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Wagging the Dog By: William R. Hawkins
FrontPageMagazine.com | Wednesday, August 20, 2003

Those involved in the acrimonious (and all too partisan) debate over weapons intelligence reports prior to the invasion of Iraq should recall the ancient wisdom of Polybius. A Greek who both chronicled and participated in the rise of republican Rome to Mediterranean dominance, Polybius criticized his fellow commentators for taking too narrow a view of events. They identified as the causes of war events that were merely the pretexts for war. Polybius argued that a series of strategic movements bring the interests of states into conflict years or decades before the actual clash of arms. This was certainly the case with the United States and Iraq.

Washington started out with a very different approach to Baghdad than that of regime change. The failure of that earlier approach provides a diplomatic lesson even more profound than the military lessons from the Baghdad blitz. The United States first attempted a decade of commercial engagement to give Saddam Hussein positive incentives for good behavior. The story is laid out in the Summer issue of Parameters, the quarterly journal of the U.S. Army War College, by Douglas A. Borer, Director of International Studies and Associate Professor of Political Science at Virginia Tech university.

In March 1982, Washington removed Iraq from its list of state sponsors of terrorism in order to open wider trade relations with Baghdad. Dr. Borer sees two objectives in this change of policy. First, to aid Iraq in its war against Iran; which, following the overthrow of the Shah, appeared to be the major threat in the Gulf region. Second, to be able to shape Iraq's behavior, using trade as a tool of influence. The Reagan administration thus initiated a policy of commercial engagement with Iraq long before such an approach became the central tenet of Clinton Administration foreign policy. Emphasis was given to boosting Iraq's oil exports; while selling Baghdad technology and agricultural products (Iraq depended on imports for 60-70% of its food).

After the Iran-Iraq War ended, the first Bush Administration continued this policy. Dr. Borer argues that mounting concerns in the Defense Department about Saddam's weapons programs and aggressive behavior were overridden by the State and Commerce departments who embraced expanded trade as a moderating and profitable policy. This approach continued even when Saddam revealed his chemical weapons program by using it against both Iran and the Kurds. Borer calls this "the most damning evidence of engagement's ineffectiveness in altering Iraq's behavior."

As pressure mounted in Congress to impose sanctions on the Baghdad dictatorship, "Iraq pressured American businesses and organizations with vested interests in trade to lobby key members of the House." Iraq also gave a $1 a barrel discount to American oil companies, "who in turn would be asked to use their substantial clout inside the Washington beltway" according to Borer.

Professor Borer calls this "inverse engagement." Even though the United States was in the stronger economic position with a heavily indebted Iraq dependent on trade, the American domestic political system was vulnerable to a foreign regime able to manipulate well-connected special interests. Saddam was not the first nor the last to discover how easily money buys influence in Washington. Borer's argument stops at Iraq's invasion of Kuwait, an act too blatant to be ignored. This aggression against a former ally with which the United States had strong ties marked the strategic turning point from which have marched the events of the last dozen years. But one might well conclude that Saddam's past success in curbing U.S. reactions to his aberrant behavior gave him a false confidence that Washington would not react even to the attempted conquest of a neighboring state.

Borer believes that Iraq provides a model for "turning" engagement policies. He concludes "when an economically powerful yet politically sensitive democracy is pitted against an economically vulnerable yet politically resilient autocracy, the autocracy may achieve undue levels of influence if it is clever....if one wished to identify an Achilles heel of engagement, the answer is not found beyond America's borders, but within the nation's constitutional structures and governing order."

One can see the same pattern in other current cases. China is dependent on foreign investment and exports for its economic growth, but those financial and trade ties have created powerful business lobbies in Washington who advocate appeasement policies towards the Beijing regime. When a Chinese fighter crashed into a U.S. Navy EP-3 reconnaissance plane on April 1, 2001, the immediate response of the American business community was to dampen any adverse reaction. The Chamber of Commerce sponsored a national speaking tour by the Chinese ambassador, including an April 25 appearance in Chicago at a conference promoting investment in China. The Chamber and other business groups have also lobbied against any economic sanctions being applied to Beijing for its proliferation of weapons or its coalition with France and Russia at the UN.

Recently, House Majority Leader Tom Delay (R-TX) took China to task for its opposition to U.S.-Taiwan trade relations. Speaking at the American Enterprise Institute, Rep. Delay called the Beijing Communist regime "a backward, corrupt anachronism"—which it assuredly is. Robert Kapp, president of the U.S.-China Business Council, felt compelled to criticize the Republican leader the next day in the Washington Post, saying "'It's been our impression a somewhat cooler approach to international trade agreements and diplomacy has generally better served the American national interest." But the interests of transnational corporations are not the same as the national interests of a major world power like the United States; as Kapp surely knows since his only real concern is the former.

Even the mere prospect of commercial gain has created business lobbies in favor of detente with dictators, such as Fidel Castro (a major player being rice exporters, who were also prominent in the Iraq case).

The end of the Cold War brought forth another ephemeral moment when it seemed the dream of 19th century liberals like Richard Cobden would come true. It was Cobden who believed that international commerce would be "the grand panacea" that would eliminate "the motive for large and mighty empires, for gigantic armies and great fleets."  Transnational business was to be given its head in a supposedly benign international  environment. By the end of the 1990s, the State Department bureaucracy was even pushing the incoming administration of George W. Bush to lift sanctions on Iraq. But the September 11 terrorist attacks reminded Americans than the world is not a harmonious place.

A return to traditional thinking about international relations should include a reconsideration of trade policy. Princeton political economist Joanne S. Gowa, in her book  Allies, Adversaries and International Trade, argues that we should not abandon the traditional practice of having  "trade follow the flag" because interdependence is too risky with any government that cannot be trusted on political grounds.  Gowa contends "power politics is an inexorable element of any agreement to open international markets....trade enhances the potential military power of any country that engages in it." As Borer argues, it also enhances diplomatic leverage, and not just in one direction.

The United States needs to move away from the notion of non-discriminatory trade that has been advocated by corporate lobbyists and enshrined in the World Trade Organization. Washington should play favorites, using trade to strengthen ties with proven allies while keeping those who would use the gains from trade to advance hostile agendas at arms length. With the world economy currently awash in excess production capacity, Washington has considerable room to maneuver when picking its trading partners. Recent bilateral "free trade" agreements with Singapore and Morocco have been motivated mainly by geopolitical concerns. By the same token, it would also be wise to orchestrate incentives for a shift of investment and trade away from rival China to more friendly places like the Philippines.

Business lobbyists will complain bitterly about such "interference," but capitalism must always operate within a larger context where parameters are set by more than economic concerns. Experience indicates that trade with malevolent regimes does more to constrain American action than it does to tame the intended targets of engagement. Government policy-makers should dismiss the special pleading of lobbyists and keep their attention focused on the behavior of contending states.

William Hawkins is a consultant on international economics and national security issues.

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