(Bloomberg Opinion) -- The U.S. appears to be stepping up the defense demands it makes of European allies — a development that could complicate trade talks between the U.S. and the European Union.
Spiegel Online reported Tuesday that two Trump administration officials have written a letter to top EU diplomat Federica Mogherini to express their displeasure with the European effort to streamline procurement and with the fund the EU has created to develop new weapons. The letter, signed by Ellen Lord, the Pentagon’s lead procurement official, and Andrea Thompson, responsible for arms control and international security at the State Department, describes the moves as a “dramatic turnabout” in Europe’s defense sector integration with the U.S. and a breach of European nations’ commitments to the North Atlantic Treaty Organization.
It’s not the first time U.S. officials have expressed concern about European defense cooperation outside NATO. Now, however, the qualms appear to be more specific, and they come with a threat of retaliation.
At issue are two main points. Last June, the EU member states decided that third countries’ participation in projects under the auspices of the EU’s Permanent Structured Cooperation on defense (PESCO) should be an exception and requires the consent of all the European countries engaged in PESCO. Also, the EU will allow non-European participation in projects financed from the European Defense Fund only under certain conditions, such as giving Europe a say in where the new weapons systems are exported. The U.S., according to the Spiegel report, wants access to the projects and the right to make export decisions unilaterally — or else. Lord and Thompson reportedly wrote to Mogherini that the U.S. would hate to retaliate with restrictions of its own but might be forced to do so unless Europe reconsiders.
It’s only natural that the U.S. is worried about losing European orders for military equipment. First came the PESCO rules, clearly aimed at prioritizing European defense suppliers. Then, earlier this year, Germany refused to consider the F-35 stealth fighter as a replacement for its obsolete Tornado planes; it favors the Eurofighter Typhoon, built by a European consortium. Ever since the EU declared strategic autonomy as its goal back in 2016, the direction of the bloc’s policy has been clear. Now, however, the practical matter of streamlining the 172 weapon systems used by European armies, compared with just 30 in use in the U.S., is on the agenda. The unification should make competition tougher, and the EU’s intention appears to be to exclude outsiders as much as possible — especially as, since Donald Trump won the presidential election, strategic autonomy has gained urgency for European leaders.
Trump is already unhappy with European NATO members’ defense spending levels. But concern about U.S. companies’ access to the European market is another of the U.S. president’s pet subjects. Now the two matters are coming together ahead of U.S.-EU trade talks that, if unsuccessful, threaten to unleash a trade war like the one Trump is waging on China.
It’s hardly in the long-term U.S. interest to hamper the EU defense cooperation plans or to try to muscle in on them. Europe isn’t ready to ditch the American security umbrella: Full strategic autonomy might come at a steep price. The London-based International Institute for Strategic Studies recently calculated that European NATO members would need to spend between $288 billion and $357 billion to fill the military capability gaps that would be created by the loss of the U.S. as a security partner.
Letting the EU find ways to save on military procurement — and, with that in mind, expand their joint military industrial capacity — would make it unnecessary for the U.S. to keep pushing Europe to spend more. It would create more capable security partners in Europe at a lower price. The strategic goal for the U.S., after all, is to improve deterrence in Europe, not to force allies to show loyalty by approving higher budgets.
For Trump, however, the latter may well be more important. Given his America First agenda, he’ll probably find it hard to countenance any European capacity improvements that involve less revenue for the U.S. defense industry.
In addition to agriculture, where the U.S. also demands more access to the European market and has been met with staunch resistance, the defense issue is likely to haunt the European negotiators. But it will probably be easier for them to compromise on, given that true and full strategic autonomy for Europe remains an ideal rather than a near-term goal.
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Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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