Zut Alors! No Contracts?

Did you catch the latest news about the Pentagon shutting out from eligibility for those big rebuilding contracts in Iraq all those countries that didn’t support the war, like France, Germany, and Russia? (For the protection of the essential security interests of the United States, natch!) Hoo-hah! Suckaaaz! Did those jackal-states really expect that they could step back and let the American troops and their various allied homies go in and put their rears on the line to lay down some hurt, and then just show up afterwards to earn some big green cleaning up the mess?

(Of course, maybe it wasn’t such a good idea to hit them with this tough new reality just before the Prez was scheduled to give them a call asking them to forgive the Iraqi debt they hold. Josh Marshall feels that there really should be some official in place to coordinate things between Washington’s various diplomatic and security agencies so that embarrassing things like this don’t happen – something perhaps like a “National Security Advisor”?)

Ah, but remember that you are now in EuroSavant territory, my friend, which means that you get to hear from the other side. Are the French gnashing their unhygienic teeth in frustration? Are the Germans crying into their beer? I’ve got time to check out the one (France); stay tuned to this site to see if I also squeeze in the other.


I think Libération has it best (“Peace Camp” Removed from the Reconstruction of Iraq): “Last spring,” it’s article begins, “the American Secretary of State, Colin Powell, warned that the countries opposing the war in Iraq would suffer ‘consequences.’ The hour for those has rung.” That funeral-bell was chimed in the Pentagon document, signed by Undersecretary of Defense Paul Wolfowitz and made public on the Pentagon’s web-site last Tuesday, which excludes companies from countries which did not support the American war-effort from being primary bidders on 26 contracts to be awarded for work involving the reconstruction of Iraq’s infrastructure, which will collectively total $18.6 billion. Or rather, the document explicitly enumerates the 63 countries which are considered to be eligible; names like France, Germany, Russia, and Canada are off the list, while other economic and technological superpowers like Palau and Tonga (as Libération writer Pascal Riché reminds us) are on it.

Indeed, Riché makes it clear that he finds that document to be bizarrement troussé – “bizarrely dashed-off.” Limiting competition for the contracts this way (as we noted above) is supposed to be “necessary for the protection of the essential security interests of the United States”; it “will encourage the expansion of international cooperation in Iraq and in future efforts.” Riché’s plain-text translation: Those countries who want contracts for their companies have first to put troops on the ground. And about those “future efforts”: when the next war comes, he writes, everyone will know the rules of the game! (“[C]hacun saura à quoi s’en tenir!“)

What Riché finds the most strange about all of this is that it comes right at a time when the Bush administration seemingly was trying to mend fences with potential supporters among other countries. Instead, it has sparked off a wave of outrage; we’ll be surveying other commentary in a little bit, but Libération uniquely managed to dig up the declaration of deputy Canadian prime minister John Manley. President Bush has defended the exclusion policy with the fact that, after all, that money comes from American taxpayers; well, Manley counters that Bush can’t expect to take money for Iraq from Canadian taxpayers (the Canadian government has earmarked 190 million dollars for Iraqi reconstruction – it doesn’t say American or Canadian) with one hand and with the other “exclude Canadians [as primary bidders on these contracts] just because they’re Canadians.”

(A quick couple of notes in addition to that: Le Monde, in an excellent article we’ll deal with more extensively soon, adds the observations of new Canadian Prime Minister Paul Martin. He cites a figure of $300 million – this time US dollars for sure – that Canada has earmarked for aid to Iraq, as well as the fact that Canada has provided the most Western troops for Afghanistan. “I find it very difficult to comprehend,” is his verdict on the Pentagon’s move. And this clarification: Note that companies from these countries will not be allowed to bid as primary bidders, but will be allowed to work as sub-contractors to those who do win these bids. Josh Marshall explains how this is not so much of a consolation as it may seem.)


Let’s cut now to a more detailed rundown of the international outrage over this decision in the French press. Hey, what do you know, there’s a good one in Les Échos, the primary French financial/business newspaper. (The brief opera-critic reviews that follow are mine, and not from Les Échos):

– France (cool, waiting for its chance for revenge): We’ll be studying the American decision to determine its legality.
– Canada (shocked – I know, we’ve covered them already): We’re shocked. Guess it’s going to be hard to give any more money for Iraq.
– Germany (self-righteous, with perhaps an overblown picture of its power on the international stage): This decision is not acceptable. We can’t believe the information we’re getting is correct.
– Russia (there’s no way I can believe this guy is really so naïve – this is from foreign affairs minister Igor Ivanov): Countries prepared to participate in Iraq’s reconstruction should be allowed to do so.


The French spokesman was not only talking through his hat when he spoke about the American move’s questionable legality. Le Monde (Those Excluded From Iraq Reconstruction Criticize Washington) covers this well. It amounts to another dispute looming at the World Trade Organization. (Darn, and we just resolved one of those – when the WTO ruled American steel import quotas illegal under the international trade regime in November, and the Bush administration backed down. And we’ve got another big one coming up at the very beginning of 2004, over allegations of systematic subsidies for exporting American firms.) France is not dealing with this alone, but has pulled in its friends at the European Commission to study things along this angle as well. You see, an agreement that the US and the EU signed under the rubric of the WTO, namely the Agreement on Public Markets (my translation from the French) doesn’t allow you to discriminate between foreign and domestic companies when it comes to awarding contracts for government work. But then Le Monde notes that State Department spokesman Richard Boucher maintained that the Pentagon’s decision is perfectly in line with WTO regulations; these 26 contracts, which will formally be administered by the Coalition Provisional Authority (CPA) in Iraq, don’t count because the CPA is not subject to such WTO obligations.

A quick switch now to L’Express (Iraqi Reconstruction: Brussels Denounces the American Decision), which reports that, even as it dug up from its files the text of that Agreement on Public Markets for study, the European Union also appealed to the Bush administration to “itself review the compatibility [of the new Pentagon policy] with the [WTO] rules before envisaging any action.” “Right now we don’t really need another quarrel at the WTO,” said European Commission spokesman Reijo Kemppinen. (What sort of a name is that?! It’s Finnish! Yes, they’re part of the EU too, since 1995!) Kempinnen still called the move a “political error,” a “very bad signal coming at the moment when the international community is trying to work in a constructive fashion to make Iraq an open, democratic, transparent, and prosperous country.”


When it comes to pure commentary on the Pentagon’s move, little can hold a candle to Le Monde’s companion article Washington Dictates Its Way on the Subject of Iraq, although this is more because of the commentary the newspaper gathers here than any that it contributes itself. OK: Washington is taking the risk of new contortions (“crispations“) at the heart of an international community already profoundly divided by this conflict. No problem there. But much more interesting are the comments of Ivo Daalder of the Brookings Institution, whose judgment it is that the Bush administration did something like this – which “reopened wounds that were barely beginning to close” – for domestic electoral reasons, and because it “never really thought that it would obtain more support on the part of NATO” in Iraq – this even as Colin Powell recently addressed the (NATO) Atlantic Council over getting NATO military assistance in Iraq, and reported that “nobody objected to the idea.” Thomas Carrothers, of the Carnegie Foundation in Washington, agrees that “the administration has lost hope of getting troops from the excluded countries,” and points out in particular the position of Russia in all of this. Russia rightly feels herself pushed out of Iraq to the profit of the Americans, a sentiment sure to shift what has been up to now her relatively ambivalent attitude towards what was going on there. “It would have been enough to grant one or two medium-sized contracts to Russian enterprises for that country to be much more positive.”

As things stand instead, as Le Figaro reminds us, of the 71 companies which have so far been awarded $8 billion worth of contracts for work in Iraq and Afghanistan, every single one contributed to George W. Bush’s election campaign in 2000, to the total tune of more than half a million dollars. French companies (which, understandably, are loth to contribute to the Bush-in-2004 campaign – and American law prohibits them from doing this anyway) have at least two consolations to fall back on: 1) Several are still being paid for work in or deliveries to Iraq under the old “Oil for Food” program which is still in place, and which is administered not by the Americans but by the UN. Actually, the cheques are signed by Iraqi authorities (presumably acting for the CPA); and they continue to sign the cheques. 2) As that great philosopher and musician George Harrison once sang, “All things must pass.” The CPA and even the American administration in Iraq are not there for the long-term; indeed, a new Iraqi regime is supposed to be handed power in mid-2004. Considering the enormity of the $18.6 billion and the 26 huge contracts, with up to 300 sub-contractors that need to be gotten on-board as well, all that work will barely have gotten started once that new Iraqi administration is supposed to take over. “The cards can then be re-shuffled,” Le Figaro writes. “That is the secret hope of all those excluded from the Wolfowitz list.”

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