Proceedings of the Standing Senate Committee on
Foreign Affairs
Issue 19 - Evidence
OTTAWA, Wednesday, May 13, 1998
The Standing Senate Committee on Foreign Affairs met this day at 4:00 p.m. to consider the consequences for Canada of the emerging European Monetary Union and other related trade and investment matters.
Senator John B. Stewart (Chairman) in the Chair.
[English]
The Chairman: We will hear from two witnesses today, both of whom are with the Department of Foreign Affairs and International Trade.
I would ask Mr. Lysyshyn to start it off.
Mr. Ralph Lysyshyn, Director General, International Security Bureau, Department of Foreign Affairs and International Trade: I will bring you up to date on NATO enlargement, and on Canadian views on the present enlargement process. I will also discuss the future of NATO enlargement.
The starting point of any discussion of enlargement must be Article 10 of the Washington Treaty, the treaty that created NATO. It provides that parties to the treaty made by unanimous decision invite any European country which accepts the principles of the treaty, and can contribute to the security of the north Atlantic region, to join the alliance.
More immediately, the latest wave of enlargement came from the end of the Cold War; the very fundamental changes that took place in European security with the collapse of the Warsaw Pact, and the change of system in Russia. A number of steps were taken to create an atmosphere of cooperation in Europe, where there had been an atmosphere of confrontation. These measures included the creation of the North Atlantic Cooperation Council, outreach to the countries of the former Eastern European Union, and to the former countries of the Warsaw Pact.
After a period in which cooperation continued to be enhanced through Partnership for Peace, nations began to study the question of NATO enlargement within this broader context of cooperation. In 1995, a study on enlargement was produced which set out four basic considerations which would guide the alliance's judgment as to which countries might be ready for membership.
At no point was a decision made to set rigid criteria. In part, it was felt that such criteria could create impediments if it were necessary or desirable to move quickly. Further, the use of criteria could create a situation in which a country might meet the general terms of the criteria, but not meet the requirements of the treaty itself, which ask that a member country contribute to the security of the north Atlantic region.
In essence, it was decided that a candidate country should be a democracy respecting individual liberty, the rule of law, and civilian control over armed forces. It should respect the OSCE norms on the peaceful resolution of ethnic boundary and jurisdictional disputes, as well as the treatment of minorities. It should endorse a free market approach to economic development, and it should accept to undertake all the roles and responsibilities that come with alliance membership.
A schedule for enlargement was not developed in 1995; that only came in mid-1996. Originally, pressure for an early enlargement came from the United States, from candidate countries, and from some European Union countries who saw early NATO membership as a stabilizing measure for countries preparing for EU membership. Canada was also amongst the countries to support NATO enlargement, although we never set a particular target date. Eventually, an informal target date of April 1999 evolved, this being the 50th anniversary of the NATO's creation, and this has been the date to which we are all working.
Early on, a fairly informal consensus seemed to develop that Poland, Hungary and the Czech Republic fulfilled considerations for early membership. In late 1996 and 1997, however, discussion as to whether other countries might be invited continued. Both Slovenia and Romania enjoyed support from as many as nine alliance members, including Canada, along with France, Italy, Greece, Turkey, Spain and Portugal. This support was influenced by issues such as language, history of military contacts, and also a desire to maintain a north-south balance in enlargement.
Germany, the United Kingdom, Denmark and Norway were more restrictive in their approach to enlargement. In the end, when the United States concluded that it would be less difficult to invite a small group into the initial enlargement, this view formed the basis around which a consensus was formed.
The idea that enlargement would be easier with a smaller group reflected concerns about maintaining the credibility of the alliance's security guarantee, and the extent to which invited countries could in fact afford to join NATO and contribute to its purposes. In the American context, it was also a determination about the limits of congressional support for enlargement.
In Madrid last summer, invitations were issued to the three countries: Poland, Hungary, and the Czech Republic. At that time, the alliance committed itself to further enlargement, but without setting a date for the next round. Very explicit recognition was made of the significant progress of Romania and Slovenia towards membership, however.
In Madrid, the alliance also took particular note of the continuing progress in the Baltic regions, where other states retained an interest in membership. A number of alliance countries, particularly the Scandinavian countries, worked very hard to ensure that the Baltic states were not left in some kind of gray area of influence. However, no state supported the inclusion or invitation to Baltic states at Madrid.
Enlargement must also be seen in the context of an overall approach to NATO's internal and external adaptation. Our external adaptation involved the creation of a new framework for NATO-Russia relations, the Founding Act, and the NATO-Russia Permanent Joint Council. A similar -- but less elaborate -- arrangement was developed for our relations with Ukraine. As well, the Euro-Atlantic Partnership Council was created to provide an overarching framework for discussion of security issues among 44 countries, in order to oversee the implementation of an enhanced Partnership for Peace. In essence, the alliance went through the early step of the North Atlantic Cooperation Council. To that it added Partnership for Peace, which tended to operate in parallel. With the creation of the Euro-Atlantic Partnership Council, these two parallel tracks were amalgamated into a single track, with more synergy between them.
Internally, NATO has also agreed to a number of reforms. The most striking, of course, is a reform of the military command structure to ensure flexibility to address new security challenges, such as peace support operations. Until recently, NATO never envisaged that it could be involved in anything other than an actual war. Peace support operations, operations such as those that we have undertaken in Yugoslavia, were not considered or planned for. With the change in NATO structures, the military now plans for this. The political side of the house is now organized in such a way that we can plan for, and prepare for, these operations.
For the longest time, a number of nations, and particularly the military, argued in favour of an approach that put one capability on top of another. In essence, adding to NATO as its functions were added to. A number of nations, Canada included, argued very strongly against this, and we succeeded in arguing for an integrated approach, and for a complete reorganization of our military command structure. As a result of this integration, the number of NATO headquarters and commands has been reduced from more than 60 to 22. It is a much leaner structure and organization.
Most recently, NATO has undertaken to review and examine its strategic concept; its fundamental plan of operation. This was revised in 1991 to take into account the end of the Cold War, but the security climate in 1991 was very different than it is now. Most pointedly, there is the kind and degree of cooperation that we have undertaken with Russia, with the other countries of Central and Eastern Europe, and the kinds of operations that we are undertaking in the former Yugoslavia. We hope that this new strategy, which we are working to implement and to agree on at the same time as the NATO enlargement, will provide a clear direction for the alliance's role in international security for the next decade, or perhaps longer.
When we formulated the strategic concept in 1991, we recognized that we were trying to capture an evolving situation. We knew that it would not endure, but at the same time we felt that it was politically important to ensure that the old strategic concept, which was based on confrontation, be amended to a new one, based on managing risk. We wanted to move from a concept that looked for threats to one that, while seeing some risks, also focused on a positive role for NATO. We hope that the new strategic concept will go even further; we hope to move from the idea of security against something to a concept of security for something -- a protection of certain values and common interests.
We are now starting to think about what will happen after the first phase of NATO enlargement. Will there be a second phase? We assume that there will be a second phase at some point, but the question is when. It is already fairly clear that the Washington Summit in April 1999, which will celebrate the 50 years of NATO, will focus very much on a discussion of future enlargement. At this point, it is too early to foresee or to make any kind of meaningful guess as to what the outcome of that discussion will be.
For our part, Canada's position rests on the general principle that enlargement is a positive development, and we were the first ally to ratify the accession protocols for the three new invitees earlier this year. A number of the allies saw this as an extremely positive step. More recently, the U.S. Senate, in a vote of 81 to 19, voted in favour of these accession protocols, and we are very pleased by that. We expect that most of the other nations will ratify them within the next few months.
We continue to support an open door to NATO membership, and have traditionally favoured a broader enlargement of the alliance. As you recall, our Prime Minister stated publicly that Canada could have envisaged a much larger enlargement than took place. He also recognized that consensus on that would be unlikely in Madrid, however, and that, since consensus is necessary, these issues must be approached practically.
Our considerations governing new applications to the alliance remain the same. They are: stable democratic governments with established records of human rights and the principles of good governance, civilian control of the military, durable settlements to disputes with neighbours, well-established economic reform programs, and an ability to contribute to the objectives of the alliance and to European security in general.
A number of other factors will also need to be addressed when we look at a second round. Romania and Slovenia obviously have strong advocates, and Canada has already spoken on their behalf. Other nations also have strong advocates, however, particularly the Baltic states. A number of alliance members have said that they would very much want to avoid a second round of enlargement that does not include the Baltic states, so we need to look at these issues. They need to be discussed further.
All of the likely candidates are continuing their progress towards achieving the kinds of reforms that the alliance considers desirable. Of course, when we make a decision, we must look at the situation in play at the time of the decision. It is quite possible for new candidates to emerge, or for older ones to improve their standing. When we first started talking about enlargement, Slovakia was included as a very strong candidate. It fell off the screen, and while it may seem unlikely now, political reform could start in that area.
It is worth noting that political parties in Sweden, Austria and Finland have all talked about the possibility of joining NATO. We have had discussions with some of these nations, who at one point even thought that they might like to be in the first wave of NATO enlargement. As we move ahead with enlargement, we need to ensure that we continue to build on and strengthen our partnerships, particularly the work that we are doing with Russia and with Ukraine.
The financial aspect of NATO enlargement is of some interest. We recognize that NATO enlargement will cost some money, but figures have been suggested that are excessively large. My own view is that some of these figures were politically motivated to support a particular point of view. We have noted the kind of change that has taken place in the military structure. The commands have in fact shrunk, and we believe that continued reorganization and restructuring can meet most of the costs of NATO enlargement by reprioritizing our activities. We do accept that reasonable new costs can be expected and must be met, however.
The aim should be to ensure that any additional costs are incurred for good reasons, and that they are affordable to the allies and to new members. I think we would make ourselves look very foolish if we started to organize an enlargement that people did not feel they could pay for. We must keep the costs in mind as we move ahead.
From what we can tell, the anticipated costs of enlargement are reasonable, and will be acceptable to the Canadian government. We expect that the total additional costs per year for the civilian political operations of NATO are probably only in the $7 million to $10 million range. The range is quite large, because we have not yet made any decisions as to what will be done about building office space in Brussels.
On the military side, we seem to be working with a budget of about $100 million per year. This should cost Canada somewhere in the range of $5 million per year. We are prepared to accept this significant change of scope.
The preparations for the 1999 Summit in Washington will bring the issue of further enlargement into clearer focus. Canada's goal is to welcome Romania and Slovenia into the alliance as soon as possible after next year's summit, but without setting any kind of absolute target or date. Some allies believe that the meeting in Washington might be too early to extend invitations for the second round, and they argue that the alliance needs time to get used to the changes launched in the past year.
Our approach to enlargement is very similar to our approach to NATO reform. We need to keep our options open. When Canada first put the idea of a cooperation approach with former allies on the table in a 1991 NATO discussion, we actually described a number of aspects that might be part of this approach. Many said that this would never happen in the alliance. When we first made a statement in the council, outlining our approach to this, the reaction of a number of people was to say "never." Considering what we do with Russia and with the Partnership Council, our original proposals now look very much like small potatoes.
We were regarded as radical and way out front. In seven years, however, the path that the alliance has followed has gone far beyond what we set at the time. We need to approach the new enlargement issues with that same kind of open mind. The security situation in Europe is evolving, and we want to make sure that the alliance keeps up with these changes. NATO must be part of the management of these changes, not an organization that lags behind in them.
The Chairman: When this committee looked at the matter of NATO enlargement about two years ago, we were a bit hesitant. We were uncertain how an apparent eastward push of NATO would look to Russia. Perhaps we were influenced to some extent by what we heard from representatives of countries which were seeking to become members of NATO. They emphasized that it would be helpful to their security, and while they were very discreet as to identifying the origin of the threat, it did not require much imagination to understand what they were saying.
You seem to say that the apprehension which we felt at the time has thus far not been justified. Is that correct?
Mr. Lysyshyn: NATO as a whole has worked very hard with Russia, Ukraine, and other nations in central Europe who are not presently joining the alliance, as have individual NATO members. The goal has been to convey the sense that we see the enlargement in the context of a cooperative approach to security in Europe. It is in the interests of all of us to make this work.
We have created a NATO-Russia Permanent Joint Council with Russia, which meets in the NATO building, where Russia, along with other Eastern European countries, has offices. We have made good progress, but there is still an awful lot more that we can do. We are all working very hard to create a serious and effective security dialogue with Russia. We are trying to create an agenda for this dialogue that leaves no subject off the table, and that creates no taboos. We are pressing for a very open dialogue, and we are working in that direction.
It must be a two-way street. We must tell the Russians about our concerns and what we are doing, and we expect to hear from the Russians about their concerns, and what they are doing. We are quite pleased with the way that the process has gone. We do see room for considerable improvement, but we do think that this helps, and responds to the concerns that you mentioned.
The Chairman: When you refer to the Russians, I assume you mean the present Russian government.
Mr. Lysyshyn: That is right.
The Chairman: What about those who do not support the present Russian government? Some of us have been involved in domestic politics in Canada. Is there danger that the opposition will use the NATO threat, real or perceived, for its own domestic political purposes?
Mr. Lysyshyn: I hesitate to comment about politicians, Mr. Chairman, as I am only a poor civil servant. There is a danger that some politicians will misuse NATO statements and NATO intentions, or will misrepresent NATO actions. That is always a danger, and that is the benefit of our dialogue with the Russian government, which ensures a clear transmission of our views.
Our dialogue with Russia is not limited to a dialogue with the Russian government. A NATO information office operates in Moscow, and is intended to ensure that information about NATO and its activities is available to the media and to politicians. We also invite opinion makers, whether they come from a think-tank, or are journalists, to visit NATO. There are briefings for them.
Recently, a group of Russian journalists visited this country. They were very interested in the NATO aspect, and in NATO enlargement. It is important to ensure that an appropriate understanding is there, and that information on NATO activities is available.
Senator Grafstein: There has been a shift in the mission of NATO. NATO's original mission was to contain the expansionist threat of Soviet Russia, but now you are talking about cooperative security in Europe. I am not sure where the boundaries of Europe are anymore.
I do not understand what the new mission is. Obviously, there is no expressed threat. One of the senators in the debate in the United States Congress, Senator Moynahan, made the argument that this is the first time that democracies have tried to stultify a democracy, Russia. It was an interesting argument, because the others thought that democracies never declare war on other democracies. In fact, democracies were implicitly declaring war against an emerging democracy by using NATO as a security ledger. Therefore, what is the new mission?
Physically, Canada has substantially withdrawn from NATO, and no longer has a large presence on the European continent. Again, then, what is our mission?
Mr. Lysyshyn: I do not think that we are stultifying Russia at all. The kinds of bilateral programs and bilateral relations that we have with Russia work in the opposite direction, as does the partnership approach with Russia in NATO.
As to the physical presence, there has been significant Canadian participation in the NATO security forces in the former Yugoslavia. We have over 1,000 troops there. As we have always pointed out, we could not have troops both in the former Yugoslavia and along the German-French border, and there has been good understanding of that.
We are physically present. We play a large role in IFOR, and our numbers there have been fairly constant. We also remain politically present, and that is important. It is an important role for NATO, and the cooperation is there.
NATO has gone beyond gauging a country's contribution to European security by counting the number of soldiers that it has in Europe. NATO and its future role must be considered in the context of all European security organizations, and the developments in Europe. I note that your hearings today examine the development of the EMU, and other European developments.
In this panoply of organizations, there is a role for an organization that is capable of mounting a military force if one is required. Military forces do more, as the Canadian public knows very well, than just fight wars. The role we have played in the former Yugoslavia demonstrates the kind of task that we can do. The capability of playing a military role in other contexts is there, and is one that we want to keep. What is the line for this activity in the future? I do not know.
When I first arrived at NATO in 1990, people could not envisage the Cooperation Council that we now have, nor could they have envisaged NATO soldiers in the former Yugoslavia. That would have been out of area. It is obvious, however, that the area is not clearly defined anymore.
We are not just operating as NATO. We are operating with Russian and Ukrainian forces as part of our forces. There is a small Baltic unit operating with us, the Czechs are there, we are using Hungarian facilities, and a lot of other countries are there, too. In the future, NATO will not be the entire effort; we will probably see NATO as the heart, the core, and the organizational structure for a broader range of activities. I do not know how big that will be; your guess is as good as mine at this point.
Senator Andreychuk: When we last looked at this issue, there was some optimism. Expansion was based on that optimism. It was felt that giving countries the benefit of the doubt towards democracy, stability, and security would make NATO an enlarged part of the peace and stability process. In light of the creeping communism that is seen in Hungary and many of the other countries, has there been any change in NATO's assessment of its enlargement, or should there be any change?
There have been infrastructure difficulties that far exceeded what was contemplated, and we must also consider the issues of transparency, corruption, and the drug trade. Should we be shifting gears as we look to expansion, or is it OSCE that should be changing?
Mr. Lysyshyn: Both organizations are changing and evolving. Without getting into a formal division of responsibilities between NATO and the OSCE, I believe that we are seeing an informal evolution in that direction. The OSCE is focusing much more on the election mandate -- ensuring democratic elections, and assisting governments in running elections and in good governance.
NATO has focused more on the hard security aspects, although we clearly play a role in the other aspect. In the former Yugoslavia, we are seeing cooperation between the NATO forces, the OSCE operation, and the operation run under the high representative to ensure an effective transition. We will see more of that in the future.
Nobody ever expected that the transitions in the former Soviet Union and former Warsaw Pact countries would be easy and simple. In fact, the transitions, difficult as they have been, have probably been easier than most of us who were dealing with east-west relations thought that they would be. We have been pretty cautious all along.
Obviously, there are problems in those countries, such as the drugs and the corruption that you mentioned. At the same time, there has also been tremendous progress in implanting democracy. Even among those parties who now brand themselves as communist, there is tremendous support for the democratic process. We are still on a good track, and on the whole I think that there is reason for optimism. No one is saying that we made a mistake.
Senator Andreychuk: We do not speed up or slow down -- we keep going?
Mr. Lysyshyn: We move ahead steadily. In the future, there may be reasons for slowing down, or for speeding up.
Senator Andreychuk: There is no reason to do so now?
Mr. Lysyshyn: We do not see one at this stage.
Senator Andreychuk: The dismantling of the old Warsaw Pact armament structures and nuclear arsenals is an issue that, while omnipresent, has always been on the back burner. This is partly because it is a sensitive issue, and partly because of the financial implications. Where you are headed next is obviously of great concern. How much of that technology and of that weaponry has been moved into other spheres of influence?
Some claim that, unless this present crisis is averted, the nuclear reality will continue to escalate in India, Pakistan, and China, which will have an impact on Russia, and therefore on NATO. In light of that nuclear situation, what role should Canada or NATO be playing?
Mr. Lysyshyn: We all recognize that there is a role to play. The flight of arms from these countries, particularly small arms, has created problems elsewhere in the world. We are all aware of that. We are looking at ways to stem this. This is being done not only in the context of NATO and the OSCE, but also in the context of the G-8 Summit, and working with the Russians.
Canada and our allies have put money into projects to ensure that nuclear expertise does not follow dollars. It is a concern. We have worked on it, and we have found that this has been one of the very fruitful areas of cooperation with the Russian government. which has taken a serious and responsible approach to maintaining control of its nuclear expertise.
Senator Bolduc: Does NATO intend to protect us from other dangers, like the international drugs and the arms dealing?
Mr. Lysyshyn: At this point, there is no particular sense that NATO should become involved in playing a police role. Drugs are a police responsibility, not a military responsibility. Trying to weave the two together would create a whole series of other problems, and societal problems as well. Indeed, one of the things that we are looking for in new members is a separation of military functions from other areas.
Having said that, we must recognize that all aspects of security are related, one way or another. We need to find ways of creating synergies and coooperation between organizations. That way, when we see gaps in one area, we can move to fill them.
For some time, one of the Canadian approaches to security has been the very strong belief that an established record of cooperation in one area will help the creation of cooperation in another area. Let us consider the example of drugs, where there is already a high degree of cooperation. I believe that, if we establish a record of strong coooperation on the military side, it may help us indirectly, but in an important way, to strengthen cooperation in another area. This has been a rather strong and fundamental aspect of the approach to security in a number of Canadian governments.
Senator Bolduc: A more delicate subject is spying. With the end of the Cold War, world expenditures on spying must have decreased, or perhaps the focus has shifted to industrial spying.
The Chairman: Last night we were told that the EMU would bring about a rationalization in the banking industry. Could you ask if there is a rationalization in the spying industry?
Senator Bolduc: The same amount of money is available; the money does not go down. Is the money now oriented toward industrial espionage?
Mr. Lysyshyn: You must recognize that the intelligence operations of governments probably have shifted focus. One of the outgrowths of that is cooperation. One of the reasons for our relative success in containing Russian nuclear material has been the degree of cooperation which we have created among intelligence agencies in this area. Intelligence agencies that did not cooperate before, and which viewed each other as the enemy, are now cooperating in a number of areas. Whether or not this will save money for treasuries is not my decision. Cooperation is certainly much greater, however. Methods of operation have changed, and I assume that targets have changed too.
The Chairman: In your initial presentation you spoke of managing risk as a pre-eminent goal of NATO as it now exists. In my mind, those words conjured up the picture of a local -- perhaps ethnic -- friction, which attracted support from different groups. What was initially friction gradually becomes fire, and the fire becomes an explosion. I do not know very much about Central Europe or the Balkans, but I have the impression that friction is endemic in certain parts of that area. You say that one of NATO's concerns now is to manage risk. Is that friction the kind of risk to which you are referring?
Mr. Lysyshyn: There is certainly a danger of ethnic conflict becoming broader and more violent. NATO could envisage playing a helpful role in the management of such conflict.
One of the most positive and somewhat surprising developments over the last decade has been the degree to which Hungary and Romania have worked together to manage ethnic conflict between them. There was great concern about the large Hungarian population in Romania. The desire to one day form part of NATO has helped these two governments move towards a cooperative approach in dealing with these issues.
The war in the former Yugoslavia was clearly an ethnic war, and we would certainly be willing to help create the conditions by which these concerns can be put behind us. At the same time, however, it needs to be recognized that NATO will not solve these problems by itself. This is a very fundamental change in thinking in NATO over the last decade. Up until the end of the Cold War, it was thought that NATO would do that job. If there were a war with Russia, for example, governments and politicians expected to be able to have NATO military command solve the problem.
Most of NATO planning and thinking is no longer based on operations alone. It is very much based on operating and cooperating with the OSCE, the UN, or whoever else happens to be involved, and working with NGOs. The way in which we work with NGOs in the field certainly was not part of NATO doctrine before, but it is now, and it is evolving.
Yes, we must consider ethnic tensions. At the same time, however, NATO would not be working alone to solve those problems. We would be working in partnership.
Senator Grafstein: Let us return to this question of Russia. On the one hand we want to reassure Russia that NATO does not pose a threat, yet we also want to ensure that our bilateral relations with Russia do not stultify the ability of NATO to respond to a threat. It is an ambivalent provision.
I have just been reading Brezezinski's book, and he raises an interesting proposition. He takes the position that, in order to ensure security and independence for the sister states of Russia, such as the Ukraine, NATO must agree not to make forward deployments of either troops or strategic weapons within a demilitarized zone on the NATO side of expansion. By the same token, Russia should make reciprocal agreements not to deploy troops within a demilitarized zone on the other side of the new expanded line. It is, as he says, a mutually reassuring technique to ensure that there is some sort of balance, and it will stifle the fears of Ukraine and others that they may be closer to the threatened line. Is that a valid position?
Mr. Lysyshyn: NATO has indicated that it currently foresees no need to move its troops closer to Russia than they now are, or to move nuclear weapons into the new member states.
Senator Grafstein: Has that been matched by a reciprocal agreement on Russia's side not to do the same?
Mr. Lysyshyn: Russia has withdrawn tactical nuclear weapons from its border areas, and negotiations are ongoing. We also have the Conventional Forces in Europe, Arms Control and Limitations Agreement, or CFE, and there is an ongoing negotiation in Vienna to bring that agreement up-to-date.
The old agreement was based on the existence of two blocks. They do not exist anymore. We are working very hard and constructively with Russia and the other nations of Europe to try to find a satisfactory approach to that issue. There have been unilateral declarations to enhance confidence, and we have also had these negotiations. Further, the NATO-Russia Permanent Joint Council which we have created with Russia provides a forum in which we can discuss these issues as well. One of the recent meetings of that council talked about nuclear weapons and tactical nuclear weapons, and what they are doing with them. This is an important confidence building measure. It is important to ensure that these discussions and negotiations are as open as possible.
Senator Grafstein: Have the Russians been back to the table on START II?
Mr. Lysyshyn: The Russian Duma has the agreement for ratification of START II before it. My most recent information is that there is a strong expectation that the Duma will ratify this before the end of June. This would be very good news.
The general outlines of a START III agreement have more or less been agreed to by the Russians and the Americans. Once START II is ratified, we will see a stepped up pace of discussions and negotiations there. This is why India's actions cause us so much concern. Somebody has thrown another card on the table.
The Chairman: I was surprised by the vote in the U.S. Senate. What factors led to the 81 to 19 vote in favour of the admission of the three states?
Mr. Lysyshyn: Personally I was not surprised, but I was one of a small handful of people within our department who believed that this would not be a problem. Others were surprised.
A number of factors went into the vote. A number of people who were hanging in the balance were uncertain which way to go. Once they saw that there was enough support for ratification, they went the other way in order to be part of that vote. At the same time, we have had a number of people tell us that this was a specific vote on a specific expansion, and that it was not a vote that should tell us an awful lot about any future expansions. That is probably a wise bit of advice.
Two different American administrations have been strongly supportive of NATO expansion, and of using NATO as a partnership tool. In my view, that always signalled a broader support within the American Congress. There always was by-partisan support for enlargement in the American Congress.
Senator De Bané: A lot of people challenged the wisdom of the expansion. Would you please state their case for us? Why can expansion be viewed as hostile? If defence policy is based on analysis of potential threats, and there is no threat from the other side, as you said, what is the rationale behind it?
Mr. Lysyshyn: I am being invited to debate with myself.
Those who argued against NATO expansion had a number of concerns. The first -- and we have heard it already in this discussion -- was that the Russian government might see it as a threat, and respond to it as such. Some have even suggested that it would go so far as to take military actions against its immediate neighbours who are not joining the alliance. It has also been suggested that expansion might be used in an emotional way in a Russian political debate, creating confrontation where there is now a good atmosphere of cooperation. That has been a strong point. A number of people have argued both aspects of that, and it is clear that the Russians would be concerned. In Russia, both those who would use it for political reasons and very serious analysts have been worried that NATO enlargement might pose a threat to them.
A number of nations have argued that one of the reasons for NATO's effectiveness has been our size. Unlike the UN or the OSCE, we are a small group, and it is much easier to come to decisions. In letting in additional nations, the fear is that the mathematics of that will make it harder to make decisions, and will make the alliance more difficult to manage.
At the same time, some people have gone on to argue that the nations who would be members do not fully share our values. I do not agree with that. Others have simply argued that, in a time of no particular threat or danger, NATO enlargement would be expensive, and would result in high additional costs, and that we should seek to avoid these additional costs.
We have managed the costs issue. As I indicated, the costs will be small, because we will expand NATO at the same time that we change it. The NATO that countries are joining next year is not the NATO of 1989. It is a different NATO, and we have changed it in a lot of ways. We have shrunk the military structure, and we have reoriented it.
Let us consider the cohesiveness of the alliance, and its ability to act. Over the years, and particularly during the operation in the former Yugoslavia, we have worked very hard to establish new ways of operation, and we have demonstrated that we can operate in different environments, with different partners, and in very different ways.
The idea that we do not share common values is no longer an issue. The three countries joining the alliance have demonstrated their commitment to these values, and to the goals of the alliance, quite effectively.
With regard to Russia, we have created the Partnership Council. We have worked hard to demonstrate to Russia that expansion is not directed against it, but rather is a means of preserving a valuable asset, and of finding other uses it. NATO's integrated military command, and its ability to operate effectively in an integrated manner is a tremendous asset. It is an asset that we do not want to lose, and we do not want to see it weakened. In the former Yugoslavia, we have seen the difference in effectiveness between UNPROFOR and the NATO force. This is a very vivid illustration of the fact that NATO has something that is worth preserving, and that is worth using. The reduction of our military forces and structure, our change to peace support operations <#0107> all of these things have served to reassure Russia, and we will continue to do that.
What is the rationale behind enlarging, as opposed to maintaining the status quo? NATO's philosophy never concerned the defence of a particular island or of a particular group of people; we were always focused on values and interests. To close the door on other European interests who shared those values and interests would have been counter-productive, and would probably have led to the disappearance of NATO. In countries where there are a lot of people with names like mine, there would have been a real diminishment of popular support for an alliance with such a limited membership. If we are to maintain our credibility, we need to show that our organization is an open one. As the security situation evolves, so should the alliance.
Mr. R. J. Brooks, Deputy Director, Ukraine, CIS, Eastern Europe Division (REE), Department of Foreign Affairs and International Trade: I would like to begin with a few comments about the former Soviet Union. It is a complex region where traditional western perceptions and values do not always hold. It is a large area, with a population of over 250 million people. There are now 15 different countries, and far more languages. Russia alone claims more than 100 language groups.
On the wall in my office, I have a map of the Caucasus that I got out of the National Geographic. It shows 51 distinct language groups just in the small area of the Caucasus. It is just like Toronto.
Canada's foreign policy is being built on three pillars -- peace and security, jobs and prosperity, cultural awareness and promotion of Canadian values abroad -- that is democracy, good governance, human rights, and rule of law.
Since 1945, our security policy has been arranged around a need to mount a credible military deterrent to Soviet expansionism in Europe. We took up membership in NATO, maintained armed forces on the border between NATO and the Warsaw Pact, and did everything we could think of to protect ourselves. All of that changed seven years ago.
The break-up of the Soviet Union in 1991 signalled the last hurrah of the Cold War. The west claimed victory, and those controlling the fractured pieces of the Soviet Empire were quick to distance themselves from Soviet Communism while seeking to solidify their own portions. President Yeltsin in Moscow struck out to build an independent power base, as did others in other capitals.
Today, Canadian security policy in Europe is built on the premise that the end of the Cold War was a good thing, and that an effective transition of the economies of the former communist states can be the most effective bulwark against re-establishment of imperial dominion in Central and Eastern Europe, and the start of another Cold War. We have put our money on the line to shape the transition of the region to strong, democratic, free market societies, representing those values that we hold dear.
As in all good plans, there is a self-generated benefit. We hope to build new markets for Canadian goods and services. Our fundamental approach is still:
the pursuit of a long term strategy to support economic and political reform in the former communist states and to win for Canada an active and successful role in the region's trade, investment and technology growth.
Over the past seven years we have been active in efforts to bolster reforms and to encourage change. We have used many tools, some invented for the purpose at hand, like the extension of technical assistance from CIDA, the Renaissance Eastern Europe Program, or the European Bank for Reconstruction and Development, and some which already existed, such as the IMF and the World Bank. We have worked through old fashioned diplomacy, and we have worked through the new diplomacy of technical assistance and investment facilitation.
Russia continues to hold the key to the entire region. As an imperial power, Russia accumulated power over the region. The U.S.S.R. exercised that power, often with brutal consequences. Russia remains the benchmark against which everything else is measured and defined.
In geo-strategic terms, Russia represents a diminished threat. Its ambitions of world dominance have passed, but it remains a nuclear power, and that commands attention. Russia continues to have concerns about its global and local security, and these are growing rather than shrinking. Its historic partnership with NATO, which it signed last year, went a long way to removing some of the immediate concerns, including that of the encroachment of an expanding NATO upon Russia's western borders.
Local security concerns are important to Russia today. The secessionist rebellion in Chechnya has been partly resolved, but not completely. The reintegration of Chechnya into the Russian Federation is far from a done deal. In fact, Chechnya now enjoys virtual autonomy as the Russian military is incapable of exerting force in the area, even if it wished to do so.
Military reform is urgently needed. The problems of the Russian Army and its structure are critical, and the plight of the private soldier is most desperate. Soldiers are underpaid, poorly trained and equipped, and unmotivated. Without reform that deals effectively with the lower ranks, the Russian military could be on the road to collapse.
Russian organized crime is another major destabilizing influence. It has spread its influence to every corner of the world, becoming pandemic in its presence and impact. The Russian mafia is a major challenge for law enforcement in Canada and elsewhere, and will remain a top drawer security concern.
By contrast, the Arctic and the North make for a good news story. We have devoted significant attention to building international cooperation on the critical issues facing the Arctic, from the environment through to economic survival. Russia is our principle partner in leadership in the circum-polar region. In particular, Russia is a major potential market for Canadian construction technology, northern infrastructure, and for the Arctic bridge, a significant economic initiative to build northern transportation links.
Russia has made great economic strides. It has managed the perilous road to economic stabilization quite well, and market reforms are deepening. Russia is well ahead of the other former Soviet states in land ownership, privatization, legal reform, and the other measures necessary to stimulate economic transition. Fresh concerns are emerging, however about persistent budget deficits, low commodity prices, particularly oil, and other forms of financial fragility that could lead to a currency crisis, and undermine the modest economic successes that have been registered to date.
Canadian business in Russia is picking up. Two way trade is reaching $1 billion, and is well on the way to the Prime Minister's goal of doubling it by the end of the millennium. Canadian exports are growing strongly this year. More financing is now available for Russia from EDC than ever before, and commercial banks are also strong providers of financing. Despite the Aerostar Hotel experience that attracted headlines a few weeks ago, Canadian direct investment stands at over $800 million in Russia, and there is no shortage of Canadian companies coming to us telling us that they would like build more effective trading relationships.
Let us turn to Ukraine. Conventional wisdom holds that Ukraine is the key to peace and security in Europe. It occupies the geo-strategic centre of Europe, astride the historical invasion routes, and the modern day commercial routes. Ukraine has devoted a great deal of attention to building its security; normalizing its relations with Russia, reaching agreements with all of its neighbours, joining NATO's Partnership for Peace, and last year entering into a Distinctive Relationship with NATO.
There are two key aspects to Ukraine, its performance on the economic files, and its nuclear safety record. The latter is dominated by Chernobyl and the 1987 fire and explosion at reactor four. The closure of Chernobyl by the year 2000 is an emotional issue, which calls up images of the world's most horrific nuclear disaster. The subject of replacement power -- specifically EBRD funding for Khmelnitsky 2 and Rivne 4, K2R4 in the parlance of the department -- is equally emotional for an energy poor, cash strapped Ukraine. This will end up being a major topic at the Birmingham Summit.
Equally compelling is Ukraine's inability to achieve significant economic reform. This ensures that attention will be made to Ukraine at major economic fora, like the Birmingham Summit. Perhaps it will be very unpleasant.
A key element in Canada's approach to Ukraine is the large and active domestic constituency. Some 1 million Canadians count themselves as descendants of Ukraine, including Mr. Lysyshyn and Senator Andreychuk. Canada has accepted a special responsibility for Ukraine in the G-7 and elsewhere, and we have made extensive efforts to assist in the democratic and economic reform of Ukraine.
That said, within our own operations we are devoting increasing attention to Central Asia. Canada's relations with the five countries of Central Asia have been largely limited to business and investment issues. The great oil and gas plays on the eastern side of the Caspian Sea and the vast gold and other mineral reserves have attracted enormous international attention.
Canada has been a leader in developing these reserves, led by our gold miners. The Kumtor mine in the Kyrgyz Republic, owned in part and operated by Cameco Mining of Saskatoon, contributes 10 per cent of that country's GDP, ensuring Canada's special recognition. Teck, Barrick Gold Corporation, Placer Dome, and numerous other mining and oil companies are working in the region, or have expressed a strong interest to do so.
The major limitation on development in Central Asia is its geography. A quick look at the map will show how difficult it is to move goods any distance at all out of Central Asia. These countries have no international ocean borders at all.
The Kyrgyz Republic has been a shining light for Canada. It has achieved significant economic reform, in part through the assistance of CIDA, and it has also made real strides on democratic reform. By comparison, Turkmenistan is dominated by the cult of personality surrounding President Niyazov, who has chosen for himself the ceremonial title Turkmenbashi, Father of all Turkmens.
While these countries have made some progress on economic reform, their record on human rights, legal reform, and democratic reform has lagged miserably. The Kyrgyz Republic has been the only country to make any notable progress on democracy. By comparison, Uzbekistan and Turkmenistan are ruled by the same people who ruled them in the days of the Soviet Union.
The "Great Game" was Kipling's phrase for the 19th century competition between Russia and Britain for India. The Great Game II is being played out here and in the Caucasus. There are more players, though, and it is no longer just the big players who call the shots. The battlefield is the chase for oil riches, and those who control the oil will control the region.
Foreign investment will be essential to bring oil and other minerals into production. The high cost of modern oil and gas wells, and of capital intensive mines, is beyond the capabilities of these countries. Moreover, foreign investment will remain the major source of foreign exchange until oil revenues flow in earnest. This will certainly be for the balance of this decade, and probably well into the next.
The key use of foreign investment will be to build routes to market. Construction of oil pipelines will be a major point of international diplomacy over the next year. Oil pipelines represent access to cash paying markets. While Russia has a self-interest in maintaining its existing monopoly, everyone else has an interest in breaking that monopoly. Pipelines also represent a cash cow for those countries lucky enough to have them crossing their borders. Oil transit fees will be a major source of income for Georgia, and for others lying en route between the oil and the marketplaces. The existence of pipelines is also a great assurance of a supply of oil. Ukraine has a particular interest in this regard.
As in the Great Game, the modern version of this geo-political contest pits imperial foes against one another. Russia has exercised dominion over the region for a century, and it has not given up hope of reasserting control. By contrast, the Americans wish to assure the independence of the region, both to protect American commercial interests, and as a balance to Russia.
The modern version of the Great Game is equally as complex as the original. Turkey, controlling the Bosphorus, Iran with its pretensions for regional dominance, and India, seeking to influence this basically Muslim region, will all have a role to play. As the North Sea oil dwindles, Western Europe will search for oil in the next decade. Given that, this mix becomes even more fascinating.
Let us consider the Caucasus. Vast new oil wealth under the Caspian Sea holds great promise of new riches for what was an economically disadvantaged corner of the FSU. A strong entrepreneurial spirit, and a relatively open commercial environment, give us assurances that the region will prosper.
At the same time however, territorial disputes such as Nagorno-Karabagh and South Ossetia threaten to undermine regional stability, and the difficulties in Chechnya and the Northern Caucasus threaten to leak into the region.
As in Central Asia, the major economic battles will not be about developing oil and gas, but about moving it to market. Pipeline diplomacy will occupy centre stage as Russia seeks to maintain its monopoly. Access to paying markets, which means Western Europe, will be essential to ensure the economic development of the region. Just like Central Asia, the Caucasus will remain a target for the big powers.
The Commonwealth of Independent States is a curious thing. Its history starts with the collapse of the Soviet Union, and in many respects it was initially seen as a security blanket for some of the newly independent institutions.
For Russia, the concept of the "Near Abroad" persists: the notion that the far flung elements of the Soviet empire were somehow not quite part of the homeland, but were closer than foreign destinations. This is even more the case with the CIS; the belief is that the countries of the Former Soviet Union are not foreign, but linked by some special relationship.
Cynics look on the CIS as Russia's attempt to hold onto empire, and as a mechanism through which they can exercise continuing dominion, including Russian peacekeeping and the provision of external border guards.
The Commonwealth of Independent States has been marked by the signing of a range of -- mostly economic -- agreements which would have the effect of re-enforcing old Soviet trading patterns if they were implemented. We do not believe that they ever will be implemented in any meaningful fashion. Under the old Soviet system, all decisions were made in Moscow, and all production moved through Russia. The CIS is an attempt to try to re-enforce this.
To close, I want to add a few words about economic transition. In 1992, we had great hopes that the countries of the former Soviet Union would throw over the traces of communism, and embrace the free market with enthusiasm. We put exceptional resources into helping these countries to withstand and reverse the severe economic collapse that followed the political collapse of the U.S.S.R.
In reality however, economic progress has been slow and uneven. As the graph behind me shows, only Armenia achieved growth in 1994. This, you must bear in mind, was the result of the 1998 earthquake, and the 1992 Nagorno-Karabagh war, which saw a 56 per cent decline in the GDP in 1993. By last year, all but Ukraine, Turkmenistan, war-torn Tajikistan, and Moldova had recorded economic growth. Even in the cases of the countries which did nor record growth, the rate of decline had slowed. There is a visible and apparent transition to economic recovery.
Within the whole issue of economic transition, by far the most vexing problem is Ukraine. The lack of economic reform is a millstone around the collective necks of the G-7, and the failure of Ukraine to embrace reform will continue to be a major problem. We have begun to hear rumblings already about the economic sustainability of Ukrainian independence, and it is not a pleasant thought. President Kuchma seems intent on economic reform, and he may even believe at long last that Ukraine needs to fix an economic agenda in concert with the IMF, and to deliver some legislative elements of that agreement. We have heard the story before, and we have been disappointed before. We can only hope that he means what he says, and that he can actually deliver. With a newly elected anti-Kuchma and anti-reform Rada, he will have a very difficult time doing so.
For the others, we have seen Central Asia take serious steps on economic reform. They have been painting a strong background against which to sketch out their future. We only hope that they can be so successful in making democratic reforms. Equally, the Caucasus have an instrument of economic success at hand, if they can resolve their differences.
Senator Andreychuk: You pointed to Ukraine. It is the first time that I have heard the geopolitical position of Ukraine and its importance to all of us described so well. At the same time, you also pointed out the importance of economic reform. I understand that the IMF is now withholding money, and that the next payment will not be delivered. This is the first time that such a step has been taken in the region. Will that signal a change in the IMF policy towards Ukraine? Should we all be changing? Will this have a reverberating effect into Hungary, or some of these other areas?
Mr. Brooks: Taking your question backwards, it is a uniquely Ukrainian problem. It is not something that will spread. The IMF and the World Bank have both withheld funds from Ukraine on several occasions in the past. The IMF has had a stand-by agreement.
Senator Andreychuk: Have they cancelled that?
Mr. Brooks: They withheld the second and third tranches of the stand-by agreement. They are working on an extended fund facility, which is a longer term proposition. Ukraine and the IMF have reached a basic agreement on a program that would support Ukraine's economic transition, using IMF funds. There are 91 or 92 conditions. Ukraine has previously failed to live up to conditions to which it had agreed. Consequently, the IMF, with the full encouragement of the G-7 member states and others, has made it a firm condition that these 92 conditions must be met before any moneys are issued.
For a long time, we have maintained that Ukrainian political independence was critical to our security interests in Europe. Economic stability is a necessary precondition, and that has been the underpinning of the technical assistance program, and every other program that we have attempted in Ukraine.
Senator Andreychuk: We make a distinction between Ukraine and Belarus. When Belarus made a special arrangement with Russia, we understood the difference, but did others?
Mr. Brooks: We do not link Ukraine and Belarus at all.
Senator Andreychuk: The Americans often do.
Mr. Brooks: They do, but they have a different strategic view of the world. The American reality does not reflect as large a Ukrainian population. Ukrainian Canadians represent about 3 per cent of the population here, but Ukrainians make up less than 3 per cent of the population of the United States. I do not think that anyone would seriously link Belarus to Ukraine. There is little hope in Belarus right now. It is an absolute economic basket case, and its political leadership is highly questionable.
Senator Grafstein: We would like to hear more about the strategic interests that we have in the United States. I agree that the Americans tend to blend the Belarus and Ukraine together. They are separate and distinct, however. They have different postures.
In that part of the world, one of our foundations is that we have a prosperous and democratic Ukraine. I want to deal with a more ticklish area, and that is the soft underbelly of Russia; the section that runs south of Russia, and which includes Georgia, Azerbaijan, Turkmenistan, Uzbekistan, and so on.
Let us return to the Great Game, and the desires of Turkey and Iran to extend their influence. Surprisingly enough, Kazakhstan is a very positive force, in the sense that its government feels that Turkey has been very helpful in allowing it to maintain the momentum towards independence from Russia. They have a good working relationship, and a good strategic relationship. Iran is trying to do the same thing with the adjacent state of Turkmenistan, and the other "Stans."
How does the Canadian government view these Iranian and Turkish forays? The Europeans obviously made a big, stupid decision when they did not include them in the EU, as they should have. Having said that, however, what is our strategic interest in those issues, or do we have one?
Mr. Brooks: Our interests in Central Asia have been principally on the commercial front. We have one embassy in the region in Almaty, and that covers the Kyrgyz Republic, Kazakhstan and Tajikistan. It is to support our commercial activities. Canada is the largest investor in the Kyrgyz Republic, Kazakhstan, Uzbekistan, and Tajikistan. Canadian commercial interests are extremely strong in that region.
Senator Grafstein: Why then do we only have one little outpost to deal with that vast region?
Mr. Brooks: We have one embassy in Almaty, which essentially covers the two most important countries, Kazakhstan and the Kyrgyz Republic. It is like having an embassy in Ottawa to cover Ottawa and Montreal. The distances are comparable. Beyond that it is a question of cost, of course. Embassies are expensive operations, and our capacity to deploy embassies abroad is limited by the total size of the departmental budget.
Turkey has had an interest in working with Canadian companies in Central Asia. The truth of the matter, however, is that Turkey is not a competitor with us, and is not a potential ally in the business sense. We are quite independent.
Iranian interests have not been a particular concern for us. They have, of course, been much more of a concern to our American neighbours. We have had neither cooperation with the Iranians, nor conflict with them.
Senator Andreychuk: You pointed out that the success story was in the Arctic. We have been able to engage Russia in that, and it is seriously coping with the Arctic, and beginning to understand its own aboriginal peoples, which is reflected in policy.
The biggest threat is still the nuclear waste in the oceans, which is seeping, and it is of great concern to the environment, and to Russia's neighbours. Russia cannot cover the cost of this. I understand that we have all pledged our universal concern and our money, but it has not been forthcoming thus far. Has that changed?
Mr. Brooks: I must defer. I am not a Russia expert; I handle all of the CIS, save Russia. My colleague, Chris Alexander, handles Russia, but he had to leave to attend the Birmingham Summit.
Generally speaking, there is a strong spirit of cooperation within the G-7, and within countries partnering with the G-7, to try to clean up a number of the messes in the former Soviet Union. Chernobyl is one, the Arctic nuclear waste is another, and there is a genuine commitment. I do not know the specifics of that, however. When we are invited back, I will ensure that we can answer that question very precisely.
Senator Andreychuk: I would appreciate getting a written answer. As we noted earlier, India is now another card on the table. This question could be just as explosive, and it could catch us off guard. I would hope that some attention will be paid to it.
Mr. Brooks: I will ensure that you get an answer.
Senator Grafstein: Let us consider Georgia. I just read that Shevardnadze's life was threatened again. I know that he has joined with Kazakhstan to form some sort of independent front against Russian interference in their affairs. What is the latest on that? What is going on in Georgia? This areas lies right across these fuel lines, and it is quite strategic.
Mr. Brooks: There are two secessionist regions, South Ossetia, which is half of Ossetia, and Abkhazia. The northern half of Ossetia is Chechnya's neighbour. All the pipeline routes from Baku, Azerbaijan were routed to the Black Sea through the T'bilisi valley, and unfortunately Ossetia is on the route. There is a great deal of instability in that region. The Abkhaz are virtually independent, not quite as independent as the Chechnyans perhaps, but getting close. There have been numerous attempts on Shevardnadze's life, and the international community holds President Shevardnadze in extremely high regard. There have been many pledges of support to him from around the world, including from Canada.
The role of the Russians in terms of providing peacekeepers in Ossetia and Abkhazia is a major issue, and the geopolitical relationship between Abkhazia, Georgia, and Russian peacekeepers is highly tenuous.
The Chairman: Thank you very much, Mr. Brooks.
Honourable senators, yesterday we saw some tables. Do I have your authorization to have those included in the record of yesterday's meeting?
Some Hon. senators: Yes.
The committee adjourned.