Another 'Bits and Pieces' as Holidays Abound

With another holiday upon us - this July 4th, Independence Day', and just after Canada Day, July 1st, I thought another 'Bits and Pieces' seemed to be in order.

Photo by Valeria Nikitina at Unsplash

USMCA

Given we just passed July 1^st, Canada Day, it makes sense to start out with USMCA. And, yes, not surprisingly, the three North American countries failed to renew the trade agreement. Which, as pointed out by Tonda MacCharles at the Toronto Star means the Agreement will continue until 2036 with annual renewals, unless otherwise terminated:

“The decision at the behest of the U.S. was confirmed during a virtual meeting between U.S. Trade Representative Jamieson Greer, Canada-U.S. Trade Minister Dominic LeBlanc and chief negotiator Janice Charette, and Mexico’s Secretary of the Economy Marcelo Ebrard, thousands of kilometres apart.”

“Greer’s office announced the outcome in a statement, saying the U.S. “did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries. However, the Agreement remains in force pending resolution of these issues or until the Agreement’s termination.””

So here we are at the possible renewal date with the Trump administration, and the President himself making clear – notwithstanding he took the lead in concluding the trilateral agreement – that he’d prefer not to have it, as described again by MacCharles back in June:

“U.S. President Donald Trump said Wednesday that he would prefer it if the Canada-United States-Mexico Agreement on trade “expired immediately,” although he left open the possibility that he could sign a new deal, but would still rather leave it “unsigned.””

““I’d rather have it terminated,” Trump told reporters on the tarmac at Paris Orly Airport, where he arrived after leaving the G7 summit before a dinner hosted by President Emmanuel Macron.” …

“To me, I think it’s better without it,” he said. “I mean, to be honest with you, I’m not a big fan of it.””

So where do the negotiators go from here. Here are comments, as revealed by MacCharles, from Canadian and Mexican officials

“Afterwards, LeBlanc [Canada’s Trade Minister] said in a statement he had
reaffirmed Canada’s “unwavering support for the CUSMA and its renewal” and
noted that the deal remains fully in force until 2036 “and can be renewed at
any time for another 16-year period.””

“Mexico’s Ebrard [Secretary of the Economy] underscored the same. “If (Trump) wanted to leave, the United States would have done it by now,” he said.”

“In the immediate term, the decision to enter a period of annual reviews changes little. But it will contribute to ongoing investment and business uncertainty.”

““The Americans have made it official,” said Brian Clow, a former top Canada-U.S. adviser to the Trudeau government. “They want more concessions from Canada and Mexico, and they want the trade uncertainty to continue before they’ll consider extending the agreement.”

So, the negotiations will go on with the three countries, with heightened uncertainty, and it would appear that such negotiations will at least for now go forward bilaterally among all three Parties. I have no doubt there will be loud noises from President Trump but I also have the suspicion that these negotiations will in the end outlast this President and perhaps the next administration will then have the sense to conclude negotiations among the North American countries.

A Look at NATO

Now a quick turn to NATO. The next NATO gathering is in Ankara Turkey on July 7-8^th, this at the level of Heads of State and Government. Once again Trump has made clear his distaste for this alliance. As pointed out by The Economist back in May:

“Mr. Trump has been casting doubt on his commitment to NATO and its Article 5 mutual-defence clause since the start
of his second term. That has prompted a long-overdue increase in European
defence spending. Yet in recent months he has gone further, announcing unexpected
troop reductions and cancelling the deployment to Germany of a cruise-missile
unit that was to plug an important gap in Europe’s defence.”

“The rapid drawdown has upended Europeans’ assumption that they would have time to build up their own forces and replace vital American “enablers”, such as intelligence and surveillance assets.”

“Some European armed forces are making secret plans to fight not just without America’s help, but without much of NATO’s command-and-control infrastructure. “The Greenland crisis was a wake-up call,” says a Swedish defence official. “We realised we need a Plan B.””

“The question cuts to the core of the alliance’s success. Most military coalitions look like a primary-school music practice: each country turns up, bangs its drum roughly in time with the others, and leaves. NATO, by contrast, was set up as a symphony orchestra controlled by a single conductor, the Supreme Allied Commander Europe (SACEUR), an American general who also commands America’s forces in Europe.”

“Thus a Plan B requires more than acquiring weapons; it means creating a structure under which Europeans would fight. The core, at least in northern Europe, would probably be a coalition of Baltic and Nordic countries, plus Poland.”

So is it all ‘gloom and doom’ over NATOs future. Well, not exactly. Stephen Walt, my colleague at Harvard, back in February in the FP made clear that the Europeans would need to step up and take over coordination:

“Lastly, as I noted above, the United States’ NATO allies do face a collective action problem, and getting them to pull together to increase their weight within the alliance is not an easy task. But in the present era, it is the job of the secretary-general to make the alliance more effective by working 24/7 to overcome those obstacles instead of reinforcing them.”

“Things are radically different now. The Trump regime has precisely zero commitment to so-called liberal values, engages in predatory behavior toward allies and adversaries alike, and cannot be trusted to keep any agreements or pledges that it might make.”

“In this emerging multipolar world, Europe no longer enjoys pride of place, and it will be forced to chart its own course. That need not lead to a full trans-Atlantic rupture, but it does suggest the need for a major rebalancing. Trying to preserve NATO’s old formula of U.S. dominance and European submission is an increasingly bad bet.”

“The safest course would be a new division of labor within NATO, where its other members build up their own defense capabilities as rapidly as possible and the United Staters gradually becomes
their ally of last resort but not Europe’s “first responder.” That won’t happen
overnight, but a more unified and capable Europe would find itself getting more
respect and attention from Washington (which might begin to realize that
preserving these ties were in the United States’ own self-interest) and would
be better prepared should the United States continue its efforts to alienate as
many former friends as possible.”

The Walt view has been more recently underscored by Alexandra de Hoop Scheffer, the current President of the German Marshall Fund of the United States and a former adviser to the French government, in another FP piece, this titled: “Trans-Atlanticism Isn’t Dead—It’s Being Renegotiated”:

“The obituaries for trans-Atlanticism are being written too soon. The Trump administration has indeed profoundly shaken the U.S.-European relationship. But Nathalie Tocci’s recent essay in Foreign Policy, which posits that trans-Atlanticism as a living, operative force
is over, mistakes a needed transformation for a terminal diagnosis.”

“The evidence points not to the end of the trans-Atlantic alliance but to the emergence of a more demanding and ultimately more durable partnership that signals Europe’s long-delayed emergence as a geopolitically mature entity.”

So, we will need to look forward to growing European coordination and leadership of the alliance if NATO or its European successor is to emerge as a credible defense alliance for Europe. Will there be doubts, undoubtedly, but there is a path forward assuming the Europeans ‘suck it up’ and move forward collectively.

Now I was going to go on to describe the growing insecurity in nuclear balances as a result of technological change and significant modernization of nuclear forces by the Great Powers. It is a very serious debate and requiring important strategic policy action.

But I think I will hold off for the moment to allow us all a hot but well deserved break. Be back soon.