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- secretary leon panetta stated we could bring home our combat troops as early as 2015 and this is his quote from it to the latter part of 2013 we will be able to make a transition from a combat ralf period to a training advice and assist world. can you update me on where we are on that? i interpreted at the time when he said that the death he was moving in that direction but i haven't heard anything else. maybe you can start on where we are because i think there are a growing number of americans who asked the question why are we in these villages and basically policing villages when we've been there for ten years, why aren't the afghans doing that, and it just seems to me that secretary panetta pits and on

the head when he says we need to move out of that combat role and do everything we can to have them taking the lead, moving forward to bear the major part of the responsibility, and i hope that's what we are pushing for and i also hope the chicago summit when folks come together that they listen to the kind of issues and maybe reconsider the date they have but please go ahead. >> thank you, senator. i appreciate that question. that is what we are working towards right malkoff. 2014 has been an important day for the alliance and president karzai and we see the afghans taking the lead for security and

taking on the front end of the combat mission from 2014 and out but what's important now and under way was this transition from other allies being in the lead in the combat missions to the afghans that is underway added the date 2013 that has been discussed we look on as a milestone to 2014. 2013 is important because in this transition this is where there will be the security lead for most of afghanistan by that time. i already here 22 of the afghans are taking on the lady and much of afghanistan 2013 will see i think the completion of that. there has to the facts on the ground and certainly the afghan government and the commander and

allies are working on this, but right now he's pretty impressed they're ought to the task of taking the lead in terms of the combat and we are going to see this transition you've mentioned and secretary panetta mentioned in terms of allied forces and u.s. forces transitioning from combat to this advice and assist taking the lead in the combat and that is what we are seeing in a great extent 2013 is going to be a landmark for that and we've seen the past couple of months as the security incidents have happened such as in kabul the ansf have done the same thing they've stepped up and we've been impressed and their performance, so a lot of what i could hear from you in terms of your aspirations for what you want to see in transition is occurring and weigel as we go from 2013 to 2014 will be primarily in the assist will be

able to take on the combat but i think what we're seeing is the ansf is going to be up to the task and will be largely doing this straining at the 2014. >> it seems to me that before you have this date when every said it of getting out afghanistan in terms of combat troops, not the counterterrorism roll and all of the ss and the other things we clearly need to continue that you really need to test out what they are up to it and the need to be in the front doing the job and being in the ancestral to make sure we test their capabilities and i think that is what the secretary was hitting on in terms of we've been there so long we need to try to do everything we can to

get them out and do a major responsibility for security and we are only in an advise and assist role and i hope we are not headed for a situation where we are going to keep pushing down the line. we need them to take responsibility. if they can't do it, we need a tough assessment of what is going on and a reassessment of what's going on, but i don't know whether you were going to comment or not i thought was primarily a question for mr. townsend. >> i hear what you're saying and that is precisely the point of the milestone after it will be training and assisting but we have to be clear and honest we can't promise from some date in 2013 there will be no combat in

afghanistan. obviously that would be ideal but we need to make sure we succeed as also from the milestone primarily and by the end of 2014, combat troops are out and the purpose in many ways of the discussion in chicago would be to get everyone on the same page for that concept the milestone transition at the end of 2014 and how we make sure we succeed after 2014. >> my guess is in chicago there is going to be a big push to try to do it secretary panetta was talking about and many of our nato partners you're going to talk to them that i would see that we've waited too long in terms of about having an afghan leader. i've heard from the europeans talking about this for eight years. it should be after inlet,

security should be afghan let, and i think they are getting very impatient i know you all can't meet a commitment publicly this is how we are going to discuss the meeting in chicago because that would be the big headline but i hope that there's very serious discussion about this transition and how quickly we can do it and make sure this is an afghan lit a security operation. sorry to run over, madam share but we really appreciate you. >> thank you very much. in the interest of time because we have another panel i think we should move on and less either senator udall or senator lee are leaving so unless you have further questions i'm going to move on to the second panel. >> i'm ready for the second panel.

i have a lot more questions but i will reserve those. thank you both very much of a good trip to paris. undersecretary gordon. and while we are transitioning the panel in and out i will take a moment to introduce the second panel. senator kerry did adelbert but let me point out that each of the next three experts has extensive experience working throughout government and in the private sector on europe and nato and we are pleased to have them join us today. first is dr. charles kupchan, the whitney shepherdess and fellow at the council on foreign relations and a professor of international affairs in the law school of the foreign service government at georgetown. second is ian brzezinski a senior fellow in the international security program at the atlantic council and a member of the strategic advisers group p also leaves the

brzezinski group. finally dr. binnendijk at the research defense university and fearless about chiricahua think you'll for being here. i have a statement i'm going to submit for the record and ask dr. kupchan if he would like to begin. >> thank you very much. it's a privilege to have the opportunity to have a conversation with you today. i ask that it be submitted for the record. the summit in chicago represents a moment for stocktaking investments in a sense we've been through two decades in gillian's as feared much better than we expected that most

alliances disappear when the threat that gave birth to them disappears, but here we are in 2012 and not only is nato still in existence, but it has troops in kosovo and afghanistan and has partnerships aren't the world so clearly the alliance is a growing concern and i also think that despite the fit and finish the transatlantic relations over the last 20 years we can relatively confidently say the united states and europe remain each other's best parkhurst and that when the american president or european leader looks how the public and says pudu one call when there's a problem of the person on the other side of the cleantech. my judgment is that is not going to change anytime soon partly because of the affinity of interest of the values and also there aren't other options and even though there are emerging

countries out your waist count on our european allies and to rely on our european allies more than we can count on a cost-cutting. at the same time i think it's clear that we are at the cusp of a major historic transition in the global landscape in which the world that nato represents his losing the primacy it enjoyed the last 200 years and if you look at the share of global product represented by nato and i would include japan because they are a part of the western world since world war ii we've gone from roughly 70% of the global product to 50% and we are headed towards 40% and that says to me the big security question of the day are about how we are going to manage that transition the big challenges to american security moving forward are not in the atlantic community of about some of the atlantic community and as a

consequence the relevance of the alliance to us and our allies but more to us because we are a global power will be what is nato doing in this wider world. how was the tow keeping the united states saved as the global distribution of power shifts in the years and decades ahead and i'd like to simply call for a few comments on next broad subject of the wider world. it's important to keep in mind nato represents the primary institutional infrastructure of the west. it keeps us together as a meaningful community. that is particularly important when the emerging power is around us don't share our values or interest. how can we preserve the of rules based system the u.s. and europeans have together built

since world war ii and this circle whitens as more players joined the table. this is not a conversation that is front and center on the agenda, but i think it has to be moving forward because of the west comes together and quote years and generates a plan for managing this transition i think it will withstand the test of time. if the united states and europe go their separate ways figuring out how to preserve the rules based system, then i fear the next 20 or 30 years will be a very bumpy period in international history. second point, i think that nato needs to establish itself as a global security hub. that doesn't mind that nato should go global. i think a global would be a bridge too far. it would be a step that would burden the alliance with political requests and material requests and would be unable to

sustain and in that respect i think we would be sober and cautious about thinking of nato as the military alliance of last resort for missions moving forward. nato went into afghanistan. yes we will hopefully live together, yes we just finished its mission and lydia the was reasonably successful but to take down should be sobriety, not caring that for the next deployment and that's because the cat scan mission has been somewhat successful, not a smashing success. we are chasing at the bit to get out and we collectively as you were saying, senator, and i think that there will be a long time coming before nato engages in the same kind of operations that it engaged in in afghanistan. libya i think the success is more conclusive, but many of the conditions that were present in libya were not being replicated elsewhere particularly in syria

a u.n. legal authority, the approval of the arab world, the degree to which libya was close to the reservoirs of european power it easy for the europeans to do even though they still rely heavily on us. in regard some of the most important programs moving forward will not be the deployment of force even though there will be some of that, they will be the broad array of programs, the partnerships, the mediterranean dialogue, the cooperation in this initiative, the supper for the african union, the training mission which is always concluded. in many respects they have to help other regions do for themselves what nato has done for the atlantic community, deepen integration come understand what it means to work together and gradually build the solidarity. to final comments we've already

discussed this this morning, thinking about the ability of nato to be a global hub and to serve as the institutional core of the west during this period of transition i think requires a european pillar that stands up to the plate and this issue is more pressing today than it's ever been before. we have debates about burden sharing since nato was born. that went so far because the europeans are quite confident that we were there to stay and if something went wrong the united states to show whether the party. the europeans know the need to do more and did it to asia and the drawdown in europe is justified and inevitable about the need to do more to balance

the alliance. i'm skeptical europeans will spend more on defense. in fact i would go so far as to say they are going to be spending less and less and that is for the foreseeable future there were it not bailing out, how to deal with the debt, how to save the year goes on and perhaps even the european union and this says to me we should be pressing them all so much of the spending because i think it's running into a burkhalter and rationalize and how they spend. i'm getting them to pull their resources. that in my mind is the best way to get europe to become more capable and in many respects that involves closer links between nato and the european union. finally, i think that it would be remiss for me not meet the following point which is not going to be on the summit in chicago but should be in the back of our might and that is from the beginning of the

atlantic partnership or strength abroad has depended upon our strength at home. our economy, our political solvency and in some ways what i am the most worried about today as i testified before the committee is not whether we get enlarge it right and it's not been and how because afghanistan is the degree to which we are now stumbling the west collectively in terms of our economy stuck in neutral, the european union pulling apart experiencing a nationalization that we haven't seen since world war ii and our own political system going through a very rough patch sali final thought to be impossible to think about and a mention the nato future without doing our work is getting our own houses in order because in the end of the day nato will only be as strong as its individual member states. we have a lot of work to do on that front. thank you very much.

>> thank you. mr. brzezinski. >> if you could get a little closer to the microphone so we can hear you better. >> as a former staffer who served the committee and prior to that the lead senator william roth is a pleasure to return to these calls and it makes me recall the strong bipartisan leadership in this committee brought to the efforts to extend the membership to the democracies essential europe. those were historic decisions that strengthened the alliance and strengthen the security. the chicago summit spent the important large part because the context in which it takes place. that context includes a war in afghanistan from which both the united states and europe appear to be engaging, economic crises on both sides of the atlantic,

diminishing the european defense capabilities, the qualified success in libya and one that nonetheless raises questions about the commitment to nato and highlighted the european defense shortfalls, and of course the recent u.s. defense guidance that initiates another reduction on the american forces stationed in europe to read some of us stated this should be in implementation focusing on the operation and reviews alliance progress under the strategic concept. in light of our context that would be insufficient. that would reinforce the sense of program growing irrelevance and further process of decoupling. u.s. quote should be the one central message from the chicago summit. in my view the chicago summit doesn't have one overarching purpose it should be to provide a credible reaffirmation of the transatlantic bargain one in which the united states

demonstrates commitment to the regional security interest and our european allies should stand with the united states to address global challenges for long-term security. toward that end the u.s. should pursue five priorities, chicago summit first and foremost, the president must reaffirm europe's centrality in the u.s. global strategy. a drifting apart has many causes. the including u.s. trans-atlantic agenda whose dominant elements has been defined with russia, a new defense guidance and a proposed missile defense architecture that still remains conditional. to further reduce u.s. forces stationed in europe occurs on the context of increasingly assertive russian policy and just last week russia's chief of the general staff threatened to launch preemptive strikes against proposed missile defense sites in central europe. washington should remove the

conditionally that hangs over the u.s. missile defense in europe. that undercuts confidence european confidence in u.s. commitment to build the sites but certainly incentivizes opposition. the u.s. military drawdown will also make it important to ensure that reinforces in europe are fully funded and equally important careful consideration has to be given in the future the united states and europe will sustain their military interoperability. the united states fights war complex there's not much more difficult and challenging, time-consuming to maintain of her ability with other allied forces. it's not yet clear how interoperable will be sustained as united states further reduces its forces in europe and continued in the duty on this issue communicates disinterest not just in the regional security concerns of our allies but also in the role of the

potential partner is yondah out of area operations. second, the chicago summit should be used in a division of the year of free and secure as a guiding pretty of the alliance and the united states should be leading this effort. europe is undivided whole and free more stable and secure continent, one better able to address global concerns and partnership in the united states. imagine you're of today did not integrate poland, the baltics or remain in bulgaria or nato with the you extended membership to all of them with russia and poland to normalize relations. to revitalize the process of the enlargement of the alliance can and should at the summit declared its intent to issue invitations no later than the next summit to qualify candidates three underscore the urgency of resolving the macedonian's dispute with greece or the last remaining and then to its secession to the alliance. it should assert that have to be through the existing georgia commission and should applaud

significant progress under the membership action plan. third, the alliance must charts we forth in the area of austerity. resource constraints are a double-edged sword that can call small initial cooperation mengin revision and indeed we see that today. as a central europeans watch as germany, france and italy military equipment to russia and efforts to sustain the respective national defense industries. allow me to commend senator lugar and the research service for the recently published study examining the sales. i hope this report will prompt the alliance and take action and potentially. austerity can also be leveraged to drive forward the prioritization and collaboration. i'm glad the alliance plans to roll out 2020 s of long-term capability goals. but i hope will give equal greater emphasis to the near term multinational projects that

exist in the shortfalls such projects assured logistics hubs and platforms are needed urgently and there are projects more credible to the public's than promises regarding the distant future. fourth, so much should be used to expand and deepen partnerships in the alliance is a looker of the world. sweden, australia, new zealand, korea, jordan, others and other non-nato members have made important contributions to myself, the libyan mission and other operations. in addition to the military to devotee to bring diplomatic leverage as well as the needed insight to the prospective regarding the respective localities in the region's. nato should expand the partnership that is open to all the qualified geography and contribute more militarily should have the opportunity to be certified as interoperable. those certified can then be allowed to participate in

different nato programs be it exercises, command structure, centers of excellence and civilian agencies. finally, of course, nato and chicago needs to demonstrate and in the u.s. determination to sustain the stables of can stand. i hope nato will be a will to compete to endure well beyond 2014. the recently signed a u.s. afghanistan agreement and an important step if it is sloshed of robustly will be insufficient to ensure success in afghanistan and the absence of the long-term consequence commitment. strong leadership has been a prerequisite for the vibrancy and success, likewise, europe's ability and willingness to contribute to the forces in the global capital necessary to address regional and global concerns are equally essential. it's in europe or the united states interest to allow the guard in has done so well over the last decade to drift into

irrelevance. the chicago some at reaffirms the bargain it will serve as an important if not inspiring benchmark of american commitment and to be an impression regarding the transatlantic alliance. thank you for the opportunity to share my views. >> thank you very much. let me just point out that you mentioned the report that was done that soon senator lugar had requested on the military equipment. i would just like to point out that we will be submitting that for the record so thank you for raising that. i've spent a decade of my life in those seats back there serving the committee on both sides of the aisle and i was just recalling by first boston. hubert humphrey. i want to make a few free general comments about the summit and focus in on what i was asked to talk about russia's military and defense to devotees

i ask my statement be in the record and i will ask licht if i might. first let me say that dating back to the rome and london summit and was really turning the alliance from the cold war to the alliance continent and madrid was about enlargement and really a change in the alliance in that sense prague was about military transformation of the alliance, lisbon was a new strategic concept and a new direction for the alliance politically, so the question is what will the chicago summit, what would be its focus and i think the headline will certainly be afghanistan, senator udall and the kind of questions you were focusing on would be hard to you transition and keeping the in together out together formula and what is the formula for the post 2014 period

but i think the other two elements of the summit both to devotees and partnerships are also very important. he talked about the partnerships and i think this is extremely important because the alliance basically will not fight by itself anymore. wherever it goes and out of area operations is going to have partners and needs to have capable partners. i don't see this particular basket as being full at this point pivot i think more work needs to be done. i think there are real opportunities to make our partners interoperable to certify that come to give them better consultation arrangements. work can still be done between chicago on that. but let me turn my attention to the military capabilities because that's what i was asked to talk about and i want to raise four problems, and i want to argue that the summit will

take steps in each case to begin to alleviate those problems. the first problem has been addressed already in some depth that's the collapse of the european defense spending of a little over a decade ago the united states spent about half the total of nato defense spending that now it's about 69%. the united states to distance about 4.8% of its gdp on defense. the alliance of original is about 1.6 and falling. the two per cent figure that we talked about there was only a handful of allies that spend that much and that creates problems. personnel costs remain about the same for europe they are funding operations out of their current budgets and like we do out of supplemental. what does that mean, their investment accounts are being hurt very badly that's about the

future so they are cutting into the future. they are not being coordinated. with nato or many others these are national decisions and that has to change. we've done an assessment about the impact of this and we've seen what you might call horizontal cut initially where you are cutting across the force and that tends to hollow out and make the force's less ready and sustainable and now they are moving to vertical cuts where they're taking in tire chunks of capability out of the force. you see this with dutch and armor into the danish and submarines, you see it with the british and the carrier capabilities of this is a problem for the future. the summit i think will take some steps in the right direction. i think we are going to see some kind of commitment out of the summit to identify the core capabilities and try to protect the court and to also create a kind of us operational view of where we should be going into the would be called nato force

2020. i think the summit will continue the lisbon capability tenet matteo the work that was done there and will continue the command structure reform. what will be new is what secretary rasmussen has called a smart defense that is about pulling and sharing somebody referred to it as let's go by together. that's not a bad start. there will be about 20 projects or soda will be on the table to demonstrate smart defense will have some meat on the bones and then there would be the connected force initiative and the danger is the interoperable become a military into governor buddy between the united states and the european allies is good now because we've been operating together but post afghanistan its fragile, so we need to start thinking now about how to continue to maintain the internal brevity and there will be an initiative at the summit to try to do that. i think more needs to be done to deal with this problem.

my view is as things get worse we are going to have to have a much higher degree of specialization in the alliance which means our allies will have to be able to trust their fellow allies if they're going to concentrate on a certain to become certain role they have to trust their allies. the trust isn't there yet. so we have to build that trust and move in a deduction. i think our own command needs to become much more of an interoperable become and. it's been sort of a lily pad where we move forward to the areas of operation in afghanistan and iraq in the past and that has to change. it has to be about maintaining the internal probably of the forces and as i said, we need to do much more with our partners. the second problem is missile defense. the story of the iranian threat building, russia trying to limit

the european phased active approach and to get as much as they can this is a success story for the summit. there is a consensus in the alliance to we need to move forward with missile defense and that is a really solid consensus and it's a good thing. we will be able to announce that there will be an interim capability for missile defense. if you look at the technical and political achievements the last couple of years they are great. we are going to be depleting, we have deployed in turkey and we will be deploying missile interceptors in romania and poland for the destroyers in spain. we have agreement on the command and control system for the alliance and the dutch will be building up there to devotees of there's a long list of things

the allies have done to build on the consensus. the problem is we cannot give the russians to cooperate. i think they are concerned about countries participating in this, and they're concerned about where face three and phase four will go into represents to their deterrent to devotee. we've gone out of our way to ensure them it will not undermine that determined to the ability. i do think it's important to continue to try cooperation with the russians and this is important standing in the way of other things we should not cross the red lines and i don't think we will. so far the obama administration in my view has been very successful and putting forward a good ideas to the russians and but not crossing those red lines. the third problem very quickly has to do with nuclear deterrence and i was asked to say a few words about the deterrence of the posture review.

this is about nuclear deterrence in europe. we have hundreds of nuclear weapons the united states owns and as we know the germans and others have been putting pressure on the system to reduce those. the strategic concept that came out of lisbon designed a very nice formula for this. it said that the alliance will remain a nuclear alliance as long as there are nuclear weapons but we will try to create the conditions of further reductions, no unilateral action and that the aim of all of this should be to create a greater transparency for the russian systems and to get russian systems relocate about of europe. i think that's a good formula. what happened subsequently as additional pressure to try to change that and i think that is what was behind the deterrence and defense posture review.

to its credit the administration has been able to work with that deterrence and defense posture reveal, and it's not been made public yet, but i believe that the conclusion of that is the current mix is a sound and that is an important conclusion. fourth problem is, and ian mentioned this, i was privileged to work with secretary albright, was one of her advisers and a group of experts. this was probably the single most important issue that we have tackled, and out of our work in the new nato strategic concept it's a very clear statement about the importance of article 5, reinforcing that. what has happened subsequently is that both european defense cuts, but also the russian intimidation has led to some opening up of that question

again. is reassurance really what we said there would be at lisbon with regards to article 5? i think a number of things have happened since then that should give comfort to our eastern airlines. one is that we now have plans to deal, contingency plans to deal with problems and threats from that part of the world and we will be exercising those plans. it's coming up next year, a big exercise of here. balk tichenor policing will be continued through 2018 and probably beyond. the nato response force which we worked on many years ago will be revitalized and refocused on article 5. the united states as the f-16 training programs in poland and we will retain the base in romania's of this is just a few examples of the steps we've taken as a nation and as an alliance to reassure eastern

airlines. those are important first steps so i've laid out these problems and my argument at the summit and within nato we are taking steps to deal with all those problems. that doesn't mean they go away as problems, but the steps are taken to deal with them. thank you. >> thank you all very much. i want to start, dr. binnendijk, but your comments around missile defense. as mr. brzezinski mentioned earlier, this month we heard russia suggest they might use preemptive force against missile installations if there isn't a cooperative agreement reached with nato. ..

>> that notion was accepted by both sides and kept the peace during the cold war. i think the russians were quite upset when the treaty was abrogated, because it tended to challenge that notion. period when the bush

administration put forward the third site, which was different in composition, but a similar purpose, they opposed that when the obama administration decided to go with another option, an adaptive approach based on a standard missile three. at first they were quiet, then they started looking at it, they started looking at faces three and four and thought maybe that would work. so i think they are testing us. they are uncomfortable with us. they would like to set limits. i think actually, if you look at the consensus in europe, it is really about creating missile defenses to deal with an iranian threat. not to do with a russian threat. if you look at the capabilities we are talking about, these missile interceptors are slow. we are not going to catch a icbm.

i'm not sure that a legally binding assurance would be ratified. secretary anders fogh rasmussen is assuring political assurances. i don't think we need to give in, though. we need to understand where the red lines are. there is a threat coming from the middle east. this is a serious proposal that has consensus, and i don't think we should let the russians move us from the direction in which we are headed. what we ought to seek to give them as many reassurances as we can within the scope of the plan that we have. >> let me just ask the other two panelists. do you all agree with that analysis? >> i agree with the analysis. i think that hans binnendijk's is spot on. i think it is more geopolitical than they are technical. they are more upset over the fact that the united states will have military installations in

the territories of poland and romania. the only thing that i would add, is there concern about the conditionality of the missile defense plans. to quote the president, he stated that president obama, as long as a threat from iran persists, we will go forward with a missile defense system that is cost effective and proven. the iranian threat is limited, we will have a stronger basis for security and a driving force for missile defense construction in europe will be removed. that has been hanging over central european understandings of how committed america is to this plan. they are not quite sure. they're not quite sure that these civilians will be built in 2013. furthermore, on foreign policy for poland, we stand ready to implement the poland u.s. agreement on the defense base, even though we are aware of the

facts that the u.s. plans may be subject to modification. for example, if agreement is reached on iran's regular program. so if they are not confident about its plans will go forward, i think these plans are justified whether we make progress with iran or not. we have basic facts that the weapons of mass destruction and missiles are proliferating. missile defense will become part of any forces complement of capabilities, including the transatlantic community's complement of the defense capabilities. >> thank you, captain. >> i would associate myself with doctor hans binnendijk and his analysis. i think the dispute over missile defense is really part of a broader lack of confidence and trust that exists between nato and russia. i would agree with what ian just

said. it is not a technical issue. it is much broader than that. i am someone who is supportive of the obama administration's reset. it has had good days and bad days, but i think the glass is half-full and half-empty. i think we should continue to press on u.s. and russian relations and nato and russian relations. we have differences over georgia and missile defense, but we continue to pocket those areas where we have agreements. if we can build greater trust, if we can get the russians to see that nato means them no harm, then i actually think we will be able to reach an agreement on missile defense and perhaps, on georgia as well. i don't want to minimize the difficulties of doing not, but i think the outreach to russia is correct and we should push hard on that front. one quick comment on what doctor hans binnendijk said about

conditionality. i don't see the obama's commitment is conditional. i think it is conditional in the sense that it is being adapted to the nature of the threat. that is why there was a revision to begin with. to move towards a fee-based structure that was better dealing with the threat from iran. i think that the threats of both sides of the house are moving forward on missile defense. what remains to be determined is the exact nature of that system, and that will depend upon the nature of the threat. >> i assume you would agree with his analysis that there is still some concern in the eastern european capital about the commitment of our missile defense efforts. >> i think there is still some broad discomfort in central

europe about the degree to which they don't enjoy the same pride in place than they did in the alliance 10 years ago. during the first decade after the fall of the berlin wall, they were the apple site. side. they had a door open policy in washington. they don't enjoy quite as much access in private places as they used to. i do not think that is because of the obama administration neglecting them are going over their heads are working on russia at their expense. i think it is what one could call the new normal. a nato alliance in which colin enjoys the same kind of state as italy and spain. that requires adjustments, but it is actually good news for poland. >> given what you said about the russian recess, you share what

we heard from secretary gordon that we shouldn't read anything more ominous than to vladimir putin's not coming to the g-8 summit, other than he he has worked at home. >> i find it regrettable that president putin has decided not to come. i think that it is a mistake on russia's part. who knows exactly why he made that decision. but there is no question that his initial decision not to go to chicago and now his decision not to show up at the g-8, suggests that he's keeping a certain distance. i am confident that over time, russia is going to orient itself westward. that is because i am not sure geopolitically speaking, they have a lot of other options. unions with nearby countries are not a right future for russia. it is in my mind a question of

when russian domestic politics works itself out. it could take a very long time. but i think that president clinton is smart enough to know that the arrow points westward. and that is the mark of the institution of the european union and nato will provide a better future for russia than the alternatives. >> you said in your statement -- i am not quoting exactly, but as the circle widens, preserving the rules-based system, that has really been established by the united states and europe and the transatlantic relationship. it will be difficult if the united states and europe will move forward together. is there some reason to believe that we will not be moving forward together? are you suggesting that because of the current fiscal crisis because of some of the mystic

issues that you have identified, that we should worry about this future challenge? >> i worry about two different dimensions of that challenge. one is the bigger question of the degree to which the chinese and resilience and indians of the world will embrace a rules-based system. and if so, will it be our rule-based system? i think that is a conversation that will be increasingly important in the years ahead. it has already started. my second concern is that we can't manage that path on our own. the west, as a going concern, has really been about partnership between the united states and europe and between the united states and japan and other allies in the pacific, and i do worry that the european union's foreseeable future is

perhaps introverted and fragmented. it is not that they will diverge from us on what these rules are, it is that they might not be in the game. that, i think, would leave us in an exposed position, and that is why i think the united states and europe should do what they can to refurbish and revitalize this anchor of liberal values of open markets and democratic institutions. because they are now under threat. rising powers do not share those same commitments, and that is why we need to make sure that our model is both strong and serves as an example for the rest of the world. >> you know, we had a panel in the european affairs subcommittee on the european fiscal crisis. virtually all of the panelists agreed that one of the most important things we could do to support europe in addressing their fiscal crisis, was to address our own at home.

i would certainly support your analysis. let me just go to an issue that i think has been brought up several times. that is as we look at the summit and the future of nato, that it is the partnership, it is one way for us to expand the influence and ability to work in the global environment that we are now in. do you think that offers an opportunity, and i guess i would ask mr. ian brzezinski and doctor hans binnendijk, do you think this offers the opportunity to expand the circle in a way that allows that influence to continue to happen? as you look at the partnerships

that have been developed and are being looked at in the future, is this a way for nato to continue to have some influence and work with those countries with rising economies? >> absolutely. i think partnerships are the way of the future for the alliance. the fact is that the most urgent challenges and most surprising, unpredictable challenges are going to come from outside the north atlantic area, the middle east and asia, i think eventually it will be africa. also, because of the systemic challenges these regions are facing. nato will be drawn into them just the way we work with afghanistan. those negative changes can affect our own security. we experienced on september 11. the partnerships provide an opportunity not only to bring more capability to the table, but also to provide an opportunity to bring to the table countries and regional

perspectives because they have the intelligence, they provide the nuance that countries from the north atlantic area don't have. we are going to need more to those relationships. i think it is smart to think about nato is a community, like many democracies, serving as a hub that can participate with a wider set of players. be it brazil or india or japan or australia. most of whom already have relationships. we need to deepen them and develop a more. >> thank you. >> let me answer the last two questions together. i think they do fit together. if you look at american grand strategy today and you look at the so-called private to asia i think that is the right thing to do. that is where the long-term

security challenges lie. shorter-term challenges remain in the middle east. that is the second part. we are looking to our european allies to help us in that second endeavor. otherwise, we are not going to have the capacity to do it. the question is, are the european allies willing and able to do that? there is afghanistan petite here as there is in europe, but we have the financial problems that we discussed. as you look at that strategy, the question is, i think, are the european allies willing to go along with the strategy? some have talked about not giving away from europe, but rather pivoting with europe. that notion of pivoting with europe requires partners who are willing and able, and that is the task. that is the first part. the related part with regard to partnerships and general, i

agree with ian. i think we're going to have 13 or so partners meeting in chicago. there is a real opportunity there. if you look at the so-called partnerships for the alliance today. you have a partnership of peace, which was initially a waiting chamber for memberships. now you have some very capable countries and some less capable countries in the partnership. it is not really functional anymore. you have the have the mediterranean dialogue coming out of istanbul and others, but they don't make much sense anymore. i think we really have to think about the partnerships in general for the alliance. to me it is about capabilities and will. you need to find this functional partners, if you will who can be with us. and they can be global. australia, japan, south korea,

india, potentially and others. how do you partner with them and how can they be useful to the united states? i think where you have to start in addition to the political elements, is interoperability. so that we can operate. there are standards within nato we should be using. we should be using those nato standards so when we come together for an operation, we should be able to certify that. we should get greater consultation for that. i think there is a lot that can be done. this partnership will help the grand strategy that i laid out to be able to work. >> i think you all have mentioned the pivot toward asia and what the european reaction has been in some quarters. i like your comment, hans binnendijk, about what is happening in asia. it is of equal interest to

europe. there is an opportunity to pivot together. i wonder if any of you have thoughts about what extent that kind of message will come out of the summit in chicago and whether there is an opportunity to make that point in a way that has not been made to date. >> i think the europeans are beginning to understand the importance of global engagement. they are beginning to understand the future of our partnership, which depends on their readiness to do things that are well beyond their normal purview. but i think that is going to be a long-term process. in the sense that the europeans at this point, simply don't have the equities or the capabilities to be players in asia in the

same way that we are. does -- that doesn't mean they can't be held for can invest in the capabilities that will get them fair, but i do think that when this comes back to the question we were just having about partnerships, it is not just about nato capability, but what nato can do for others in the sense that, as i have suggested in my opening remarks, i am not sure that nato is going to be sending out the fire trucks every few months when there is a problem out there. who is going to be sending out the fire trucks? probably groupings that are local. if i were to guess what the most important security institutions would be, they will be the

african union, the security council, a defense unit emerging in africa, and so i think that nato's engagement with these groups should be partly about interoperability. but also teaching them to do for themselves what nato has done for it self, which is the most accessible operational integrated militarypolitical institution in history. if we are going to do it, we should invest and make sure that others will be ready to fill that gap. >> thank you. yes? ian brzezinski? >> i would hope that would be the message that comes from chicago. that we will be ready to handle the challenges of the 21st century. i think partnerships and global partnerships are a way to do that. the united states, canada, and our european allies, reaching out to brazil and india and other countries, that is europe

and north america pivoting together for these newer regions. i am concerned about our ability to pivot the military together as we reduce the united states forces in europe. i think it does raise, because it has not adequately been addressed by the administration, how we will maintain a operability between these countries. all i have heard is that to reduce the kind of engagement that occurs between the combat teams that are being eliminated, they are going to have the united states commit to the nra. fantastic, were straight decision. we should have done it a long time ago.

and they are going to ensure that the combat team equivalents are going to rotate through europe each year. which sounds good, but when you start scratching the surface of that, those rotations are only six to eight weeks per year. that comes nowhere close to the kind of engagement that a permanently based unit can provide in europe. it comes nowhere close to the level of joint training that a unit based in europe can do with the italians and poles and more regions and such. i think there is a real question about what is going to happen to all be interoperability we have developed in the last decade? remember, when europeans started flowing into afghanistan and iraq, we had real interoperability problems. it was not smooth. as the battlefield becomes more complex, certainly the way we fight, interoperability is more difficult to maintain and

develop and sustain, regards more engagement instead of less engagement. that is the question mark that i bring to the table. >> yes, doctor hans binnendijk? >> i would hope that the message from chicago is that we face global challenges together. this group of nations and democracies meets together to talk about those charges. that is what the measure messages should be. if you look at libya and what happens there come it does demonstrate that if an issue is in the interest of our allies to engage in, they will do it. it didn't require all european allies to engage in that. 90% of the ordinance dropped in libya was a european ordinance. that demonstrates that when

there is an interest, there can be a will. i would not write off the europeans as quickly as some others might. they are near an existential crisis over the future of the euro, and we have seen that with developments in greece. so that will complicate it. let me just say a final word about what ian just raised. which is the narrow issue of brigade combat teams in the american presence. i also think that as been suggested, this is a sound decision to have these brigade combat teams have at least one us-based combat team deployed battalions to do joint training with the nato response force. that ought to be a model for what we do. to maintain interoperability, military interoperability, between the united states. post isap. this may be a place for the committee to pay an instruction

role. interoperability is very precious. and it is very fragile. we need to be able to sustain that if we are going to see progress with the alliance post- isap. i know we promise to have folks out by about 1230, let me disclose with one question that is a little bit more parochial for me. i am planning to attend the summit in chicago. one of the programs i'm going to be participating in is the planet council's young council program. optically, it is aimed at engaging young professional leaders and future decision-makers in policy questions, particularly, the importance of nato. do you all have thoughts about what we can do to better engage upcoming leaders on nato and what the next generation should look like for nato and for our future leaders?

>> u. professors ought to have some very good ideas. >> we are thrilled to have the atlantic council conference they are, senator shaheen. it communicates a lot of commitment. they need to hear that america is interested in europe security interests. i would encourage them to think globally and recognize that they and their countries have a lot at stake globally, and they have to start looking beyond their immediate financial crisis and think about how their interests are affected by asia and africa. just as charlie did today, by working with the united states, we are together stronger and going to be more influential and be able to shape and drive a benz he on the north atlantic

area in asia and africa and the middle east together and if we do it separately. >> thank you. and the other thought? >> i would just concur that it is more and more important over time on both sides of the atlantic we are going through generational changes that are, to some extent, not eroded -- it would be too strong a word, but diminishing the social foundations and the partnership in the sense that, i mean, you and i represent the last generation of people in this game who entered professional life when the cold war was still alive. the students i teach at georgetown, they are growing up in a world in which atlantic partnership? the cold war? berlin wall? what's that? i think that is why it is especially important to get

americans and europeans to engage in these issues to be educated on these issues, and also for europeans, the main thing i worry about is their own commitment to the european project. one of the issues that pullin gave at the beginning is that they don't have the same emotional attachment to europe. that was sacred ground. and that is why, i think, investing in the emerging generation is so critical. >> doctor hans binnendijk, you have the last word. >> thank you. camberwell has done a great job with that program. i go to meetings and everybody looks like me. this generation. we need to fix that.

i have my daughter now engaged in nato affairs. >> bringing my daughter would help, right? >> i think the message you want to take is that we are faced with global problems that cannot be solved by the united states. they have to be some salt globally. for all the faults that the europeans have, they still are our best partners in dealing with those global challenges. it is not just military stuff. it is energy and climate. it is cyber. that is where the ledges latest generation is focused. i would focus on those as well. well, thank you very much. this has been very enlightening. at this time, i will close the hearing.

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

he spends 2012 congressional directory has details on each member of the house and senate. including contact information, district maps and committee assignments. you can get your own copy for $12.95 plus shipping and handling at c-span.org/shop. up next on c-span 2, a discussion about the u.s. and russia relationship at the center for strategic and international studies. a treasury department official discusses his agency's counterterrorism work. and later, the british parliament holds a hearing on the relationship between the government and the media. prime minister cameron's former communications on telecommunications director. >> on "washington journal" tomorrow morning, we will focus on the institute of medicine's report on the obesity rate.

we will be joined by the institute's food and nutrition chairman, former agriculture secretary dan blechman. libertarian presidential candidate, gary johnson, the former governor of new mexico, will take your calls about the campaign. and we will examine the foreign-born population in the united states with a elizabeth grieco from the census bureau and audrey singer from the brookings institution. "washington journal" is live every day at 7:00 a.m. eastern. >> i remain optimistic about the future of united dates and indiana. political leaders spend a great deal of time talking about what is broken in our country. to some degree, that is the nature of their business. but we should also have confidence that the unique american experiments experience is alive and well, and our political system can still work. >> longtime indiana senator

richard lugar lost to richard murdoch could look back at senator lugar's career on the senate floor and in hearings, including his work in the 1990s while online and searchable at the c-span video library. >> now a discussion about u.s. russian relations. the center for strategic studies hosted this panel. this comes ahead of the g8 summit to be held at camp david next week. [inaudible conversations] [inaudible conversations] >> welcome.

i want to welcome you to an important discussion on bilateral relations between the united states and russia on the eve of the g8 summit meeting and during the period leading up to the boat. we hope next month to ratify russia's accession to the wto. the world trade organization. since 2009, the relations between russia and the united states, there have been many successes, including the new start treaty, cooperation on afghanistan, iran, north korea. but there have been notable differences over syria, missile defense, human rights, enforcement of intellectual property rights, and the conduct of parliament elections last month. ghost president putin and president obama have called for a deepening of cooperation between the two countries. the russians are expected to add

to the wto in june or early july. thirty days after that, we expect, roughly that russia will become a member of the world trade organization. for the united states to take advantage of the new market opening in the russian market, congress must pass legislation to grant russia a permanent trade. the panel today will focus on prospects to improve on relations with russia and how the wto process has prompted russia to take measures to open its economy to more international trade and investments. we had time to this panel so that it could set the stage for the meeting between president obama and president putin on may 18, which we have just learned has been canceled today. president clinton has decided to president clinton has decided to forgo his trip to the united states for the g8 summit. with that introduction, i would like to yield to my colleague,

andrew kuchins, director of our russia and eurasia program or did he will moderate today. >> thank you very much, meredith. welcome everybody to csis. it is great to see everyone and we have an absolutely superb group of speakers. let me make haste and make some brief introductions so people can make some remarks. we will start up with our two ambassadors to each other's countries. worst of all, the current ambassador from the russian federation to my right, one of the most distinguished and long serving successful members of the russian ministry of foreign affairs, he has been here, of course, in washington since 2008. he is an ambassador and has overseen the russian side of

things often called the reset. he has also served as russia's ambassador and simultaneously the ambassador to nato and is a foreign minister. sergey kislyak it is a wonderful pleasure to see you here. our second speaker will be doctor john beyrle, who has just returned with a successful stint at the russian federation. he arrived back in january 2012. and from the american perspective, was implementing on the ground the improvement of relations in the long series of agreements and cooperation that has developed over the past three years between the united states and the russian federation. like mr. sergey kislyak, he is one of our most successful and decorated members of the u.s. foreign service. he is also served as ambassador to bulgaria from 2005 to 2008.

and also many other assignments having to do with the soviet union and russian federation and central europe and europe. john, great to see you here today. our third speaker to my left will be ambassador susan schwab, who served as a united states trade representative for several years, beginning in june 2006. she is currently a professor of the school of public policy at the university of maryland, a place where she has a long and distinguished history. she served as the dean of the university of the school of public policy for eight years. if you read in the biographical material that we have on susan schwab, you will see a long series of achievements that she made in the united states and trade negotiations. the only thing i'm not seeing there, susan, is the u.s. and russian bilateral.

maybe it is by oversight. our final speaker will be klaus kleinfeld. the ceo of alcoa, the largest employer in 31 countries. that is a big job, and he also serves on the business council. i would like to extend a shout out to the russia business council. the vice president has been working with him for u.s. russian trade and on this effort to promote russia's graduation from the amendment and to establish permanent trade relations status status. which we hope will happen soon. with that, let me turn the floor over to the ambassador.

[inaudible >> [inaudible] [inaudible] [inaudible] [inaudible]

>> we have the greatest nations. these are significant as a country. >> i think you probably have to switch the microphone to the on position. >> coming back with ideas to work in the country that they didn't know very well. that is quite normal. i would say that we have normal relations with israel, but we do not have normal relations in this particular field with the

united states over the issue. that is no longer the case. by all standards, there is a political context for this. we will see and hear a debate as to whether russia can [inaudible]. to be honest, in terms of russian economic interests, the completion of the negotiations of entry to the wto, give us an opportunity to become a member before the end of this year. currently, the situation is that if this is not granted to russia, that means it is not going to be granted to the united states. i am pleased that the wto gives to the russian market, will be less vulnerable to others.

we did not want that kind of situation. what we think is needed is a normal relation. normalcy. we tried to measure our relations, but agreements -- agreements are extremely important in their own right. what is missing? normal trade. normal interaction between business communities. not only big companies, once it the ones that enter the market and are doing pretty well, in my view there are a number of russian companies that have invested heavily in the united states and are doing pretty well. i will give you a couple of examples. one company is the biggest producer of tubes. they have become number one having come to the american

market as well. they are the best. they have four or five facility productions here. we consider to be a step towards normalcy in their relations. i would also say that we have a market of 142 million people. russian market is very significant for other countries, including the united states. we could stand to benefit with increased communication with the united states. the current members, if you look

into this, but reflecting on trade. the trade both ways is accounted for $40 billion. it is only 1% of foreign trade for the united states. we suggest, in turn, that neither the united states or russia [inaudible]. just for example, trade is 20% higher. in the eu, it is almost 10 times higher. what it means, it means that we are missing a group economic or political operations.

we simply have a lot of things that we have in common in terms of challenges that we have faced. it appears to me much longer and indefinitely. for russia and also for the united states. we have progressed a lot during the last two years. there is a new way of doing things. the commission that was established by the president seems to be producing good ideas between the governments and also by creating business to business and people to people. which is good. we wanted to see this progressing further.

but still, the potential that does exist for our partnership is still [inaudible] we wanted to be developed into full stability. and we want to maintain stability. we have members of the security council. we have good relations between us. we will focus on international issues of debate. so what i am trying to suggest and focus on the subject matter on today's discussion, economics are important for the sake of economics. for the businesses, for job creation and creation in both countries.

also, it is important in terms of building political relations. making our relations less formidable. even between the closest allies, we learn to work on these issues with each other. i think it means better and more strong markets for russia and america, and american partners. we would like to develop stronger ties and hopefully will. thank you. >> thank you very much, ambassador. i was struck with vladimir putin's campaign article that dealt with foreign policy. i read the line to the effect that the trade and economic relationships between them in

nine states and the russian federation -- the russian federation is way underdeveloped. this is something we need to devote more attention to. >> i agree. >> paraphrasing what he said. it sounds like it is right out of the state department. >> thank you very much, and thank you to csis for hosting this very timely panel. as the ambassador to russia for the past three and a half years, up until january of this year, i was often asked, what exactly is the reset about? i don't think i can put it any better than what he said. it is about a much more normal relationship between the united states and russia. a more constructive and more productive relationship. i have worked most of my career in the state department and even before to help foster that constructive and more productive approach. i was very fortunate for the past three and half years to be

able to play a part in some of the orchestra. i first reached out and made it clear that for the united states to reset was not about just improving the tone of the relationship, which has gotten to be scratchy, frankly. it was also about a substantive agenda which would fundamentally improve living standards and a lot of people in both countries. clearly, the s.t.a.r.t. treaty, the cooperation that the united states and russia achieved in afghanistan, in particular russian support for american forces in afghanistan, those are

two single accomplishments that i think were signaled very early on. both countries were serious about getting back to business and recapturing the habits of cooperation. the most difficult goal, that was the wto. wto membership for russia did not depend on the united states alone. it depended that most of the action that russia needed to take itself. the president was willing to go the extra mile to work with our european allies and with the u.s. congress. to work with the u.s. community to ensure that everyone saw the benefits of the wto session for

russia. the fact that russia was the only country in the g20 and the g8 seem to be incomprehensible. ira member very clearly when you were in a meeting with me when president obama and the president met in the summer of 2010. in the cabinet room. and discussed the need to really get down to business the president turned to their advisor and said we are going to go to lunch now. and we want you to come up with the plan that will make russian mentorship and wto a reality after 18 years. i looked out in the audience i see some of the people here who were intimately involved in just about every step of this. the president had a strong team on his side, obviously,

ambassador ron kirk and the president also had a strong team. it was clear is that the first deputy premier would have the main responsibility for the legislation that needed to be passed in a very short period of time. it was also clear to us that both sides need to work hard to resolve the differences over chicken imports exports. to make among story short, as we all know, in the fall of last year, russia was formally invited to join the wto. the negotiations were included after many hours in which russia, the united states our european allies, all identified the benefits to the world economy. not just to our own economy and to russia's economy, but to the

world economy of having russia as a member of the wto. this, to me, is the achievement that i am most proud of playing a small part in because the dividends from that will continue to pay out for years and even decades to come. as sergey kislyak said, the foundation for it a sustainable relationship between the united states and russia is a strong economic relationship. when i was coming up to the state department with the center of gravity and we were laboring in the trenches on arms control for many years, it was said that it is still important that a strong trade relationship will create stakeholders on both sides who understand the fundamental importance of this relationship to the world

economy and the world as a whole and will continue to push forward sustainable momentum and also build on that to reach new achievements. >> thank you very much, john. to vladimir putin's credit, i don't think that the russian government really got serious until he became president back in 2000. that leads me to turn to you, susan, as you were directly involved in many of the associations for several years. what is your perspective on what this means for russia? and also to the wto. >> well, i must say that this has gone on a very long time. speaking of one who put in several years who was involved in the bilateral negotiation and

agreement phase of this. for those of you not familiar with the ins and outs of the wto succession process, there were two stages. this, by the way, is a miserable process for any country try to get into the wto. this is not easy for russia and not easy for vietnam or the ukraine or any other country. when china came in, being a late comer to the wto, you're expected to come in a in five or 10 years, do it every other country that is a member of the wto got 50 years to do. so let's put it into some perspective here. i have the opportunity to negotiate on these matters over an extended period of time. in 2006, november of 2006, to be precise, managed to conclude a bilateral russia agreement on

russia's accession to the wto. what is part of a series of bilateral agreements that russia concluded in advance of the multilateral that was concluded last year. it paved the way for the situation where we are -- where we find ourselves today. the short version of my remarks is that russia will become a member of the wto this year. and two, whether the unit the united states graduates russia or not, and therefore, three, the sooner the united states can move ahead with their own process, we can fully take advantage of russia's joining and becoming a member of the wto. that is the short version. the slightly longer version is that it is somewhat more

complicated than all of this. for the various actors, i would begin by offering kudos and congratulations to the community of business which is up on capitol hill, day in and day out, making the case for why it is in the interest of the united states, as well as in the interest of russia, for russia to join the wto. it is very much in the interest of u.s. goods producers and manufacturers of goods and services. services and exporters, supporting russia to join the wto and russia to lower its barriers to trade. also, it intellectual property protections and enforcement opportunities.

for those of you familiar with the website known as global trade alert, the g20 in november 2000 and 8 at a front-end that the g20 members said they were not going to impose the protection of trade investment measures two years out. gta measured and was able to measure some 431 new protection and trade investment barriers that were imposed by g20 members of those 431, russia had imposed 35. all of the g20 members, only russia is not a member of the wto. i think the two are related. it is in our interest to have protections and to diversify its

markets away from just natural resources. it is very much an interest of u.s. producing exports. i have the privilege of sitting on the board of caterpillar and fedex, another jim mcmurray is up on the hill in the community and is going to work with them. i see scott miller from procter & gamble. very much a presence working with congress on this. quite quickly, the business community can do it. they can do by themselves. chairman baucus of the finance committee, chairman of the house ways and means committee, this is bipartisan support from moving this wto membership for russia. if it is going to happen, the

sooner the better. what is the next step? well, this is going to happen. the sooner the better. this is a june-july equation that we are talking about here. for that, we need the white house to step up and engage with the leadership. and also for congress to work to make sure that the votes are there. here we get into the issue and this is sort of an awkward moment for me, i am an economist and trade policy person. i am not a foreign-policy person and i am not a human rights person. i pulled by everyone that the way this legislation will move, at some point in parallel, there will be some other kind of legislation moving in the human rights area this is not my lane. this is what i'm told and this is what i read. if that is the case from the white house needs to be up on the hill working that part of the equation and doing it promptly and doing it with the

decision-makers who are going to be making those decisions as well. >> so i put that out there because nobody else has yet. the sooner the better. >> thank you very much for those inspiring words. and also putting out there. i think we will continue to follow up on that. klaus kleinfeld, you have also been on the barricade of this issue. and i think you have seen enough up close and personal during her long career. and also now, with alcoa, with the foreign engagement means and what has taken place over the past year and what you see developing possibly going forward. >> the first thing is is what has happened on the commercial side. the second thing is not everything is open.

we have to be open about it. the third but the thing is, what are the opportunities? the last thing is what needs to be done not together. i think we need to have joint effort between the business and political communities. human memory is usually very short, and quickly, if you just look at the things that have happened over the last three years, this is an unbelievable subject. we have had four meetings with ceos. and they have been super successful on both sides predicted with the investment side of things, leaps and bounds have been made. we have invested almost a billion dollars over there and it has been done successfully. also, coca-cola making a

commitment to 3 billion. 500 million over a decade. i could go on and on. this is not small change. this is big. and we should not consider that it's normal. it is normal if it were a normal place. but under the conditions, we have been operating under, it is actually pretty substantial. the business community is working out. we wouldn't put our money behind their and others' women if they didn't see it as an opportunity. for most, it has worked out well. also, from the russian side, [inaudible] that is okay. the little things, we are always

complaining about involvement and thank you to both of you. you are always great and open. you do a fantastic job. highly qualified immigrants are working. all of these things are great. the business community is working on things that are new and russia. when we do run into issues, and the argument is that the countries are big. and we don't all the things that are going on. then we came out with a suggestion. want to establish a hotline? that is how it evolved. if you listen to the business community over what has worked very well, it is particularly those ones that helped russia to

have a hotline, which they can go to come elevating the issue and the issue is taken seriously. that is happening. i think we should not ignore that. we should also not ignore, and this comes to my second point, you cannot walk which is looking at that. i'm trying to be as objective as possible and not step on any toes. there is a good indication for transparency. russia in 2011 has made it to the position of 143 out of 183 countries. knowing the expirations on most. i cannot believe that that is what anybody is fighting for. [inaudible] it is on the same level as

bangladesh and nicaragua. i don't think i need to save more. the commerce department has come out on the ip protection rights and basically has put russia is the ip protection for 16 years in a row. that is all, i would say is a businessperson, needs improvement. big-time improvement. i mentioned a couple of time, 88,000 pages for the authorities. that is a substantial improvement over a year before. the good news is, those things were, but they work slowly. now we must focus on changing over to electronic systems. we will be one of the first to try out. let me move on to the opportunity.

i think the business side wouldn't be [inaudible] and saying [inaudible] this is now about jobs and businesses in the u.s. this is about u.s. business profits. the export council of the president has done a very good job of looking at export opportunities and they came out with a nice study promising we can double exports from the u.s. russia in the next 45 years. having looked at that, that is s pretty credible. we have done, with the coalition we have found it, dealing with the u.s. and russia business, we have done a profile of each of the states. it basically put a radar together what businesses are in each state that have business with russia?

those that are exporting to russia. it is fascinating to see this. if you look at the numbers for two states, new york has about 500 million to russia. and there are many jobs behind it. if you go to california, the number is 665 million of exports in the last year. can anybody really say that we can afford to leave this on the table? the other thing is, can you really think that we don't have a chance to do next spring? their there are other companies that are in other places in the world that are prepared to jump in immediately and basically take the opportunity. if it meets more convincing arguments, things are clear on the business side. the business side is totally convinced. i gave you reasons why.

john deere has been very clear about that and an educated all of us in the business community. 9% of available land is in russia. a persona farmlands and 20% of forest area. if you look at the automation and farming, we strongly look at that. that is the opportunity that i'm talking about. tractors, exactly. basically, we are just getting more out of it. i didn't know that, actually. gm, chevrolet, is currently the top-selling foreign brand in russia. i didn't know that. thinking about all of the fallout that was there, this is my third point. the fourth point is the question to what everybody else has addressed. what needs to be done? i think it is absolutely clear. we want to hear and we have

heard -- we would like to hear it here from the administration. it is absolutely a question of commitment to the modernization. i believe russia needs this and that is what the business community needs. that has a couple of facets. we have heard it through some of the people in the administration, but it would be really important here is a message to the business community. it is important to our relationship for modernization. that also has implications of and that opportunities for business. the second thing is [inaudible] there is no question that we make sure that this gets passed. we have had many meetings on the hill i talked about this a

couple of times, but i think that the president is behind and others are too. we mentioned this before. we also have the right to a address the elephant in the room. i totally agree with you, susan. we have to be realistic to these things. if they grow as a parallel, they will be seen as one. and i agree with that. >> thank you very much, klaus. following up on us, this, the point that you were both making, the pntr, as senator baucus put it recently, in a hearing for the finance committee, the argument from a standpoint of

economics is it is a slam dunk. i read a piece last week in an intellectual way, i concluded that it would be idiotic for the united states not to do so. there are two problems. one is that this is a campaign year. and so getting the senators to make a boat that will be viewed by many as doing something positive for russia, and positive for the united states, it's a challenge. and number two, while the economic argument is clear, this is not just going to be about an economic argument. this is going to be a broad referendum about russia. that takes us back to, i think, the realm of our investors. what is the argument to make?

i think there is a very strong argument to make about how improved relations with the russian federation have in fact served u.s. and national interests as well as russia and their national interests. how would you characterize that argument in a nutshell, john, that would put this in a different light? >> well, i think it's clear that we, the united states, want to see a strong, democratic -- a strong, democratic russia that has an economy that is producing for its people. that is the kind of partner that we need in the 21st century. and that means that we, like many russians that we know, many russian citizens, have a stake in seeing institutions built inside of russia that make russia a stronger and more sustainable country.

it is no question that it is in our interest. we talk about that in many different ways. the centrally is trying to build a strong will economic relationship with russia because it is good for both countries and also it serves as something of a shock for the political cycle, the ups and downs that we see periodically. i think it means that we need to speak very frankly as we do in private when we see things happening happening that aren't leading to the stronger, more stable future. this and the end depends on the russian people and russian leaders. but if we as americans are making it clear to the russians that we see them as a desirable strong partner, and that our

desire to see them strengthen their institutions is what we have stood for as a nation for 200 years, i think perhaps some of the scratchiness and unpleasantness that sometimes accompanies this dialogue back and forth can go away. how that plays out exactly in the context of granting pntr to russia, we are going to have to see the administration is committed to seeing this through. we are committed to working with congress to do this in a way that is good for the u.s. russia relationship going forward for that many years and decades come. [inaudible conversations] [laughter] [talking over each other] >> i will tell you a couple of

things. we have self-reliant -- we respect our partners and we insist that others in our partners respect us. the way that sometimes people try to teach us what is good and what is wrong, in russia -- for russians, sometimes goes beyond something we can accept. i pick up the argument that john left us with. and that is the government should be pntr. it is for american business in russia. and we need to understand that. because we have been invited to pntr.

whether the united states gives us pntr or not, it is not something that we want to continue [inaudible] first, we want americans we are partners. second, one of the vestiges of the cold war mentality that is still intact, and spurs political environments -- for the reasons which we cannot even explain today. the reason that appeared in the first place, even in that time, are no longer. [inaudible] the cold war mentality that sometimes still persists is one -- one of my american colleagues

says that we are victims of the post post-cold war hangover. which is right. frequently we judge each other through that which had been developed. which is different than the commonality of purpose that we have today. we want to work with americans. we want to do business with americans. we want you to be present in the russian market. we stand to benefit from partnerships with american companies. i am via in the american market more and more. we plan to diversify. mr. klaus said it would be very important to commit ourselves. i can say that it is something that we will be fully committed to and we will continue. it is not because american business tells us to do it, it is something that we decided we

want to do for the benefit of the russian economy and the benefit of the russian people. [inaudible] we have well-educated people, mathematicians, physicists, and we have an entry of managers. most people can confirm that we rely on russian management. we have a new generation of people who are entering the market economy. mind you, we are still a young market. just try to imagine. it is only 12 years. try to look at the constitution. we are extremely proud of what we have been able to achieve.

there have been a number of things we have done to make our democracy more modernized. political bait debate is more and more likely in russia. whatever has happened in russia is because we do it for ourselves. not because we are told by americans or anybody else. i think that what we have been doing in russia is in line with europe's ability to work with us. as john said, and i fully agree, pntr needs to be granted in a way that would exemplify russian-american relations.

we all know what it is, however i do not know the final version of what it is going to be. we know what is behind it. and i will tell you up front, that this kind of legislation is adopted, it will deal a significant blow in our ability to work in a number of areas. we will work with the united states in as much as the united states is willing to work with us. in a respectful, mutual and beneficial way. i think that opportunities are great. unless somebody wants to torpedo that kind of interest, we can do it. >> the unmentioned piece of legislation goes by the moniker of the [inaudible name] act. google it.

i have some concern the administration is shying away from a debate -- a public debate on russian policy during a campaign year per and i don't think that they should. i think there are a lot of positive data points that you can point to. the things that russia has done has really served russian interest. one of the lesser ones has to do with the transit quarters. the transit quarters that supply u.s. troops and forces in afghanistan in which the russian federation plays a key role. three and half years ago, our troops in afghanistan were being supplied through the port in pakistan and what the military calls from loss of communication. we were totally dependent upon

that supply line. we opened up a new line of supply that went through the caspian states and russia, which means that we had the ability to be less vulnerable. all i can say is that a year ago in may, if we didn't have those other communications and the cooperation for the russian federation, the calculation on the strike for osama bin laden would've been very different. there might have been more opposition of defense secretary gates at the time. with that, i think we have about 15 minutes or so for questions and discussions with the audience. there are microphones around the room. please raise your hand.

know your affiliation. and limit yourself to one brief question. thank you. >> yes? >> could you talk on syria and how that is affecting u.s.-russia relations and how it will affect the u.s.-russia wto discussions as well? >> john, would you like to take a crack at that one? >> well, we all see what is happening in syria. we have been watching this develop with a motion over the last six to eight months. it is quite appalling. we are, as a government, determined to see the end and to see stability return to that part of the world into syria in

particular. to do this, the united states needs to work in concert with our allies and we need to work in concert, particularly with those countries in the united nations that cooperate with us the ep five. russia, shares the goal. i won't speak for sergey kislyak, i'll let him speak, but i think russia probably shares the goal for a end to violence. we share a strategic vision. we have had some disagreement on the tactics we should take to bring that about. we are committed to continuing to do everything in our power to end the violence and to see an orderly succession take place. we have made very clear that president bashir max time has come and gone. through the dialogs we have had in other partners in new york, but we will continue to find

ways to hasten that kind of change and transition so the people in syria can live normal lives free from violence. >> i will add to that. we want violence ceased. we want political dialogue on all sides for syria to be engaging. and also successful, because we do not believe that anybody in washington or moscow, can or should tell the syrians as to how they need to leave and who will be the next president. he needs to be done by the syrians themselves for obvious reasons, because they have to decide their own future. we need to be able to recognize it. all of us. so the difference was as to how

we approach this issue. i think we have a little bit more common ground. both the united states and russia support the plan is the basis for immediate steps to be taken in syria. then we will see how the political dialogue and political process can be organized in this country. but we insist it needs to be done by the syrians themselves and not to be dictated from the outside. >> excuse me, and the second part of the question was on russian-american relations. this is one of the issues that we do not see eye to eye, the same time, it does not undermine our ability to work where we do agree. here i think we have a little bit more normalcy in our relations. disagreements are fair, especially on issues that are very important to both

countries. at all points, even points of significant disagreement, i think we have open and respectful dialogue on this issue. >> thank you. we will collect two or three questions right here in the front. gentleman over to the left? >> let me ask a question to you. i have been listening carefully and it is clear that we should wrap pntr. what do you think -- and i hope maybe, and i realized that this nuance -- if you could articulate -- what are the specific objections, and if you don't want to say to in the congress is opposing, just say is as a group so we can get an

idea what are the objections, if you would, please. >> okay. >> to get another question and we will go back. >> if i am correct, there is in agreement that has been agreed to by the united states government and russian government, but not ratified. if that is true, i'd like to know the status. >> our american colleagues are sitting together in developing this agreement. [inaudible] our american colleagues were rethinking the strategic post in those kind of agreements, not

that it applies to russia, but as applied to the rest of the world. my sense is that american colleagues are ready to engage in the treaty. >> we should have a treaty and the administration just finally teamed up. maybe we can engage with russia in the number of other countries. >> that's fine, i will try to address your question. and anyone can jump in. i'm sure representatives will be thrilled to do so. one of the vintages of a think tank is you can say whatever you want with no constraints. one set of objections comes from people who are concerned about human rights and democracy. it is perceived and russia in those areas.

there is a lawyer who died while he was being held in prison and there are concerns about that. there are a whole set of concerns about that. the way the parliamentary elections had been held -- that is one constituency, okay? a second constituency would be those that russia is pursuing certain foreign policies that are counter to u.s. interests. so we point to the disagreement about syria. this has poisoned russia's reputation on capitol hill right now. it is such a big issue on the headlines. our inability to come to an agreement about missile defense. aspects of russia's relationship with iran, in fact, actually, our cooperation with the russians in iran has been quite extensive.

but there are a whole series of concerns that people have about russian foreign security policy. and then, i think, more pertinent to susan's area, there are concerns about how russia does business and there are concerns about whether russia will actually live up to the wto commitments that it has made. and also whether adequate -- and he teased his word -- -- adequate concessions were made in the negotiations as part of the agreement on intellectual property rights. etc. etc. etc. i think they are are probably these three constituencies that have various objections for different reasons to russia's pntr status.

.. >> to develop our relations

if they want to work with us it is based on a mutual respect. as far as we're concerned it needs to be based on mutual benefit that is for any operation especially long term. to make many and the

business we know what the partners want with the goals of developing, we will come it. 20 years in the market economy to develop the market that has not existed for generations and generations. you also have to create the amount of people. there is a stronger position that still don't ask to proceed. it is normal because people

are different but the overall direction with the market economy as for the business environment is described by a bad company working that is very respectful. i had a meeting with a member from russia and affiliate's. all of them said they want to stay. not a single one said they are reconsidering. and then to explain some say

they do not want to additional competition. [laughter] but american companies with serious proposals are doing pretty well. it does not come without overcoming problems including from the united states overall they feel comfortable. the other companies have the

same problem meeting to abide by the accounting procedures is a serious proposition people i have spoken to you understand they are comfortable. >> to one of these objections have stability concession that raises concerns what have we learned from that? >> as the trade negotiator is the predecessors' steel. [laughter] monday morning quarterback.

you can always think of saying this you would do differently. that said most objective observers contemplate what it was look like today if trade was on the inside or the u.s. had not granted china and t.r. we would be in worse shape us and china. also it is in the u.s. interest and russia's interest for russia to join the wto in the u.s. to benefit that will only take place after it is history

following the observation this is a complex bilateral relationship. i a agree with the ambassador we can navigate a complex bilateral relationship for them to have a healthy bilateral economic commercial relationship. and still working our way and still working our way through foreign policy

disagreements. i speak as the former cabinet official listening to individuals second-guessing the politics. you get used to. [laughter] is in russia's interest and u.s. businesses engaged in capitol hill they recognize the importance.

it would be a shame if the most vocal with russia secession was punished with government procurement actions. said afp for the timing because i would say or predict just as in russia will be a member of the wto. the only question is timing. is it july or after? i know the business community is working very

hard. i predicted this in parallel with other pieces of legislation. leading this to the high foreign policy you are used to dealing with much more complicated issues. put on your big boy pants. the relationship will survive. [laughter] >> i can only say very simple, i did buteo gives a level playing field. if you look at the largest wealth creation and engines larger than any country or countries together coming here we bring in another country on to the system with conflict resolution mechanisms. look at those negotiations

that it is very good. finally what we always wanted. second to, i would argue to say is an election year. who can see we don't need jobs in the last? i would be out of my mind anybody could see we are keeping that on the table. you might not understand most of the company's our global and headquartered with a great heritage. about how strong they can be

and in the u.s.. that is access to the russian market. but then the russian and automotive market already in europe the largest one. did you compare it from three years ago they are cars you would not want to drive. it is a good thing. i a talk about the farming and there are other industries to really make the market around. and it is stated that i

agree with you. would u.s. companies bring? when we acquire the plants plants, we are recognized on this planet. the culture in russia, if you look today that was an extremely hard job with education, the training training, that was nightmarish but that is the change. that to change the behavior with more respect to the

point* going into the private space just last week we have the annual shareholder meeting where we ask the employees to give that. when restarted that in russia we said we should give back to the community. last year we have 56% of all russian employees doing work in the community in addition to their job. this is the value coming with the globalization with a positive impact to achieve

much more in society which is the whole idea of modernization. >> i know there are other questions but i have to be responsible of my role in the moderator so the guests can get to their necks to gauge member broke susan, i agree when you say eventually russia will get there. but it reminds me about churchill. americans always make the right decision after exhausting all the alternatives. [laughter] on that note to comment think you. [applause]

[inaudible conversations] also the tea party movement seemed to come and of

nowhere. occupy wall street? the important to take seriously as a social movement. >> these men go through things and have scars no one can understand except each other. >> relationship between harry truman and herbert hoover who were personally and politically different but formed an alliance that neither would have anticipated and was

enormously productive forming the foundation of a very deep friendship of letters later in their lives are extraordinary. >> the most exclusive club in the world. >> good morning welcome to the center for strategic and

international studies. we will be live on twitter for this event. i have the privilege to welcome to distinguished public servants david cohen undersecretary of terrorism of the treasury and we can think of no better% to tell us about the role of treasury and national security. my colleague 1015 this job was deputy national security by serb four combating terror. we owe both officials agreed that for their service. i will turn it over to juan

zarate for this discussion. >> thank you for coming today and attending today and agreeing to do this. open may and honestly i ian fight to that of a high-profile government officials but also friends. it is a great discussion have as we read the newspapers everyday importance of treasury as a key part u.s. government thinks of financial power and security and david is now leading the office that is the vanguard of that

strategy and those tools and global elements of influence putting treasury at the center. talking about iran or north korea, drug-trafficking, tre asury not only has a seat at the table but at the head of the debate. we're happy to talk about the issues and frankly those issues from the national security level. >> great to be here. >> i find continuity in the evolution you with the treasury department in 1999 through the beginning of the

bush administration. can you talk how you have seen the evolution and how it shapes national security? >> thank you four those kind words. i will get to your question but it is a great pleasure to be here to talk about the treasury department's role and i am mindful what i am able to do today is very much dependent on the work of those who came before me including yourself. as noted i was in the department through 2001 with the general counsel's office. at that time the treasury department was involved the

national security finance world to a lesser extent than today. we were at the time that i would come back to the body for anti-money laundering we were responsible for regulating the domestic anti-money laundering through the financial crimes network and sanctions and when i came to treasury, i came at a time when there summer's just became secretary. he elevated the importance of anti-money laundering not just domestic international

issue. to see the threat to internationally the treasury department should be more involved. we looked at those issues the two years i was there. the issue began to gain greater attention within the government and internationally. noting in july 2001, this was developing but had not taken hold. i came back in 2009. a part of treasury ivied was completely transform to. we lost all law-enforcement agencies but gained something enormously important that that our

growth as a player of national security with two offices with a policy of this specifically dedicated to developing innovative approaches to combat financing and intelligence. we now have our own intelligence unit comprised of an ls who stay and and day out mission is to develop financial intelligence to understand the networks in different contexts whether narcotics narcotics, terrorists comment organized-crime organized-crime, weapons, th ese analysts working with others in the community help us to understand where we should target our efforts. adding on top of the regulatory responsibilities

we negative all are much more effective to take it internationally that is quite useful to pursue u.s. foreign policy to talk to foreign financial institutions about the importance of combating illicit finance to address our most important foreign policy whether terrorism terrorism, weapons proliferation over organized crime. the power we can extend internationally and the ability to attract complementary actions has

led to the most difficult foreign policy problems are addressed those that are being debated would gain added tool that could help to solve the problems. we now have the expertise and the credibility to promote national security interest. >> soleil man's way to think

about it between diplomacy lies a full range of financial tools. and made dive into the issues with al qaeda of lot of discussion of the one-year anniversary. let's talk about terrorists financing. it seems buckeye did not only beleaguered but has trouble financing the network behalf of the rise is of the affiliate's and the wherewithal. kidnapping for ransom, a list of other ways to

finance itself. what is treasury thinking about? >> it is the abolition of my office. i am the anders secretary although the offices financial intelligence when it was created the principal focus was going after terrorists financing. we have been doing that quite aggressively before the creation of the office. the al qaeda collor that to

is hold up and pakistan is a much weaker state from 2008 and 2009. with actions taken by others but to the effective use that has led to a substantial decrease of support. when we've designate supporters of the al qaeda to raise money for al qaeda qaeda, that has the effect where it in the united states one of the same as we could do get institutions

that are not obliged to follow law to screen their transactions they're not facilitating in the transactions were being involved with terrorists financing that has prevented al qaeda from using the network to move money and that has had a tremendous impact on the situation. one of the areas where we are focused is kidnapping for ransom with those sokaiya that affiliate's

using kidnapping for ransom to have substantial amounts of money. spelman and we have seen need a q. i am raise 10 the billion-dollar says kidnapping for ransom. these are big dollar amounts >> that is harder to of fact? >> hall the zero lead to have the authority to designate off the coast of

somalia to identify individuals who are the money men behind the operation to disrupt their ability. but our tools are broader than just designation and kidnapping for ransom, we embark on the effort to persuade our allies to adopt the policy the u.s. has had for a long time. they will not pay ransom or give things of value as a concession to kidnapping. it is a difficult policy to implement in each specific instance because there is someone held hostage they say pay us to have your

loved one back but longstanding policy that the president is firmly committed we will not pay ransom. the fact of this is we have seen hostage takers are less likely to take americans as hostage because they recognize it is not a pot of gold. there are others who don't subscribe to that policy. countries pay ransom and organizations that do. we are focused on trying to use our persuasive ability to get others to adopt a

policy that is the same was -- as ours. law enforcement, information sharing there are good examples using the military to free hostages. >> initiative to take money out of kidnapping grants them this hugely important this is the leading edge of terrorist financing today and analogous to the super pac because instead of the individual to a nation you have big chunks of money

coming again. >> talk about iran when it is essential component of engagement with iran with some evidence the economy has been hurt badly that started 2006 in earnest. can you talk to us where you see financial pressure taking as? and one where you help fashion especially as we look to baghdad. >> the path we're on

big-name financial institutions with the work you. gramm but to highlight the failure with the obligation and designating people at the level also foreign partners to have similar actions taken to isolate the pressure. that is the dual track strategy with a meaningful substantive engagement but it will face increasing pressure as long as they don't accept the offer of a engagement. the gauge contract was not

bearing in the fruit steadily and aggressively increase the pressure that authorities that congress has given us but what most recently has culminated that focuses on and iran six port of oil and transactions at the central bank. with a combined effort or working with the international community. i cannot overstate the importance of the fact we can generate when we haq of international partners. e.u., japan, south

korea, switzerland, a very broad based coalition of country is not doing the same thing all pushing the same direction as the dual track strategy. the impact of that through the fault and in the spring shows a significant shows a significant deterioration in the iranian economy. of their currency has dropped like a rock. that has significant impact on iran's ability to pay for the material it needs for the program because the

people feel the pressure themselves. you see that with the gdp. others better exporters with it increase wailed prices you can see the unemployment rate to steadily increasing and is higher today. you can see how to interact with the international financial committee they are isolated diplomatically financially economically. there is no question the impact has contributed to the new fund apparent

willingness of iran to come to the table. to think we have turned the corner? no. but a meeting was held several weeks ago in istanbul. iranians came and willing to engage in a conversation. in the meantime we well maintained the pressure but the pressure that is applied is in part a contributing factor. >> you have baghdad and with

the mac -- mechanism with the banks with the oil embargo triggered done july 1st. what we see is treasury palisade with those of mehl events? >> in particular the june 28th date is important at the end of a rich and a country that purchases of oil from iran and pays the central bank it could be sanctioned unless the country has the significantly reduced imports if the country does

reduce the imports than the financial institutions for 180 days. with the drive down of the amount of will iran can sell. for those who don't receive the reduction. after june 28 with the central bank iran is under sanctions if u.s. law. surely some of them will well. an article yesterday's saw

that with the alternative payment mechanisms to you paid the nba to say 10 percent would be used with a private entity with the ministry that owns the oil. it is fair to say we will be skeptical of reference of alternative payments premise of the fact under rainman lot it says of revenues earned by any government industry have to be