperation with other states, as well as the requirements and burdens they place on the other party to open up their nuclear industry--but also for our economy--because without such agreements U.S. companies are unable to do business in this field. Such agreements should be judged solely on their merit--and not used as political footballs for other items.

The agreement with India, however, is now languishing and may be dead, because, rather than seeing the U.S.-India deal as an important agreement in its own right, and one that was of critical importance to getting India's nuclear industry "regularized"--a key U.S. national security consideration, as well as opening up potentially very lucrative opportunities for U.S. firms--members of Congress saw this as some generous concession of America. Anyone with any knowledge of Indian history knows the hypersensitivity of the Indian political elite to anything that smacks of outside interference in their affairs. So what do members of Congress do? They suggested that India would have to change various policies if it wanted Congressional goodwill to see the nuclear deal passed and implemented. What should have been a done deal by now, and a crowning achievement in Nicholas Burn's career as a diplomat--is now stuck, because an oddfellows coalition of Indian leftists and nationalists opposes the deal as a trojan horse for U.S. interference in their affairs. Senator McCain has said if he's elected he'll get the deal through--but I'm not sure.

Then we have Russia. Russia has made it clear that part of its economic recovery and plans for future growth is to sell nuclear generators and fuel around the world. As more countries look for a clean way to generate electric power, interest in nuclear power is growing. The 123 Agreement with Russia would put a number of non-proliferation safeguards in place and clear the way for U.S. firms to partner with Russian ones for mutual profit. But because we have a long list of complaints about Russia in other areas, that will obscure the benefit of getting the 123 Agreement passed. No one wants to "reward" the Russians for "bad behavior", after all.

The problem for the U.S., though, is that time is not on our side. Countries want these 123 deals with the U.S., but what happens if in 2009, France, Russia, India and others essentially say, we aren't going to wait for the U.S. Congress to act, but we will go ahead with forging a new approach? As with the Law of the Sea--where our non-participation has prevented us from challenging Russian Arctic claims to prospect for oil and gas--we could find ourselves both "out of the tent" with other powers forging a new process without our participation, and locked out of commercial arrangements.

Treasury Secretary Henry Paulson's speech in Qatar on Sunday--where he said there would be "no quick fix" to the problem of high oil prices--is based on a sober economic analysis of the facts. He followed this speech up with one today in the UAE where he reiterated:

There are no simple or quick remedies for this, and let me be clear in stating that the Gulf region alone cannot alleviate the pressures in global oil markets. High oil prices are the result of supply and demand factors that are likely to persist for some time. Supplies have been affected by low capacity expansion and declining yields, while demand has surged largely due to growth in emerging markets. Speculation and the depreciation of the dollar are likely only small factors behind oil price increases.

So ... the surge in oil prices may last for a while, it cannot be solved simply by getting "the Arabs" to pump more, and it isn't something largely caused by speculation. So essentially Paulson wiped out the three excuses/solutions proffered by elected U.S. politicians.

We are also seeing continued fallout from the way elected politicians dealt with the Dubai ports debacle a few years back. Paulson is asking the Middle Eastern oil producers to open up their markets to more U.S. investment, and then he gets this handed back in his face. He noted this in his remarks in Dubai: "I have met with many leaders from the Middle East who ask if the United States really continues to welcome foreign investment. Some here worry about growing protectionist sentiment in the United States, and they also worry specifically that U.S. sentiment toward Middle East investment has been permanently affected by the Dubai Ports World case. " He then went on to reassure his audience that most foreign investment in the U.S. coming from the region has in fact been approved (and he didn't say so openly, but it is clear that not only is it approved, we actually need these continued inflows for our own economic health.)

So my "dare"--deliver these speeches here in the U.S. before domestic audiences, not a "safe one" thousands of miles away. And let's see if any of the candidates adopt any of Paulson's clear thinking in their own remarks.