It became known last week that the United States and the European Union exchanged communication on the latter's defense integration, or to be more precise on Permanent European Structured Cooperation (PESCO) and the European Defense Fund. France's Bruxelles2 website first published a letter that US Under Secretary of Defense Ellen Lord and US Under Secretary of State Andrea Thompson had sent to Federica Mogherini on May 1 and later the EU response to the letter.
The essence is pretty simple. The Americans want to ensure free access of their companies to the European Defense Fund, as well as the participation in PESCO projects financed by the fund. The American officials said in their letter that this requires just "slight changes" to governing documents currently on the EU agenda.
However, the problem is that the American demands render both the defense fund and PESCO senseless, just as the whole concept of Europe's defense integration that has been actively promoted over the past several years.
The main idea behind the defense fund and PESCO military-technical projects is to create the integrated defense industry in the EU, which is one of the key elements of "strategic autonomy" that has been widely discussed in Brussels and other European capitals. Among other things this integrated defense industry should unify arms of EU member states allowing to save quite a considerable sum ranging to some estimates from 20 billion to 100 billion euros per year. The core task of the defense fund is to stimulate integration through funding joint military-technical projects of EU member states, as well as countries that have association agreements with the EU which means countries that are included in the unified European market. Apparently, the US falls short of this scheme.
Washington backed the idea of Europe's "strategic autonomy" under Barack Obama considering the militarily strong EU as a useful ally that will take on a part of the burden of maintaining the American global leadership. But as the EU was engaged in characteristically long discussions on better ways of defense integration, another president came to power in the US and its foreign political priorities changed.
Trump perceives the EU as a competitor rather than a partner. Washington said early last year reacting to the setting up of PESCO that it should not lead to protectionism and limit the access of American companies to the European arms market. This is easy to understand as from Trump's point of view arms together with gas are a means of rectifying foreign trade balance.
That is why the involvement in PESCO and access to the defense fund are of strategic importance for Washington. And the goal is not to get some money from the fund as at the end of the day relatively small sums are involved, just 13 billion euros until 2027. The US fears that the EU defense industry formed without the American involvement would become a too strong competitor and is ready to counter this by all means. The Spiegel journal reported citing European diplomats that the Americans wanted to strangle at birth any possibility of establishing European companies similar to Airbus.
In the letter to Mogherini, Lord and Thompson not only threatened the EU with response trade restrictions if the American demands were not accepted but openly hinted that the US could again start countering the EU defense integration as it had been before Obama came to power. The American officials said that the situation might go back to the time of 15 years ago, when the US and EU had considerably differed on European defense initiatives.
The American threats didn't affect the EU: its reply was a polite refusal. Brussels is ready to clarify current "misunderstanding"; however, will not make concessions. The procedural factor is engaged here among other things. The Americans tried to interfere at the final stage of the decision-making process proceeded by a long period of adjustments. And the EU isn't going to again launch this process, especially at the whim of the US, the relations with which are not at its peak.
Moreover, the Americans seem to have gotten the opposite result to what had been expected. Until recently a number of the EU member states favored allowing Great Britain (after Brexit), the US and Norway to take part in PESCO on rather advantageous conditions. Just a small group of countries headed by France was against. But now the minority can easily become a majority. Judging by media reports the tone of the American letter outraged European politicians. It is possible that Paris had a hand in "leaking" the communication between Washington and Brussels.
The conflict between the US and EU is unlikely to be resolved. That is why one should pay attention to the position of Warsaw. If the US does decide to start actively countering Europe's defense integration, then the most apparent decision for Washington would be ensuring the support of Poland that wants to have a permanent American base on its territory.