The Congress of Phoenix Rethinking Atlantic Security and Economics Edited by Gerald Frost The AEI Press Publisher for the American Enterprise Institute WASHINGTON, D.C. 1998 Available in the United States from the AEI Press, c/o Publisher Resources Inc., 1224 Heil Quaker Blvd., P.O. Box 7001, La Vergne, TN 37086-7001; call toll free 1-800-269-6267. Distributed outside the United States by arrangement with Eurospan, 3 Henrietta Street, London WC2E 8LU En- gland. ISBN 0-8447-4052-7 1 3 5 7 9 10 8 6 4 2 © 1998 by the American Enterprise Institute for Public Policy Research, Wash- ington, D.C. All rights reserved. No part of this publication may be used or reproduced in any manner whatsoever without permission in writing from the American Enterprise Institute except in cases of brief quotations embodied in news articles, critical articles, or reviews. The views expressed in the publica- tions of the American Enterprise Institute are those of the authors and do not necessarily reflect the views of the staff, advisory panels, officers, or trustees of AEI. THE AEI PRESS Publisher for the American Enterprise Institute 1150 17th Street, N.W., Washington, D.C. 20036 Printed in the United States of America Contents INTRODUCTION, Gerald Frost 1 PART ONE KEYNOTE SPEECHES IS THE ATLANTIC COMMUNITY OBSOLETE? Paul Wolfowitz 7 DEFENDING THE TRANSATLANTIC WORLD, Jon L. Kyl 20 SHAPING THE WEST’S DEFENSES FOR THE TWENTY-FIRST CENTURY, Margaret Thatcher 29 PART TWO COMMENTARY THE NEW ATLANTIC INITIATIVE, Christopher DeMuth 41 THE NATURE OF ATLANTICISM, Christopher DeMuth, Jon L. Kyl, Charles Powell, Max M. Kampelman, Michael Zantovsky, Brian Beedham, and John O’Sullivan 42 U.S.-EUROPEAN TIES, Thomas J. Duesterberg 49 EUROPEAN POLITICAL INTEGRATION, Charles Powell, Richard Burt, Dan Quayle, and Margarita Mathiopoulos 51 iii CONTENTS A CHANGING BALANCE OF POWER, Max M. Kampelman, Josef Joffe, and Margarita Mathiopoulos 53 NATO REFORM, Christopher Cox, William E. Odom, Rainer Schuwirth, and Richard N. Perle 55 MEANS AND RATIONALE FOR NATO ENLARGEMENT, Mark P. Lagon, Jeremy D. Rosner, Mira Baratta, Ojars Kalnins, Douglas J. Feith, Bruce P. Jackson, Valois V. Pavlovskis, Charles Gati, Maciej Kozlowski, Josef Joffe, Brian Beedham, William E. Odom, and Dan Quayle 58 COSTS OF NATO ENLARGEMENT, Jeremy D. Rosner, Robert Mroziewicz, Réka A. Szemerkényi, K. Eric Tygesen, Kalev Stoicescu, and Maciej Kozlowski 67 THE NATO-RUSSIA FOUNDING ACT, Christopher Cox, Michael Zantovksy, Peter W. Rodman, Josef Joffe, Richard N. Perle, Brian Beedham, Rainer Schuwirth, Frank J. Gaffney, Jr., and Charles Gati 73 RUSSIA, Christopher Cox, Max M. Kampelman, Radek Sikorski, Josef Joffe, Brian Beedham, William E. Odom, Dorel Sandor, Martin Sieff, and Dan Quayle 79 UKRAINE AND THE BALTICS, Christopher Cox, Anton D. Buteyko, Ojars Kalnins, Martin Sieff, and Dan Quayle 86 BOSNIA, Max M. Kampelman and Richard N. Perle 88 TURKEY, Richard Burt, Norman Stone, and Margarita Mathiopoulos 89 MISSILE PROLIFERATION AND STRATEGIC DEFENSE, Martin Sieff and Dan Quayle 91 CHINA, Dan Quayle 93 APPENDIX A: AGENDA FOR THE CONGRESS OF PHOENIX 95 APPENDIX B: ATTENDEES 99 EDITOR AND CONTRIBUTORS 103 iv Introduction Gerald Frost A word of historical background may be helpful to those not famil- iar with the origins or activities of the New Atlantic Initiative (NAI). This is a nongovernmental network comprising scholars, former and current public servants, business leaders, and journalists reflecting a wide range of political beliefs and allegiances. It came into existence out of a common apprehension that because of the prevailing mood of introspection on both sides of the Atlantic, Europe and America would drift apart—to the profound detriment of both—unless a se- rious and sustained attempt was made to apply Atlanticist principles to the conditions of the post–cold war era. A busy program of conferences, meetings, and publications helped establish three fundamental aims: to anchor the new—in some cases still fragile—democracies of Central and Eastern Europe more securely to Western institutions, to ensure that the European Union’s political development proceeded in a way that did not damage U.S.- European relations, and to create a transatlantic free trade area. The pages that follow comprise the edited text of the Congress of Phoenix held under the auspices of the NAI on May 16–18, 1997, with the aim of defining the means by which these objectives might be met. The congress program and a list of participants are contained in the appendixes. In preparing the text for publication, I have aimed to provide an accessible guide to the views of participants on central themes and topics that will have an appeal extending beyond merely those who were present at the congress. For this reason, the text has been 1 INTRODUCTION organized by subject rather than chronologically, although the key- note addresses by Margaret Thatcher, Jon L. Kyl, and Paul Wolfowitz have been given in their original form; my apologies are due to con- tributors if the form and shape of their remarks have suffered in the process or if some original nuances have been lost. They are owed in equal measure to those whose comments could not be accommo- dated within the present format. As the title implies, the purpose of the Congress of Phoenix was to stimulate public debate about ways of strengthening the in- stitutions of Atlantic cooperation so that they meet the needs of a greatly altered economic and security environment. As one partici- pant pointed out, the road to hell may well be paved with new inten- tions: it is therefore important to stress that the “new” in the title of the New Atlantic Initiative should not be seen as implying a desire for novelty; it is the initiative and circumstances of international poli- tics that are new, not Atlanticism or the principles underlying it. The aim of the NAI is to help sustain both. A year earlier, at the Congress of Prague, the first major public event staged by the NAI, those taking part had expressed a common fear: that while history remained open and therefore susceptible to efforts to change its course in this, or indeed, other directions, this situation would not last indefinitely. As a result, there was a serious danger that through inertia and neglect, a unique opportunity to expand the area of human liberty and promote structures serving the interests of international stability was being lost. Meanwhile, the nations of Eastern and Central Europe remained in a kind of politi- cal limbo, unsure of their own futures as well as the intentions and wishes of the political community that they had bravely struggled to join during the cold war years. But by the time discussion of such matters moved from the glit- tering chambers of the Cernin Palace to the air-conditioned luxury of the Arizona Biltmore, it was clear that a start had been made in laying the institutional foundations of the post–cold war order. Evi- dence for this could be found in the detailed and authoritative ac- counts by representatives of the U.S. and European governments of the plans—to be announced at the Madrid Summit in July—to begin the negotiations to admit the first new applicants to NATO. That aspiration had enjoyed the ardent support of nearly all those involved with the NAI since its beginnings. Equally welcome were the accounts from representatives of the 2 GERALD FROST Polish, Hungarian, and Czech governments of the steps being taken to meet their expected obligations as new NATO members and their estimates of the likely costs involved. News that a NATO-Russia Founding Act, copies of which cir- culated rapidly among participants following its signing just days earlier, would reportedly allow Russia influence over NATO secu- rity arrangements, received rather more mixed responses. Those ranged by degree from the assertion that, given Western prudence, the document would provide an improved channel of cooperation and communications with Russia to the view that it was in fact a cold war stratagem: the tortured prose might have been smartened up to meet the new circumstances, but the aim was still to under- mine and destroy NATO. NATO enlargement, the most suitable means to preserve NATO cohesion and clarity of purpose in the wake of a historic victory, and the likely impact of the Founding Act were inevitably the subjects that dominated discussion. But some of the most interesting debate focused on the future political development of Russia, the impact of Asian economic strength on the international order, and the chal- lenge presented by an increasingly powerful China; there were also stimulating debates on the effectiveness of economic sanctions and on institutional constraints to economic growth. It is not possible to convey the full range of opinions expressed at Phoenix in this brief publication. It will have fulfilled its purpose, however, if it conveys the views of those present on a range of issues whose outcome will shape a still fluid international order at a re- markably interesting stage of history. It will have fulfilled a second important function if it provides a footnote to an attempt to ensure that that future reflects both the best traditions of Atlantic engage- ment and the values upon which the Atlantic Community is based. 3 PART ONE Keynote Speeches Is the Atlantic Community Obsolete? Paul Wolfowitz I have chosen to address the question of whether the Atlantic Com- munity is obsolete. It might be thought that we have already an- swered that question by coming all the way to Phoenix to discuss how to deepen the Atlantic Community. Nevertheless, it is worth thinking about whether and why the Atlantic Community is still rel- evant in an era very different from those earlier ones in which the Atlantic Community proudly triumphed, first over fascism and Na- zism and later over communism.