war on the rocks

Control vs. Cost-Sharing: The Dilemma at the Heart of NATO

August 7, 2018

Among President Donald Trump’s most consistent foreign policy positions is his distrust of alliances and his feeling that allies have ripped off the United States. Indeed, Trump has at various points mused that the United States should only defend allies that have paid their “fair share” and refused to reaffirm the U.S. commitment to NATO’s Article 5 mutual defense pledge. More recently, Trump questioned the premise of Article 5, suggesting that the United States should not be willing to defend Montenegro, which joined the alliance last year. Many observers have criticized not only Trump’s use of threats, but also the desirability of more defense spending on the part of U.S. allies more generally.

But no matter what one thinks about the wisdom of Trump’s preoccupation with alliance burden-sharing, it would be a mistake to consider it an idiosyncratic fixation. Unequal burden-sharing is the product of a dilemma wherein the United States must choose between keeping its partners dependent and susceptible to U.S. influence and encouraging them to become stronger but at the cost of becoming more autonomous.

Like Trump, previous presidents at times viewed the cost of defending allies as a burden. Even Dwight Eisenhower, in the earliest years of the transatlantic alliance and at the height of the Cold War, remarked that if U.S. forces remained in Europe for longer than ten years, “then this whole project will have failed.” As part of his “New Look” policy in an effort to cut costs after the Korean War, Eisenhower sought to reduce America’s military presence abroad and rein in defense spending. Eisenhower preferred to rely on nuclear weapons to deter Communist expansion, calculating that they offered more “bang for the buck.” Part of this entailed a tacit or even explicit acceptance of allied nuclear proliferation. Indeed, under Eisenhower many NATO allies — including West Germany — had de facto control over U.S. nuclear weapons stationed on their territory.

The Tradeoff

Decades later, there remain sizeable U.S. military footprints in Europe, Asia, and elsewhere. Moreover, most U.S. alliances have persisted, in no small part because they facilitate Washington’s ability to discourage nuclear proliferation, project power, and secure favorable economic bargains for itself — to say nothing of the role they have played in deterring adversaries, pacifying Europe, and discouraging Japan from remilitarizing.

Nevertheless, the United States faces conflicting imperatives in its alliances: control and cost-sharing. On the one hand, U.S. policymakers have reason to seek a more restrained foreign policy in order to minimize the costs of providing protection, reduce the risk of being entangled in regional conflicts, and foster allied burden-sharing. On the other hand, however, doing so empowers allies and encourages them to consider other options for meeting their security needs, and thus carries the potential to undermine America’s ability to control them. This can manifest itself both politically and militarily. Politically, American retrenchment and demands for burden-sharing are likely to cause allies to seek closer relationships with third parties, including adversaries, and to act in ways not consistent with U.S. policy preferences. Militarily, allies forced to shoulder more of the burden of to defend themselves are less dependent on the alliance. They may choose to arm themselves with weapons provided by third parties or even with nuclear weapons — which, in turn, can further enable allies to go their own way.

As a result, as some have argued, unequal burden-sharing is the price the United States pays to ensure that its partners remain dependent on its protection, thus allowing it to retain leadership and control over its alliances. By focusing so intently on burden-sharing, Trump risks devaluing the U.S. guarantee of security in the eyes of its partners and encouraging them to seek outside options. Indeed, since Trump took office, both German Chancellor Angela Merkel and Foreign Minister Heiko Maas have suggested that their country can no longer rely on the United States. Similarly, in a September 2017 poll a majority of South Koreans approved of obtaining nuclear weapons.

The historical record is replete with examples of allied independence proving to be a double-edged sword for Washington. Perhaps most notably, despite Eisenhower’s earlier hope that proliferation could be an avenue for burden-sharing, France withdrew from NATO command in 1966 after obtaining nuclear weapons earlier that decade. Similarly, in the wake of doubts about America’s ability and willingness to defend its allies in the 1970s, stemming in large part from Richard Nixon’s Guam Doctrine, which called for allies to take more responsibility for their defense, Australia pursued a policy of self-reliance. To the Americans’ chagrin, however, self-reliance under Prime Minister Gough Whitlam meant a more autonomous foreign policy that included withdrawing diplomatic support for the U.S. war in Vietnam — including vocal opposition to the U.S. Christmas bombings in 1972 — and removing the last Australian troops from Vietnam. Whitlam also pursued an independent rapprochement with China, which preceded that of the United States, and with North Vietnam. While relations improved after Nixon and Whitlam left office, the principle of self-reliance continued to play a role in Australian foreign policy, and U.S.-Australia cooperation directed against the Soviet Union remained limited.

The Uneasy Coexistence

Nevertheless, virtually every president — regardless of their overall commitment to U.S. alliances — sought to increase alliance burden-sharing. In his final year in office, Barack Obama expressed his exasperation with U.S. partners, remarking that “free-riders aggravate me.” John F. Kennedy similarly stated that “We cannot continue to pay for the military protection of Europe while the NATO states are not paying their fair share and living off the ‘fat of the land.’” To this end, Kennedy frequently put troop withdrawals on the table as leverage over both burden-sharing and over trade disputes with the European Community. He directed in early 1963 that “we should be prepared to reduce quickly, if we so decided, our military forces in Germany.”

The biggest issue of contention was the balance of payments deficit, driven by the foreign exchange costs the United States incurred ran from having its forces stationed overseas. Under pressure from the United States, the West German government agreed to offset these costs by purchasing huge amounts of American military equipment. Indeed, members of the Kennedy administration often explicitly made the U.S. presence in West Germany conditional on these offset arrangements. Nor did this pressure abate under Kennedy’s successor Lyndon Johnson, who continued to wield the threat of troop withdrawals to extract offset payments. This ultimately contributed to the downfall of West German Chancellor Ludwig Erhard, whose government acquiesced to Johnson’s offset demands despite domestic opposition to doing so.

But even presidents committed to reducing U.S. costs and seeing allies do more have vacillated when faced with the potential consequences of greater allied autonomy. Notably, unlike Eisenhower, Kennedy and Johnson ardently opposed the spread of nuclear weapons, and their efforts to secure increased burden-sharing occurred in tandem with their attempts to discourage West Germany from seeking nuclear weapons. The latter did not necessarily preclude the former. Nevertheless, West German backlash to U.S. pressure, coupled with the growing influence of the less pro-American Social Democrats, increased American fears about a more independent West German foreign policy. As a result, Johnson reined in his pressure on West Germany during the later years of his presidency. Indeed, even Eisenhower, despite initially pressing for a larger Japanese military role in the Western Pacific, relented when faced with the possibility that doing so might push Japan into the Soviet Union’s arms or lead it to seek neutrality vis-à-vis the superpowers.

Richard Nixon exhibited similar ambivalence on pushing too hard for burden-sharing despite it being one of the hallmarks of the Guam Doctrine. On the one hand he sought to reduce the U.S. military footprint in Asia and pass off more of the responsibility for regional defense to local partners, both in Asia and elsewhere. But on the other hand, Nixon resisted asking much of Japan — the most plausible candidate to take over responsibility for defending the Western Pacific — for fear that doing so would cause it to move into a more neutral, potentially nuclearized position. Instead, Nixon only called for “moderate increases and qualitative improvement in Japan’s defense efforts, while avoiding any pressure on her to develop substantially larger forces.” Nixon similarly limited his aspiration for Japanese burden-sharing to the defense of Japanese territory, rather than extending across the region. Thus, realizing that he could not have the best of both worlds — a pacified, pliant, non-nuclear Japan which also contributed a great deal to the defense of the Western Pacific — Nixon attempted to secure what limited burden-sharing arrangements he could without sacrificing other U.S. interests.

Nixon feared that the growing strength and unity of the European Community during the 1970s posed problems, insofar as it both enabled Europe to both present the United States with a united front on protectionist trade policies and intensified preexisting fears that Europe might chart a more autonomous, potentially more neutral course vis-à-vis the Soviet Union. He preferred instead to deal with European states individually, where the United States had more leverage. Despite his earlier support for Britain joining the organization, he later lamented that promoting European Community expansion had been a mistake. Secretary of State Henry Kissinger even warned that Europe might “prove to be a competitive power center with the US.”

More recently, when the European Union announced the creation of its “Permanent Structured Cooperation” initiative for defense, even the Trump administration recoiled for fear that such efforts, which included a European Defense Fund, could siphon resources from Europe’s contributions to NATO. Such concerns echoed earlier sentiments in the Bush and Clinton administrations regarding the potential for the European Union’s “European Security and Defense Policy” to become an alternative to NATO. A Center for Strategic and International Studies report from 2005 put the matter well: “the United States sometimes appears to be of two minds… It applauds steps taken to strengthen European military forces but in the next breath worries about Europe taking independent action…”

The Ongoing Dilemma

One need not necessarily interpret divergent approaches across presidents — or even ambivalent, vacillating stances within the same administration toward burden-sharing — as the product of muddled thinking, but rather as a manifestation of incompatible incentives. There is a dilemma inherent to the tradeoff between control and cost-sharing that cannot be overcome but rather can only be managed by striking a balance between the two. This balance, in turn, must be informed by strategic and political considerations. Today, one can certainly make the case that the proper balance is far from where Trump assumes it is, but one can hardly say that Trump’s predecessors were all of one mind on the matter. The debate was never fully settled, and likely never will be.

Moreover, in an era of resource constraints in the United States, this balance could shift in favor of reducing costs and devolving more regional defense responsibilities to allies. According to the Congressional Budget Office, U.S. federal debt will reach nearly 80 percent of GDP by the end of 2018, and is expected to reach nearly one-hundred percent within ten years. In such an environment, the allure of allied burden-sharing is only likely to increase. Nevertheless, U.S. policymakers would do well to keep in mind that cutting costs may mean cutting allies loose.


Brian Blankenship (@BrianDBlank) is a U.S. Foreign Policy and International Security postdoctoral fellow at the John Sloan Dickey Center at Dartmouth College. His research interests include alliance politics, foreign military basing, and signaling and perception. His book project studies reassurance and burden-sharing in U.S. alliances.

Image: NATO Photos