• Fossil Fuels
    The Most Important Part of the Keystone XL Environmental Impact Statement
    The State Department has released its long-awaited final environmental impact statement (EIS) for the Keystone XL pipeline. The headline is straightforward: the pipeline is “unlikely to significantly impact the rate of extraction in the oil sands” and, as a result, world greenhouse gas emissions. This is essentially a status quo conclusion, reaffirming the essence of the draft EIS (released last year). It also allows President Obama to judge that the pipeline meets his requirement that the project “not significantly exacerbate the problem of climate pollution”. The report does, however, carve out one substantial exception. That’s worth drilling down into, because it’s what the President will likely lean on if he decides to say no. The logic in the final EIS (as in the draft) is straightforward: blocking the Keystone XL pipeline is unlikely to significantly affect oil sands production because oil sands has other ways of getting to markets. But the final EIS, unlike the draft one, stress tests that claim, pushing it to identify conditions under which it would fail. It finds some, but they’re narrow. The first condition for Keystone to have a significant impact on oil sands extraction has to do with other pipelines: they need to consistently fail for Keystone to matter. Otherwise, denial of Keystone would shift oil sands to different routes that have similar economics, with roughly the same emissions results as Keystone itself. The second condition has to do with rail. If no pipelines are built, oil sands will be shipped by rail instead, with producers incurring higher transport costs as a result. The draft EIS noted this, but argued that oil prices were so high relative to the breakeven price for new oil sands investment that producers would essentially eat the extra transport costs without cutting production. Producers’ profits would drop, but extraction would remain the same, as would emissions. The final EIS leans on this with a simple question: is there any oil price at which this argument would fail? Its answer is yes – which is at the heart of the exception that the EIS carves out. At an oil price between $65 and $75, it says, the extra cost of transporting oil by rail rather than pipeline would flip some producers’ economics from the black into the red, prompting them to leave some Alberta oil in the ground. (Below $65, the rail versus pipeline distinction would again be mostly moot, since oil sands extraction would quickly become uneconomic in general.) Here’s what the EIS says: “Assuming prices fell in this range, higher transportation costs could have a substantial impact on oil sands production levels—possibly in excess of the capacity of the proposed Project—because many in situ projects are estimated to break even around these levels. Prices below this range would challenge the supply costs of many projects, regardless of pipeline constraints, but higher transport costs could further curtail production.” The EIS authors note that a $65-$75 oil price is below most long-run estimates. As a result they treat this possibility as an outlier. My guess is that their worst-case scenario is even less likely than they think. Why? Because it’s difficult to conjure a low oil price case in which oil sands production is sharply constrained. To the extent that some forecasters expect oil prices to fall and stay below $75, it’s because they see a surge of non-OPEC oil supplies combining with low demand to push prices down. A significant contributor to that surge, of course, is new output from the Canadian oil sands. The upshot is that if forecasters were asked for projections in which oil sands were trapped in Alberta, even fewer would project oil prices below $75 than do today. Here’s another way to look at this. Imagine that oil prices go down to $70 because of a mix of supply gains and demand curbs -- the sort of scenario the EIS flags. And now imagine that, because of constrained transportation options, the average break-even cost of a new oil sands development suddenly rises from $65 to $75, blocking some oil sands investment. What happens to oil prices? They go up, either to squeeze demand or to boost supplies, in order to make up for the missing Canadian oil. Those higher prices, in turn, weigh against the higher transport costs, bringing some Canadian projects back into the black. Among other things, this makes it difficult to believe the EIS claim that blocking oil sands pipelines could ultimately have an impact “possibly in excess of the capacity of the proposed Project”. There are self-correcting mechanisms – less oil production in one place means higher oil prices everywhere and consequently more oil output somewhere else – that would weigh strongly against this. To be certain, even if blocking the pipeline were to keep Canadian oil in the ground, that wouldn’t make killing Keystone a good idea. Just because there could be climate impacts from the pipeline (and, to be clear, I think there would be some small ones) doesn’t mean that they would be large. More important, any decision on the pipeline will need to go well beyond climate and take economics and international relations into central consideration as well. If the President decides to reject Keystone, though, it will be on climate grounds. And the final EIS shows that, if he wants to do that, he’ll need to thread a very small needle.
  • Israeli-Palestinian Conflict
    The Israeli-Palestinian Negotiations: Aiming "Low" or "High"
    The Obama administration is fostering Israeli-Palestinian negotiations aimed at a full and final peace agreement. While the talks last they help calm the regional political situation, but they do nothing to improve Palestinian daily life or help build the institutions of a future Palestinian state. If they fail, as all past efforts have, they may leave behind frustration and bitterness. Even so, negotiations should not be abandoned, but should be buttressed by a simultaneous effort to undertake pragmatic steps that support Palestinian institutions, improve life in the West Bank, and strengthen the Palestinian Authority (PA) against Hamas. While today's political-level peace negotiations can provide an essential umbrella for such steps, focusing solely on achieving a full "final status agreement" is too risky. Practical "on-the-ground" improvements are beneficial in themselves and can improve chances for an eventual negotiated settlement. Moreover, because such steps do not violate the interests of the Israeli or Palestinian sides, they can be pursued without continuing the top-level U.S. intervention that other and often higher U.S. policy priorities may require. The Cost of "Aiming High" At least since the Oslo Accords in 1993, Washington has sought to broker a comprehensive peace agreement to resolve the Israeli-Palestinian and Israeli-Arab conflict. Those efforts have failed, and they have damaged the prestige of both U.S. administrations and Palestinian leaders. Had the moderate leadership that emerged under President Mahmoud Abbas and former prime minister Salam Fayyad achieved a peace agreement and created a Palestinian state, it would have been greatly strengthened vis-à-vis Hamas and other terrorist groups. When this failed to occur, the PA's main argument against Hamas—that Hamas could only deliver violence, while they could deliver a state—was weakened. The United States has contributed to this problem by "aiming high." The cost of Washington's focus on a comprehensive agreement has been that it has rarely pushed hard for immediate, on-the-ground changes that would be meaningful to Palestinians—such as more jobs in Israel or more control over larger areas of the West Bank. Such changes do not reflect a lack of ambition or vision; rather, they can be characterized as "preparing for statehood," and would suggest to Palestinians that their affairs are being competently handled by the current leadership and that they have much to lose from the violent actions and extreme politics of terrorist groups. The United States can, as a matter of policy, seek both a long-term, comprehensive deal and take incremental, preparatory steps. But top officials have limited time and energy, and focusing on the former has crowded out the latter. The rebalancing of policy from focusing exclusively on a final and comprehensive deal to examining preparatory steps as well means more than just rearranging diplomatic talking points. It requires reorienting U.S. policy after decades of aiming high and falling short. It also requires a new understanding of how a Palestinian state will be built: not at the United Nations or even at the negotiating table but, rather, in the West Bank. While the U.S. timetable of nine months to negotiate a full peace agreement and the longer time needed for pragmatic steps to bear fruit appear out of sequence, the opposite is true. A final peace agreement will take many years, and the effects of practical steps can be felt far sooner. And because such steps do not threaten Israeli security or the PA's role in the West Bank, they should be agreeable to both sides. Negotiations and Practical Steps Taking incremental steps is not an argument against seeking comprehensive peace negotiations. The renewal of peace negotiations is useful, if only to demonstrate that the ultimate goal of a comprehensive agreement has not been abandoned. But it is unlikely that new negotiations will make progress in the near future; the most any Israeli government seems able to offer is less than the least any Palestinian government seems able to accept. The United States should help the PA emerge from a state of financial crisis. The PA depends on foreign aid for survival, because it cannot pay salaries or provide public services on its meager tax revenues. This objective will require maintaining U.S. aid at current levels, pressing the EU to do the same, and pushing Arab oil-exporting countries to provide additional aid. It will also mean pressing Israel to transfer PA tax monies it has intermittently withheld since the Palestinian statehood initiative in the United Nations. A bankrupt PA that cannot pay salaries will not survive. The United States should encourage Israel to take further steps to improve the Palestinian economy. In the last four years, Israel has removed some barriers and checkpoints that interfere with mobility in the West Bank, granted permission for Israeli Arabs to shop there, and created more opportunities for residents there to work in Israel. In September 2013, with negotiations under way, Israel granted five thousand more work permits, and during Ramadan it permitted hundreds of thousands of Palestinians to enter Israel to shop, visit holy sites, and meet with family members. It should be a top priority of U.S. policy to seek the continuation and enlargement of these steps. Israel should limit construction in settlements to the major blocs that, in all previous negotiations, have been understood that Israel will keep. The logic is obvious: limiting construction to the major blocs would signal that Israel does intend ultimately to enter into an agreement that establishes a Palestinian state in the rest of the West Bank. Israeli coalition politics makes achieving these limits difficult, but the United States will have a better chance if it drops the politically impossible demand that Israel cease construction in Jerusalem and all the major blocs and focus instead on outlying settlements. Israel should minimize its incursions in Palestinian territory and undertake only those with significant security payoffs. In areas of the West Bank, Palestinians feel the Israeli presence outside of settlements through their interactions with Israeli security forces: the Israeli Defense Force, police, and Shin Bet (the Israel Security Agency). Raids in urban areas are particularly likely to result in violence, as they have on several occasions in 2013. Such incidents severely damage essential Israeli-Palestinian security cooperation. The United States should publicly ask for explanations by the government of Israel when such raids do occur. The United States should encourage Israeli security forces and courts to prevent and penalize settler violence against Palestinians, which has increased in recent years. The United States should seek investigations and prosecutions of such incidents. The United States should be willing to criticize and sometimes penalize the PA whenever it glorifies violence or those who have committed acts of terror. This issue, known as preventing "incitement," goes to the heart of the Israeli-Palestinian relationship and the chances for peace. The U.S. government should publicly criticize actions that glorify violence and terror, and demand PA responses that address U.S. criticism. Financial penalties undermine U.S. efforts to help the West Bank economy but can drive home the message to the PA that this issue is viewed as serious. Given U.S. aid levels of over $400 million per year, penalties of several million dollars in the direct budget support portion (roughly $200 million) will not bankrupt the PA; conversely, the absence of them sends the message that such conduct does not matter or that U.S. complaints may be ignored. Hamas will denounce practical steps as "making the occupation more tolerable." But, in fact, steps that improve life for Palestinians and help them build state institutions are beneficial in themselves and create a positive background for serious talks and improve their chances of success. Moreover, such steps would help the PA demonstrate its efficacy to the Palestinian people today, when it cannot deliver statehood (and indeed when Fayyad's departure suggests that the PA may be hard put to deliver clean and effective governance); it will need that credibility to sell the compromises that any final status agreement will entail. None of this will transform the Palestinian political situation, but it can at least prevent a further deterioration in PA popularity. Those who focus instead on achieving a comprehensive peace are allowing their hopes to crowd out the pragmatic steps that are the most realistic path forward. The Next Three Years While today's political-level peace negotiations can provide an essential umbrella for pragmatic steps, focusing solely on achieving a full final status agreement is too risky. Practical on-the-ground improvements are beneficial in themselves and can improve chances for an eventual negotiated settlement. They will also strengthen the PA and its ability to engage in the compromises any full peace agreement will require. Supporting the construction of a Palestinian state from the ground up, strengthening Palestinian institutions, and seeking pragmatic Israeli-Palestinian cooperation should be the center of U.S. policy now, not the handmaiden to a policy aimed at a comprehensive but currently unattainable final peace agreement.
  • Ukraine
    A Tug of War Between East and West
    Ukraine tacked toward Russia ahead of the EU summit but the geopolitical contest for all three sides will likely intensify, says expert Jan Techau.
  • Treaties and Agreements
    How the Copenhagen Climate Talks Succeeded
    Negotiators are gathering in Warsaw this week and next for the nineteenth annual UN climate talks (COP19). Their job will be to prepare the groundwork for a big summit in Paris in 2015 where countries are supposed to ink a new climate agreement. Many diplomats and observers are likely to warn against repeating what they see as the disastrous 2009 Copenhagen summit. That meeting merely produced a voluntary pact, but only legally binding commitments, many will insist, can do the job. But the evidence from at least one big country suggests otherwise. There’s a good argument to be made that Copenhagen is having a real impact on carbon dioxide emissions in the United States. In early 2009 the House of Representatives passed the Waxman-Markey climate bill. That bill mandated a 17 percent cut in U.S. greenhouse gas emissions from 2005 levels by 2020. When Copenhagen rolled around in December, the United States needed to make an offer. It took the 17 percent number from the Waxman-Markey bill and told the world that would be its goal. We all know what happened next. The world agreed only to a voluntary deal; the 17 percent number was put into the final agreement but it did not become legally binding internationally. A few months later cap-and-trade died in the U.S. Senate. That meant that the 17 percent target didn’t become legally binding domestically either. Yet a lot of anecdotal evidence suggests that the 17 percent goal remains a focal point for many U.S. policymaking conversations. When the Obama administration issued its draft Climate Action Report in September, it laid out a suite of options that might get the United States to the 17 percent target. Many of those tools are being actively pursued. The 17 percent goal, for example, appears to be on people’s minds as they sort through possible ways to tackle carbon dioxide under the Clean Air Act and judge whether they’re sufficiently ambitious. And as people (including in government) debate how much to do, the U.S. Copenhagen commitment is often central, with people arguing (not without some controversy) that delivering on the 17 percent pledge would strengthen the U.S. hand in future talks, and hence is something worth pursuing. It’s highly doubtful that would be the case were the 17 percent goal only a relic of a failed piece of legislation. Of course, one shouldn’t overstate the influence of the U.S. Copenhagen commitment. Many factors are informing U.S. regulation of carbon dioxide. And had U.S. emissions not plummeted as a result of the natural gas boom, steadily rising efficiency, and government support for renewables, the United States wouldn’t be in striking distance of the 17 percent goal; in that context, where meeting the 17 percent target would be highly costly, it’s doubtful that policymakers would be trying to use existing regulatory authority to close the final gap. But these caveats shouldn’t distract from the central lesson. International commitments influence domestic policy in many different ways. Whether those commitments are legally binding or not is only one of the things that determines how likely they are to succeed.
  • Trade
    Why Obama Shouldn’t Cancel his Asia Trip
    With the government shut down, the White House announced yesterday that the President’s upcoming trip to Asia, scheduled to begin October 6, will be cut short. Plans to visit Malaysia and the Philippines have been shelved for now, though Obama will still attend the annual Asia Pacific Economic Cooperation (APEC) meeting of leaders in Bali, Indonesia. Republicans will undoubtedly accuse Obama of hitting the beach rather than resolving the budget crisis, but the President’s decision to keep his commitment to APEC makes sense. Southeast Asia is increasingly critical to U.S. interests, and Obama has made the region the heart of his government’s “pivot” of forces and diplomatic personnel to Asia. To make good on that goal, Obama should push forward several critical ideas that would help the region become a better market and trading partner, and that would enhance stability in Southeast Asia. For the whole article, and the recommendations, read here.  
  • Trade
    The Futility of Obama’s Southeast Asia Trip?
    Later this week, President Obama will embark on a six-day trip to Southeast Asia, visiting Indonesia, the Philippines, Malaysia, and Brunei, to attend the East Asia Summit, the annual ASEAN leaders summit, and the Asia Pacific Economic Cooperation meeting, along with a global entrepreneurs’ meeting in Malaysia. It might seem surprising that the president would leave the United States at such a critical time in federal budget negotiations, but these are the biggest leaders’ meetings in Asia, and since 2009, the White House has committed to increasing the presence of the president and other top Cabinet officials in Asia. Certainly, face time is critical in Southeast Asia, and the president’s presence at these summits is a sign of the continued U.S. commitment to the region, a sign further burnished by the launch earlier this year of the comprehensive partnership with Vietnam. But what about the substance of these meetings? The White House has pledged to finalize the Trans Pacific Partnership(TPP) by the end of this year, and this will be the top subject at nearly all the summits Obama attends. But the TPP negotiations held in Washington two weeks ago did not make substantial progress on many sectors, and most major U.S. business trade groups are pressing Obama not to make the kinds of compromises on intellectual property during his trip to Asia that most of the other TPP countries demand for talks to be finalized. And even if they did actually finalize TPP, the White House has almost no chance of getting fast trade track authority from Congress again, despite pledges by the Office of the United States Trade Representative to work for it. Without fast track, and with so many concerns in Congress over the vast scope of the TPP, it would likely be dead on arrival on the Hill. Later in the week, I’ll take a look at how Obama should, during his trip, address concerns over the state of political freedom in Southeast Asia, particularly in Malaysia, Myanmar, and Cambodia.  
  • International Organizations
    Obama and Syria: Insights from the President’s G20 Press Conference
    In his revealing press conference closing out the G20 summit, President Obama provided the clearest summary yet of his thinking on Syria. Perhaps the most significant points were the following: *The purpose of any strike must be to defend the chemical weapons taboo: Obama made a clear distinction between Assad’s use of chemical weapons and the ongoing civil war in Syria. The rationale for striking Syria is punishment and deterrence, not tilting the balance in Syria’s grinding conflict. “Syria’s escalating use of chemical weapons threatens its neighbors,” the President said. “But more broadly, it threatens to unravel the international norm against chemical weapons embraced by 189 nations.” Even though Syria is not a member of the Chemical Weapons Convention (CWC), Obama implied, the prohibition against the use of such weapons is now established as customary international law. Failing to respond to Syria’s violations would send a terrible “signal to rogue nations, authoritarian regimes, and terrorist organizations.” They would conclude that there is no consequence for using weapons of mass destruction. Among those “rogue nations” taking note of any international response—or lack thereof—is of course Iran. *This is not about choosing sides in Syria’s civil war. The President once again insisted that any strikes by the United States and other partners would be aimed at holding Assad accountable and deterring further chemical weapons use, not determining the outcome of the ongoing military struggle between Damascus and the rebels. As in previous statements, he insisted that “the underlying conflict can only be resolved through a political transition,” rather than militarily. Despite its differences with Moscow, the United States still hopes to move forward with the Geneva peace process. In clinging to this two-track approach, the President risks running afoul of Republican hawks in Congress, including Senator John McCain, who clearly envision crippling strikes on Assad’s military as a way to tilt the playing field toward the rebels. Beyond the need to keep GOP interventionists on board, Obama faces a more practical military quandary:  Can he actually bring off the “Goldilocks” scenario he seeks? That is, can he calibrate any military strikes so that they are sufficiently punishing to persuade Assad to stick to conventional weapons without being so devastating that they ensure his swift collapse and/or the battlefield triumph of rebels (many of whom the White House distrusts for their jihadist, anti-Western orientation). *Paralysis in the United Nations cannot be an excuse for inaction. One of the supreme ironies of the Syrian situation is the spectacle of a Democratic president elected on a platform of multilateral cooperation now espousing some of the “unilateralist” arguments used by his predecessor, George W. Bush.  “There are a number of countries,” Obama observed in St. Petersburg, “that just as a matter of principle believe that if military action is to be taken, it needs to go through the U.N. Security Council.” Obama begged to differ. Although declaring himself “a strong supporter of the United Nations,” he insisted that in certain grave situations it is legitimate to act without the authorization of the Security Council, when the latter is hamstrung by internal divisions. “I would greatly prefer working through multilateral channels and through the United Nations to get this done,” he said, but given that impossibility, the United States had to look to other approaches to “enforcing international norms and international law.” Of course, Bill Clinton also made similar arguments to justify  the 1999 NATO intervention in Kosovo. *Presidents should take note of public opinion but must not be ruled by it. As the President reminded the press corps, he was elected by the American people to end wars (in Iraq and Afghanistan), not to begin them. He is fully aware that U.S. citizens are exhausted by more than a decade of war and wondering why their country must once again take risks by intervening in another nation’s conflict. The President replied with a couple of apposite historical analogies. In 1940, he recalled, there was little U.S. public enthusiasm for aiding the United Kingdom during the Battle of Britain. But the United States did the right thing in aiding Winston Churchill and his countrymen in surviving the assault from Nazi Germany. Warming to the theme, Obama noted that if a replay of the Rwandan genocide were to occur right now, and the American people were asked whether the United States should intervene, “I think it’s fair to say that it probably wouldn’t poll real well.” But failing to act on this moral imperative would once again consign hundreds of thousands of innocents to slaughter. *The United States retains special responsibilities as the ultimate custodian of world order. A recurrent refrain of U.S. legislators and citizens, the President acknowledged, is, in effect, why us? Why should our country always have to take the bloody field, while others watch from the sidelines? Obama’s answer was that the world continues to depend on the United States, as the most powerful country in the world, to preserve international law, peace and security. “There are going to be times…where, as is true here, the international community is stuck for a whole variety of political reasons. And if that’s the case, people are going to look to the United States and say, ‘what are you going to do about it?’ and that’s not a responsibility we always enjoy.”  Indeed the “leader of a smaller country” had recently told him, “I don’t envy you because…nobody expects me to do anything about chemical weapons around the world,” whereas “people do look to the United States.” Obama concluded: “And the question for the American people is, is that [a] responsibility that we’re willing to bear”?  The President has already provided his own answer: There is no substitute to American leadership. In the coming days he will be seeking to shore up support from an inward-looking Congress and a war-weary public that the United States—today’s “weary titan”—should continue to shoulder the responsibilities of power.
  • China
    Blink and You Will Miss It: Obama’s Quiet Pivot Progress
    Amidst the din of Syrian intervention talk and Fed picks, the Obama administration is pushing forward quietly, but determinedly, to flesh out the pivot to Asia. While most of the critical attention on the pivot or rebalance is paid to what is transpiring on the security front, there is real, albeit slow, progress on the trade front and the potential for significant advances in other areas such as environmental protection. Washington is pushing hardest to advance the Trans-Pacific Partnership (TPP), which if successful could be one of the signal achievements of the Obama administration’s second term. The high-end trade agreement involves negotiations among twelve countries over twenty-one widely disparate areas, such as government procurement and fishing subsidies. A meeting of the chief trade negotiators in Washington is scheduled for mid-September, and there is a continuous stream of thorny issues such as intellectual property on medicine and tariffs that must be waded through before a final agreement can be achieved. Washington is putting significant energy behind its efforts to get an agreement by the end of the year, but by most accounts this is overly ambitious. The administration’s efforts to promote regional security are also moving forward. Secretary of Defense Hagel recently traveled to Brunei for a meeting of the ASEAN defense ministers and along the way visited the Philippines, Malaysia, and Indonesia. In the Philippines, there were further discussions of a framework agreement that would promote closer cooperation between the Philippine and U.S. armed forces and allow for a rotational presence of U.S. troops, much in the same way as there is in Singapore and Australia. Finally, Congress held hearings over the summer to explore ways in which the United States could enhance the rebalance through stronger U.S. action in areas such as environmental protection. The United States is already engaged in a number of cooperative efforts with the Lower Mekong Delta region and a particular area of new focus in this environmental partnership could well be Burma/Myanmar, where biodiversity and timber resources are under severe threat and could benefit significantly from U.S. assistance. Critics of the U.S. rebalance nonetheless continue to abound. The TPP comes under fire for the opaque nature of the negotiations as well as its exclusion—not deliberate or permanent—of China. Washington’s efforts on the security front—which are often mistaken as the sole element of the rebalance—have been blamed for sparking “an Asian arms race” and accelerating the “militarization of states.” Some also criticize the unstated focus on China as misplaced. Amitai Etzioni argues, for example, that the Obama administration’s decision to plan for Air-Sea Battle is an over-reaction to China’s development of its anti-access/area denial capabilities; moreover, in Etzioni’s view, China has used legitimate channels to resolve more recent trade and territorial disputes, so why is the United States creating a problem where none exists? It remains far from clear that Vietnam, the Philippines, India, and Japan would agree with such an assessment. Whether or not the rebalance is in fact part of a U.S. “imperial pivot,” as some suggest, these critics miss the most salient point. There is no rebalance without the rest of Asia. If Australia, Singapore, Vietnam and others don’t buy into the brand of partnership or leadership that the United States is selling, the rebalance will die a very quick death. To assume otherwise ignores the vigorous debates ongoing in many of these countries, and ultimately demeans these countries’ ability to recognize and pursue their own political, security, and trade interests.
  • International Organizations
    Pluralism, Peace, and the "Responsibility to Innovate”
    Below is a guest post by Mark P. Lagon, adjunct senior fellow for human rights at the Council on Foreign Relations and professor at Georgetown University’s School of Foreign Service. Solutions to global problems of pluralism and peace as in Syria and Egypt need not only international institutions, but also political imagination. Two institutional innovations, one American, the other international, show just what sort of impact creative thinking can have. One U.S. innovation with enduring value is the National Endowment for Democracy (NED). It was crafted thirty years ago on the premise that U.S. Cold War interests were bound up in more nations becoming functioning democracies. Beyond holding elections, these countries needed capable parties, civil society actors, and leaders prepared to govern once elected. Rather than using covert CIA channels, the Endowment would embrace transparency, independently directing funds appropriated by Congress through non-governmental organizations to assist local democratization efforts. Critical to the NED’s success was its broad domestic base of support. Leaders of the Republican and Democratic Parties, the U.S. Chamber of Commerce, and (under the visionary leadership of Lane Kirkland) the AFL-CIO came together to form a partnership. Four implementing organs, one with each of those institutions, were created to carry out the Endowment’s mandate. This partnership proved all the more valuable after the Soviet Bloc crumbled. Today the NED provides critical lines of communication between the United States and civil societies in other countries, providing an invaluable complement in turbulent transitions to blunter policy instruments like aid to foreign governments or the use of military force. Subsequent U.S. public-private partnerships—from the Clinton-Gore “Reinventing Government” initiative to the George W. Bush sponsored Millennium Challenge Corporation—follow the creative trail blazed during the Reagan era NED. Kofi Annan was an innovator against atrocities. As head of the UN Department of Peacekeeping Operations, he had witnessed firsthand the inability and unwillingness of the UN Secretariat and its political master, the UN Security Council, to stem atrocities in Bosnia and Rwanda while UN peacekeepers were in situ. After ascending to UN Secretary-General, he became determined this experience should never be repeated. But it was not just moral commitment which guided his response—it was creativity. He nudged the Canadian government to convene the International Commission on Intervention and State Sovereignty, shepherded by two former foreign ministers, Australian Gareth Evans and Algerian Mohammed Sahnoun. That Commission’s report uncorked the concept of the “Responsibility to Protect” (R2P). Annan created another commission in 2004, the High Level Panel related to UN reform, paving a path to a 2005 UN World Summit at the 60th UN General Assembly, which endorsed R2P. That same year, a U.S. commission on the future of the United Nations, co-chaired by former Republican House Speaker Newt Gingrich and Democratic Senate Leader George Mitchell, embraced the R2P norm. In subsequent years, the UN Security Council itself invoked the principle, first generally and then in the specific cases of Libya and Cote d’Ivoire. To be sure, the world should be chagrined at the failure to apply R2P to other atrocity situations. But it is amazing how quickly R2P has become embedded as a global norm—due, in no small measure, to Annan’s entrepreneurship. Consider how different the result can be when a leader fails to show creativity. This is, alas, a common, non-partisan failing. George W. Bush found himself in a policy cul-de-sac in the face of persistent atrocities in Darfur, despite the president’s sincere, “not on my watch” concern. His administration pushed for generous funding of humanitarian operations, dispatched tough-minded special envoys like Richard S. Williamson, and cajoled the African Union into significant deployment of peacekeepers in Darfur. Still, it was beyond the imagination of the President and his military chiefs how to marshal military assets to address a problem that an official U.S. legal finding called genocide, given the vast footprint of Bush’s own military deployments in Iraq and Afghanistan. Lack of imagination has afflicted President Obama’s policy toward Syria. As Middle East specialist Michael Rubin observed on ABC’s This Week on July 7, 2013, the President resembles a dealer in blackjack: he waits to see all the other players’ hands before showing his own. In Syria, if Washington had not waited so long to assist the armed opposition to Assad’s butchery, the United States and partners might have strengthened the rebels’ more liberal elements, who will be critical to the nation’s future just governance. President Obama’s wait-and-see approach is evident in Egypt. During the week of August 19, 2013, it remained ambiguous whether or not the United States had cut off military aid to Egypt following what cannot be called anything else than a “coup” and a brutal crackdown. The indecisiveness and lack of creativity of the administration’s current policy is consistent with its irresolution in previous phases of the Egyptian crisis, including following President Morsi’s suspension of judicial review; or earlier when thousands first took to the streets in Cairo in January 2011 insisting on Mubarak’s ouster; or earlier still when the Obama administration (like multiple predecessors) bankrolled Mubarak when he offered the false dichotomy of “back me or get the Muslim Brotherhood.” A longstanding, static U.S. policy squandered opportunities to support the very moderate political forces whose capacity to compete and govern is so needed today (exactly what NED was created to nurture). NED and R2P show the creativity of leaders like Reagan and Annan—backed by plenty of help from others, like Lane Kirkland to Reagan, as well as Gareth Evans and Newt Gingrich, no less, to Annan. The lesson is an important one: Global governance requires creating institutions, partnerships and solutions…creatively.
  • Arms Industries and Trade
    A Strategy to Reduce Gun Trafficking and Violence in the Americas
    The flow of high-powered weaponry from the United States to Latin America and the Caribbean exacerbates soaring rates of gun-related violence in the region and undermines U.S. influence in the Western Hemisphere. Though the Senate rejected measures to expand background checks on firearms sales, reinstate a federal assault-weapons ban, and make straw purchasing a federal crime, the Obama administration can still take executive action to reduce the availability and trafficking of assault weapons and ammunition in the Americas. The Problem With the launch of the Merida Initiative in 2007, the U.S. and Mexican governments agreed to a regional security framework guided by the principle of shared responsibility. Among its domestic obligations, the United States committed to intensify its efforts to combat the illegal trafficking of weapons and ammunition to Mexico and elsewhere in the Americas. Six years later, little has changed: the U.S. civilian firearms market continues to supply the region's transnational criminal networks with high-powered weaponry that is purchased with limited oversight, especially from unlicensed individuals at gun shows, flea markets, pawn shops, and on the Internet. Lax U.S. gun laws enable straw purchasers, including those under investigation in Operation Fast and Furious, to legally procure thousands of AK-47 and AR-15 variants every year and traffic them across the border to sell them illegally to criminal factions. U.S. government data highlights the problem. The Bureau of Alcohol, Tobacco, Firearms and Explosives' (ATF) Web-based firearm trace request and analysis system, eTrace, enables law enforcement officials to collaborate with ATF to track the path of recovered weapons from the manufacturer or importer though the distribution chain to the first retail purchase. Over 70 percent of the ninety-nine thousand weapons recovered by Mexican law enforcement since 2007 were traced to U.S. manufacturers and importers. Likewise, 2011 eTrace data for the Caribbean indicates that over 90 percent of the weapons recovered and traced in the Bahamas and over 80 percent of those in Jamaica came from the United States. The ATF has not released data for Central America, but the numbers are likely similar. The UN Office on Drugs and Crime reports that easy access to firearms is a major factor influencing homicide trends in Latin America and the Caribbean; the gun-related homicide rate in Latin America exceeded the global average in 2010 by more than 30 percent. The World Bank estimates that crime and violence cost Central America nearly 8 percent of its GDP when accounting for the costs of law enforcement, security, and health care. The U.S. government has empowered law enforcement in the region to recover and investigate the source of weapons used by criminal factions. In December 2009, the ATF introduced the Spanish version of eTrace. Since 2012, the State Department has funded the Organization of American States' (OAS) program to provide firearm-marking equipment and training to law enforcement in twenty-five countries. Yet, these efforts notwithstanding, Mexican authorities intercepted only 12.7 percent of the roughly 250,000 guns smuggled into Mexico between 2010 and 2012, while the ATF intercepted no more than 2 percent. In effect, the United States undermines its own efforts at preventing arms trafficking with its unwillingness to strengthen oversight of the firearms industry and lukewarm support for multilateral agreements. The United States is one of three countries that have not ratified the Inter-American Convention Against the Illicit Manufacturing of and Trafficking in Firearms, Ammunition, Explosives, and Other Related Materials (CIFTA). In addition to requiring parties to criminalize the illegal manufacture, import, or export of high-powered weapons, the treaty encourages information exchange and cooperation on initiatives including the marking and tracing of weapons and the identification of criminal transit routes. President Bill Clinton signed CIFTA in 1997 and submitted it for ratification to the Senate, where it has lingered for over a decade. Likewise, although the United States voted in favor of the United Nations' Arms Trade Treaty in April 2013, it has yet to sign or ratify the treaty. Given the political complexity of legislative action to reduce arms trafficking, Latin American governments have moved to disarm criminal networks by tightening their own gun codes: Mexico prohibits the sale of handguns with calibers greater than .38 and Colombia bans civilians from carrying firearms in Medellin and Bogota. Brazil, Mexico, and El Salvador have implemented gun buyback programs. At the 2012 Summit of the Americas, heads of state demanded a new approach to the failed war on drugs, including greater efforts to disarm criminal networks. U.S. allies have repeatedly urged the United States to reinstate the federal assault-weapons ban and take action against weapons trafficking. Their patience—and the United States' credibility as a responsible partner—is waning. U.S. action will strengthen those regional heads of state who want to work with the United States and who also regard lax U.S. gun laws as fueling violence and anti-Americanism among their own publics. Across the board, Latin American governments are turning toward the Community of Latin American and Caribbean States and the Union of South American Nations, which pointedly exclude the United States, to handle regional political and security dilemmas. Stronger action to regulate the southward flow of weapons represents an opportunity for the Obama administration to enhance U.S. relevance in the region, especially at the early stages of new regional institutions and security protocols. Recommendations In the absence of major legislative action, the Obama administration should pursue the following executive and diplomatic actions—consistent with the Second Amendment—to reduce the trafficking of firearms that contribute to crime and violence across the Americas: Expand nationwide the state-level multiple-sale reporting requirement for assault weapons. In 2011, the Obama administration adopted a federal rule that requires gun dealers in California, Texas, Arizona, and New Mexico to report sales of more than two semiautomatic rifles to the same person within a five-day period. Unintentionally, the rule shifted gun sales to states not covered by the requirement, prompting the need for improved oversight of all suspicious semiautomatic firearm sales. Incorporate strategies to reduce existing stocks of illegal firearms into U.S.-Brazil dialogue on defense and security. As home to the two largest firearms industries in the hemisphere, the United States and Brazil have a mutual interest in incorporating this topic into their ongoing bilateral policy dialogues. For example, sharing best practices regarding gun buyback programs in border regions on the U.S.-Mexican and Brazilian-Bolivian borders will build mutual confidence between the two largest Hemispheric powers. Exclude firearms and ammunition products from the Export Control Reform Initiative. As currently crafted, President Barack Obama's reform initiative may make it easier for U.S. manufacturers to export military-style weapons to allies. Liberalizing export restrictions on firearms poses a serious security risk to the Americas; potential reexport of firearms without U.S. oversight could jeopardize local law enforcement efforts to keep weapons from criminal groups and rogue security forces in the region. Apply the "sporting test" standards of the 1968 Gun Control Act. This provision prohibits the import of weapons not "suitable or readily adaptable for sporting purposes," including but not limited to military-style firearms. Throughout the 1990s, under Presidents George H.W. Bush and Bill Clinton, the ATF adhered to the sporting test guidelines, preventing thousands of assault weapons from entering the U.S. firearms market. Enforcement of the test lapsed under President George W. Bush and has not been reestablished under President Obama. Continue to support federal, state, and local initiatives to improve regulation of the U.S. civilian firearms market. As grassroots organizations prepare their long-term legislative strategies, the White House should back state and local legislation, based on reforms in Maryland and Connecticut, which bans the sale of assault rifles and high-capacity magazines, broadens existing background check requirements for firearm purchases, and modernizes gun-owner registries by requiring, among others, that buyers submit their fingerprints when applying for a gun license. While piecemeal regulation of the U.S. civilian firearms market does not represent a comprehensive solution, passage of state and local measures, including gun buyback programs, will reduce the number of weapons in circulation and available for smuggling and generate momentum for a broader federal approach over the long run. Conclusion Strengthening U.S. gun laws will not eliminate gun violence in Latin America, where weak judiciaries and police forces, the proliferation of gangs and black markets, and deep inequality exacerbate violent conflict. Nonetheless, lax U.S. gun regulations do enable international trafficking. While the effects of tighter regulation will not be felt overnight, such steps will offset widespread regional views that the United States remains indifferent to its own role in exacerbating one of Latin America's most significant challenges. Although recent federal gun control measures have run aground on congressional opposition, the Obama administration retains considerable leeway in the foreign policy arena, where concerted action can help U.S. allies in Latin America make the case to their constituents and to other skeptical governments that the United States can be a legitimate partner in combating transnational crime. At a juncture in U.S.-Latin American relations that again features both tension and opportunity, these actions will demonstrate that the United States is prepared, if imperfectly, to fulfill its shared responsibility for regional security and enhance American standing and positive influence in Latin America.
  • International Organizations
    Global Development 2.0: Assessing a New UN Roadmap
    Last week the UN’s latest “High-Level Panel of Eminent Persons” released a long-awaited report on global development. The resulting document—A New Global Partnership: Eradicate Poverty and Transform Economies through Sustainable Development—is not only a good read, it’s also a compelling blueprint for extending prosperity to the world’s poor. Formed in July 2012, the panel of twenty-seven luminaries had a clear mandate: to craft a “single, universal… agenda” to guide development cooperation once the Millennium Development Goals (MDGs) expire in 2015. The panel—cochaired by Indonesian President Susilo Bambang Yudhoyono, Liberian President Ellen Johnson Sirleaf, and British Prime Minister David Cameron—succeeded admirably. While building on the MDGs, the report widens the aperture of global development to consider new horizons and avenues to reach them. The MDGs, as the report notes, have mobilized unprecedented global support for development cooperation, particularly when it comes to foreign assistance. While the MDGs’ precise impact is hard to gauge, the years since 2000 have witnessed “the fastest reduction of poverty in human history.”  The number of people living in absolute poverty has declined by 500 million, and the incidence of infant mortality has declined by thirty percent. These are monumental achievements. At the same time, the MDGs were heavily focused on meeting basic human needs. As such, they overlooked other preconditions for sustainable development, among these security from violence, the provision of good governance and the rule of law, protection of human rights, reliable infrastructure, access to energy, and responsible environmental stewardship. The MDGs also framed development cooperation, narrowly, as essentially an aid-driven relationship, in which wealthy donors provided charity to the tin cups of demanding recipients. This ignored the many other policy instruments both sides could deploy, from trade to investment to technology transfer. The new report corrects these gaps by proposing an innovative post-2015 agenda organized around five broad themes, accompanied by twelve “illustrative” goals. The five themes are: “Leave no one behind”: The report embraces the goal of “ending” (not just reducing) poverty and hunger. Beyond these baseline objectives, the panel recognizes the imperative of improving equitable access to education and health care, as well as to the infrastructure of electricity,  transportation, and communications. Sustained progress on these fronts requires, as a matter of justice, reaching out to formerly excluded and marginalized communities. “Put sustainable development at the core”: In a long-overdue shift, the panel insists that the environmental aspects of sustainable development must be given equal weight with economic and social dimensions. In the past, the philosophy was “grow now, clean later.” But that “business as usual” path will only further degrade the ecosystem services—including fisheries, aquifiers, coral reefs, arable land, and forests—upon which humanity depends. “Transform economies for jobs and inclusive growth”: Ensuring decent employment and secure livelihoods for a swelling global population will require unprecedented investments in human capital and productivity. The report is bullish on the potential of technological innovation and private sector initiative to “unleash” entrepreneurial dynamism, diversify developing country economies, and turn the world’s swelling cities into engines of growth. “Build peace and effective, open and accountable institutions for all”:  For too long, as Thomas Carothers and Diane de Gramont point out in their new book, well-meaning donor nations have ignored  the fundamentally political nature of development, even as a growing percentage of the world’s poor is concentrated in fragile states plagued by arbitrary rule, corrupt elites, and endemic violence. The panel acknowledges the centrality of good governance,  civil liberties,  stable property rights, and peace as preconditions for human development. “Forge a new global partnership”: For all their value, the MDGs framed the development cooperation as principally an aid relationship between wealthy donors and poor recipients. The panel offers a more encompassing vision, celebrating the range of partnership possibilities between private and public sector actors, including international instituions, governments, local authorities, corporations, and civil society. The panel exhorts donors “to go beyond the aid agenda” by expanding trade and investment links, as well as transferring technology, to poor nations. Finally, the report calls on donors to get their “own house in order” by eliminating practices that cripple development, like tolerating corrupt business practices, providing havens for tax evasion and money-laundering, and exacerbating greenhouse gas emissions. So far so good. But how to realize these broad shifts? Here, the report pulls its punches a bit, offering only an “illustrative” (rather than “prescriptive”) list of twelve new goals to replace the MDGs. This decision may disappoint some readers. But it’s strategically wise. The ultimate goals will be hammered out within the UN General Assembly (UNGA),  which guards its few prerogatives jealously. In such a context, the panel’s subtle, indirect approach may pay greater dividends. The report’s twelve proposed post-2015 development goals are: 1.  End Poverty 2.  Empower Girls and Women and Achieve Gender Equality 3.  Provide Quality Education and Lifelong Learning 4.  Ensure Healthy Lives 5.  Ensure Food Security and Good Nutrition 6.  Achieve Universal Access to Water and Sanitation 7.  Secure Sustainable Energy 8.  Create Jobs, Sustainable Livelihoods, and Equitable Growth 9.  Manage Natural Resource Assets Sustainably 10.  Ensure Good Governance and Effective Institutions 11.  Ensure Stable and Peaceful Societies 12.  Create a Global Enabling Environment and Catalyse Long-Term Finance Each of these goals is accompanied by 4-6 “measurable targets,” ideally allowing one to gauge progress. (For example, a target for “securing sustainable energy” includes “doubling the share of renewable energy.”) As the report concedes, refining these targets, as well as developing accurate indicators with sufficient global coverage, will require a lot more technical work. One of the report’s most promising recommendations is its call for a “data revolution for sustainable development.” It has become a cliché, of course, that we live in an era of “big data.” What is less well known is the degree to which digital connectivity, including mobile telephony and social media, has begun to change the development landscape, empowering individuals and enabling communities to make large improvements in the quality of their lives and livelihoods. The same technologies can be usefully marshaled to gather timely data on local conditions and needs, domestic and international responses, and development outcomes. Recalling how far the world has come since 2000, the authors are “convinced that the next 15 years can be some of the most transformative in human history.” Their report offers a useful roadmap for that journey.
  • Trade
    Energy and Climate Issues Awaiting Mike Froman at USTR
    With Mike Froman nominated to become U.S. Trade Representative (USTR), change in how the White House handles international energy is sure to follow. But Froman won’t be able to leave energy or climate behind as he moves across the street. I see at least five areas in the offing where the USTR is going to be drawn into energy and climate. Clean energy trade. The United States has adopted a strong stance against others’ restrictions against clean energy trade and investment. Most recently, it challenged local content requirements in India’s solar program. Several colleagues and I wrote a couple years ago about the pitfalls of taking too hard a line here: there’s a delicate balancing act to be played between capturing the benefits of open trade and letting countries create the political conditions required to boost clean energy use. Natural gas exports. This is Department of Energy territory: a host of companies have applied for permission to freely export natural gas, and DOE will say yes or no. But if permit applications start being rejected, there’s a real potential for WTO lawsuits against the United States, which would land the issue over at USTR. In any case, one can only hope that USTR will be involved up front, since a decision against exports would have broader reverberations for U.S. trade relationships. Carbon tariffs and U.S.-EU trade talks. Americans who have only focused on climate change in the last few years might be forgiven for believing that carbon tariffs are something that Congress considered using in conjunction with a cap-and-trade scheme to make sure that China wouldn’t get an unfair competitive advantage. But the idea originated more prominently in Brussels and Paris around 2008 as a way to protect Europe against the United States, and to prod Washington to impose its own carbon pricing. I wouldn’t be surprised to see this come back, perhaps in the context of ongoing U.S.-EU trade talks, which will undoubtedly see some in Europe ask for measures to make sure the United States doesn’t get an unfair edge. More natural gas exports – and the TPP. Japan is set to join talks on the Trans-Pacific Partnership (TPP) trade agreement. If you’ve visited Tokyo recently, there’s a decent chance you’ve been asked whether joining TPP would give Japan special access to U.S. exports of LNG. While decisions on applications to export LNG to countries with which the United States doesn’t have special free trade agreements is housed at the DOE, a decision on whether to give Japan special access as part of a trade deal will need to run through USTR. Europe’s aviation scheme. European efforts to expansively include foreign airlines in its Emissions Trading Scheme didn’t go down well in most of the world. Ongoing negotiations are aiming to find an alternative approach agreeable to all the major players. Froman and Todd Stern (at State) have been leading this for the United States. I have a tough time believing that a move to USTR will leave him less involved. Wildcards? Oil exports (again, not a USTR decision, but with consequences for trade relationships), potential NAFTA fallout from a Keystone XL decision, border adjustment measures accompanying a (highly unlikely) U.S. carbon tax, and I’m sure much more.
  • International Organizations
    The “Final” Conference on the Arms Trade Treaty
    Coauthored with Andrew Reddie, research associate in the International Institutions and Global Governance program. The Final Conference on the Arms Trade Treaty (ATT) convened by the United Nations General Assembly (UNGA) is being presented as a last-ditch attempt to negotiate standards for the international trade in conventional arms. After a twelve-year process involving panels of experts, regional dialogues, and a lengthy planning program, it is showtime for the international community.  Given the well-documented hurdles to achieving consensus among 193 UN member states on international issues, however, the treaty is unlikely to be the “final”  word on the issue. The previous round of negotiations on the ATT concluded in failure just eight months ago, in July 2012, in part because the Obama administration did not want to hand Republicans a red meat issue in the run-up to the November elections. This time around the White House seems to be on board, buoying prospects for the treaty’s signature. For the first time, the world is on the verge of new rules to govern trafficking in conventional weaponry, including small arms and light weapons. On the surface, governments  have accepted the compelling humanitarian need to curb the trade in instruments of violence too often exploited by war criminals, despots, and human rights abusers All is not rosy, however. As often occurs in complex multilateral negotiations, the language in the draft ATT has been diluted to reflect the discrete interests of major players. The United States, for example, has previously rejected proposals to regulate the trade in ammunition—of which the United States has half of the $4.3 billion annual trade. China, too, has added reservations to allow the “gifting” of weapons to favored strategic partners, including in sub-Saharan Africa. Russia, similarly, has requested an addendum to allow it to loan weapons to its own allies.  Clearly, these initiatives violate the spirit of the proposed agreement. There remains broad disagreement, moreover, concerning the scope of any treaty—and considerable hypocrisy among the great powers. For instance, while the Permanent Five members (P5) of the UN Security Council (China, Russia, United States, Great Britain, and France) signed a statement supporting “the highest common standards” for regulating the international trade in conventional weapons, all except Great Britain reject a joint statement of 120 countries (drafted by Mexico and backed by Germany) calling for a “strong” treaty. Given the reluctance of the P5 (excepting perhaps the UK) to create binding and international mechanisms of enforcement, the impact of the ATT will depend on the vigor of its implementation by domestic  authorities. The draft treaty [PDF]  proposes that each state party rely on its own national control system, with limited oversight from a modest international secretariat. In conjunction with Conference President Peter Woolcott’s decision to strike language broadening the treaty’s application to weapons not explicitly specified in the convention, states will enjoy broad license to define their own efforts to regulate the arms trade. In the absence of a more powerful secretariat empowered to define concepts like “war criminals,” “terrorists,” “illicit markets,” and the like, the long-anticipated ATT may make little difference in the real world. Beyond a weak secretariat, the effective implementation of the ATT will face three additional obstacles. The first relates to capacity. Poor states like Mali have already made clear that though they are likely to ratify the treaty, they will require financial and technical assistance to implement its complex provisions.  It remains unclear that the international donor community will offer such aid, particularly in an era of fiscal austerity. The second obstacle is less about capacity than about will—specifically, the lack of commitment among some “outlier” states to conform to the treaty, regardless of whether they ratify it. The draft ATT is different from other arms control treaties, such as those concerning the use of biological, chemical, and nuclear weapons (as well as initiatives to ban landmines and cluster bombs), in that it would regulate a market in legitimate arms, rather than a prohibition against those broadly considered normatively out of bounds. For the ATT to be effective, states must be willing to distinguish between licit and illicit forms of trade in the same class of weapons. Unfortunately, outlier states like Iran, North Korea, and others have proven all to willing to disguise the final destination and purposes of trafficked weapons, including by using shell companies and false end-user certificates. Even if the ATT goes into force, non-ratifying (and even some ratifying) states may occupy a position similar to that of tax havens, continuing to facilitate the illicit and increasingly opaque transfer of weapons. Some fear that an imperfect treaty might actually exacerbate the illicit trade in weapons—and that no treaty might be better a fatally flawed ATT. The third challenge is legislative. Signing a treaty is one thing, ratifying it quite another. This is most obvious, and problematic, in the case of the United States, which has signed numerous multilateral treaties, including the UN Convention on the Law of the Sea (UNCLOS), the Convention on Biological Diversity (CBD), and the Convention on the Elimination of Discrimination Against Women (CEDAW), only to see them languish in the Senate. Prospects for ratification of the ATT have been complicated by conservative resistance, backed by the influential lobbying activities of the National Rifle Association (NRA). Senator James Inhofe (R-OK) has introduced an amendment to a U.S. budget bill that would prevent the United States from becoming party to the ATT, on the grounds that the treaty would impinge upon citizens’ Second Amendment rights. This claim is entirely without merit, since the ATT regulates international trade in weapons, does not interfere with domestic commerce, and places implementation entirely in the hands of the state, rather than any international body. As Senator Patrick Leahy (D-VT) pointed out in his own amendment, the United States cannot be party to treaties that violate the U.S. Constitution in any case (making Senator Inhofe’s amendment moot). Nevertheless, it is quite possible, even likely, that opponents will be able to generate opposition from more than one-third of the Senate to block ratification. As of today, a final draft treaty has been produced and released by Conference President Peter Woolcott with no further scope for amendment. It remains unclear whether states will, in fact, sign onto the treaty . The ATT negotiations reflect the obstacles to achieving grand bargains in the twenty-first century, particularly ones requiring difficult negotiations at both the multilateral and domestic levels. If nothing else, we can  be confident that this “final”  treaty will not be the last word.
  • Trade
    Environmental Security Goes Mainstream: Natural Resources and National Interests
    Not long ago, concerns about environmental degradation were marginal in U.S. national security deliberations. What a difference climate change has made. Foreign policy officials and experts are starting to recognize profound linkages between planetary health, economic prosperity, and international security. These connections were on full view Wednesday, when the Council on Foreign Relations (CFR) teamed up with Conservation International (CI) to convene a symposim,“Global Resources, the U.S. Economy, and National Security.” The livestreamed event (available here) assembled intelligence officials, development economists, defense experts, conservation biologists, and corporate executives to discuss the rapid degradation of the earth’s natural endowments and its dire implications for long term prosperity and stability. The provocative conversation ranged far beyond global warming to assess the implications of deforestation and desertification, collapsing fisheries, habitat destruction, and water scarcity.  That these topics were broached at CFR—an august institution traditionally concerned with issues like Middle East peace, nuclear proliferation, or China’s rise—shows how central the subject of sustainability has become for foreign policy professionals. The reasons are clear. For the first time in Earth’s 4.5 billion year history, the most powerful force shaping the planet is human activity. Some geologists have coined a new label for this era: The “Anthropocene.”  This epoch may turn out to be short-lived, however, given the disastrous pace at which our species is degrading the earth’s natural capital endowments—from rainforests to oceans to aquifers. Globally, governments have failed to account for—and private markets to put a price on—the many  “ecosystem services” that nature provides, ranging from arable land to clean air to fresh drinking water.  Unless humanity reverses course, warns the Stockholm Resilience Center, the world could be in for “irreversible and abrupt environmental change.” Powerful demographic and economic forces are driving these trends.  The world will need to make room for two billion more people in coming decades, before the global population stabilizes at nine billion. Consumer demand will accelerate even faster, as humanity becomes richer. Between now and 2030, the global middle class is slated to double­­.  These newly affluent populations will place extraordinary strain on the earth’s limited supplies of arable land, fresh water, fisheries, and forests, with knock-on consequences for political instability and international security. Fresh Water. According to the National Intelligence Council’s (NIC) Global Water Security [PDF] report, the world’s annual water requirements will exceed current supplies by forty percent in 2030, thanks to demographic pressures, agricultural demands, and watershed degradation. Nations  will need to negotiate new arrangements to manage the world’s 263 shared water basins (among these the Mekong, Nile, and Tigris-Euphrates) negotiate equitable access to stressed aquifiers The alternative, the NIC warns, could be growing instability and conflict, particularly in contexts of “poverty, social tensions, and weak political institutions.” Arable land. Meanwhile, the global demand for food will surge [PDF] more than thirty-five percent by 2030, as populations swell and dietary preferences (particularly for meat) evolve. Already, food consumption has outpaced production in seven of the last eight years—and current global food reserves amount to only two months of world production. Such scarcity virtually ensures a future of price volatility and disastrous shortages, of the sort that led to food riots in dozens of countries—and the toppling of the Haitian government—in 2008. Historically, degradation and scarcity of arable land has fuel violence, whether in Central America in the 1970s or Darfur in this century. Fisheries. The degradation and emptying of the world’s oceans were among the most alarming trends discussed at the conference. As Kerri-Ann Jones, Assistant Secretary of State for Oceans, Environment and Science, told the gathering that the vast majority of the world’s commercial fish species are over-exploited [PDF], fished to capacity, or barely recovering, thanks in large part to rampant illegal, unreported, and unregulated (IUU) fishing.  Simultaneously, growing atmospheric concentrations of greenhouse gases are acidifying the oceans, portending “an unprecedented loss of species,” including the disappearance of biodiverse-rich coral reefs by the end of the century. Such an environmental catastrophe would have devastating implications for global food security, given that one-fifth of humanity depends on fish for their primary protein source. Deforestation. Finally, the UN’s Food and Agriculture Organization reports that global deforestation and forest degradation continue, albeit at a slower pace. Already, twenty-seven percent of the world’s tropical forests are cleared, and each year, the world loses additional forest cover twice the size of New Jersey. Rampant logging—much of it illegal—deprives the world of valuable biodiversity, degrades watersheds, destroys habitats, and leaves countries vulnerable to environmental disaster. Uncontrolled and illegal logging has been linked to repression and violence in many countries, from Cambodia to Haiti, Burma to Liberia. As the conference sessions made clear, recent multilateral efforts to advance conservation and environmental sustainability have been woefully inadequate. Several problems stand out. First, the world is clearly fatigued with large, UN-sponsored mega-conferences (like the UNFCCC Conferences of Parties or the Rio Plus 20 meeting), which promise comprehensive solutions but deliver little but rhetorical pablum. Second, the existing set of “regimes” governing the global environment is fragmented, with significant overlap and redundancy among competing, but underpowered and underrersourced institutions. In the absence of a single “World Environmental Organization,” one answer may be to ramp up the UN Environmental Program into a fully-fledged specialized agency, on a par with the UN Development Program (UNDP), to help provide coherence to UN efforts. Third, international negotiations on the environment suffer from a crippling bureaucratic weakness. They are typically conducted under the purview of the ministers of the environment—whose political clout pales in comparison to their foreign or finance ministry counterparts.  Finally, global environmental cooperation is hamstrung by a lack of global leadership—not least from the United States fails—which remains outside the UN Convention on the Law of the Sea and the Convention on Biological Diversity. Given the perceived failures of top-down, intergovernmental efforts, what can be done? Conference participants offered several suggestions. One was to look more closely at narrower “minilateral” efforts. Rather than insisting on the presence of all countries, why not begin with coalitions of the willing, relevant, and capable? A second was to encourage parallel national processes when a formal treaty or agreement was impossible. In place of a binding agreement, ask countries to adopt a “pledge and review” approach in which countries promise to take certain actions—such as phasing out harmful subsidies, embracing “green procurement,” or increasing foreign aid for natural resource management—and set up a system to monitor commitments. Another was to expand the use of multi-stakeholder partnerships, including by enlisting the private sector in certification schemes to ensure that their complex global supply chains do not inadvertently contribute to illegal logging, overfishing, or trafficking in endangered species. Advances in information technology, including geospatial mapping and remote sensing, can play an important role in identifying problems (from deforestation to poaching to illegal fishing) and empowering governments and law enforcement. Participants also noted the potential of multi-level approaches that could enlist municipalities and local communities and even individuals as partners in the campaign for sustainability. Among the few major accomplishments at the 2012 Rio+20 conference was the C40 Cities Climate Leadership Group—a coalition of fifty mega-cities whose mayors (including Michael Bloomberg of New York) agreed to collaborate on new approaches to urban waste management. These are all laudable initiatives, but we can’t afford to ignore the multilateral track entirely. Three priorities come to mind. The first is to ensure that the post-2015 successor framework for the Millennium Development Goals includes new sustainability priorities beyond the provision of “clean water and sanitation” and attempt to price the ecological costs of economic activity. In parallel with this effort, national governments should endorse the proposal by the UN Secretary-General’s Global Sustainability Panel to create a Global Sustainability Index [PDF], which would measure “development” beyond mere calculations of gross domestic product. Second, the international community must deepen its commitment to fight corruption and increase transparency among UN member states, recognizing that organized crime is frequently at the core of rapacious behavior toward the environment. A good place to start would be to develop an analog to the Financial Action Task Force (FATF) or the Extractive Industries Transparency Initiative (EITI), which could establish minimum environmental standards, identify non-complying or underperforming jurisdictions, and eventually permit the naming and shaming of countries, corporations, or organizations that embark on environmental crime. In closing the conference, CFR President Richard Haass joined with CI’s Chairman Peter Seligman and Vice Chair Harrison Ford in underscoring the “direct connection” between global resources, the U.S. economy, and U.S. national security. Ford’s message was a plainspoken reminder that “nature doesn’t need us. We need nature.” Richard Haass, for his part, explained that the world, unlike universities, isn’t divided into separate departments. In the twenty-first century, major security challenges will span borders, both geographic and disciplinary.  
  • Competitiveness
    Shortcut to U.S. Economic Competitiveness: A Seamless North American Market
    See CFR Senior Fellow and Renewing America Director Edward Alden's accompanying blog post here. In looking abroad to promote economic growth, the United States need go no further than its two closest neighbors, Canada and Mexico. But the three governments have failed to pursue collaborative efforts to address a new generation of issues that were not anticipated by the 1994 North American Free Trade Agreement (NAFTA). Instead of tackling new transnational problems such as regulatory harmonization together, the United States and its neighbors reverted to old habits of bilateral, ad hoc negotiations. Instead of forging a unified competitiveness strategy toward the European Union and East Asia, each government has negotiated on its own. The three North American governments should create a seamless market, one in which it is as easy and cheap for a Chicago merchant to sell products in Monterrey as in San Francisco. This requires negotiating a common external tariff, eliminating restrictions on transportation and services, funding new continental infrastructure, and fostering a sense of community among the publics of the three countries that will also enhance the region's influence in negotiations with Asia and Europe. One estimate suggests that the benefits to the three countries would exceed $400 billion. The Case For a North American Market With rising competitive pressures from overseas and weak growth at home, the quickest external route to economic recovery and enhanced competitiveness is to stretch the U.S. market to include 113 million Mexicans and 34 million Canadians. The Obama administration has made it a priority to complete the Trans-Pacific Partnership (TPP) with Asia and has announced its intention to launch a new U.S.-European Union Transatlantic Trade and Investment Partnership. But the administration has neglected its two neighbors despite the fact that their combined product is more than six times that of other TPP countries and that U.S. exports to them exceed those to the EU. Mexico and Canada are already the United States' two largest export markets, its two largest sources of energy imports, and in the case of Mexico, the largest source of immigrants. The three countries also make products together. Unlike U.S. trade with most other countries, roughly 25 to 40 percent of the value of U.S. imports from Canada and Mexico comes from components made in the United States, and then assembled into finished goods in one of the two countries. Closer integration would translate into a more efficient supply chain and improved competitiveness. With labor costs in China rising to those in Mexico, and the cost of transportation across the Pacific increasing, a North American supply chain is not only more efficient than an Asian route, but it could also become a strong export platform to Asia. Moreover, if the United States seeks a unified approach to trade negotiations with Mexico and Canada, Asia and Europe will recognize that Washington has other options, and prospects for concluding transpacific and transatlantic trade deals would likely improve. For example, in the 1990s, world trade talks were stalemated until NAFTA was signed. Where NAFTA Went Astray North America was on track to create a competitive market in the 1990s. The most rapid job expansion in recent U.S. history occurred between 1993 and 2001. This coincided with the onset of NAFTA and the end of most trade and investment barriers between the United States, Canada, and Mexico. Trade tripled and foreign direct investment grew fivefold. But 2001 proved to be a turning point for North America just as the outlines of a continental market were becoming visible. Growth in trade has since declined by two-thirds and foreign investment by half. There are multiple causes for the decline. China entered the World Trade Organization (WTO) and rapidly expanded its exports to all three countries in North America. Post-9/11 restrictions significantly raised the cost of moving products back and forth across North American borders. There has been little investment in common infrastructure, resulting in long wait times at borders and slower movement of commercial goods. But the main cause was simply the failure of leaders in the three countries to build on NAFTA's foundation and create a seamless market. Deepening North American integration is more productive than widening it to add more free trade agreements (FTAs), but it will require the United States to address numerous domestic issues with its neighbors. Regulatory requirements should be meshed so as to eliminate trade protection while also ensuring safety and environmental concerns. National infrastructure grids—roads, railroads, electricity, and natural gas pipelines—should be built and connected. Repetitive and unnecessary border inspections should be eliminated. Labor market needs should be addressed on a continental basis. Toward a Seamless North American Market To invigorate the three economies and forge a higher level of competitiveness, the North American governments should undertake the following measures: Build public support for a shared vision. North American leaders should say clearly that economic progress depends on closer collaboration. The three leaders should speak often of the common North American vision and community and bring it to life with symbolic steps—such as a "Buy North American" ad campaign, instead of "Buy American." There should be more educational exchanges and support for North American research centers. Negotiate a common external tariff. This would permit products to cross North American borders without any customs forms, inspection, or duty. Current "rules of origin" requirements mandate that goods must contain a certain level of North American content to qualify for NAFTA tariff preferences, which slows commerce and costs consumers billions of dollars. Review and eliminate all restrictions in transportation and services. The U.S. government violated NAFTA for more than fifteen years by prohibiting Mexican trucks from entering the United States. Although the U.S. government finally relented last year after WTO rulings, Mexican shippers are reluctant to upgrade their equipment without assurance that these barriers are gone for good. Other barriers include cabotage, which prevents trucks from depositing and acquiring cargo at different points on long journeys, and the Jones Act, which subsidizes American maritime transportation. In addition, while the exchange of services (e.g., banking, engineering, consulting, and health care) is increasingly important, professional certification and parochial regulations retard their growth. All these restrictions should be eliminated. Forge a continental plan for transportation and infrastructure. Led by each country's minister of transportation, the countries should build new trade corridors, improve railroads and ports, and construct a new highway that stretches from Canada to southern Mexico. Funding for the infrastructure could come from the common tariff, which should yield about $45 billion annually. These funds would be managed by a North American Investment Fund, which could be administered by the World Bank with decision-making in the hands of the three governments. Create a single North American working group on regulatory issues with a comprehensive strategy. Currently there are two separate bilateral working groups—U.S.-Canada and U.S.-Mexico—that negotiate individual regulations, but they have failed to agree on a single one. A merged working group should aim for across-the-board regulatory convergence. This means that pharmaceuticals should be subject to uniform high standards and would not need to be retested in each country, that food imports should be tested just once by North American inspectors, and that regulations on the size, weight, and fuel efficiency of trucks should be the same in all three countries. Adapt immigration policies to a wider labor market. The United States and Canada should permit their citizens to work freely in either country. This step is not possible with Mexico until the income gap narrows, but other steps should be taken. NAFTA visas for professionals should be easier to obtain and extend longer for Mexicans. An expanded guest-worker program for Mexicans should be included in comprehensive immigration reform, and to prevent abuse, biometric identification should be required for hiring all employees. For the United States and Canada, negotiate a new energy framework. The framework should balance the region's need for energy security with the necessity of curbing carbon emissions. The two countries should also develop ways to reduce the multiple-approval process for hydroelectricity transfers and negotiate a plan for future oil and natural gas pipelines. Mexico should be invited to participate but will probably wait until it completes domestic energy reforms. Make antitrust policies continental. In a continental market, national efforts to break up corporate monopolies will be needlessly duplicative and, as in the case of the telecom monopoly in Mexico, ineffective. A concerted trinational effort would strengthen the capacity of each government to keep North America competitive. The Need for Leadership There is no better path to stimulate the U.S. economy, increase U.S. competitiveness, and bolster U.S. influence in emerging markets in Asia and Europe than by deepening integration with Canada and Mexico. The three countries already trade more than $1 trillion in goods and services each year. A small but vocal group in the United States opposes any further integration, but by and large the public supports freer trade in North America. Leadership is needed from President Barack Obama, the U.S. business community, and border states and communities. Mexico's new president has already expressed support for bolder initiatives to integrate the continent. Canada is more reluctant, but would not want to be left out if there was clear leadership from its neighbors. The place to start is the next North American Leaders Summit, which Mexico will host this year. The three leaders should articulate a clear vision and pledge to create a single continental market of mostly harmonized regulations in which nearly all products, produce, and services would transit borders without impediment.