HOW US ALLIES UNDERMINE NATO

European countries divest from American defense firms that help protect them

By Orde F. Kittrie

The Wall Street Journal
July 31, 2017

The U.S. spends heavily to defend Europe, yet most North Atlantic Treaty Organization members don’t spend 2% of their GDP on defense, as the alliance’s guidelines call for. Worse, many of these free riders also punish U.S. companies for manufacturing weapons used by the Pentagon to defend NATO allies and other countries. Specifically, several NATO member governments have divested from or even criminalized the purchase of stock in U.S. defense contractors.

Between 2005 and 2013 Norway’s government pension fund divested from U.S. defense contractors such as Boeing , Honeywell , Lockheed Martin and Northrop Grumman “because they are involved in production of nuclear weapons.” The fund, controlled by Norway’s Finance Ministry, is worth some $900 billion. At the end of 2015, approximately $180 billion was invested in 2,099 American companies.

Norway, a NATO member, divested even though these companies produce nuclear weapons only for the U.S. government, and NATO’s 2012 Deterrence and Defence Posture Review describes U.S. nuclear weapons as “the supreme guarantee” of members’ security. The hypocrisy goes further: In 2016 Norway authorized its pension fund to invest in Iranian government bonds—even though Iran has sponsored terrorism for decades and is a patron of Bashar Assad’s atrocities in Syria.

So far only Norway has divested from companies for producing nuclear weapons. But the government pension funds of Denmark, France and the Netherlands have joined Norway in divesting from American companies that produce other weapons stocked by the U.S. military. These countries have targeted General Dynamics , Raytheon and Textron for manufacturing cluster munitions and land mines, in some cases after production reportedly has stopped.

Six European countries—NATO members Belgium, Italy, Luxembourg, the Netherlands and Spain, plus nonmember Liechtenstein—make it illegal for their nationals to invest in companies that produce cluster munitions or land mines. In Switzerland, citizens can be imprisoned for five years for direct and indirect financing, including stock purchases, of companies that manufacture nuclear weapons, cluster munitions or land mines.

While these weapons often pose a threat to civilians even after conflicts end, the U.S. government deems them necessary. The Obama administration acknowledged in 2014 that land mines are needed to protect South Korea. The State Department has long said the elimination of cluster munitions “from U.S. stockpiles would put the lives of its soldiers and those of its coalition partners at risk.”

Many NATO governments joined the 2008 international treaty to ban cluster munitions and the 1997 agreement to forbid land mines. Boycotts targeting companies producing these weapons derive from expansive interpretations of particular provisions in these accords. Both treaties say that “never under any circumstances” will a country “assist, encourage, or induce” anyone to engage in activities such as the development or production of the banned weapons.

The treaty banning nuclear weapons, which was adopted by the U.N. General Assembly on July 7, includes similar language. Many of the 122 governments that voted for the nuclear treaty will likely divest from and criminalize purchase of stock in nuclear-weapons manufacturers. No NATO government supported the nuclear ban treaty. Yet Norway’s divestment from stock in nuclear-weapons manufacturers shows the fervor generated by movements against disfavored weapons can spur such boycotts even if a country ultimately doesn’t support the treaty.

The danger of European economic warfare against Israel—including the Boycott, Divestment, and Sanctions movement—deservedly has received considerable attention. In contrast, European economic warfare against U.S. companies for implementing U.S. government policy has avoided the spotlight and elicited virtually no response from Washington. This must change. The targeted U.S. firms together employ hundreds of thousands of American workers. For allied governments to penalize such companies for filling U.S. government orders is unacceptable. It could even increase costs to the U.S. taxpayer, who ultimately would pay extra legal or financing costs associated with producing these weapons.

If left unchecked, this problem will grow. Norway’s pension fund has divested from Wal-Mart , America’s largest employer, for “serious violations of human rights,” according to the fund’s website. The fund has also divested from two U.K. companies for producing Britain’s nuclear arsenal and one Israeli company for involvement with Israel’s antiterrorism fence.

Congress and the executive branch should spotlight, and vigorously oppose, ally and partner government boycotts that target the defense industrial base of the U.S. and key allies such as Israel and the U.K. Governments must know that such boycotts, if continued, will subject them and their companies to commensurate penalties.