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--- Begin Message --- -Caveat Lector- How to lose friends and alienate people
The Economist (UK): "Revenge, Paul Wolfowitz seems to think, is a dish best served cold, and possibly often. This week ... the velociraptor-like [Wolfowitz]--"_________________
Christian Science Monitor, December 12, 2003
http://www.csmonitor.com/2003/1212/p10s01-comv.html
How Not to Win Friends
The timing couldn't have been worse: Hours before President Bush was to call the leaders of France, Germany, and Russia to seek their help in easing Iraq's foreign debt, the Pentagon announced it would bar those same countries from bidding on Iraqi reconstruction contracts - on the basis of their opposition to the war. To be sure, the resulting flap is overblown: First, the ban applies only to the $18 billion in aid supplied from the US Treasury. Countries often tie foreign aid to their own companies or route it to favored foreign firms. By contrast, anyone may bid on the $13 billion in pledged multilateral aid.
Second, the ban applies only to the 26 prime contracts, not to subcontractors. Since subcontractors do most of the work in such situations, the ban is more apparent than real. Siemens AG, along with several other German firms, is already a subcontractor in Iraq. French and German firms built much of Iraq's infrastructure; they'll almost certainly supply spare parts for repairs.
What really rankled Paris, Berlin, Moscow, and Ottawa - the ban also includes Canada - was the Pentagon's wording, which implied that firms from the countries in question were a threat to US national security.
The spat highlights the continuing tone-deafness of large parts of the Bush administration to how its words play overseas: The administration's neoconservatives and the Pentagon in particular, frequently pushing justifiable policies, often couch them in unnecessarily inflammatory language. The dispute also displays the administration's difficulties in coordinating its foreign-policy actions - the job of the National Security Council staff.
The administration is bringing back former Secretary of State James Baker III to help reduce Iraq's debt. He returns not a moment too soon.________________
What WTO accord says on Iraq contract dispute
Reuters, 12.11.03
GENEVA, Dec 11 (Reuters) - The United States' decision to bar Iraq war opponents like France, Germany and Russia from $18.6 billion in U.S. reconstruction projects has refuelled bitter trans-Atlantic tensions over the conflict.
Washington says it is entitled to take the action despite trade agreements, signed by the United States and many of its critics, that were designed to ensure governments opened up state contracts to international competition.
The United States, France and Germany are among some 25 state signatories to the World Trade Organisation's Agreement on Government Procurement, which came into force on January 1, 1996. Russia is not a member of the WTO.
The accord sets out to make government procurement more transparent so that it does not protect domestic products or suppliers, or discriminate against foreign competitors.
The preamble to the agreement states that government procurement:
"...should not be prepared, adopted or applied to foreign or domestic products and services and to foreign or domestic suppliers so as to afford protection to domestic products or services or domestic suppliers and should not discriminate among foreign products or services or among foreign suppliers."
Governments have to set an appeal process by which aggrieved bidders can challenge procurement decisions and obtain redress in the event these decisions break the accord.
The WTO can also be asked to set up panels to investigate alleged violations.
But there are circumstances under which signatory countries can set aside the WTO agreement. They are:
-- When it considers it "necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes".
-- When it is "necessary to protect public morals, order or safety, human, animal or plant life or health or intellectual property; or relating to the products or services of handicapped persons, of philanthropic institutions or of prison labour".____________
Former U.S. officials, analysts blast Bush administration over new rift with Europe
BARRY SCHWEID, AP Diplomatic Writer
Wednesday, December 10, 2003
sfgate.com/article.cgi?file=/news/archive/2003/12/10/national0153EST0419.DTL (12-
10) 22:53 PST (AP) -- An AP News AnalysisWASHINGTON (AP) -- Former top U.S. officials are blasting the Bush administration for reopening a rift with Europe by excluding critics of the war from prime contracts for Iraq's reconstruction.
"I thought we were in the process of acquiring support rather than alienating it,"
former Secretary of State Madeleine Albright said. "And I think it's petty. I really do think we should not be in the business of alienating people."
Former national security adviser Sandy Berger said the decision did not make sense.
And Zbigniew Brzezinski, who held the job in the Carter administration, called the announcement Tuesday by the Pentagon "bizarre."
President Jacques Chirac of France, Chancellor Gerhard Schroeder of Germany and
President Vladimir Putin of Russia all raised the contracts issue when President Bush telephoned them Wednesday with an appeal to ease Iraq's debt burden.
The decision on contracts will complicate the task of former Secretary of State
James A. Baker III, who was named by Bush to oversee efforts to scale down Iraq's debt. Baker plans to begin his travels and jawboning next week.
U.S. relations with Germany, France, Russia and other opponents of the war with
Iraq had appeared to be on the mend. There was cooperation on trade. Bush and Schroeder agreed to September to bury their differences. Secretary of State Colin Powell steered a resolution through the U.N. Security Council in October to expand the U.N. role in Iraq. Bush also backed down on a trade flap over steel tariffs. But the European mood has turned bitter again.
And complicating the newly troubled trans-Atlantic relationship is a pending decision
to relocate U.S. military bases that are now in western Europe. Germany, among others, is bound to be upset if the administration decides to cut US Army forces in Germany, sending some to eastern Europe and others home.
The Europeans did not attempt to stifle their outcry Wednesday when the Pentagon --
backed by the White House -- said only countries that supported the U.S. war in Iraq could share in the prime contracts being awarded for the American portion of the postwar reconstruction there.
The decision should not have come as a complete surprise. Several times this year,
Secretary of State Colin Powell cautioned that countries that did not assist in Iraq's liberation from Saddam Hussein could not expect to be rewarded.
Still, Germany called the decision unacceptable. Russia, which is owed $8 billion by
Iraq -- even more than Iraq owes France, the United States and Germany -- threatened to retaliate by not easing the debt burden. Russia also is registering concern with the prospect of shifting some U.S. bases to Poland and Bulgaria, placing them closer to the Russian border.
"Any plans to bring the NATO infrastructure closer to our borders prompts an
absolutely understandable, explicable concern," Defense Minister Sergei Ivanov said in Moscow.
Trying to soften the blow of the contracts decision, State Department spokesman
Richard Boucher said the restrictions applied only to primary contractors, leaving lots of opportunities. "There are very few restrictions on subcontractors," he said. And, Boucher noted, managers of the World Bank and International Monetary Fund trust funds, through which billions of dollars in non-U.S. assistance will be channeled to Iraq, "may have different, or their own rules for how they contract."
Still, the criticism mounted. Brzezinski said it was "bizarre" of the Bush
administration to make a public announcement on Iraq contracts.
"There are perfectly good reasons to discriminate between those who are very helpful
and those who are less helpful," Brzezinski said in an interview. "But why rub it in with a political announcement that will further diminish the probability of serious European participation with men and money in the effort to internationalize the Iraqi conundrum?"
Berger said the United States needs help in Iraq. But he said the contracts decision
"has made it politically impossiblefor those counties to gradually move toward cooperation."
"I wouldn't rule out the potential of the French, the Germans and the Russians
helping us at some point," the former Clinton administration official said. "But you draw lines in the sand and I don't think you gain much."
Chris Lehane, an adviser to Gen. Wesley Clark, an aspirant for the Democratic
presidential nomination, was harshly critical.
"George W. Bush's rewarding of campaign contributor Halliburton makes it clear for
all to see that he is of big oil, for big oil and 'buy' big oil. At the end of the day he is putting the special interests before our national interests," Lehane said.
Ivo Daalder of the Brookings Institution said, "At a time when we should want the rest
of the international community to come in and help to the maximum extent possible in the rebuilding of Iraq, this gratuitous slap at our major allies seems to be particularly ill-timed and misplaced."
EDITOR'S NOTE -- Barry Schweid has covered diplomacy for The Associated Press for 30 years. ©2003 Associated Press________________
'Old Europe' banned from Iraq aid contracts by Washington
By Alec Russell in Washington and Robin Gedye, Foreign Affairs Writer
London Telegraph
France and Germany led a furious reaction yesterday against a Pentagon directive barring countries who opposed the war on Iraq from bidding for reconstruction contracts worth billions of pounds.
In what appeared to be a carefully planned act of revenge, Paul Wolfowitz, the deputy defence secretary, issued a directive under which 26 reconstruction contracts worth $18.6 billion (£11 billion) will be open only to companies from Iraq, America and 61 named "coalition partners".
Non-American companies have until now been effectively sidelined from the bidding for nearly $6 billion worth of main contracts in Iraq simply by not being invited to tender.
In the second and by far the largest tranche of contracts, France, Germany and Russia were specifically excluded from bidding along with Canada and China. Any country would, however, be permitted to bid for sub-contracts.
The directive will immediately benefit countries including Britain, Italy and Spain, whose governments led the support for the war.But it constitutes a significant setback to the gradual improvement in relations between Washington and the countries -- led by France and Germany, branded as "Old Europe" by Donald Rumsfeld, the defence secretary, for their obstructive attitudes.
The Pentagon order, issued last week and published on a website linked to the Coalition Provisional Authority, Iraq's transitional government, cited the "essential security interests of the United States".
Allowing only allies to bid for contracts was meant as a reward and an incentive for other nations to join the rebuilding effort.
Herve Ladsous, of the French foreign ministry, said France "was studying the compatibility of these decisions with international competition law together with our partners that are involved".
... A German government spokesman, described the ban as "unacceptable" and the European Commission said it was looking into the legality of the move "with regard to the law on international competition".
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