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Q&A

To the Victor Go the Spoils

Aired December 10, 2003 - 14:30:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEOTAPE)
DALJIT DHALIWAL, CNN INTERNATIONAL ANCHOR (voice-over): It's the list that is causing outrage around the world. A Pentagon memo lists countries eligible to compete for billions of dollars in contracts to rebuild Iraq. Big names left out France, Germany, Russia, countries that led opposition to the war in Iraq.

UNIDENTIFIED MALE (through translator): All I can say is that we noted the reports today with astonishment. And we will speaking about it with the American side.

UNIDENTIFIED MALE: Canada is putting close to $300 million in terms of reconstruction of Iraq, and I think it is the responsibility of every country to participate.

UNIDENTIFIED MALE: Iraq's debt to the Russian Federation comes to $8 billion U.S. And as far as the Russian government's position on this, it is not planning any kind of write-off of that debt.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We are talking about U.S. taxpayer dollars here. And I think it is appropriate and reasonable.

DHALIWAL: On this edition of Q&A, to the victor go the spoils.

(END VIDEOTAPE)

DHALIWAL: Welcome to Q&A, the memo from the Deputy Defense Secretary Paul Wolfowitz says the decision was made for security reasons. And the contracts are worth over $18.5 billion. Now the European Union says it will examine whether the U.S. decision to shut out some countries violates world trade organization rules. Is the controversial decision a faire one?

Joining us from Washington, we have Frank Gaffney, former U.S. assistant secretary of defense, now president of the Center for Security Policy.

Also in Washington, we have David Marchick, who is a lawyer who specializes in international trade.

And from New York, we have Hubertus Hoffman, president of the World Security Network. He has previously been an advisor for the European parliament and the German Bundesbank. Gentlemen, welcome to all of you.

Frank, let me start with you first of all. It has a bit of a nasty whiff about it hasn't it?

FRANK GAFFNEY, PRESIDENT, CENTER FOR SECURITY POLICY: Well, I don't think so. I think anybody who has been watching the progress of this war from the moment when the United States first talked about believing that it was going to be necessary to liberate Iraq by force to the present moment has been under no allusion that there were going to be consequences for those countries who did not participate in the war, who did not support it, who have not made the reconstruction a team effort, as have others who are part of this coalition on the ground in Iraq today.

DHALIWAL: Hubertus, what are your thoughts on this? Is it sort of a form of political blackmail. On the one hand, the United States is saying that you can have a slice of the reconstruction pie but you have to send your troops in. You have to get on side basically?

HUBERTUS HOFFMAN, PRESIDENT, WORLD SECURITY NETWORK: I think most important is that America's success in Iraq serves European interests too. We have two phases. The one phase we are still discussing with this paper is should we go into Iraq with forces or not. This is far over. We are in the second phase to build up Iraq. And we need as many countries as possible. We have just published in Worldsecuritynetwork.com a very good analysis of General Klaus Neumann (ph), who was the chairman of the NATO military committee on Iraq. And his proposal we support with our network. It is to have a NATO-backed peace force with a U.N. mandate in Iraq to help the Americans.

And, basically, America has withdrawn already 12,000 soldiers because there were additional coalition forces coming in. They were increased. And if American soldiers want to have their boys home for Christmas they need to have other forces. And they can only come from NATO, because all the forces we have now are there. And, therefore, this punishment in the Wolfowitz paper does not serve American interests, it's counterproductive. And it only helps the anti-American forces in France, in Russia and in Germany.

DHALIWAL: OK, David, what is the legal position here? Has the United States done anything wrong?

DAVID MARCHICK, INTERNATIONAL TRADE LAWYER: Well, I think that France, Germany and Canada will have a strong argument that the U.S. actions violate the WTO under what is known as the government procurement agreement, in which countries that make commitments to open up their government procurement processes to other countries who are also parties to this agreement are obligated to ensure that tenders are offered on a nondiscriminatory basis. France, Germany and Canada are members of this agreement and, therefore, have a strong argument that the U.S. decision and the U.S. policy violates the WTO.

DHALIWAL: OK, Frank, let me come back to you. Just looking at how this looks to the rest of the world, is the United States throwing a bit of a temper tantrum because it hasn't got its way? It is saying that you can have a slice of the pie but you've got to send your troops in. Give us what you want and then we will give you what you perhaps want.

GAFFNEY: This reminds nothing so much as the old children's story about Henny Penny, the hen that was trying to bake bread and ask for help at every stage, you know, grinding the wheat and baking it and so on. And when it came time to eat the bread everybody was willing to help and nobody had been willing to help up to that point. This is, in fact, I believe an orderly approach to a very important reconstruction effort. As Paul Wolfowitz makes clear in this memo, it is essential to its success that we have people on the ground there who are committed to its success.

The problem with France, and Germany and Russia before the war, of course, was they were committed to perpetuating Saddam Hussein's misrule. It is very unclear to me that it would be advisable for us to have their government, or their contractors playing leading roles. They are going to be able to play subcontractor rules, which is generous it seems to me, and certainly an opportunity for them to participate fully if they wish. But to play a leading role with $18.6 billion in US tax dollars would I think would not only be unsupportable, as far as the American people are concerned, but very ill advised strategically.

DHALIWAL: But, Frank, how does this action actually further the U.S.'s Iraq policy, because it is being interpreted as a slap in the face and old Europe is foaming at the mouth.

GAFFNEY: Look, the old Europeans have been unhappy from the beginning. I think one of the reasons why we have new Europeans and a great many other countries involved in this is they weren't hung up on keeping Saddam Hussein in business as the Germans, as the French and as the Russians were. We are in a position now where he is gone, thank, God. And we are rebuilding the country. The people of the country don't much care frankly for having people who wanted to support Saddam Hussein running around and telling them what to do.

And this is another reason why I think we have the support of the Iraqi people in having the coalition. Those on the ground now there are putting their lives on the line to help this country get reconstructed be the ones who are, in fact, the beneficiaries at the prime contractor level. And, again, I emphasize subcontractors from France, Germany and Russia are going to be welcome to participate if they choose to.

DHALIWAL: OK, well, we will come back to that in a second. But I think Hubertus you want to give us a very quick reaction to what Frank said.

HOFFMAN: Yes, I think always in politics Frank in each administration mistakes are made. So I am not pleased with the French position, the German position against the war, I think it was the right thing to free the people of Iraq from this totalitarian dictatorship. And the one thing it is not the Germans. If you would ask Germans should they help the Americans? We have a test like this. We have a three star general as a commander in Afghanistan, General Gliemeroth. And he also in an interview with WorldSecurityNetwork.com discussed how active the Germans are in war. We have 5,000 troops in Afghanistan from 33 different countries. And this is a war model for Iraq. And I think basically this paper is just looking back. And we have now to look forward. And to look forward that is always politics.

DHALIWAL: OK, well, let's look a little bit at the reasons that have been given, the reason is to protect your security interests and the public interest. So what is the threat? And why can't the French do it and the Poles can? But it is OK for the French to perhaps and the Germans to have some subcontracting work. Frank, do you want to very quickly answer that and then we will move on.

GAFFNEY: I would just simply say that we are talking about running the operation. I think it is different than being part of the team that is participating in the work program. I think we want to have very high confidence that the people who are running these very important infrastructure rebuilding and Iraqi force modernization programs are with the program. And that was not always the case, as Hubertus has just said, with the French, and Germans and Russians. And I am afraid today even still we are concerned about it.

DHALIWAL: OK, David, let's probe a little more sort of the legal aspects of this. What about the W.T. laws. And if the U.S. seems to be in breech what is the worse that could happen to them?

MARCHICK: Well, the worst that could happen is similar to what just happened on the steel case, where the U.S. imposed tariffs on steel in violation of WTO rules. The WTO ruled that the U.S. decision was illegal. And the Bush administration had to reverse itself and unlock and undue the tariffs that they just applied. And the WTO could similarly decide that the Bush administration's actions are illegal. And the Bush administration would either be forced to change the law, or change the approach or that that the U.S. could face tariffs on our exports..

DHALIWAL: When you look at this particular case is this, though, without precedence?

MARCHICK: While it is an unusual case at best. And it is particularly unusual because the Pentagon invoked essential security as a reason to justify that the decision. And it is very unprecedented for the U.S. to invoke national security to defend a discriminatory action.

DHALIWAL: Are you saying David that that is a bit of a red herring?

MARCHICK: Well, it is a red herring. And not only will it hurt U.S. exporters who are the biggest beneficiaries of open procurement rules and WTO system since US exporters are the most competitive and can gain access to foreign government contracts. But also, it will give other countries, the Japanese, the Europeans and Latin Americans the excuse to shut out US products based on national security.

DHALIWAL: OK, which kind of brings me back Hubertus to this issue of the reasons that have been given that it is to protect security interests and the US public interest. Are the Germans, are the French who are supposed to be friends, are they considered some sort of threat that they are not quite up to the job?

HOFFMAN: I think most Germans do not want to leave the Americans in problems in the lurch. They want to support them. And we have seen the last weeks a change in public opinion more supportive of the Americans Iraq. And at this time comes this debate, which in my opinion, I would make a proposal. This paper is not well written. It is not well thought to the end, because basically $18 billion U.S. is still little for Iraq. I would guess we would need at least $100 billion. We know it from the building up of East Germany, that is to be compared. Therefore, America needs money, billions and billions from Europe. And if you block now European countries from buildup, you block this help. And it costs you much more than you gain from it. Therefore, I think it should be overworked. This is a paper not ready to have signed, but that is bureaucracy sometimes.

DHALIWAL: Do you think it is political then?

HOFFMAN: It is not political, because I think we have a new phase. The phase is to cooperate and not with the French that much. They are very special on this, but at least with the Germans. And the Germans and the French are dominating the European Union. And without them, you will not get the support in the European Union or in NATO as well

DHALIWAL: All right, Hubertus Hoffman, David Marchick and Frank Gaffney, gentlemen, many thanks for joining us here on Q&A. Thanks a lot.

MARCHICK: Thank you very much.

GAFFNEY: Thank you.

HOFFMAN: Thank you.

All right, let's take it back now to Michael.

END

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