It’s a fairly safe rule of thumb that if you want someone to do you a favor, it’s probably not a great idea to insult and alienate them. The Bush administration is learning this wisdom in a week when it asked Russia, France, and Germany to write down their portions of Iraq’s multibillion-dollar debt while simultaneously, and for explicitly vindictive reasons, freezing them out of Iraqi reconstruction contracts.
In its sheer self-defeating dumbness, the move perfectly sums up four years of Bush diplomacy.
In a memo on Tuesday, U.S. deputy defense secretary, Paul Wolfowitz, outlined a policy for doling out $18 billion worth of reconstruction contracts. Only the 63 countries that supported the war in Iraq would be allowed to bid on “prime contracts.” More than two dozen contracts are at stake, covering areas like oil, power, communications and housing. The memo implies that the U.S. wants to use the contracts as a way to reward countries for supporting the US and punish those who didn’t.
“Limiting competition for prime contracts will encourage the expansion of international cooperation in Iraq and in future efforts.”
…
“Coalition partners share in the US vision of a free and stable Iraq. The limitation of sources to prime contractors from those countries should encourage the continued cooperation of coalition members.”
But the Pentagon claims the decision was not intended as a slap to the excluded countries, which are welcome to bid for subcontracts . Larry Di Rita, spokesperson for Defense Secretary Donald Rumsfeld said:
“Nobody had the intent of being punitive when this was being developed.”
Clearly Germany, France, and Russia don’t see it that way. Canada, which was originally included in the list of those who wouldn’t get contracts, has contributed over 300 million to reconstructing Iraq and played a role in efforts to combat terrorism in Afghanistan. After Canadian leaders expressed disbelief at the list, President Bush assured Canada he would take action to include them in the contracts (although it’s unclear whether he meant Canada could subcontract, in which case — big deal.)
President Bush backed the rationale for excluding opposing countries, thwarting hopes that the White House would reverse the decision. He said:
“Men and women from other countries, in a broad coalition, risk their lives to free Iraq. And the expenditure of U.S. dollars will reflect the fact that U.S. troops and others risk their life.”
Whitehouse spokesman Scott McClellan further explained the decision:
“These are countries that have been with us from Day One. These are countries that are contributing forces, that have been making sacrifices, and that’s why this decision was made.”
Apparently, President Bush didn’t know that the memo was going to be sent at the same time he asked several countries to forgive Iraq’s debt. (Dumb or incompetent? Take your pick.) He recently sent James Baker as a special U.S. envoy to restructure Iraq’s debt—estimated at between $128 billion and $200 billion. President Bush asked that Iraq’s debt be written off by the France, Russia and Germany. Russia, at least, says no way. Russia’s defense minister, Sergei Ivanov, said:
“Iraq’s debt to the Russian Federation comes to $8bn and as far as the Russian government’s position on this, it is not planning any kind of a write-off of that debt.”
The Australian notes that the stake the U.S. has in maintaining good relationships with the countries it offended:
“It is difficult to overstate how much annoyance the move has caused among countries that may have opposed the war but have still worked hard at maintaining relations with the US.
After all, a pragmatic alternative was available: to allow companies from all countries to bid, but quietly to award the best contracts to the preferred ones. No: Wolfowitz’s statement was an expression of distilled ideology, and so something of a diplomatic indulgence.Should the US care about the reaction? Well, yes. In the next six months, it wants help on several crucial fronts from the countries it has offended.”
The policy was defended, in the memo, by a somewhat cryptic statement:
“It is necessary for the protection of the essential security interests of the United States to limit competition for the prime contracts of these procurements to companies from the US, Iraq, coalition partners and force-contributing nations.”
Is the U.S. really afraid that its security would be in jeopardy if it allowed France, Germany or Russia to bid on contracts? More likely the reasoning was added as a way to avoid legal problems. As a matter of trade law, countries are often allowed to limit trade with other nations on national security grounds. The Washington Times reports that a senior State Department official, speaking on the condition of anonymity, said the citation of U.S. “security interests” in the Wolfowitz memo was a legal necessity to get around contract-bidding requirements and U.S. obligations under the World Trade Organization.
An editorial in the New York Times also questions this rationale:
“The document, printed before Mr. Powell was back in Foggy Bottom, said America’s “essential security interests” required the move. But it is hard to follow that reasoning when it means cutting out countries that might be able to bid competitively, contribute money, forgive debts and relieve American forces. The approved list of 63 nations includes Britain, Italy and Japan, but quickly tapers off to countries unlikely to help and to struggling nations like Albania and Eritrea.”
The EU claims the U.S. decision violates WTO rules, and is threatening to take the matter up with the trade body. Arancha Gonzalez, the trade spokeswoman for the European commission said, “We are asking the US to provide us with information so we can see whether or not their commitments with regard to the WTO have been respected.”
Just when we thought the U.S. seemed might be developing positive — or at least less negative — relationships with Germany, France and Russia, they have created another rift. The decision hasn’t gone down well in the U.S. either. Both conservatives and liberals are criticizing the decision. This from the conservative Weekly Standard:
“But instead of being smart, clever, or magnanimous, the Bush Administration has done a dumb thing. The announcement of a policy of discriminating against French, German, and Russian firms has made credible European charges of vindictive pettiness and general disregard for the opinion of even fellow liberal democracies. More important, it has made former Secretary of State James Baker’s very important effort to get these countries, among others, to offer debt relief for the new government of Iraq almost impossible. This is to say nothing of other areas where we need to work with these governments.”
