US Should Require NATO Treaty Be Amended or the US Should Withdraw

Posted on January 29, 2024 by vjtruglia

By Vincent J. Truglia

Given that Trump is the likely GOP Presidential candidate and given that he remains highly critical of NATO as it exists today, I wish to point out there are several paths he could follow. Developments in Ukraine over the last two years make it clear that the US should review the existing NATO Treaty and either have it amended or the US should withdraw. 

This may be shocking to some, but I doubt most Americans realize how risky the treaty has become for the United States.  The rapid accession of relatively small Eastern and Central European countries has caused a massive shift in requirements to come to the rescue of countries which do not represent US vital national interests.

The core risk lies within Article 5 of the treaty. According to Article 5, if any NATO country is attacked, it would be considered an attack on all NATO countries. All other NATO countries would be expected to come to the aid of that country.

Article 5

The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defense recognized by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.

Any such armed attack and all measures taken as a result thereof shall immediately be reported to the Security Council. Such measures shall be terminated when the Security Council has taken the measures necessary to restore and maintain international peace and security.

This was all well and good when the Western Alliance was faced with a Communist threat centered in Eastern Europe.  Before the recent ramping up of NATO membership, NATO members protected by Article 5 represented vital US interests.

After the fall of the Soviet Union, the Communist threat in Europe disappeared.  Counterintuitively, despite the risk of communism having declined precipitously, what then happened is that a number of smaller European countries joined NATO, including Albania, Bulgaria, Romania, among others, and most dangerously, the three Baltic states of Latvia, Lithuania and Estonia.  None of these countries represent a vital national interest to the US.  I doubt most Americans realize that if there is a Russian move into Estonia or Latvia, that the US might be at war with a nuclear-armed Russia. 

The risks, especially posed by Estonian and Latvian membership in NATO are that both countries have large Russian-speaking minorities, which are, by most standards, treated as second-class citizens.  Given developments in the Ukraine, it would not be surprising if Russia demands better treatment of Russian speaking minorities in both those countries.  Lithuania doesn’t have a large Russian speaking minority.

Frankly, although I would hope that instead of Russian military force being used, that Estonia and Latvia would better respect their Russian-speaking minorities. If they don’t, and Russia intervenes in either one, I would certainly oppose the use of force by the US to prevent such intervention.

There is one Eastern European country, Poland, which I believe is of vital interest to the US because of World War II’s redrawing of boundaries in Eastern and Central Europe. Poland got shifted so far westward that now the Polish border is a mere 60 miles or about 100 kilometers from Berlin.  Any attack on Poland should and would require a military response.

How could this problem be resolved?  The US could invoke Article 12 of the treaty, which allows for a review of the treaty.  The US could then demand that it will only come to the defense of certain countries, not necessarily all of them.

Article 12

After the Treaty has been in force for ten years, or at any time thereafter, the Parties shall, if any of them so requests, consult together for the purpose of reviewing the Treaty, having regard for the factors then affecting peace and security in the North Atlantic area, including the development of universal as well as regional arrangements under the Charter of the United Nations for the maintenance of international peace and security.

If other NATO members do not agree to such a review, then the US could invoke Article 13, which allows any country to leave the alliance with one year’s notice. 

I would argue that instead of dismantling NATO, the original core NATO states would prefer an amendment to the treaty rather than a US departure from the alliance.  I don’t want to put our military at risk to protect Estonia and Latvia, especially since their treatment of their Russian-speaking minority is poor.

If asked, how many Americans would want to go to war if Albania, Bulgaria, Romania, Croatia, or Slovakia are attacked?  Most Americans wouldn’t even know where they are on a map.

As always, Clear and Candid.

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Canada and the US

Posted on March 20, 2025 by vjtruglia

By Vincent J. Truglia

Should the US be willing to allow Canada to become the 51st State? The answer is an unambiguous NO!

For the sake of transparency, I am US born and bred. However, my connection to Canada is strong. Not only did I spend four years of graduate school at Montreal’s McGill University, but as a country risk economist I was the lead analyst for Canada’s Moody’s bond rating in the early  1990s during the height of Canada’s financial crisis.

I could go on and on about the chaos that emerged as a result of the Canadian rating being lowered to Aa1 from Aaa in June 1994, followed by a further downgrade to Aa2 in April 1995. However, that’s not the purpose of this short comment.

Is Canada suitable for statehood?

I would argue it would completely upset US political dynamics. Although the argument is made by some that since the size of Canada’s population is similar to California, population size shouldn’t be a problem. What they fail to recognize is how varied Canadian provinces and territories are. It would make the new state ungovernable because provincial governments would be turned into the equivalent of counties or some other designation. Attempting to impose all the constitutional controls over state governments imposed by the Supreme Court would require a restructuring of provincial governments to a point where they would be largely unrecognizable. Also, what would happen to all Canada’s outstanding Federal and Provincial debt?

Alberta and Saskatchewan.

If Canada is to be absorbed into the US, the only way would be if individual provinces were allowed to join. The only two provinces, which I see as potential states are Alberta and Saskatchewan. Both are heavily dominated by natural resource wealth, maintaining more politically center-right views than the other provinces and therefore are more compatible with the US political system. Culturally, both provinces have a close affinity with American culture. A problem posed by adding these two provinces as states would be it would change the balance in the Senate, with each new state receiving two senators, never mind that Congressional districts would need to be adjusted to account for Alberta’s 2025 population of 5.96 million and Saskatchewan’s 1.25 million. Nonetheless, these latter concerns are easily addressed.

The other provinces are just too alien given their histories and political viewpoints to fit into the American system.

BC

British Columbia is far too left-leaning for red states to support two senators for that province.

Ontario

Ontario is too big and too politically mature for it to smoothly function in the US system. First, Ontario (population 16.18 million) would go from being the dominant political force in the country to being one of many states, a number of which have larger populations. Years of multiculturalism indoctrination would make the province a likely belligerent, uncooperative state. Nonetheless, the economic benefit to Ontarians of being Americans would be enormous.

The Maritimes

The Maritime provinces would not be particularly beneficial to the US if they joined as individual states. Prince Edward Island’s population would not even meet the minimum population required to be a state. Given that these provinces are the poorest, they would likely represent a drain on US federal resources. It is obvious that allowing those provinces to have two senators each would be a non-starter. One part of the Atlantic provinces, which the US might consider annexing, is Labrador, presently part of the province of Newfoundland and Labrador. It’s long coastline and proximity to Greenland would clearly be tempting.

Quebec

By far, the biggest obstacle for Canadian statehood would be Quebec. Merging Quebec with the US political system would not work. The bilingual nature of Quebec makes any attempt at unification a non-starter. To accommodate Quebec, adding the French language as an official language in the US would meet enormous resistance across the US. Also, Quebec politics is more closely aligned with European social democracy. Quebec’s use of civil law, however, would not be a big problem. Louisiana has easily dealt with that over time.

If Alberta and Saskatchewan were to become states, the rest of Canada’s political system would fall apart. The US would then need to consider a complete free-trade agreement with Canada, where the US-Canada border would disappear except for provincial governance in the remaining provinces.

Canadian Territories: Annexed

I expect that if Alberta becomes a state, the US will simply annex the Northwest Territories and the Yukon. That would add more Arctic Ocean coastline to the US. The annexation might even include Nunavut, the enormous territory bordering large sections of the Arctic Ocean. These territories would represent vitally important military assets.

As always, Clear and Candid.

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Is Free Trade Always the Best Approach?

Posted on October 16, 2024 by vjtruglia

By Vincent J. Truglia

In 1956, Richard Lipsky and Kelvin Lancaster introduced the Theory of the Second Best. What they were aiming for was to explore what would happen if all the required conditions for economic models were not met. They concluded that if even only one of the so-called necessary conditions were not met, then a policy of moving closer to the required theoretical conditions is not necessarily the best approach. The policy implications are profound.

Free trade has been the model espoused by most economists since the days of Adam Smith and David Ricardo. However, today many economists do not like to discuss the theory of the second best because when doing so it becomes clear the argument for unfettered free trade is a hollow one. Once we are in the world of the second best all bets are off as to what the best policy approach is.

We are in the midst of a significant policy debate about the re-introduction of tariffs in the US. It seems most commentators continue to base their analysis of the imposition of tariffs on trade models based on a world of pure competition, perfect information, markets that will always clear themselves, etc. It is obvious we do not live in such a world. Therefore, believing that moving ever closer to free trade is always the best policy falls flat.  Deciding the impact of tariffs or other trade restrictions requires a robust exploration.

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Ukraine is Heading Towards Civil War

Posted on January 11, 2024 by vjtruglia

By Vincent J. Truglia

April 13, 2013

I fear we are slowly seeing a slide into civil war in the/Ukraine.  I see little room for compromise on either side, especially since both the present “interim” government and Russian speaking Ukrainians view their country so differently.  The geopolitics is such that without both sides giving in to the other in a way acceptable to both, the likely outcome is an escalation of violence.  I cannot see such a rapprochement happening.

As violence escalates in the Eastern Ukraine, it will grow increasingly likely that the Russian Federation will be forced by circumstances to move into the Eastern Ukraine to avoid a Syria-like situation there. 

My own personal view, as I have said/written on numerous occasions is that it is highly likely that the Russian Federation would move not only into the eastern and southern parts of the Ukraine, but go beyond Odessa and fixing another problem, that of Russian-speaking Trans-Dniester, which could then join the Russian Federation, or at least become a member state of the Eurasian Economic Community.

There is little the US, the EU or NATO can do to prevent this.  If sanctions are hardened against Russia, given its history of strong resistance to outside pressure, the likely outcome of more sanctions will be a toughening of the Russian position.  In addition, besides the fact that NATO and the EU did the exact same thing when they invaded Serbia, and separated Kosovo, Serbia’s traditional heartland into, an Albanian state, without the acquienscence of Serbia, it is the height of hypocrisy for the West to argue that Russia is breaking international law.  Using the West’s present logic, then Kosovo should immediately be given back to Serbia.

We must remember, President Putin warned NATO and the EU that by creating a separate state in Kosovo, the West was changing international law.  He is even quoted as stating that such an action “would come back and slap them in the face.”  That’s what’s happening now.

If events in the Ukraine grow worse, and I expect they will, then I expect that the next provocative move the Russians may make is to put nuclear weapons in Kaliningrad, a perfectly legitimate action for them to take. They threatened this in 2008.  After all, Kaliningrad, despite being between Poland and Lithuania is an integral part of the Russian Federation.  Russia is free to move its nuclear weapons wherever it wants within its own territory.

Also, claims of the high ground by the so-called interim government in Kiev are laughable.  The government came to power as a result of an overthrow of the legally elected President of the Ukraine.  It was a coup, simple as that. They had perfectly legal means of removing him, and yet still follow the Ukrainian constitution.  They could have impeached him.

Ukraine is scheduled for national elections in May.  Under present conditions, it will be impossible for the Ukrainian government to guarantee free and fair elections, especially since it is not viewed as legitimate by a large swathe of the country.

The US is powerless to resolve this problem. More sanctions will make matters worse.  The reality is that a modern version of the Soviet Union is practically complete.  Since there are no real policy differences between the West and the Eurasian Economic Community, as there was when the Soviet Union tried to overthrow capitalism, the risk and national interests are quite different.  Today, if anything, the Russian Federation suffers from an extreme form of capitalism.

Let’s hope that the Ukrainians either make peace – not likely – or separate into two separate countries.  Then the last thing NATO should do is to move into the Eastern Ukraine.  That would make tensions throughout the region, especially in the Baltics, which are now not center-stage, much worse.

As always, Clear and Candid.

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