When Richard Nixon visited China in February 1972, the world was agog. His reputation as an anti-communist and Cold War hawk was well established. Today there are those who find the idea of George Bush in Europe almost as improbable. But that is where President Bush is heading this week — to Brussels, Berlin and Bratislava.
Like Nixon, Bush has a track record of hostility toward his hosts. In his first term, he and his closest colleagues made no secret of their impatience with the reluctance of France and Germany to become involved in the war to depose Saddam Hussein.
For much of 2003 a mostly frivolous but sometimes earnest mood of Francophobia swept the US. White House speechwriters did not actually use the phrase “cheese-eating surrender monkeys”. But it was easy to imagine the president muttering it in private. Bush in Europe? It really is as incongruous as Nixon in China.
Meanwhile, Europe itself — like China in 1972 — has been undergoing profound change that has seemed for some time to rule out meaningful trans-Atlantic reconciliation. Ever since the decline and fall of the Soviet Union, Europeans have depended far less for their security on the US. That has significantly reduced the incentives for harmony within what used to be called “the West”.
Perhaps more importantly, large Muslim populations (especially in France and Germany) have subtly shifted European attitudes toward the Middle East, the world’s geopolitical hub. Traditional Arabophile tendencies on the part of European diplomatic elites have been reinforced by politicians fearful of alienating Muslim constituents if they adhere too closely to the US. In some quarters, European hostility to Israel has become more strident, sometimes (at least to American ears) even anti-Semitic.
For these reasons, it is hard to feel optimistic about the tour. Yet the lesson of Nixon in China is that sometimes opposites really can meet. Both sides seem in the mood for rapprochement. Condoleezza Rice’s recent tour of European capitals was the opening salvo of a US charm offensive.
And there are signs that this amity could be mutual. The Dutch secretary-general of NATO has said he will try to get more European member states to contribute to the training of Iraqi security forces. Yet it is impossible to escape the suspicion that this mood music conceals fundamental differences on three major international issues.
No. 1 remains Iraq. France and Germany still refuse to allow military personnel to enter Iraq. Any contributions they make to training will take place in countries neighboring Iraq.
No.2 is Iran. The US is intensely suspicious of the recent European deal that elicited promises from Tehran — a “totalitarian” regime, according to Condi Rice — to renounce uranium enrichment in return for assistance with nonmilitary nuclear projects. The European position, as enunciated by the German defense minister last week, is that Iran will “only abandon its nuclear ambitions if ... its legitimate security interests are safeguarded”. This does not play well in Washington. The biggest source of tension, however, may relate to China. The Europeans plan to lift the arms embargo imposed in 1989 after Tiananmen Square. The Americans oppose this, but their opposition is a symptom of a deeper suspicion of what Europe is up to in Asia.
It is not widely recognized that the US is being subsidized by foreign monetary authorities, mostly Asian. Central banks, led by the People’s Bank of China, are financing about 75 percent-85 percent of the US current account deficit. In essence, the Chinese are buying dollars and US bonds to prevent their own currency appreciating against the dollar, which would in turn hurt exports.
Not only are the returns on these dollar holdings miserably low, but as the US “twin deficits” grow, the exposure of China’s central bank to a dollar devaluation grows. According to a recent estimate, if the yuan appreciated by 33 percent against the dollar, it would inflict a capital loss on the People’s Bank equivalent to 10 percent of GDP.
From an American perspective, this arrangement is just fine. American consumption and foreign policy are effectively being paid for with low-interest loans from Asia, allowing the Bush administration to give American voters both butter (tax cuts) and guns (the occupation of Iraq). And economic interdependence notionally reduces the risk of Sino-American disagreements on strategic matters, notably North Korea but also Taiwan. Yet the Chinese must be feeling nervous.
Step forward Europe — already a bigger market than the US for Chinese goods and proud owner of the euro, a currency looking increasingly like an alternative reserve currency to the dollar.
The irony is that just a few months before Bush’s visit to Brussels, a European statesman went on a little-reported trip to Beijing. President Jacques Chirac was there ostensibly to promote trade and cultural exchanges with France.
But Chirac surely had a rather grander design in mind. He knows that talk of trans-Atlantic rapprochement amounts to little more than empty rhetoric. He also knows that Europe has an opportunity to woo China from the American embrace.
Today, as in 1972, the international system has a triangular shape. Then it was the US that outwitted the Soviet Union by making overtures to China. Perhaps it is now Europe’s turn to outwit the US by doing the same. Or has George Bush already booked his flight to Beijing?
— Niall Ferguson is professor of history at Harvard, a senior fellow of the Hoover Institution, Stanford, and a senior research fellow of Jesus College, Oxford.
