Wednesday, May 11, 2005

Ray Evans on "The Atlantic Rift: Is the Gulf Now Unbridgeable?"

In "Lamy's Got a Friend", I referred to a highly interesting article by Ray Evans on transatlantic relations and the WTO, while regretting the fact that it is not available on line. Now it is. With the kind permission of Ray Evans, here is his "The Atlantic Rift: Is the Gulf Now Unbridgeable?". The piece first appeared in the January-February 2005 issue of Quadrant, "Australia's Independent Review of Literature and Ideas".

The Atlantic Rift: Is the Gulf Now Unbridgeable?

by Ray Evans

On Nov 9, 2004, Robert Kagan, regarded as a member of the neo-conservative group identified with Deputy Secretary Paul Wolfowitz and other influential officials in the Bush Administration, gave the Bonython Lecture in Melbourne. The theme of his presentation was the overriding need to repair the gulf between the US and Western Europe, meaning essentially France, Germany and their supporters within the EU. [1]

Kagan’s formula for mending the breach was for each of the estranged parties to give a bit in order to meet at some sort of half way house where the integrity of the West could be restored. He spelt out the sort of moves which he believed could lead to a rapprochement.

However, the question which immediately arises is whether a rapprochement is possible; and if it is not possible, what are the consequences, particularly for Australia.

There is no doubt, of course, that there is a wide gulf between France and Germany on the one hand, and the US on the other. The UK is, for the most part, on the American side of the fence. Prime Minister Tony Blair has been President Bush’s most important ally in the war in Iraq, and has incurred a great deal of hostility from his own party, and also from the Conservatives, because of his support for the US in Iraq. President Bush was so annoyed with the continuing carping from the Tory Opposition over Iraq that he pointedly declined to meet party leader Michael Howard. On the other hand, however, Tony Blair has been an outspoken critic of US policy on the Kyoto Protocol, and we read that the Queen herself is now concerned about US failure to sign onto the decarbonisation programme which is at the heart of Kyoto. The Kyoto Protocol is at the heart of the EU’s quest for legitimacy within Europe itself.

Coupled with commitment to the Kyoto Protocol, EU legitimacy is also buttressed by a deep anti-Americanism which came to the fore during the German elections of 2002 when Chancellor Schroeder came from well behind in the polls to snatch victory on an anti-American platform.

The recent US elections revealed a great deal about the Atlantic rift. The funniest incident was the attempt by the London based Guardian to swing Ohio to Senator John Kerry. Apparently the plot was devised by a group of Guardian sub-editors after they had completed their evening’s work and were having a few drinks before going home. They selected Clark County as an important part of Ohio which had narrowly supported Al Gore in 2000, but was at risk of swinging to Bush in 2004. They asked Guardian readers to write to residents of Clarke County, urging them to vote against George W Bush and for John Kerry. Names and addresses from the Clarke county electoral role were provided and a number of eminent British citizens accepted the Guardian’s invitation, including Prof Richard Dawkins, author John le Carre, and Lady Antonia Fraser amongst them. But to no avail. Clark County swung decisively to George Bush and Mark Steyn wrote:

Alas for the Republican Party, Lady Antonia and her chums never got round to writing to New Jerseyites and Pennsylvanians and Oregonians, or we’d be looking at a Bush landslide. Instead, Republicans had to settle for a little less.
Why are these divisions arising and what do they portend? In his Bonython Lecture Robert Kagan referred to the end of the Cold War, to the collapse of the Soviet Union, and thus to the consequent freedom for the Franco-Germans to pursue policies at odds with US interests. But there is much more to this growing gulf between Franco-Germany and the US than the end of the Cold War.

One of the most perceptive books on global politics to have been written in the last ten years or so is Samuel Huntington’s The Clash of Civilisations and the Remaking of World Order. One of his observations on the causes of war is this:

Millennia of human history have shown that religion is not a “small difference” but possible the most profound difference that can exist between people. The frequency, intensity and violence of fault line wars are greatly enhanced by beliefs in different gods
The most dramatic fault line in today’s world is that between militant Islam and the West. What has become clear since 9/11 is that the West is not united, but divided, and the division is seen most clearly between Franco-Germany on one side and the US on the other. This division has great consequences for the war against Islamic terrorism

Before speculating on the forces which are driving this division it is useful to consider an arena in which the contest between Franco-Germany and the US has been visible for at least ten years. That arena is the WTO and the attempt by the EU to turn the WTO into an instrument of extraterritorial power for the global enforcement of European environmental policies, most notably the decarbonisation program embodied in the Kyoto Protocol.

The WTO’s predecessor, the GATT, was one of the key institutions established at the end of WWII. The Americans, with Secretary of State Cordell Hull, and the British with John Maynard Keynes as UK representative at Bretton Woods, were the prime movers in building the GATT legal structure. The five basic elements of the GATT structure were:

1. The MFN principle, defined in Article I, which meant no discrimination between GATT members.

2. Equal treatment of products after crossing the border.

3. No interference in the sovereign rights of member states, which meant no interference in production and processing methods of goods. (Article I)

4. Barriers to imports on health and safety grounds, as in quarantine decisions, had to be justified on internationally accepted sound science. (Article XX, the exceptions clause)

5. Trade barriers were accepted as part of the reality of world trade, but such barriers were to always in the form of tariffs based on market prices. Quantitative restrictions were to be rejected. (Article III)

Article I forbids the use of specific trade sanctions against particular countries as a method of enforcing environmental or labor market policies, for example, extraterritorially. Article XX is the exceptions clause which legitimises the banning of particular imports from particular countries, as in quarantine procedures. The Uruguay Round tightened Article XX procedures and definitions. It has been the long-standing ambition of the Europeans to expand Article XX so that trade sanctions can be used as an international police power to be used to enforce EU policy objectives. The developing countries have repeatedly, and with increasing determination and coherence, resisted the EU (and the US) attempts in this regard - notably at the WTO meeting held in Seattle in 1999.

It has been apparent, ever since the Kyoto Protocol was adopted in 1997, that the EU has envisaged the use of trade sanctions as a means of imposing upon “recalcitrant” nations, the decarbonisation policies which are at the heart of the Kyoto Protocol.

Late in October 2004, Pascal Lamy, the retiring EC Trade Commissioner, spoke at a farewell luncheon. He made some very important remarks which reveal the extent and durability of EU ambitions in this regard.

“There are now more good trade specialists with Oxfam and Greenpeace than in trade unions,” he said. “In a few years we will have to assess whether the free ride that China got in Kyoto is sustainable and they will have to accept more standards and restraints. I think the Chinese recognise this.”

Making some points on Europe he said: “We will get to the point where everyone, as with the British and German model, where you have the same minister for trade and the environment. If you did that in France tomorrow there would be screaming and fires in front of the mairies. But it will happen.”

Pascal Lamy is deluding himself if he believes China, or India, will accept decarbonisation as a policy imposed at the point of trade sanctions. I doubt very much that the Howard Government would do so. But that is very clearly what Pascal Lamy is talking about. You will find on his website a long and rather tortuous lecture, entitled “The Emergence of Collective Preferences in International Trade: Implications for Regulating Globalisation” given in Brussels, on 15 September 2004. A careful reading of this lecture shows, once again, that the EU is setting the stage for the imposition of trade sanctions, or alternatively, the establishment of trade preferences, on the basis of the environmental policies adopted by the disfavoured or favoured nation respectively.

So while the EU, or more precisely France and Germany, attack the US for “unilateralism” particularly in relation to Iraq, the EU itself is setting the scene for unilateral trade restrictions or trade preferences which will be imposed to achieve policy results which they deem desirable. Once again, Kyoto is the most critical issue on this agenda.

Now, if the EU really does go down this road, it will split the WTO, and the world will divide into two trading blocs. One bloc will be based on Washington, essentially a Pacific Bloc, and one based on Brussels and Bonn (where the Kyoto Secretariat is based). There is no doubt where Australia will locate itself, the debate concerning, and now successful conclusion of, the US FTA made that point clearly. Where the UK will find a home is now at the very centre of British politics. Charles Moore, the distinguished British journalist, fulminating in the London Telegraph recently over 26 huge windmills which are to be installed on the Romney Marsh, argued:

State industrial planning doesn't work, but we seem to ignore this lesson when it comes to the environment. We are in a world of “targets”, just as self-defeating as old Soviet five-year plans. The assumption, highly debatable, is that the Earth is being destroyed by climate change. The solution, highly improbable, is that the Kyoto treaty will make a difference to this threat. The effect, absolutely certain, is that voters will be made to pay.
At present, many voters seem to like this idea, particularly in northern European countries, where the legacy of Protestantism is that what causes you discomfort must be good. But I wonder how much longer this will last, as people start to feel the effects in their own lives.

This brings me back to my earlier question regarding the main issues in play between the US and the Franco-German alliance. The most striking difference which confronts the antipodean visitor to the US and Europe is the religious difference. America is still at heart a protestant country. Church attendance is very high, about 60 percent. In Europe Catholicism is still a force, but as Rocco Buttiglione found recently, those who express traditional Catholic views on abortion, for example, pay a political price. Bruce Johnston, writing in the London Telegraph recently , said this:

Rocco Buttiglione, the European commissioner-designate rejected by Brussels because of his Roman Catholic views on abortion and homosexuality, plans to form a religious lobby group to “battle for the freedom of Christians” in Europe.

Mr Buttiglione bowed to pressure a week ago and withdrew from the commission team proposed by the incoming president, Jose Barroso, after vehement opposition from Left-wing members of the European Parliament. Scandalised by the hostility shown by MEPs towards his religious views, the Italian minister for Europe now hopes to create a Christian network to exert pressure on “totalitarian” institutions such as the Strasbourg-based body.

In Rome last week, Mr Buttiglione said: “There are a lot of people, including politicians, who have been ringing me not only from inside Italy, but also from Spain, britain, and Germany.”

Protestant churches in Northern Europe, where Protestantism began, are virtually empty, as are Anglican churches in England. Protestantism has been displaced by Environmentalism as the religion of the European upper classes. Government subvention of environmentalist NGOs is massive. The WWF in particular receives hundreds of millions annually from the German and Dutch Governments, and is now enjoying subventions from the Australian Government.

In the US, environmentalism is also a force, but it is a force precisely in those counties which voted overwhelmingly for John Kerry. In Manhattan, for example, George Bush received only 17 percent of the vote. In Palo Alto, where you will find some of the most expensive real estate in the world, George Bush did only marginally better. But in every state between the Pacific and Atlantic coasts, George Bush either won, or improved his vote on 2000.

So although American elites, like their European counterparts, are increasingly supportive of Kyoto and other global governance measures designed to save this or that species, or rain forest, or whatever, middle America is indifferent or hostile to these ambitions. Although most attention was focussed on Florida in 2000, it was George W’s clear win in West Virginia, traditionally a strong Democrat and union state, which, with Florida, pushed him over the line. The reason Bush won West Virginia in 2000 was he made it clear that a Bush Administration would not ratify the Kyoto Protocol, a position the President has resolutely maintained.

I think the religious differences between America and Franco-German Europe are likely to increase rather than diminish. The Republicans have built up a coalition which is based on religion (including both evangelical Protestants and Conservative Catholics), on market based economic principles, and on a deep sense of patriotism. This coalition, like all coalitions, contains within it tensions and contradictions. But it appears now to be a winning coalition, with enough coherence and vitality to succeed in 2008.

Quoting Charles Moore in the London Telegraph again:
The point about Christianity in America is not that it is extreme or fundamentalist (though such people certainly exist), but that it is pervasive and people seriously try to live by it. They therefore respond favourably to someone such as Mr Bush who, they believe, tries to live by it, too.
They see September 11, rightly, as an anti-Christian act, and that makes them rally to the man who wants to punish it. In all their political and social attitudes,
they think of their religion more than most Europeans do. This does not mean that they all come to the same conclusion – many, because of their Christian abhorrence of inequality, vote Democrat. Nor does it mean that they all try to impose religious law on others. But it does mean that a leader who is both a Christian and a conservative can speak a language that resonates.
Organisation relates to this. Religion in America is probably the biggest building block of a very patriotic and community-minded society, one in which there is much stronger local government, far higher individual and business contributions to charity, a stronger desire to be respected by neighbours and much less welfare dependency than in Europe.

So we live in a world which is facing very different threats and challenges from the world of 1988, the year before the collapse of the Berlin Wall. In particular, if the Europeans are determined to rewrite the rules of the WTO so that they can, under the cloak of WTO legitimacy, impose trade restrictions on environmental grounds, particularly with respect to the decarbonisation policies of other countries, then the WTO will be finished as an effective organisation, and other trading arrangements will have to made. This will be a sad conclusion to what has been an extraordinary period in the history of world trade. But the success of the GATT and its successor the WTO has always been conditional on the continuing support of the two major economic powers, the US and Europe. If Europe withdraws its support then that’s the end of that arrangement.

How will that effect Australia? The FTA with the US comes into force on 1 January 2005. Discussions with Japan for trade liberalisation have been going on for some time. We are contemplating an FTA with China. India cannot be far behind. So although the demise of the WTO will cause consternation and uncertainty around the world, with undoubted economic consequences, it is fair comment to suggest that the disruption will be less than some might fear and that new arrangements, and agreements on rules for governing international trade will come quickly into effect.

It is an event for which we should now be actively planning. The better prepared we are, the possibility that the EU will, in the end, hesitate to bring down an organisation that has done so much for the world’s peoples, is enhanced. But the religious forces I have outlined are not a passing fad. Environmentalism has been a strong force in Germany for more than a century, and was an important element in the coalition which brought Hitler to power in the 1930s. In Australia the passion for saving “old-growth” forests was an important factor in the defeat of the Court Government in Western Australian in 2002 and played a critical role in the loss of four Labor seats in the federal election of 9 October 2004.

Protestant Christianity in America is very deeply entrenched as the religion of the pilgrim founders, and as a consequence of 9/11, is today politically aroused. The stage is set for increasing tensions between the US and its allies and the EU. Those tensions will be articulated in the language of Environmentalism and, particularly, global warming and decarbonisation.

If we are about to enter a bipolar world then Australia itself will be divided, as it was during the Cold War. The trigger will be the Kyoto Protocol and its de-carbonisation project for the world. We will be returning to the religious disputes of the 16th and 17th centuries.

Some years ago the late Aaron Wildavsky wrote:

Global Warming is the mother of all environmental scares. In the scope of its consequences for life on planet Earth and the immense size of its remedies, global warming dwarfs all the environmental and safety scares of our time put together. Warming (and warming alone), through its primary antidote of withdrawing carbon from production and consumption, is capable of realising the environmentalists dream of an egalitarian society based on rejection of economic growth in favour of a smaller population eating lower on the food chain, consuming a lot less, and sharing a much lower level of resources much more equally.[2]

Presiding over this society will be a priesthood of lawgivers, imposing a uniformity of religion which will brook no dissent. Premier Bob Carr is our current trend setter in this role, and it takes little imagination to discern how an heir to this tradition will, unchecked and unconstrained, behave in 2050.


[1] See the CIS website,

[2]Introduction to Robert Ballings' "The Heated Debate" (1992 Pacific Research Institute)