| Foreign aid, foreign trade and foreign direct | | | | against a November 1990 United Nations Security |
| investment (FDI) have become weapons of mass | | | | Council resolution authorizing the use of force to |
| persuasion, deployed in the building of both the | | | | evict Iraq from Kuwait - the United states scratched |
| pro-war, pro-American coalition of the willing and the | | | | $700 million in aid to the renegade country over the |
| French-led counter "coalition of the squealing". | | | | following decade. |
| By now it is clear that the United States will have to | | | | Nor is the United States famous for keeping its |
| bear the bulk of the direct costs of the actual | | | | antebellum promises. |
| fighting, optimistically pegged at c. $200 billion. The | | | | Turkey complains that the USA has still to honor its |
| previous skirmish in Iraq in 1991 consumed $80 billion | | | | aid commitments made prior to the first Gulf War. |
| in 2002 terms - nine tenths of which were shelled out | | | | Hence its insistence on written guarantees, signed by |
| by grateful allies, such as Saudi Arabia and Japan. | | | | the president himself. Similarly, vigorous pledges to |
| Even so, the USA had to forgive $7 billion of | | | | the contrary aside, the Bush administration has |
| Egyptian debt. According to the General Accounting | | | | allocated a pittance to the reconstruction of |
| Office, another $3 billion were parceled at the time | | | | Afghanistan in its budgets - and only after it is |
| among Turkey, Israel and other collaborators, partly | | | | prompted to by an astounded Congress. |
| in the form of donations of surplus materiel and | | | | Macedonia hasn't been paid in full for NATO's |
| partly in subsidized military sales. | | | | presence on its soil during the Kosovo conflict in 1999. |
| This time around, old and newfound friends - such as | | | | Though it enjoyed $1 billion in forgiven debt and |
| Jordan, an erstwhile staunch supporter of Saddam | | | | some cash, Pakistan is still waiting for quotas on its |
| Hussein - are likely to carve up c. $10 billion between | | | | textiles to be eased, based on an agreement it |
| them, says the Atlanta Journal-Constitution. Jordan | | | | reached with the Bush administration prior to the |
| alone has demanded $1 billion. | | | | campaign to oust the Taliban. |
| According to the Knight Ridder Newspapers, in | | | | Congress is a convenient scapegoat. Asked whether |
| February 2003, an Israeli delegation has requested an | | | | Turkey could rely on a further dose of American |
| extra $4-5 billion in military aid over the next 2-3 | | | | undertakings, Richard Boucher, a State Department |
| years plus $8 billion in loan guarantees. Israel, the | | | | spokesman, responded truthfully: "I think everybody |
| largest American foreign and military aid recipient, is | | | | is familiar with our congressional process." |
| already collecting c. $3 billion annually. It is followed by | | | | Yet, the USA, despite all its shortcomings, is the only |
| Egypt with $1.3 billion a year - another rumored | | | | game in town. The European Union cannot be |
| beneficiary of $1 billion in American largesse. | | | | thought of as an alternative benefactor. |
| Turkey stands to receive c. $6 billion for making itself | | | | Even when it promotes the rare coherent foreign |
| available (however reluctantly, belatedly, and fitfully) | | | | policy regarding the Middle East, the European Union |
| as staging grounds for the forces attacking Iraq. | | | | is no match to America's pecuniary determination and |
| Another $20 billion in loan guarantees and $1 billion in | | | | well-honed pragmatism. In 2002, EU spending within |
| Saudi and Kuwaiti oil have been mooted. | | | | the Euro-Mediterranean Partnership amounted to a |
| In the thick of the tough bargaining, with Turkey | | | | meager $700 million. |
| demurring and refusing to grant the USA access to | | | | The EU signed association agreements with some |
| its territory, the International Monetary Fund - | | | | countries in the region and in North Africa. The |
| thought by many to be the long arm of US foreign | | | | "Barcelona Process", launched in 1995, is supposed to |
| policy - suddenly halted the disbursement of money | | | | culminate by 2010 in a free trade zone incorporating |
| under a two years old standby arrangement with the | | | | the European Union, Algeria, Morocco, Tunisia, Egypt, |
| impoverished country. | | | | Israel, Jordan, Lebanon, the Palestinian Authority, |
| It implausibly claimed to have just unearthed | | | | Syria and Turkey. Libya has an observer status and |
| breaches of the agreement by the Turkish | | | | Cyprus and Malta have joined the EU in the |
| authorities. This systemic non-compliance was being | | | | meantime. |
| meticulously chronicled - and scrupulously ignored by | | | | According to the International Trade Monitor, |
| the IMF - for well over a year now by both | | | | published by the Theodore Goddard law firm, the |
| indigenous and foreign media alike. | | | | Agadir Agreement, the first intra-Mediterranean free |
| Days after a common statement in support of the | | | | trade compact, was concluded In March 2003 |
| American stance, the IMF clinched a standby | | | | between Egypt, Jordan, Morocco and Tunisia. It is a |
| arrangement with Macedonia, the first in two | | | | clear achievement of the EU. |
| turbulent years. On the same day, Bulgaria received | | | | The European Union signed a Cooperation Agreement |
| glowing - and counterfactual - reviews from yet | | | | with Yemen and, in 1989, with the Gulf Cooperation |
| another IMF mission, clearing the way for the release | | | | Council, comprising Saudi Arabia, Kuwait, Bahrain, |
| of a tranche of $36 million out of a loan of $330 | | | | Qatar, United Arab Emirates and Oman. A more |
| million. Bulgaria has also received $130 million in direct | | | | comprehensive free trade agreement covering |
| US aid between 2001-3, mainly through the Support | | | | goods, services, government procurement and |
| for East European Democracy (SEED) program. | | | | intellectual property rights is in the works. The GCC |
| But the IMF is only one tool in the administration's | | | | has recently established a customs union as well. |
| shed. President Bush has increased America's foreign | | | | Despite the acrimony over Iran's not-so-civilian nuclear |
| aid by an unprecedented 50 percent between 2003-6 | | | | program, the EU may soon ink a similar set of |
| to $15 billion. A similar amount was made available | | | | treaties with Iran with which the EU has a balanced |
| between 2003-8 to tackle AIDS, mainly in Africa. | | | | trade position - c. $7 billion of imports versus a little |
| Half this increase was ploughed into a Millennium | | | | less in exports. |
| Challenge Account. It will benefit countries committed | | | | The EU's annual imports from Iraq - at c. $4 billion - |
| to democracy, free trade, good governance, purging | | | | are more than 50 percent higher than they were |
| corruption and nurturing the private sector. By 2005, | | | | prior to Iraq's invasion of Kuwait in 1990. It purchases |
| the Account contained close to $5 billion and is being | | | | more than one quarter of Iraq's exports. The EU |
| replenished annually to maintain this level. | | | | exports to Iraq close to $2 billion worth of goods, far |
| This expensive charm offensive was intended to lure | | | | less than it did in the 1980s, but still a considerable |
| and neutralize the natural constituencies of the | | | | value and one fifth of the country's imports. EU aid |
| pacifistic camp: non government organizations, | | | | to Iraq since 1991 exceeds $300 million. |
| activists, development experts, developing countries | | | | But Europe's emphasis on trade and regional |
| and international organizations. | | | | integration as foreign policy instruments in the |
| As the war drew nearer, the E10 - the elected | | | | Mediterranean is largely impracticable. America's cash |
| members of the Security Council - also cashed in | | | | is far more effective. Charlene Barshefsky, the |
| their chips. | | | | former United States trade representative from 1997 |
| The United States has softened its position on trade | | | | to 2001, explained why in an opinion piece in the New |
| tariffs in its negotiations of a free trade agreement | | | | York Times: |
| with Chile. Immigration regulations were relaxed to | | | | "The Middle East ... has more trade barriers than any |
| allow in more Mexican seasonal workers. Chile | | | | other part of the world. Muslim countries in the region |
| received $2 million in military aid and Mexico $44 | | | | trade less with one another than do African |
| million in development finance. | | | | countries, and much less than do Asian, Latin |
| US companies cooperated with Angola on the | | | | American or European countries. This reflects both |
| development of offshore oilfields in the politically | | | | high trade barriers ... and the deep isolation Iran, Iraq |
| contentious exclave of Cabinda. Guinea and | | | | and Libya have brought on themselves through |
| Cameroon absorbed dollops of development aid. | | | | violence and support for terrorist groups ... 8 of (the |
| Currently, Angola receives c. $19 million in | | | | region's) 11 largest economies remain outside the |
| development assistance. | | | | WTO." |
| Cameroon already benefits from military training and | | | | Moreover, in typical EU fashion, the Europeans |
| surplus US arms under the Excess Defense Articles | | | | benefit from their relationships in the region |
| (EDA) program as well as enjoying trade benefits in | | | | disproportionately. |
| the framework of the Africa Growth and | | | | Bilateral EU-GCC trade, for instance, amounts to a |
| Opportunity Act. Guinea gets c. $26 million in | | | | respectable $50 billion annually - but European |
| economic aid annually plus $3 million in military grants | | | | investment in the region declined precipitously from |
| and trade concessions. | | | | $3 billion in 1999 to half that in 2000. The GCC, on its |
| The United States has also pledged to cause Iraq to | | | | part, has been consistently investing $4-5 billion |
| pay its outstanding debts, mainly to countries in | | | | annually in the EU economies. |
| Central and East Europe, notably to Russia and | | | | It also runs an annual trade deficit of c. $9 billion with |
| Bulgaria. Iraq owes the Russian Federation alone close | | | | the EU. Destitute Yemen alone imports $600 million |
| to $9 billion. Some of the Russian contracts with the | | | | from the EU and exports a meager $100 million to it. |
| Iraqi oil industry, thought to be worth dozens of | | | | The imbalance is partly attributable to European |
| billions of dollars, may even be honored by the | | | | non-tariff trade barriers such as sanitary regulations |
| victors, promised the Bush administration. It reneged | | | | and to EU-wide export subsidies. |
| on both promises. Debt relief reduced Iraq's debt by | | | | Nor does European development aid compensate for |
| 90% and all Saddam Hussein era contracts were | | | | the EU's egregious trade protectionism. Since 1978, |
| vitiated. | | | | the EU has ploughed only $210 million into Yemen's |
| Thus, the outlays on warfare are likely be dwarfed | | | | economy, for instance. A third of this amount was in |
| by the price tag of the avaricious constituents of | | | | the form of food support. The EU is providing only |
| president Bush's ramshackle coalition. New York | | | | one fifth of the total donor assistance to the |
| Times columnist Paul Krugman aptly christened this | | | | country. |
| mass bribery, "The Martial Plan". Quoting "some | | | | In the meantime, the USA is busy signing trade |
| observers", he wrote: | | | | agreements with all and sundry, subverting what little |
| "The administration has turned the regular foreign aid | | | | leverage the EU could have possessed. In the |
| budget into a tool of war diplomacy. Small countries | | | | footsteps of a free trade agreement with Israel, |
| that currently have seats on the U.N. Security Council | | | | America has concluded one with Jordan in 2000. The |
| have suddenly received favorable treatment for aid | | | | kingdom's exports to the United States responded |
| requests, in an obvious attempt to influence their | | | | by soaring from $16 million in 1998 to c. $400 million in |
| votes. Cynics say that the 'coalition of the willing' | | | | 2002. Washington negotiated a similar deal with |
| President Bush spoke of turns out to be a 'coalition | | | | Morocco. It is usurping the EU's role on its own turf. |
| of the bought off' instead'." | | | | Who can blame French president Jacques Chirac for |
| But this is nothing new. When Yemen cast its vote | | | | blowing his lid? |