Friday, 19 October 2007

Organised by the Guild of Agricultural Journalists of Ireland and Sponsored by the Kerry Group

I am honoured to have been asked to deliver the Third lecture, commemorating the life and work of Michael Dillon. Having grown up in a farming family, or more particularly in a cattle raising family, I was exposed to the personality of Michael Dillon from an early age. His reports and opinions were followed with rapt attention in our house. He wrote about a subject that was, at the time of which I speak in the 1960s, one of often bitter debate – that subject was the claim of farmers to a fair price for their products and the balancing of farming claims with those of the rest of society.

The lasting memory I have of Michael Dillon, particularly of his writing in the “Irish Times”, was of the consistently balanced, tactful and at times positively diplomatic quality of his commentary on topics on which others tended to adopt a confrontational approach. His was a voice of sanity, of sanity accompanied by a studious respect for the facts, and of sharp analytical intelligence.

In tonight’s lecture, I propose to express some personal opinions on a subject that is also now one of professional interest to me – the future of the Atlantic world, the world linking Europe and America, how it will relate to the rest of the globe – to South Asia, Africa, the Middle East and to the emerging powers of the Pacific, and how the unprecedently long period of peace and prosperity that the Atlantic world has enjoyed can be sustained, at a time when the world’s resources of water and energy are being placed under ever greater pressure by the legitimate demands of new users.

Let me put this issue in more concrete terms.

Today the citizens of the European Union constitute 7.5% of the world’s population, enjoy 35% of the world’s income, and consume 18% of the world’s energy. By 2030, it is estimated that the European Union will constitute only 6% of the world’s population.

The citizens of the United States constitute 4.6% of the world’s population, enjoy 27% of the world’s income and consume 23% of the world’s energy. By 2030, it is expected they will be only 4.4% of the world’s population.

In contrast, the people of China constitute 20% of the world’s population, enjoy 5.4% of the world’s income and consume 16% of the world’s energy.

The people of Africa, with 14.2% of the world’s population, receive only 1.2% of global income and consume only 4% of global energy. By 2030, it is estimated that Africans will constitute 17.2% of the world’s population.

The people of the Indian subcontinent, with 17% of the world’s population, receive 1.9% of global income and consume only 5% of global energy. By 2030, it is estimated that Indians will constitute 18.5% of the world’s population.

These imbalances create a profound factor for instability in the world. They lie behind the immigration pressure experienced in Europe and the upward pressure on oil prices and they greatly complicate our efforts to design an agreed and fair plan to deal with the problem of climate change on a global basis.

The collapse of the Soviet Union has created a world in which only one country, the United States, dominates the world in conventional military terms. Its military expenditure comes close to half of all the military expenditure in the world, but even that does not tell the whole story. The technological superiority of the US arsenal is such that it has a capacity to defeat any enemy in destructive military terms.

There is a qualification. It appears that the US cannot guarantee, by military methods, to reconstruct a new and stable civil society, congruent with US interests, in the country it has militarily defeated. That is a political task, and one with which the US is encountering difficulty in Iraq. For this task it needs a political strategy that is acceptable to the local population, and has the full support of allies and neighbours, neither of which, in the case of Iraq, it has yet obtained. This illustrates the limitations of conventional military superiority, whether of the United States or of any other power. Military methods only succeed in their ultimate goal if the right political context is created. I think the phrase coined by Hegel “the futility of victory” to describe the Napoleonic Spanish campaign is relevant.

For Europeans and for Irish people, who have lived under the protective umbrella of US power since 1945, an umbrella we here have enjoyed notwithstanding our neutrality, this emerging reality is one on which we must reflect.

What are our interests - and our responsibilities? Are our interests the same as the rest of Europe? How do our interests and those of the United States converge or diverge? How can we protect our essential interests while rectifying the destabilizing imbalances in the world to which I referred earlier?

In a media-driven democracy, how do we ensure public opinion will support policies that are in its own objective interests and will be willing to accept the responsibilities that go with that? There have been many occasions in history when public opinion and objective public interest did not converge.

To the extent that Ireland’s foreign policy is merged with the foreign policy of European Union, is the European Union equipped to create a democratic European Union public opinion, a European Union demos, that is capable of understanding, debating and supporting common European foreign policy choices?

First, our interests.

I would say that Europeans would generally agree that we have an interest in promoting democracy, open markets, the rule of law and respect for property, including intellectual property. It is in our interests to oppose terrorist activities, and to do so mainly through criminal law and intelligence sharing, rather than through military methods. It is in our interests to put particular emphasis on the possibility of nuclear terrorism, because that form of terrorism would pose an existential threat of a severity beyond all others. Equally, it is in our interests to understand and, as far as is legitimate, to mitigate the causes of terrorism.

Europeans have limited domestic energy resources and we thus also have a common interest in promoting energy conservation globally, for its own sake, as well as for the sake of the climate.

It is in our objective interest as Europeans to promote immigration, because we simply will not have enough people in Europe to perform all the tasks that our ageing populations will need if their standards of life are to be decent. This is an area where public interest and public opinion do not converge. If immigration is in our interests, we must diminish conflicts with the neighbouring countries from which the immigrants Europe is likely to need are likely to come, namely the Arab world, Africa, and the Indian subcontinent. That means that Europe has a primary interest in minimizing sources of conflict between the Western or Christian world and the Muslim world.

We share some of these interests with Russia, which also has an ageing population and significant Muslim populations within its own borders, but which unlike the European Union has plentiful energy and is not a pluralist democracy of the kind we are.

We share more of the interests I have listed with the United States, than we do with any other area in the world. That is why Europe and the United States are strategic allies. But there are some differences.

For example, the United States has a lower population density and has plentiful coal resources, so the United States may not share all our energy policy interests.

The United States is not as physically close to the Muslim world as we are and while it needs oil from the Middle East and other foreign sources as its own oil reserves disappear, the United States has a visceral, emotional link with Israel, a society the United States sees as a pioneering replica of its earlier self, but which Israel’s Arab neighbours see as occupying land that it does not own and which it has taken by force. This creates a barrier in relations between the United States and the Muslim world, which is different in intensity and nature to the ancient barriers that have also existed historically between Christian Europe and its Muslim neighbours in Turkey, Arabia and North Africa.

The United States has a strongly entrenched political tradition of pluralism and the formal separation of religion from politics. While informally, the “Christian” vote is not unimportant in US elections, at least one European country has formally established one Christian denomination as the official religion of part of its territory, something that the United States explicitly rejected at the time of its founding.

While Europe and the United States have almost identical values, we do have different reflexes when we are faced with a threat to those values. The author of Moby Dick, Herman Melville, said of his countrymen: “We Americans are the Peculiar Chosen People – the Israel of our times. We bear the ark of the liberties of the world”.

The reflexes of the United States are influenced by the historical experiences of its founding population, reflexes that have been absorbed by subsequent waves of immigration.

The original colonists of the United States came from the same political tradition as those who planted this country after the flight of the Earls and the defeat of the Confederation of Killkenny in the seventeenth century. As in Ireland, they were fearful of and did not engage much with native peoples, were not particularly interested in their culture, and remained religiously and physically separate from them during the settlement of North America. They were, as the title of Senator Jim Webb’s brilliant book on the Scots-Irish in America describes them, “Born Fighting”, and, to this day, US society has a reverence for the bearing of arms, that Europeans find strange. Spanish colonization of America was also militarily aggressive but was tempered by much greater mixing and inter-marriage with the native peoples.

It could be argued that this historic tradition leads the United States to have a quicker reflex, than most Europeans would have, to seek military solutions to problems. But it has to be said that the United States stayed out of all the European wars of the nineteenth century, took no part in the colonization of Africa, did not intervene militarily in the Philippines or Cuba until 1898, and did not enter either the First or Second World Wars until quite late. The Nazi occupation of Poland and France pre-dated US entry to World War II by almost two years.

The Military, and military intelligence, enjoy a greater level of respect in the United States than they would in Europe. That probably contributed to congressional approval of military actions, such as that in Iraq, being granted more readily and with fewer dissenters, than might have been expected in a parliament in Europe. Europe’s early twentieth century confidence in the military methods of solving problems had been tempered by the experience of two dreadful wars on our own soil.

The 9/11 attack has also had a traumatic effect on US opinion, to an extent that most Europeans simply do not understand. As someone said of America, it will never be the 10th of September again. Security will trump other considerations almost every time, and security is largely defined in coercive, police or military terms.

So while Europeans and Americans are indeed united in defending almost identical values on a global scale, we approach the task with different reflexes.

Let me say a word now about the principal tasks we face.

I have already said a little about our relationship with the Middle East. If nuclear terrorism is the greatest physical threat we face, the most likely motivation of such terrorism is to be found in the Middle East. That is why we need to develop a new relationship with the Middle East, and with Islam.

A theological or politico/philosophical dialogue with Muslims is not easy. Muslims believe that their particular insight into God’s will is more advanced than that of other religions. Relativism about religious matters is something entirely foreign to them.

But democracy and tolerance have much support among Muslims.

Respect is the key here. We must show interest in, and respect for, Muslim points of view. We must learn to empathize, even if we do not agree.

I believe the Israel/Palestine question is a touchstone issue. Israel’s security must not be threatened, but Israel’s long-term security is best guaranteed in a mutually agreed territorial settlement with the Palestinians. Palestinians can and do find this attractive because they have no wish to continue living the confined and uncertain existence they have had for the past forty years. But if there is to be serious negotiation, both sides need to see the outlines of a settlement. It took the two sides in Northern Ireland thirty three years, from 1974 to 2007, eventually to return to the settlement that was promulgated at Sunningdale in 1973. But if the Sunningdale model had never been promulgated in the first place, there would have been nothing to return to, no paradigm, no scenario of compromise – just continued nihilist conflict.

Israelis and Palestinians need to see a similarly detailed scenario of compromise – covering precise borders, security arrangements, shared spaces, movement rights, etc. This scenario might not be accepted immediately by either side, but as in Ireland it would put those who would use violence on the defensive, by requiring them to show that they really did have something so much better to offer that it justifies all the suffering they were inflicting. I believe the United States, with European support, could offer such a scenario of compromise.

Respect – equal respect - is a key issue here too. If one is to demand as a precondition to admission to negotiation that Palestinians accept Israel’s absolute right to exist, respect requires that this be accompanied by a clear and concrete demonstration that the Palestinians’ equivalent right to a viable, manageable and reasonably sized state is also accepted.

Also, it might be added that is not always wise to make acceptance of issues of principle preconditions to negotiation. Certainly the Irish Peace Process would never have got off the ground if the prior repeal of Articles 2 and 3 of the Irish Constitution (thereby acknowledging Northern Ireland’s right to exist) had been made a precondition to any negotiation.

Relations with Iran are linked with the Afghan and Iraq issues. There is deep concern about the possibility of Iran acquiring a nuclear weapon. Israel would see that as a threat to its own very existence. So too might Saudi Arabia and other Sunni states. The nuclear non-proliferation regime might break down as a result. That regime has already been weakened by the acquisition of a nuclear weapon by India and Pakistan, and many countries are concerned by the fact that the established nuclear powers are upgrading their arsenals notwithstanding a treaty commitment to reduce them.

Can Iran be persuaded not to develop a nuclear weapon within the next five years?

Western interventions in Afghanistan and Iraq have greatly strengthened Iran’s strategic position and enhanced its confidence. But Iran still has a great need for western technology to develop its society. Its oil infrastructure is decayed. It needs trade and investment. It has a huge young population needing jobs. It needs security too, espousing as it does a religious position that is a minority one within the Muslim world, and surrounded as it is by well-armed neighbours.

Iran says it wants a direct and comprehensive dialogue with the United States, as well as with Europe.

Perhaps Iran cannot be trusted. Maybe it is time now to test that. One approach would be for the United States to set a time limit for a negotiation with Iran, but to set no limit as subject matter. Then we could see if a solution could be found, before more severe measures are contemplated.

There is another aspect of nuclear proliferation I would like to deal with, nuclear terrorism. A global supermarket where non-state actors, terrorists organizations go shopping for sophisticated, or less sophisticated, nuclear weaponry and related material is a petrifying prospect, or should I say, a chilling reality we have to deal with. Of course, the complexity of the technology can serve for a while as a natural barrier. But the unraveling, some years’ ago, of the network run by the so-called “father” of the Pakistani atomic bomb, A. Q. Kahn, reminded us of the actuality of the proliferation threats. The combination of easily accessible technology and widespread anger completely changes the parameters of nuclear deterrence. Great Powers, including Europe, can no longer isolate ourselves. The criminalizing of proliferation, law enforcement, customs cooperation, intelligence-sharing are powerful tools that we will have to constantly review and adapt. It is vital that we develop a foolproof regime to prevent nuclear weapons getting into the hands of terrorists.

Another challenge we must face together is climate change, an issue that is closely connected with other global challenges like preserving the open global trading system, minimizing forced emigration and providing a secure future for agriculture.

Let me illustrate why these four issues are linked.

It will be very difficult to keep global markets open in the absence of a global agreement on sharing the pain of mitigating climate change. Countries or trade blocs that are incurring costs and competitiveness losses in order to reduce greenhouse gas emissions will come under big pressures to adopt what the European Parliament recently described, with excessive politeness, as:

“border adjustment measures applicable to trade in order to offset any short-term competitive advantage that producers in industrialized countries without carbon constraints might have.”

That is another way of describing a trade war over climate, something that could wreck the WTO.

Europe faces the possibility of huge migration flows from Africa caused by refugee crises arising directly from wars, triggered by droughts and crop failures, caused in turn by climate change. The war in Darfur is partly due to climate change.

As far as agriculture is concerned, the era of cheap food is probably over. The proposed switch to biofuels, combined with urban sprawl on the best food growing land, salination of land by irrigation, and water shortages due to climate change, are all reducing the available fertile land for food production. Meanwhile the methane generated by agriculture, and the extra nitrogenous fertilizer that might be needed to ramp up production of some biofuels, could add to the climate change problem. The impressive economic growth in Asia, notably China, will increase demand for food in these countries as their diet evolves and incorporates more meat, whose production requires more grain.

But one should not underestimate the temporary rôle played by bad weather in the current high prices. A second generation of biofuels, if feasible, could reverse the corn price increase, and biotechnologies could increase yields and reduce the adverse impact on the environment.

There are new opportunities too.

Agricultural land will find new uses as a location for windmills to generate wind energy. Theoretically, wind farms in the Great Plains of the United States could produce all the electricity the US needs, thereby doubling or quadrupling farm incomes, if only a means can be devised of storing the electricity till it is needed, and then of transmitting it to point of use. An upfront and coordinated investment in relatively untested technologies would be needed to make that happen. The windmill might cost €80,000, but connecting it to the grid might cost an extra €65,000. Similar upfront investments will be needed in Ireland too.

Measuring greenhouse gas emission fairly and accurately will also be a major task. Trust will not be easily won, especially in the trading of international emissions permits.

The European Union’s approach is to set emission reduction targets, but mainly to leave it to individual countries to devise the mix of policies that will achieve these targets. I think we need to devise a cost-benefit scale for this. Simple things like replacing light bulbs and insulating buildings, are not as attractive to big engineering companies as persuading governments to sink large sums in schemes in carbon sequestration, nuclear generation, or so-called “clean” coal. But they give a much bigger and quicker return.

There may also be a place for simply banning the sale of certain energy inefficient products. The European Union is already going in this direction by proposing a ban on the sale of all new cars, after 2012, that exceed CO2 emissions exceeding 120 grams per kilometer. Such bans are simple, quick and easily enforced, and may be much quicker to deliver results than complex market based incentives, that most consumers do not understand. Are there other products or practices that ought to be banned?

Coming back to agriculture, to the beef industry and the Doha Round, topics that would be exercising the mind of Michael Dillon if he were with us today.

First, the beef industry.

If grain prices continue to remain high, they will advantage Irish beef production, which relies more on grass.

Opening markets for Irish beef is very important. In Washington, I am working with colleagues on opening the US market to Irish and European beef. This market is closed to our beef on grounds of BSE risk even though the World Animal Health Organization (OIE) has determined that boneless beef under 30 months of age is not a BSE risk. But the US, quite inconsistently, refuses entry for under 30 months beef from Europe while trying vigorously to get US beef under 30 months admitted into various Asian countries despite there having been BSE outbreaks in the US.

The United States is also quick to ban EU beef exports on grounds of other cattle diseases and has only recently started, in limited cases, to allow a regionalization of risk. For example, the immediate reaction of the US to the recent foot and mouth outbreak in the south of England was to close the US market to all UK exports. It took some fast reactions on our part to extricate Northern Ireland beef exports from that measure. This is a protectionist tactic and we have been working in the US to try to get them to understand that this refusal to allow regionalization of risk is a double-edged sword and that we, as well as their Asian buyers could also wield it.

Commissioner Kyprianou is going to Washington in the next two weeks to reinforce our efforts on these points.

On Brazilian beef imports to Europe, he has also said he will not “hesitate to take any measures necessary, no matter how it affects trade, if it affects the health of EU citizens”. Obviously there must be a consistency in the way we apply standards of safety to imports with those we expect for our exports.

Turning now to the Doha Round, the recent upward trend in prices, if durable, would mean that Irish farmers would have less to fear than they might imagine from the changes in necessary to get a Doha deal.

The Doha Round represents a unique opportunity for developing countries to reduce and discipline trade distorting subsidies in the world, and notably in the US. Indeed, while the EU has already reformed the CAP and has switched to fully decoupled direct payments that do not distort trade, the US has taken the opposite direction with its 2002 Farm Bill and what is currently under discussion in the Congress for the next Farm Bill will not lead to any kind of substantial reforms in the coming years, except if in the meantime, an agreement is reached between WTO members.

The United States needs the WTO to work, and so does the EU. We both gain from open markets. A return to protectionism would empty our supermarket shelves, push up our household budgets, and impoverish our families.

Developing countries would also gain from a successful round. The highest trade barriers are in place between poor countries. These lead to misallocation of scarce economic resources, to lack of specialization, and to high consumer prices among peoples that can least afford to pay them. A Doha Round that brought down those barriers, in a predictable and planned way, could increase living standards and leave the poorest countries less reliant on negotiating bilateral trade agreements with bigger and richer trade blocs, where the developing countries are in a weaker negotiating position than they are in a global round.

This is why the European Commission is working for a Doha Round trade deal. It is also why we are working for a global climate agreement.

The European Union wants to show that humanity can govern itself, and can determine its own future, rather than be prey to blind forces of nature – whether these be forces of greedy human nature, or the unpredictable forces of a natural world whose balance we have carelessly disturbed.