Everything you need to know on this:
Who’s minding the foreign policy store?](danieldrezner.com :: Daniel W. Drezner :: Who's minding the foreign policy store?)
How to react to the Defense Department finding limiting reconstruction contracts in Iraq to firms from coalition countries, and the international brouhaha this has stirred up?
Well, first, the reaction from the French, Russian, and German governments has been more overblown than a Matrix sequel. For example, France and the EU claim that the ruling may be inconsistent with WTO procurement rules. Given that the ruling is phrased to be consistent with the national security exemption, and given the understandable reluctance of the WTO to get involved, it would be safe to say that the Europeans are overreaching.
The Christian Science Monitor](How Not to Win Friends - CSMonitor.com) puts things in the proper perspective:
[T]he 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.
Does this let the administration off the hook? No. William Kristol and Robert Kagan note the following (link via ):
A deviously smart American administration would have quietly distributed contracts for rebuilding Iraq as it saw fit, without any announced policy of discrimination. At the end of the day, it would be clear that opponents of American policy didn’t fare too well in the bidding process. Message delivered, but with a certain subtlety.
A more clever American administration would have thrown a contract or two to a couple of those opponents, to a German firm, for instance, as a way of wooing at least the business sectors in a country where many businessmen do want to strengthen ties with the United States.
A truly wise American administration would have opened the bidding to all comers, regardless of their opposition to the war – as a way of buying those countries into the Iraq effort, building a little goodwill for the future, and demonstrating to the world a little magnanimity.
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.
This decision is a blunder.
It’s the last point that makes all of this so puzzling. If the administration did not need the assistance of these countries with regard to Iraq, then the finding would be gratuitous but harmless. However, why on God’s green earth would implement this decision just when you’re dispatching an envoy to ask these countries to forgive Iraqi debts? Yes, there’s a bargain to be made here, but hint at it, discuss tactical issue linkage behind closed doors, use that diplomacy thing. Don’t make your move on a web site in such crude form. From the [New York Times](]Josh Chafetz](http://www.nytimes.com/2003/12/11/international/middleeast/11PREX.html?ei=5062&en=fe4796ca7cc3b44f&ex=1071723600&partner=GOOGLE&pagewanted=all&position=)(http://www.talkingpointsmemo.com/archives/week_2003_12_07.html#002311)):
President Bush found himself in the awkward position on Wednesday of calling the leaders of France, Germany and Russia to ask them to forgive Iraq’s debts, just a day after the Pentagon said it was excluding those countries and others from $18 billion in American-financed Iraqi reconstruction projects.
White House officials were fuming about the timing and the tone of the Pentagon’s directive, even while conceding that they had approved the Pentagon policy of limiting contracts to 63 countries that have given the United States political or military aid in Iraq.
Many countries excluded from the list, including close allies like Canada, reacted angrily on Wednesday to the Pentagon action. They were incensed, in part, by the Pentagon’s explanation in a memorandum that the restrictions were required “for the protection of the essential security interests of the United States.”
The Russian defense minister, Sergei Ivanov, when asked about the Pentagon decision, responded by ruling out any debt write-off for Iraq.
The Canadian deputy prime minister, John Manley, suggested crisply that “it would be difficult” to add to the $190 million already given for reconstruction in Iraq.
White House officials said Mr. Bush and his aides had been surprised by both the timing and the blunt wording of the Pentagon’s declaration. But they said the White House had signed off on the policy, after a committee of deputies from a number of departments and the National Security Council agreed that the most lucrative contracts must be reserved for political or military supporters.
Those officials apparently did not realize that the memorandum, signed by Paul D. Wolfowitz, deputy secretary of defense, would appear on a Defense Department Web site hours before Mr. Bush was scheduled to ask world leaders to receive James A. Baker III, the former treasury secretary and secretary of state, who is heading up the effort to wipe out Iraq’s debt. Mr. Baker met with the president on Wednesday.
Several of Mr. Bush’s aides said they feared that the memorandum would undercut White House efforts to repair relations with allies who had opposed the invasion of Iraq…
Several of Mr. Bush’s aides wondered why the administration had not simply adopted a policy of giving preference to prime contracts to members of the coalition, without barring any countries outright.
“What we did was toss away our leverage,” one senior American diplomat said. "We could have put together a policy that said, `The more you help, the more contracts you may be able to gain.’ " Instead, the official said, “we found a new way to alienate them.”
The lack of policy coordination is astonishing. Going back to the Christian Science Monitor editorial:
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.
Alas, this is becoming a familiar refrain with this White House.