BRUSSELS FORUM VIEWS

MARCH 15 - 17, 2013

BRUSSELS, BELGIUM

Table of Contents
Fragility of the Global System . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Geopolitics: The Atlantic System Must Adapt for the 21st Century by Luis Amado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Trade & Investment: The Time Is Ripe for a New Transatlantic Economic Agreement by Karel De Gucht . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 European Integration: Europes Phone Connection Needs Both Hardware and Software by Carl Bildt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Security: A Frank Debate Is Needed on NATOs Future by Jamie Shea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Immigration: Citizenship-for-Labor Policies Are Far from Perfect by Christopher Caldwell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Labor: The Transatlantic Jobs Crisis Will Leave Long-Term Scars by Peter Sparding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Energy: Shale Gas Exports Could Be a Pillar of the Transatlantic Alliance by Michal Baranowski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Technology: A Digital World Requires Digital Values by William Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Public Opinion: Pessimism about Transatlantic Economic Conditions Is Rampant by Bruce Stokes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Burden-Sharing: Europe Should Lead from the Front by Alexandra de Hoop Scheffer . . . . . . . . . . . . . . . . . . . . . . . . 15 Global Governance: A G-Zero World Lacks Resilience by Gunther Hellmann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Europe: The Pacific, Atlantic, and Arctic Offer Three New Frontiers by Bruno Lt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 The United States: Global Influence Will Be Tested by Partisanship and Austerity by Xenia Dormandy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 China: Beijings Statism Is a Source of Fragility by Minxin Pei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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The Arctic: Cooperation Is Necessary in Tapping the Oceans Full Potential by Gitte Lillelund Bech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Belarus: Democracy Needs a Strategy by Andrei Sannikov . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Russia: Full Integration Is to Everyones Benefit by Celeste A. Wallander . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Middle East & North Africa: Successful Transitions Require Transatlantic Support by Hassan Mneimneh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Emerging Democracies: Engaging with Developing Democratic Powers Should Be a Priority by Dhruva Jaishankar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Young Writers Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 An Innovative Approach to Combat Transatlantic Human Trafficking . . . . 28

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Fragility of the Global System

or the first time, Brussels Forum will feature a theme connecting the different discussions that will take place during the conference. The Fragility of the Global System is meant to address the interconnectedness of todays world and the vulnerability of various aspects of the international order: the global economy, stability and security, governance, values, and the environment. Fragility does not necessarily have to be pessimistic or negative. Rather, the term is meant more as a commentary on how precarious things are, how past patterns of behavior and past solutions are either not up to the task for todays fast-paced, dynamic, interconnected environment or require a completely different means of thinking, approach, and resolution. Moreover, if something is considered fragile, it can either break under the application of pressure or it can be reinforced and readjusted to prevent such an outcome. The following essays published together as Brussels Forum Views are meant to capture various aspects of global fragility. The authors are leading policymakers, German Marshall Fund experts, and others from across the transatlantic community. The objective of publishing these views is to reinforce and reflect discussions at Brussels Forum on why certain situations are fragile, the degree to which localized failures can lead to systemic global challenges, and what can be done if anything to ensure that fragile situations do not result in outright breakage. There may not be agreement on solutions to these complex problems, but there may come to be a common recognition about the challenges facing the international community and a shared appreciation of the consequences of any failure to address them. Stimulating a robust discussion on the ways in which the international system is most threatened, and what can be done to reinforce or replace certain outmoded practices and ways of thinking about the world, would make Brussels Forum a tremendous success and set the foundation for future dialogues.

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Views

Geopolitics: The Atlantic System Must Adapt for the 21st Century
by Luis Amado

he economic and political crisis currently affecting the West is but one outcome of an ongoing metamorphosis of the international system, which has been determined by rapid structural changes to the global economy over the last three decades. In this brief period of time, half of humanity has embraced capitalism and become linked to the global market. Deng Xiaopings introduction of market reforms to the Chinese economy was the beginning of a revolution that has had immense consequences. The implosion of the Soviet Union and the rapid expansion of market forces, with unlimited flows of capital circulating at Internet speed, has created new development opportunities for hundreds of millions of people. By the time the global financial crisis exploded in 2008, the Wests overindebted economies were in a mess and China and other states in the Asia-Pacific had risen. A new balance of power has now emerged with the erosion of Western influence. The irony is that despite the relative weakening of the West, its values have expanded globally. Indeed, we are not experiencing a crisis of the Western system but grappling with the consequences of its success. It is, rather, a crisis of an exuberant form of capitalism, generated by the vertiginous expansion of financial markets, fueled by innovation and excessive deregulation that resulted in huge unbalances. In the United States and Europe, the crisis has had serious social and political implications. But in its aftermath, the West will still remain the key determinant in the establishment of a new order.

The West is perceived as the North Atlantic geopolitical space, structured by the Atlantic alliance and by strong transatlantic relations. But the vision of an Atlantic system for the 21st century cannot ignore the impact of the crisis, the new dynamics of globalization, and its effects in the wider Atlantic region encompassing Central and South America and Africa. The rapid development of South-South relations between Africa and Latin America, the performances of its economies, the new emerging powers, and the new role of China and other rising actors in this process cannot be ignored. It is time to develop a new, comprehensive Atlantic concept integrating these new strategic dynamics. Luis Amado is the former foreign and defense minister of Portugal.
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Trade & Investment: The Time Is Ripe for a New Transatlantic Economic Agreement
by Karel De Gucht

he relationship between the European Union and the United States is as old as European integration itself. John F. Kennedy wanted this vast new enterprise to provide the basis for a concrete Atlantic partnershipbetween the new union now emerging in Europe and the old American Union. He cautioned, however, that his goal would take time to achieve: A great new edifice is not built overnight. Since July 1962, when Kennedy said those words, we have built a continentwide economy in Europe, on the back of continent-wide rules to open markets. Transatlantic economic flows have also raced ahead: today, 2 billion a day in goods and services trade and over 2 trillion in mutual direct investment support 15 million jobs. However, these flows have not been supported by similar legal structures to guarantee and further open our markets. We may have survived without these so far, but todays context is different. Both the U.S. and European economies need a boost following the longest and deepest economic crisis since the Great Depression. The development of long and complex transatlantic value chains has placed an extra cost on regulatory and other barriers to trade and investment. And the core market opening elements of the Doha Round of multilateral trade negotiations remain stalled. Moreover, the crisis has tempted some around the world and within our jurisdictions to argue in favor of protectionist policies. A move towards freer transatlantic trade would show very clearly where Europe and the United States stand in that debate. That is why the time is right for a comprehensive, ambitious, and realistic free trade agreement between the European Union and the United States. Though we are both open economies, there remain considerable barriers between us, at our borders but particularly behind them in areas like services, regulation, and procurement. An agreement that properly addressed these barriers would provide catalysts for growth on both sides of the Atlantic. Such an agreement would also break new ground for trade policy in tackling these issues which are difficult but increasingly important acting as a laboratory of sorts for eventual multilateral breakthroughs in these areas. It would set a gold standard for trade openness around the world, creating common templates for other partners who export to our large mature markets. And it would be a huge step toward Kennedys idea of a concrete Atlantic partnership that looks outward to cooperate with all nations in meeting their common concern. Karel De Gucht is the European commissioner for trade.

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European Integration: Europes Phone Connection Needs Both Hardware and Software
by Carl Bildt

he Kissinger question Whom do I call if I want to call Europe? has been answered by now. Not that there is necessarily only one connection from the switchboard in Brussels, but the telephone number for Europe is now in place. Nonetheless, the critical question remains: what is our message? Or, to put in another way, if we now have the hardware of institutions in place, where is the software of policies that makes the entire thing operate in a clear and credible way? When we meet in the Foreign Affairs Council every month, it is usually the issues of the day that dominate the agenda. Foreign policy is, as Harold Macmillan once put it, events, dear boy, events. But what Europe needs today is a clear strategic framework to guide its policies in a globalized world. The European Security Strategy from 2003 was a good document, but to some extent it was an anti-Bush document reflecting the sentiment of the post-9/11 era and the Iraq War. The United States wanted robust unilateralism, while Europe argued for effective multilateralism. This is still valid. But we need a strategy beyond security to guide the institutions set up since then. In a world moving towards hyper connectivity in the entire realm between outer space and cyberspace and with age-old sectarian tensions resurfacing, developing a new strategy cannot just be about recalibrating old documents. This is why Poland, Italy, Spain, and Sweden asked prominent think-tanks to come up with elements for a European Global Strategy by early summer 2013. They have been encouraged to think outside the box, and take a fresh perspective when examining shortcomings, tasks, and challenges. This year, we are also reviewing the European External Action Service, hoping to produce an agreed blueprint for the European External Action Service 2.0 in time for the new crew entering the institutions after the 2014 European Parliament election. This work on the hardware should then go hand-in-hand with efforts to update the software of the European Global Strategy, so that when we emerge hopefully from the doldrums of the aftershocks of the 2008 financial crisis, we will have a Europe far more ready for the global century. Carl Bildt is the minister for foreign affairs of Sweden.

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Security: A Frank Debate Is Needed on NATOs Future

by Jamie Shea

ith the conclusion next year of the International Security Assistance Force (ISAF) mission in Afghanistan, NATO will have conducted over 25 operations on land, at sea, and in the air. In recent times, nearly 200,000 allied servicemen and -women have been deployed, mostly at a strategic distance outside Europe. The Kosovo Force (KFOR) presence continues, as does the Ocean Shield counter-piracy mission in the Gulf of Aden. The impact of all these operations on national finances, let alone human lives and injuries, has been substantial. Yet with NATO not engaged in Mali or Syria and focused instead on Patriot missiles in Turkey and missile defense in Central and Eastern Europe, there is no escaping the fact that the alliance will no longer be able to define itself by its ownership of large, ongoing operations. It needs to begin now to adapt to this new reality, most urgently in three areas. The first is preserving NATOs and Europes capacity to fight as a coherent, collective entity. The conclusion of the Afghan war, coupled with an enduring financial crisis and two decades of declining defense spending, makes the permanent hollowing-out of European capabilities a distinct possibility. Full spectrum forces are no longer achievable by individual European countries. At the same time, only 2 percent of Europes defense budget goes to multinational programs, 95 percent of Europes military units are nationally constituted and commanded, and three-quarters of military contracts go exclusively to the home nation. The Smart Defence and Pooling and Sharing initiatives and NATOs Connected Forces project are important steps toward integration, but to address U.S. concerns about burden-sharing and Europes future value as a military partner, these initiatives must be sustained and expanded. Defining what NATO and the EU should procure as multinational capabilities will be a crucial challenge. The second post-2014 challenge will be to clarify NATOs political ambitions. The NATO of 2020 could resemble in some respects at least its Cold War self in being a largely static structure, resettled in Europe and waiting to be attacked. Given NATOs enduring responsibility for collective defense and high-end military operations, no-one could dispute that these should be placed near the top of its agenda at all times. But is a more passive posture enough to keep NATO relevant or the best use of NATOs unique transatlantic consultation machinery, global network of partnerships, and policymaking expertise across the full range of security challenges? There is at least a debate to be had perhaps at the next NATO Summit about whether the alliance should turn its back on its 2010 Strategic Concept with its global outlook and focus on crisis management and cooperative security.

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Finally, Europeans and North Americans need a strategic dialogue about their relationship and objectives. This debate has to go beyond burden-sharing. Should, for instance, France have to assume most of the burden in Mali when extremists there have declared their hostility to the entire Western world? What can Europe do to help the United States make a success of the Asian pivot, given that Europes own economic health will depend increasingly on the Asia-Pacific? How can we work better together to help Arab democrats, curb Irans nuclear ambitions, engage rising powers, and engender greater Russian trust and cooperation? While this debate may go beyond a traditional NATO discussion, the alliances machinery could be used even if informally to contribute to it. 2014 may mark the end of one phase of NATOs long evolution, but it will not mean the end of security threats and challenges that the alliance can usefully address. While one path forward can lead to decline and withdrawal, another can lead to rebirth, new skills, and new quests. NATO has always prided itself on being militarily capable so capabilities currently occupy its attention. But its future may lie even more in its political roles and tasks, and as a transatlantic hub for global defense cooperation, training, and assistance. An alliance tackling the immediate challenges of today will ultimately find it easier to require the capabilities it needs for tomorrow. Jamie Shea is deputy assistant secretary general for emerging security challenges at NATO Headquarters in Brussels.

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Immigration: Citizenship-for-Labor Policies Are Far from Perfect

by Christopher Caldwell

e all agree that these men and women should have to earn their way to citizenship, U.S. President Barack Obama said in January. But for comprehensive immigration reform to work, it must be clear from the outset that there is a pathway to citizenship. If the president believes there are any questions involving citizenship and immigration about which we all agree, he is mistaken. Many in his own party argue that immigrants have already earned their citizenship. Eighty percent of undocumented migrants have been in the United States for more than five years, and 60 percent for more than ten. A Republican plan, by contrast, would make certain immigrants leave the country and then wait a decade or more to apply for readmission no path to citizenship there! There is also a compromise position, held by the immigration scholar Peter Skerry, which favors legalization for as many undocumented immigrants as possible, but citizenship for none of them. Citizenship-for-labor was the bargain struck after the last sustained mass migration to the United States a century ago, but it is not a law of nature. And the institution of citizenship has changed in the meantime. In 1913, naturalizing meant exposing oneself to military service while repudiating old loyalties. Today it means gaining access to a munificent set of government benefits while possibly keeping your old citizenship. In the U.S. Supreme Courts Plyler v. Doe ruling of 1982 and the European Court of Justices Sevince in 1990, judges have given even illegal immigrants many of the rights of citizens. The legal theorist Ayelet Shachar of the University of Toronto considers developed-world citizenship a form of heritable property that governments use to compete for higher-skilled migrants. She believes the United States used to deploy this resource generously and wisely, but is now being outstripped by Canada and Australia. For the native of a poor country, a perch in a developed economy is a thing of almost inestimable value. This is one reason why the number of immigrants in OECD countries has not fallen dramatically since the start of the global economic crisis in 2008, and why labor remittances from the developed to the developing world passed $400 billion in 2012, a 7 percent increase. For policymakers, is national citizenship for an immigrant and his or her descendants a fair price to pay for one generations worth of below-market-price labor? Is it a bargain price? Or does it conceal an off-balance-sheet liability? Answers await.

Christopher Caldwell is a senior editor at the Weekly Standard and a columnist for the Financial Times.

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Labor: The Transatlantic Jobs Crisis Will Leave Long-Term Scars

by Peter Sparding

ne of the gravest legacies of the global economic meltdown of 2008 is the persistent jobs crisis on both sides of the Atlantic. Five years after the onset of the Great Recession, more than 12 million Americans remain unemployed, and the eurozone reported a record jobless rate of 11.7 percent in December 2012. These conditions, as Federal Reserve Chairman Ben Bernanke remarked, represent an enormous waste of human and economic potential. And, one might add, they represent a challenge to the long-term economic prospects, political stability, and geopolitical ambitions of the United States and Europe. Two aspects make the transatlantic unemployment crisis particularly dramatic: the high and persistent number of long-term unemployed and the jobs crisis among the younger generation. In the United States, an astonishing 38 percent of those unemployed 4.7 million people have been without work for more than half a year. Throughout Europe, the situation is equally grim, but the numbers vary significantly. While Germany witnessed a decrease in long-term unemployment, rates have spiked in many southern and eastern European countries. Although these dramatic increases are largely a legacy of the economic crisis, persistent long-term unemployment is threatening to turn such cyclical problems into structural ones, as economies skill bases erode and it becomes increasingly difficult for workers to reenter the job market. As a result, the long-term economic potential of some of these countries could be permanently damaged. For young people, entering the labor market during periods of economic slowdown could also have dire consequences. While youth unemployment always tends to be higher than average, the ongoing crisis has exacerbated this situation. According to numbers from the OECD, the rate of young workers not in employment, education, or training rose by more than 2 percent in both the EU and the United States between 2007 and 2011. And some countries, like Ireland at more than 7 percent, saw significantly higher increases. The effects of youth unemployment are severe both at the individual and societal levels. Studies show significant scarring effects, manifesting themselves in an increased risk of recurring unemployment, diminished long-time earning prospects, and negative health impacts for those affected. The economic and social costs are equally troubling, as youth unemployment can contribute significantly to rising income inequality and harm social cohesion. Direct costs in social payments today and decreased tax revenue as a result of lower earning potentials in the future are having an impact on already tight public budgets. And a younger generation confronted with dismal economic perspectives could become more reluctant in their support for greater European integration.
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Given these negative long-term consequences, greater effort needs to be exerted to prevent or mitigate high levels of long-term and youth unemployment. Work share programs, for example, could lower the number of people who initially become unemployed during a downturn, thereby reducing the risk of skill erosion and longterm unemployment. Meanwhile, educational efforts must be improved to better line up with job market requirements, so as to increase the chances of young jobseekers finding employment. In the short term, however, it is difficult to see how the current employment situation in the United States and Europe can be enhanced without a return to significantly higher growth levels. Peter Sparding is a transatlantic fellow in economic policy with the German Marshall Fund of the United States.

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Energy: Shale Gas Exports Could Be a Pillar of the Transatlantic Alliance

by Michal Baranowski

hanks to its ability to extract shale gas, the United States is now enjoying an energy bonanza. It is set to become the worlds largest natural gas producer by 2015 and, according to the International Energy Agency, will attain energy independence by 2020. This newfound abundance of cheap energy is changing the U.S. domestic economy, but it can also potentially influence the United States foreign policy through the export of liquified natural gas (LNG) and the spread of fracking technology used by U.S. energy companies to extract shale gas. Nowhere is the issue of energy security more important than among the United States allies in Central and Eastern Europe. Last year, Poland paid the highest price in the European Union for its gas imports from Russia: almost 28 percent more than Germany and 40 percent more than the U.K. Other countries in Central Europe suffering from a lack of diversity in their energy supplies experienced similar premiums. Despite the high price tag, 99 percent of Bulgarias gas imports came from Russia, as did 98 percent of Slovakias and 72 percent of the Czech Republics. Access to U.S. LNG would provide Central and Eastern European states with greater energy diversity, reduce energy prices across the continent, and allow these countries to renegotiate their long-term, expensive contracts with Russias stateowned energy giant Gazprom. From the United States standpoint, LNG exports would not only be smart foreign policy, but also good business. A recent study by the U.S. Department of Energy shows that the export of natural gas would benefit the overall U.S. economy. The recent reintroduction of legislation in the U.S. Congress that would facilitate exports of LNG to NATO allies is being watched with great interest throughout Central Europe. Even the prospect of increasing volumes of available gas in Central Europe could reduce monopolistic pressure from the east. Europes import of fracking technology will have a similar impact. The introduction of this technology in Europe has been gradual, but there are signs that things are about to change. Last November, the United Kingdom lifted its moratorium on fracking. In only the past few months, Romania and Lithuania have signed large contracts with Chevron for exploring their shale reserves and Ukraine, with the third-largest shale reserves in Europe, has announced an agreement with Shell. The spread of U.S. shale gas technology to Europe along with LNG exports provides the United States an important opportunity to make its energy policy an important pillar of the transatlantic alliance. Michal Baranowski is a senior program officer on foreign policy and civil society with the German Marshall Fund of the United States.

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Technology: A Digital World Requires Digital Values

by William Powers

here is the digital age taking us? This is the question hanging over every facet of modern existence, from business and government to science and the arts, from remote villages to teeming metropolises, from social networks to the brains that must process them. What will this new society look like and how can we thrive in it? That it is still a puzzle after more two decades of change should not be surprising or discouraging. After all, this is one of historys great mash-ups, a revolution mediated by machines but not led by them or by anyone in particular. The new devices and networks have disaggregated institutional structures, flattened old hierarchies, and helped spark democratic uprisings. This flux is too drastic to be predictable. In one sense, it is an exhilarating time of promise. Creativity and innovation are blossoming as people meet and collaborate across great distances. A brilliant business idea is funded through crowd-sourcing and takes off. An inspiring speech goes viral, changing hearts and minds. A child is a global citizen from birth, in touch with the rest of humanity at an unprecedented scale. But digital devices are not inherently constructive or ameliorative. Like all mechanisms, they are only as good as the people using them. In the wrong hands, they can be instruments of repression and criminal wrongdoing, as well as unintentional disaster and tragedy. An oligarchic government turns off its citizens internet access. A young digital activist charged with hacking an academic database commits suicide. A video made in one culture offends another, fomenting violence. High-speed, interlinked financial markets raise the specter of a domino-like crash. If we cannot predict the future, we can certainly help shape it. What is missing is a set of values that we can use to navigate this new landscape wisely and fruitfully. The early digital years have been focused on breaking down barriers that divided people from each other and from information. The goals were increased access, openness, and freedom, all inarguably positive. But in every revolution, the real challenge comes after the smoke has cleared. For progress to endure, it needs a practical framework that honors and protects the upheavals highest aims for the long haul, while allowing differences and conflicts to be hashed out fairly. What happens, for instance, when one persons openness tramples on anothers privacy? There are countless unresolved questions of this sort, and finding answers requires a more robust set of digital values than we now possess. We wont arrive at them overnight. They should be the product of an extended, freewheeling global conversation, conducted on the same tools that created the need for it. The recent U.S. presidential debates, remarkable for both their seriousness and the large TV and social-media audiences they drew, could be a model, but with

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many more voices. The aim of this digital-values debate should not be to produce a legal framework, but an ethical and moral one that could be used by any public or private organization, any individual or family, to shape their own standards, structures, and practices. There is a curiously passive quality to this moment, as if were always waiting for the silicon chieftains to tell us what comes next. The question shouldnt be where the digital age is taking us, but where we are taking it. In the mid-19th century, when instantaneous global communication first arrived in the form of the telegraph, the U.S. philosopher Ralph Waldo Emerson put it nicely: This time, like all times, is a very good one, if we but know what to do with it. William Powers is the author of Hamlets Blackberry: A Practical Philosophy for Building a Good Life in the Digital Age.

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Public Opinion: Pessimism about Transatlantic Economic Conditions Is Rampant

by Bruce Stokes

uropean and U.S. views of the economy have soured since the Great Recession. Overwhelming pessimism across the transatlantic community, coupled with doubts about prospects for the next generation and rising frustrations with the free market system, are signs of an abiding fragility. In last years Pew Global Attitudes Survey, just 6 percent of Spanish and Italian respondents and 15 percent of British said the economy was doing well. Among Europeans, only Germans (73 percent) thought their national economic situation was good. More importantly, such assessments were down 29 percentage points in Spain and 23 points in Poland since 2008. Pessimism is just as rampant on the other side of the Atlantic. Despite modest economic growth in the United States, just 15 percent said the economy was excellent or good in December. And a more recent Pew poll showed that just 37 percent of Americans think the economy is going to get better in the next year.

This is, in part, because the economic downturn has cast such a long shadow. Seventy-nine percent of Americans and 65 percent of Europeans say that they or their family has been personally affected by the economic crisis, according to the 2012 German Marshall Fund Transatlantic Trends survey. In addition, the Great Recession has cast a pall over generational expectations, long part of the social and political glue in both Europe and the United States. Just 9 percent of Europeans and 14 percent of Americans think it will be easy for a young person in their societies to get a better job or to become wealthier than their parents. The prolonged economic crisis has also eroded public support for the free market system. Faith in capitalism is down 23 points in Italy since the before the recession, 20 points in Spain, 15 points in Poland, and 11 points in Britain. Only in Germany, France, and the United States is support relatively unchanged. And such sentiment is correlated with personal views of the economy. Those who are downbeat about their economic conditions are more likely to also be negative about the free market system. Moreover, 76 percent of Europeans say most of the benefits of the economic system go to a minority, according to Transatlantic Trends and 64 percent of Americans agree. All this feeds frustration with how Europe and the United States organize their economies. Bruce Stokes is director of global economic attitudes at the Pew Research Center and a non-resident fellow at the German Marshall Fund of the United States.

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Burden-Sharing: Europe Should Lead from the Front

by Alexandra de Hoop Scheffer

he ongoing French-led military intervention in Mali and the 2011 French and British operations in Libya have highlighted two major trends that will continue to define transatlantic relations in the years to come: Europes strategic retrenchment and U.S. disengagement from the Middle East and North Africa. These two trends have revived long-standing tensions between the transatlantic allies over security issues. While Europeans are concerned about the strategic vacuum created by the United States as it reduces its global military footprint and looks increasingly eastward, Americans see this evolution as an opportunity for Europe to reinforce its military capabilities, coordinate its defense policies, and lead from the front in its neighborhood. The difficulties France has encountered in enlisting both European and U.S. support for the Mali mission also reflects a certain apathy towards African affairs. But Mali has also revealed the need to strike a balance between diverging U.S. and European strategic visions and security priorities. The United States so-called pivot to Asia aims at countering the growing clout of rising powersand encourages Europeans to define their own strategy for the region. But the French intervention in Mali also reminds Washington of the continuing importance of terrorism in weak and failing states in the Middle East and North Africa and the necessity of strong leadership in the region. The challenge for the transatlantic partners is to find a way to anticipate the potentially destabilizing effects of growing power in some cases and weakness in others, in order to deploy the best foreign policy tools whether military, political, or economic to address these challenges. The absence of a common European foreign and defense policy and of a coherent U.S. strategy for the region could result in one of two outcomes. Either the West will become increasingly reliant on regional powers to advance its strategic interest, such as the United States Asian allies in balancing China or the Gulf Arab states in balancing Iran. Or it will find its emboldened allies naturally seeking to fill the vacuum left by U.S. leadership consider Japans possible rearmament against China a development that could potentially result in destabilizing outcomes. Alexandra de Hoop Scheffer is director of the Paris office of the German Marshall Fund of the United States.

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Global Governance: A G-Zero World Lacks Resilience

by Gunther Hellmann

he world today can be characterized by an increasing disconnect between the accumulation of global governance problems and the provision of governance solutions. A more dramatic description would be one of institutional crisis and disorientation, particularly in the field of international security. There is an increasing consensus that we are now in what Ian Bremmer has called a G-Zero and what Charles Kupchan has called No Ones World in the title of his recent book. Multilateralism the United Nations, European Union, NATO are out. Ad hoc G- groupings and so-called minilateralism involving loosely coordinated networks of presumably like-minded and capable states are in. In other words, this is a heyday for hard-nosed realists focused on sovereign states pursuing their national interests. Gone are the days when a new world order was synonymous with the prospect of a triumph of liberalism and democracy within and beyond the nation-state. In the eyes of their proponents, a G-Zero and minilateral world looks like the best possible outcome. After all, minilateralism brings to the table the smallest possible number of countries needed to have the largest possible impact on solving a particular problem, as Moises Naim, the possible progenitor of the concept has argued. The difficulty is that the smallest possible number required may quickly become quite large on issues such as a military escalation in the Persian Gulf. Considering how a G-Zero world might deal with the consequences of such an escalation reveals just how fragile the current international system is. To the extent that one buys into this description of a realist world of sovereign national interest maximizers, we must confront an international system that lacks what risk analysts call resilience. That means, in this context, the ability of the system and its component parts to anticipate, absorb, and recover from the effects of stress or shock in a timely and efficient manner. Some might argue that this world does not differ considerably from the realist world of the Cold War-era. But consider, by way of example, the crisis management of the United States and Soviet Union at the UN after Saddam Husseins invasion in Kuwait in 1990, and the difference is discernible. It is hard to see how the minilateral system of today might respond in order to absorb and recover from such a shock. Gunther Hellmann is a senior transatlantic fellow with the German Marshall Fund of the United States.

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Europe: The Pacific, Atlantic, and Arctic Offer Three New Frontiers
by Bruno Lt
ven as it muddles through a major economic crisis, Europe retains all the elements to remain a global leader well into the 21st century. Combined, the 27 members of the European Union constitute the worlds most productive economy, the EU dominates global trade markets, and its defense spending is more than China and Russia combined, making Europe the second most potent military power after the United States. But while Europe possesses the tools to be a global player, inefficient resource allocation and political sclerosis continue to cripple the Union from within. Europes international influence suffers as a consequence. While the EU is not necessarily inward-looking and disengaged from the global community, it does lack a common vision and sense of purpose and consequently weight in international affairs, especially because its economic interests are rarely in concert with a credible foreign and security policy. European efforts have principally been directed at weak and collapsing governments in its immediate neighborhood, but in this fastchanging world there are other regions beyond Europes traditional comfort zone that are of increasing importance to its future prosperity and security. Europe should focus more on these new frontiers and use its economic influence to solidify its foreign and security strategy. The first of these new frontiers is the Asia-Pacific region, which has become the hub of global economic growth. Europes trade interests in the region are vast, but they are not backed by a security approach. The challenges in this part of the world are multi-faceted and range from conventional military competition and energy security to climate change and the defense of human rights. It presents many options for Europeans to decide when and where to become involved. Moreover, as the United States ability to guarantee free navigation and trade flows is being undermined by regional disputes, the need for Europe to also pivot to Asia is growing fast. A second new frontier has opened as a consequence of the rise of Brazil, South Africa, and other countries on both sides of the Atlantic, which present their own opportunities and challenges. From the discovery of new energy sources and drug trafficking problems to new trends in commercial shipping, recent developments have the potential to profoundly shape the geo-economics of the four continents surrounding the Atlantic basin. New actors, above all China, are also playing a more prominent role in Africa and Central and South America. These trends should encourage Europe to widen its Atlantic strategy, and strengthen North-South connections in the fields of trade, investment, development, and security.

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Finally, as the ice melts over the Arctic Ocean, Europe should jockey for political and economic influence in this outpost. Several European nations border the Arctic region where abundant supplies of oil, gas, and minerals are becoming accessible. The Northern Sea Route could boost economic development by reducing the time required to ship European goods between the Atlantic and Pacific Oceans. It may also offer a safe alternative to the maritime routes in the South China and Arabian Seas, which are threatened by regional power struggles and piracy. By evolving clearer approaches to these new frontiers, Europe would send a reassuring signal to the rest of the world that it remains a global player. Additionally, all three regions offer important opportunities to revitalize the transatlantic partnership, either through direct cooperation with the United States, or through multilateral institutions such as NATO. Bruno Lt is the program officer for foreign and security policy with the German Marshall Fund of the United States in Brussels.

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The United States: Global Influence Will Be Tested by Partisanship and Austerity
by Xenia Dormandy

Domestically, Washington is even more polarized now than it was when Obama assumed the presidency in 2008. Studies of voting patterns in Congress show that in contrast to previous years, the 2007-08 Congress showed almost no overlap between liberal Republicans and conservative Democrats. The partisanship is even worse today. Through their control of the House, Republicans will continue to stymie the Obama administrations policies as they have done for the past two years. Perhaps in response to this, Obama seems less inclined to cater to the Republican Party. The rhetoric of bridging the divide is being replaced by less compromising positions, whether regarding new cabinet appointments or economic policy. Austerity in the United States as in other places is limiting the presidents options. As he said repeatedly during his reelection campaign, his priority is nation-building at home. Domestic priorities are going to outweigh international initiatives, except where vital national interests are concerned, a sentiment that many presidents have espoused but, until now, rarely followed through on. At the same time, the challenges that the United States and others face are ever more complex. Some are due to the actions of specific states, such as Iranian and North Korean nuclear intentions, while others manifest themselves far more widely in cyberspace, food or water insecurity, pandemics, and environmental degradation. While the United States is a necessary actor, it cannot sufficiently address these problems on its own. Neither can Europe. Together, however, they might be able to make progress and, as appropriate, bring other actors to the table with the interests, will, and capacity to engage, as seen in Afghanistan and Libya. In response to the globalization of security challenges, and to domestic constraints, the Obama administration will likely expand its collaborative, multilateral foreign policy initiatives, despite occasional Republican opposition. Tools that are less resource heavy in both human and economic terms development, diplomacy, intelligence, soft-power, and targeted kinetic force such as Special Forces and drones will be preferred over full military action. And a narrowing of focus, to issues of vital national interest, will continue. Xenia Dormandy is a senior fellow with Chatham House in London.

n his second term, U.S. President Barack Obama faces a country and a world in the throes of profound change. Taken together, they promise a very different picture of U.S. engagement with the rest of the world over the coming four years.

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China: Beijings Statism Is a Source of Fragility

by Minxin Pei

ecent political, economic, and social developments in China have refocused the international communitys attention on the countrys underlying fragilities. Politically, Chinas newly installed leadership is grappling with multiple challenges pervasive corruption, lack of credibility, a diffusion of power, a demand for greater political rights and civil liberties, and revival of economic reform. On the economic front, growth momentum is flagging, massive nonperforming loans burden the financial sector, and overcapacity plagues many key industries. Socially, high income inequality, lower social mobility, poor food safety, and environmental degradation are fueling frustrations among the middle-class, a social segment critical to the survival of the Communist Partys rule. For most governments, such challenges are difficult enough, but for Chinas new leadership, the most complex and intractable aspect is that they are interconnected. In many ways, effective solutions lie in transforming the existing autocratic political system. Fighting corruption and reining in the countrys newly emerged kleptocracy will not likely succeed without the help of a free press or vigilant civil society groups. Restoring public credibility in the Chinese government requires greater transparency. Meeting the demands for more political rights and civil liberties means liberalizing the political system. Re-energizing economic reform entails overcoming the opposition of entrenched interest groups the bureaucracy, stateowned enterprises, local governments, and families and friends of party members who have leveraged their political connections into unimaginable wealth. Tackling economic and social reforms must also start with their political causes. The centerpiece of any new economic reform program must be a drastic downsizing of the role of the state in the economy. In practical terms, this means curbing the monopoly of state-owned firms, replacing government-directed credit with market-based financing, and ending discrimination against private entrepreneurs. The political obstacle to these reforms lies in the nature of the political system; the ruling Communist Party has to control a significant portion of the economy to maintain its patronage system and the political loyalty of its followers. China is unlikely to solve its myriad social problems, such as inequality, poor food safety, and environmental degradation, without getting rid of the privileges of the ruling elites and politically empowering the masses. So the fundamental source of Chinas fragility is its ossified Leninist system. It may have thrived for two decades after the Tiananmen Square protests and the fall of the Soviet Union, but its future looks bleak. Minxin Pei is a professor of government at Claremont McKenna College and a nonresident senior fellow with the German Marshall Fund of the United States.

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The Arctic: Cooperation Is Necessary in Tapping the Oceans Full Potential

by Gitte Lillelund Bech

oday, huge and sweeping changes are taking place in the Arctic. Due to climate change and technological developments, the regions considerable economic potential is coming within reach. It is now possible to use the Northwest and Northeast Passages as transport corridors, providing lower costs and higher profits for the shipping industry. But with new opportunities come new challenges. The Arctic has to be jointly managed on the basis of international principles of law to ensure its peaceful, secure, and collaborative use. A political declaration on the Arctics future the Ilulissat Declaration is one of the primary documents to help ensure the international management of the Arctic region. The declaration was adopted in Ilulissat, Greenland, in May 2008 by ministers from the five coastal states of the Arctic Ocean: Denmark, Canada, Norway, Russia, and the United States. The Ilulissat Declaration sends a strong political signal that the five coastal states will act responsibly concerning future developments in the Arctic Ocean. In addition to acting responsibly, the five countries also confirmed that they will strengthen their cooperation in bodies like the Arctic Council and the UNs International Maritime Organization. They will also increase their practical day-to-day cooperation on issues such as search and rescue, environmental protection, and navigational safety. The states have politically committed themselves to resolving disputes and overlapping claims through negotiation, rather than by military means. Cooperation and negotiation should be the only weapons used to handle disputes, challenges, and opportunities in the Arctic. Hopefully, this will once and for all dispel the myth of a race to the North Pole. If all parties stay committed to content of the Ilulissat Declaration, it will greatly lower the risk of security challenges emerging in the Arctic region. Instead, the overall approach to security policy in the Arctic will be based on the goals of preventing conflict, avoiding the militarization of the region, and actively helping to preserve the Arctic as a region characterized by trust, cooperation, and mutually beneficial partnerships. Gitte Lillelund Bech is the former defense minister of Denmark.

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Belarus: Democracy Needs a Strategy

by Andrei Sannikov

or almost 19 years, Belarus has been ruled by one of the most ruthless dictatorships in the world. The regime of Alexander Lukashenko has survived using what in Belarus is called the East-West Swing: whenever there is pressure from Russia, Lukashenko seeks Western support claiming a threat to independence; whenever the West applies pressure on human rights, the dictator swears allegiance to Russia. Such tactics helped him usurp power through a rigged referendum on the constitution in 1996, using a moment when the ailing Boris Yeltsin needed his help to be reelected. In time, Belarus found that international legitimacy and recognition through elections were not even necessary to preserve its East-West Swing. The Wests softness on Lukashenko invariably results in the regime becoming more aggressive, both domestically and internationally. In 2009, there was an unprecedented effort by the West to legitimise Lukashenkos rule. EU High Representative Javier Solana, Italian Prime Minister Silvio Berlusconi, Pope Benedict XVI, and Lithuanian President Dalia Grybauskaite all met with him. Belarus was invited to join the Eastern Partnership, and several other high-level meetings took place before Lukashenkos bloody crackdown of December 19, 2010. Today, the dictatorship in Belarus is better equipped than ever, and is contributing to international problems. It has established ties with other rogue states around the world. The authoritarian practices of Lukashenkos rule in Belarus are also being replicated in neighboring Russia and Ukraine. For the leaderships of those two countries, Belarus is a successful example of how to maintain power and counter the liberties and basic human rights that threaten an authoritarian regime. The search for a solution to the situation in Belarus is hampered by several myths. Some say that the people of Belarus are not ready for democratic change, as if Belarusians enjoy living under a dictatorship. Others argue that Lukashenko guarantees the independence of Belarus, but the same was said about Romanias Nicolae Ceausecu and Libyas Muammar Gaddafi, and is still said by supporters of North Koreas Kim Jong-Un. Another myth is that the opposition to the regime is fragmented and weak. But such an opposition exists despite persecution, beatings, exile, torture, jail, and killings, and despite little funding or Western support. Nevertheless, it managed to produce the heaviest blow yet to the legitimacy of the regime during protests following the sham presidential election of 2010. The shock waves from those events still reverberate, as demonstrated by the miserable turnout at last years polls. Unfortunately, the window of opportunity created by the failed elections was wasted. Moreover, Europe risks falling prey to the East-West Swing again: there is no real taboo on having political or commercial dealings with Lukashenko and

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there are enough people to serve his needs in the West. But history is against them. The Arab Spring has proven that supporting dictatorial regimes for the sake of stability eventually leads to the opposite. The only solution is to invest and support democratic movements. That is what Belarus needs today. Sporadic measures taken in reaction to crackdowns will not address the problem in the long term. There has to be a strategy, backed by a political will to implement it, in order to bring freedom to Belarus. Andrei Sannikov is a former deputy foreign minister of Belarus and a leader of the civil campaign European Belarus.

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Russia: Full Integration Is to Everyones Benefit

by Celeste A. Wallander

he United States reset with Russia was not the strategic objective itself. The objective was Russias integration as a responsible stakeholder in global politics, supporting Russian progress in development, growth, transparency, pluralism, and constructive global governance. Instead, the reset was a symbol and an opportunity to transform the atmosphere of acrimony between Washington and Moscow in order to achieve cooperation in areas of common interest and build a foundation of trust for Russias constructive integration as an important European and Asian power. The glass is half full. Russia today is more integrated and has been an important partner in vital cooperative security. It has joined the World Trade Organization (WTO), adjusting its economic and trade policies in ways that should lower barriers to investors and draw Russian firms into healthy global competition. The Russian leadership seems to understand the advantages of integration, because it is seeking membership in the Organization for Economic Cooperation and Development (OECD), which entails even higher standards of good governance and global integration. This half-full glass has nourished not only Russias economic potential, but also global security. The United States and Russia concluded a treaty on nuclear arms reductions that lowers the number of warheads, creates transparency, and sends a clear leadership signal for the global community to reduce reliance on nuclear weapons. The United States and Russia have also worked together to stop Iran from attaining a nuclear weapons capability. And despite hostile headline-grabbing rhetoric about NATO, Russia has made incomparable contributions to ISAF security operations in Afghanistan by supporting transit, training, and counterterrorism cooperation that could lay the groundwork for success in combating global violent extremism. However, the glass is also undeniably half empty. Russias military doctrine remains wrapped around scenarios that are more the stuff of nightmare science fiction or clever Hollywood spy thrillers than the reality of our post-Cold War global system. Even worse, Russias policies toward its neighbors and its own citizens are premised on an attempt to turn back the tide of integration that has been the source of prosperity and the awakening of hope and growth for Russias citizens. The task facing the transatlantic community is to find ways to fill the rest of the glass for Russias integration, prosperity, and security. The United States and Europe must now pose the question to Russias leaders: are they up to the challenge? Celeste Wallander is an associate professor with the School of International Service at American University and a non-resident fellow with the German Marshall Fund of the United States.

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Middle East & North Africa: Successful Transitions Require Transatlantic Support
by Hassan Mneimneh

he transformations in the Middle East and North Africa (MENA) over the past two years have generated both the euphoria and the inevitable letdown associated with successful political change. This period has seen the toppling of four longstanding autocrats in Tunisia, Egypt, Libya, and Yemen, continuing strife in Bahrain, the prolonged and brutal repression of a resilient uprising in Syria, serious threats to the governments of Iraq and Jordan, and vocal challenges against the established political order in virtually all other Arab states. Politically, Islamist factions have generally succeeded in leveraging these events to attain power, although never categorically. Much of the region is consequently characterized by two trends. One, the outcomes of the uprisings are neither reliable nor uniform enough to provide an impetus for further action. And, two, with Islamists exposed to active politics, and their narratives under greater scrutiny, the shape of the Arab political and cultural landscape in the near future is far from determined. Just as the enthusiastic references to an Arab Spring may have been the result of exuberant optimism, those to an Islamist Winter may simply be reflections of fearful pessimism. Neither is a product of sober realism. With internal dynamics characteristic of each Arab society affecting the tone and tempo of current events, the transformations in the region have proven more complex. It may seem that the only ascertainable aspect of these transitions is that they constitute a turning point in the history of the region and a paradigm shift in its political development. However, of the vast multitude of variables complicating outcomes, two can be ascribed particular importance: the success of the Syrian Revolution and the strengthening of civil society across the region. The fall of Bashar al-Assads despotic regime in Damascus may be inevitable. The nature of that fall, in particular the role of the global community in limiting bloodshed and ensuring a less than disastrous transition, will have a considerable impact on both material developments in Syria and its vicinity, and on the ensuing narrative in a fast-evolving regional political environment. A positive narrative were it to emerge can only be reified if civil society is afforded a chance at countering the statist and ideological conditions that had shackled the region to autocracy for decades. Neither the Syrian uprising nor Arab civil society faces a bright future, unless the transatlantic alliance and its regional partners can demonstrate greater determination and support. Hassan Mneimneh is the senior transatlantic fellow for MENA and the Islamic world with the German Marshall Fund of the United States.

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Emerging Democracies: Engaging with Developing Democratic Powers Should Be a Priority

by Dhruva Jaishankar

he pessimism that has marked public discourse in the United States and Europe over the past five years obscures two overwhelmingly positive trends that now characterize the international system.

The first is that liberal democracy can no longer be considered an exclusively Western value. Seventy percent of those living in electoral democracies today reside in the developing world (almost 60 percent in nine large countries: India, Indonesia, Brazil, Bangladesh, Mexico, the Philippines, Turkey, Thailand, and South Africa). Fifty-two states represented at last years Non-Aligned Movement Summit in Tehran an event dismissed by many commentators in the West as a congregation of dictators had held free and fair elections. Most of these countries adopted democracy of their own accord, not because of its imposition by the West. In fact, democracy has flourished in many of these states despite tacit or active support for authoritarian regimes by the United States and its allies. The second welcome trend is that developing democracies are delivering. Emerging democratic powers are growing rapidly, creating new markets, improving productivity, and pulling tens of millions of their citizens out of poverty each year. Together, the economies of the nine largest developing democracies have grown an astonishing 330 percent in dollar terms over the past decade, comparing favorably to 174 percent for the eurozone and 147 percent for the United States. At a time of austerity, it is perhaps natural that the transatlantic allies should want to focus on nation-building at home and pressing global challenges, such as the ongoing turmoil in the Middle East and the rise of China. To do this, however, would be short-sighted. The constructive engagement of key emerging democracies not only has the potential to revitalize the U.S. and European economies by expanding market access and helping to preserve an open trading system, it may also be the only way to address the structural threats to Western interests, values, and institutions posed by political outliers. U.S. and European engagement with developing democratic powers will, however, face at least four unique challenges. 1. Developing democracies, by their very nature, will seek to protect their markets against perceived foreign exploitation, particularly in those sectors that are the most labor intensive and consequently the most politically sensitive; 2. They will on occasion enjoy relations with unsavory regimes, especially of states that export resources necessary for their continued economic growth.;

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3. Their relatively meager military, economic, and diplomatic resources, coupled with weak institutions, will make developing democracies reluctant interventionists; and 4. They will often find common cause with non-democratic emerging powers in multilateral settings in order to preserve their development agendas and ensure better representation. While such limitations may inhibit the assimilation of emerging democracies into existing Western blocs or alliance structures, they ought to be instinctively recognizable to anyone familiar with the complexities of functioning democracies. It may be tempting to vilify these states as job-stealing, obstructionist arrivistes, or to lump them together with the likes of China and Russia as powers that seek to challenge a Western-led international order. But in fact, the rise of developing democracies is the best possible validation of the merits of Western-origin liberal values electoral democracy, private enterprise, the free market, and the rule of law as well as a vital opportunity for the West to ensure their durability. Dhruva Jaishankar is a transatlantic fellow with the Asia program of the German Marshall Fund of the United States.

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Young Writers Award

An Innovative Approach to Combat Transatlantic Human Trafficking

Slavery is an obscenity. It is not just stealing someones labor; it is the theft of an entire life. It is more closely related to the concentration camp than to questions of bad working conditions. Kevil Bales, Disposable People: New Slavery in the Global Economy, University of California Press, 1999 by Teresa Cantero and Rachel Molomut

he world has more slaves today than ever before in history, a large number of them trafficked across borders against their will to be exploited in developed countries. Over the last few decades there has been increasing interest in the private sectors connection to human rights and development. Governments, nongovernmental organizations (NGOs), foundations, and institutions have been working to develop strategies to engage the private sector in development and human rights agendas. It is time for the private sector to take a leading role in the fight against human trafficking as well.

Human Trafficking in the 21st Century: Modern-day Slavery

It is estimated that there are currently 27 million slaves in the world.1 As a poorly understood and little known problem, human trafficking is the third most profitable illegal activity in the world, after drugs and weapons trafficking.2 As defined by the Palermo Protocol, human trafficking is: ...the recruitment, transportation, transfer, harbouring, or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power, or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve

1 Kevin Bales and Ron Soodalter, The Slave Next Door: Human Trafficking and Slavery in America Today, University of California Press, 2009. 2 Kathryn Farr, Sex Trafficking: The Global Market in Women and Children, Contemporary Social Issues, 2005.

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the consent of a person having control over another person, for the purpose of exploitation.3 Modern-day slavery, therefore, is more about control than legal ownership.4 In the United States alone, 50,000 to 70,000 women are trafficked every year, making it the second fastest growing crime in the country. In New York City, 4,000 to 5,000 children are estimated to be forced into prostitution every year. Annually, trafficking brings $32 billion in revenue into the United States, from an estimated 2.4 million trafficked persons. Human trafficking refers not only to sex trafficking, but to bonded labor, organ trade, and domestic servitude.5 Human trafficking happens in every country on earth. The main destinations are the United States, Canada, Japan, Western Europe, and Persian Gulf States, and 80 percent of the persons trafficked are women or girls.6 The uniqueness of human trafficking, compared to other illegal activities, is that the product is reusable. A woman or a girl can be sold tens of times, and can be abused over and over. Unlike a bullet or a gram of cocaine, in human trafficking, two criminal groups can benefit from the same commodity and two brothels can trade the same women. Organized crime does not emerge unless there is a profit to be made, and like any other business, trafficking happens because there is demand.7 Crime groups normally specialize in one part of the process smuggling into a country, fake documentation, transportation inside the country of destination and with the arrival of globalization and the advantages of information technologies, the business has grown exponentially. Human trafficking is a globalized problem that demands globalized solutions. Human trafficking and people smuggling differs in the nature of the activity that one is consenting to. A person can pay to be smuggled into a country, but that same person might be trafficked later on. North America, Europe, and Oceania are a net-in migration in the global export-import market of human trafficking. Asia, Latin America, and Africa account for the net-out migration, the supply side of the trafficking supply chain. The international community has tried to respond to this issue, and in 2003 International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families entered into force.8 To date, it only has 35 signatories, with no representation from the European Union or the
3 The United Nations, Protocol To Prevent, Suppress And Punish Trafficking In Persons, Especially Women And Children, Supplementing The United Nations Convention Against Transnational Organized Crime, 2000. 4 Kevin Bales, Disposable People: New Slavery in the Global Economy, University of California Press, 1999. 5 Louise Shelley, Human Trafficking: A Global Perspective, Cambridge, 2010. 6 The United Nations Office on Drugs and Crime, Human Trafficking: The Facts, 2012. 7 Jay S. Albanese, Organized Crime in Our Times, Anderson Publishing, 2011. 8 United Nations General Assembly, International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families, Office of the United Nations High Commissioner for Human Rights, Dec. 18, 1990. http://www2.ohchr.org/english/law/cmw.htm.

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United States. The United States and EU need to join this progressive community as soon as possible.

Measures Taken by the United States and the European Union: Why the Current Response is not Enough
Despite being the leading sources of international regulations and standards for fighting trafficking, the United States and Europe are two of the main trafficking destinations. The U.S. Department of State annually publishes the Trafficking in Persons Report, which divides countries into different tiers and examines whether states comply with international laws and enforce anti-trafficking regulations.9 2012 is the first year that the United States itself is addressed in this report. The key legal document about trafficking in the United States is the Trafficking Victims Protection Act.10 This document lays out a plan for how the United States will tackle trafficking nationally and internationally. In June 2012, the European Union adopted the EU Strategy Towards the Eradication of Trafficking in Human Beings, a series of measures to be implemented by 2016 that includes better protection, prosecution and the creation of collaborative teams to investigate crimes.11 This new set of measures was created to help with Directive 2011/36/EU of the European Parliament and the Council of April 5, 2011, on preventing and combating human trafficking and protecting victims. The deadline to implement the Directive is April 6, 2013. The United Nations Palermo Protocol contains the most important legal documents for fighting human trafficking internationally. These were released by the UN in 2000.12 Presently, the U.S. and EU response to human trafficking is not enough. It does not address specific practices (such as border control and supply chain practices) and this enables human trafficking to not only continue but to increase in prevalence. It is time for the United States and EU to implement an innovative transatlantic partnership to combat this issue.

9 U.S. Department of State, Trafficking in Persons Report, 2012. http://www.state.gov/j/tip/rls/tiprpt/. 10 U.S. Department of State, U.S. Laws on Trafficking in Persons, http://www.state.gov/j/tip/laws/. 11 European Commission, New European Strategy 2012-2016, New European Strategy 2012-2016, June 19, 2012. http://ec.europa.eu/anti-trafficking/entity.action?id=714114c7-cd42-46cf-85ebc09d042c7181. 12 The United Nations, Protocol To Prevent, Suppress And Punish Trafficking In Persons, Especially Women And Children, Supplementing The United Nations Convention Against Transnational Organized Crime, 2000.

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Private Sector Transatlantic Partnerships: The Importance of Private Companies in the United States-EU Relationship
Over the last few decades, there has been increasing interest in the private sectors connection to human rights and development. Governments and civil society have been working to develop strategies to engage the private sector in development and human rights agendas. The private sector can make an enormous difference in moving forward in this area. Human trafficking exists because there is demand for it. In its 2010 report, Human Trafficking and Business: Good Practices to Prevent and Combat Human Trafficking, the United Nations Global Initiative to Fight Human Trafficking (UN. GIFT) outlined several reasons why the private sector should be concerned with these issues.13 First, companies can be directly involved (whether they are aware or not) in the recruitment, transport, harbouring, or receipt of a person for the purpose of exploitation.14 In addition, companies can also be implicated in human trafficking if their services, products, or premises are used by traffickers. Furthermore, companies can also become involved through the actions of their business partners or suppliers. Under the Palermo Protocol, human trafficking is considered a crime and is currently punishable in 163 countries.15 Despite the obligations of the Protocol, there are no legal consequences for punishing those countries that do not abide by the Protocol. Human trafficking for forced labor has been shown to negatively affect certain economic sectors including, but not limited to agriculture and horticulture, construction, garments and textiles, domestic service, food processing and packaging, hospitality and catering, mining, logging and forestry, and transportation.16 There are two main risks to businesses that participate knowingly or unknowingly in human trafficking. The first is legal risk, including the violation of national civil and/or criminal legal requirements.17 An example of a U.S. company facing legal risk was when a suit was brought against Kellogg Brown & Root, accusing them of trafficking 13 Nepalese men into Iraq in 2008. This suit was brought under the Alien Tort Claims Act and the federal trafficking law.18
13 United Nations Global Initiative to Fight Human Trafficking, Human Trafficking and Business: Good Practices to Prevent and Combat Human Trafficking, 2010. 14 Ibid. 15 The United Nations, Protocol To Prevent, Suppress And Punish Trafficking In Persons, Especially Women And Children, Supplementing The United Nations Convention Against Transnational Organized Crime, 2000. 16 United Nations Global Initiative to Fight Human Trafficking, Human Trafficking and Business: Good Practices to Prevent and Combat Human Trafficking, 2010. Print. 17 The United Nations Global Compact, Human Trafficking, Human Rights and Business Dilemmas Forum. http://human-rights.unglobalcompact.org/dilemmas/human-trafficking/. 18 The United Nations Global Compact, Human Trafficking, Human Rights and Business Dilemmas Forum. http://human-rights.unglobalcompact.org/dilemmas/human-trafficking/.

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The second type of risk involves reputational risks, which can bring serious consequences if a company is implicated in human trafficking, regardless of whether the allegations are proven true. Consequences include brand contamination, reduction in demand for a companys products or services, decrease in stock price, workforce disaffection, etc.19 For example, in April 2010, the National Labor Committee published a report entitled Dirty Clothes that accused retailers such as Dillards, J.C. Penney, Nygard, and Walmart of sourcing their clothes from a factory in Jordan that was trafficking workers from Bangladesh, India, and Sri Lanka.20 Following the release of this report, an emergency team was sent to Jordan and conditions in the factory were quickly improved.21 Given the current state of the economy in the United States and the EU, companies and governments have a huge incentive to work together to strengthen the economy rather than continuing to ignore human rights and development violations that are adding to the current economic burden we are facing. The incentive here is to stop human trafficking from becoming a more rampant problem in the EU and the United States. At the End Human Trafficking Now luncheon held in March 2012 at the United Nations, the president of the General Assembly, Nassir Abdulaziz Al-Nasser, stated, What is unavoidable is that economic pressure caused by the financial crisis will continue to fuel the problem of trafficking even further... Businesses that operate under strict ethical rules are safer and more sustainable compared to those afflicted by trafficking and related abuses.22 In order to understand what we mean by a private sector transatlantic partnership, it is important to understand what a public-private partnership (PPP) is. According to the World Bank: PPP refers to arrangements between the public and private sectors whereby part of the services or works that fall under the responsibilities of the public sector are provided by the private sector, with clear agreement on shared objectives for delivery of public infrastructure and/or public services.23 Furthermore, PPPs have been expanding over the last decade and are tackling a variety of issues. These partnerships have become increasingly important for economic development and humanitarian projects worldwide.24 For example,
19 Ibid. 20 Ibid. 21 Institute for Global Labour and Human Rights, The National Labor Committee, Significant Improvements at the IBG Factory in Jordan - Institute for Global Labour and Human Rights, Oct. 18, 2010. http://www.globallabourrights.org/alerts?id=0255. 22 Rasha Hammad, Top Corporations Highlight Ending Human Trafficking as Smart Business, End Human Trafficking Now, Mar. 23, 2012. http://www.prweb.com/releases/2012/3/prweb9321588.htm. 23 The World Bank, PPP in Infrastructure Resource Center, Public Private Partnerships in Infrastructure. http://ppp.worldbank.org/public-private-partnership/. 24 McKinsey & Company, Public-Private Partnerships, Harnessing the Private Sectors Unique Ability to Enhance Social Impact, 2009. http://mckinseyonsociety.com/public-private-partnerships-harnessing-theprivate-sectors-unique-ability-to-enhance-social-impact/.

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in the United States, 25 states have enacted legislation allowing PPPs to work on infrastructure projects. These coalitions are allowing infrastructure investments to remain relatively stable and combine the best of public-sector governance with the most valuable of private-sector efficiencies. 25

Bringing in the Private Sector to take over Roles the Government has been Unable to Fulfill and to Help with Coordination
Many steps have been taken to strengthen U.S. and EU regulations for combatting human trafficking, but to date it has not been enough. The more inclusive nature of PPPs, which usually involve partners from government, the private sector, NGOs, and foundations, would help to bring together the necessary actors for combatting this issue. In addition to including the UN.GIFT in planning moving forward, The Code of Conduct for the Protection of Children for Sexual Exploitation in Travel and Tourism (The Code) is a key mechanism that has already been put into practice by 1,030 companies in 42 countries. The Code is defined as an industry-driven responsible tourism initiative co-funded by the Swiss Government (SECO) and by the tourism private sector.26 The Code commits companies to train personnel to recognize trafficking as an issue, provide information to consumers, and report annually on their anti-trafficking activities.27 The Code membership currently consists of both industry and non-industry members. Industry members include hotels, airlines, and tourism companies. Non-industry members include NGOs and various associations. Given that this association has already brought together members of the private and public sectors, the United States and EU should start by reaching out to this group and gauging interest in collaborating in a transatlantic partnership to combat these issues. Such a coalition would bring together expertise from these varying areas and build upon the commitments that The Code has already created. This would help to ensure that this issue is being dealt with at every level, from border control to flight attendants to workers in supply chains in various sectors to hotel staff and government officials. It would also ensure that this issue is more widely publicized by adding trafficking to school curriculums, teaching the next generation what modern slavery is and engaging them in combating it. Entering into a PPP could also help involve countries of origin in stopping human trafficking. Airline partners, for example, would be able to train their
25 PricewaterhouseCoopers, Public-private Partnerships: The U.S. Perspective. http://www.pwc.com/us/ en/capital-projects-infrastructure/publications/public-private-partnerships.jhtml. 26 The Code, Code of Conduct for the Protection of Children From Sexual Exploitation in Travel and Tourism. http://www.thecode.org/index.php?page=1_1. 27 Ibid.

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staff worldwide as would hotel chains and tourism companies, raising barriers to traffickers.

Conclusion
The United States and the European Union are facing 21st century twists to a dilemma that has faced humanity since the beginning of history. This year, U.S. President Barack Obama focused his speech at the Clinton Global Initiative on human trafficking. As he stated, human trafficking is not a business model. Its a crime, and were going to stop it.28 At the 6th EU Anti-Trafficking Day, the Cyprus Minister of the Interior, Eleni Mavrou, stated, we firmly believe that we now have in our hands the legislative and practical tools to effectively tackle this crime. What is now necessary is to remain alert and implement without excuses these tools in our day to day work.29 Leaders from both regions have focused their attention on trafficking. Now moving forward, the United States and European Union must work to create innovative approaches to tackling human trafficking and people smuggling. Who better to include than the entire range of stakeholders around the world?

28 The White House, President Obama Speaks at the Clinton Global Initiative Annual Meeting, Sept. 25, 2012. http://www.whitehouse.gov/photos-and-video/video/2012/09/25/president-obama-speaks-clintonglobal-initiative-annual-meeting. 29 Cyprus Presidency of the Council of the European Union. Partnerships Needed to Eradicate Human Trafficking, Press Release, Oct. 18, 2012. http://www.cy2012.eu/index.php/en/news-categories/areas/ justice-and-home-affairs/press-release-partnerships-needed-to-eradicate-human-trafficking.

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FOUNDING PARTNERS

STRATEGIC PARTNERS

Government of Montenegro