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Does President Trump Have a Point When It Comes to NATO Nations’ Defense Budgets?

July 18, 2017
Since the North Atlantic Treaty Organization (NATO) was an institution founded as a counter to Soviet aggression and designed to prevent another world war, its members should invest substantial amounts of GDP into defense. Throughout the 2016 presidential election, then-candidate Donald Trump claimed the other 27 countries in NATO were not paying their fair share of the defense expenses for the international peacekeeping organization. 

Trump often used heated rhetoric, even going as far as to claim that NATO is now “obsolete” and fails to accomplish any of the goals for which Since the North Atlantic Treaty Organization (NATO) was an institution founded as a counter to Soviet aggression and designed to prevent another world war, its members should invest substantial amounts of GDP into defense. Throughout the 2016 presidential election, then-candidate Donald Trump claimed the other 27 countries in NATO were not paying their fair share of the defense expenses for the international peacekeeping organization. Trump often used heated rhetoric, even going as far as to claim that NATO is now “obsolete” and fails to accomplish any of the goals for which it was created. He was heavily criticized as being elitist and for not understanding the positive contributions that NATO had provided since its creation in 1949. Since his inauguration, now-President Trump uses softer discourse, but his overall message and that of his administration has remained similar. it was created. He was heavily criticized as being elitist and for not understanding the positive contributions that NATO had provided since its creation in 1949. Since his inauguration, now-President Trump uses softer discourse, but his overall message and that of his administration has remained similar.

After analyzing the NATO defense budget, it appears there is some validity to President Trump’s claims - mainly that the United States contributes substantially larger amounts of money to the NATO defense budget relative to other countries. The international organization’s website defines defense expenditures as “payments made by a national government specifically to meet the needs of its armed forces or those of Allies” [1]. As is expected in an age of international uncertainty and volatility, “armed forces” is a very broad category which includes forces for land, maritime and air as well as supplementary forces such as special operations forces, national police forces or border guards. In order to be considered a defense expenditure, the money must contribute to a group of forces that is trained militarily and can respond to direct military authority. The vast majority of these payments are issued through NATO’s Ministry of Defense (MoD). The United States’ Minister of Defense is Secretary of Defense James Mattis.

Image: Only 5 NATO nations meet the 2% guideline for defense spending. Source: North Atlantic Treaty Organization.

Image: Only 5 NATO nations meet the 2% guideline for defense spending. Source: North Atlantic Treaty Organization.

NATO guidelines request that countries spend 2% of their gross domestic product (GDP) on defense expenditures. While participation in this organization is optional, many countries expect the full protection of the international institution while providing little in return. As of July 2016, of the 28 member states, only the United States, Greece, the United Kingdom, Estonia, and Poland met this standard. The United States is at the top of the list, spending 3.61% of their GDP on defense, while the next country, Greece, spends 2.38%. In 2016, NATO countries as a whole spent $918,298 billion on defense. The United States bill was $679,453 billion compared to just $238,844 billion spent by all European NATO countries. According to The Economist, “Germany, which has more fiscal room for maneuver than any other NATO country, spends just 1.2% of its GDP on defense” [2]. The lack of defense spending in relatively wealthy European countries is interesting considering the current refugee crisis and what seem to be almost weekly terror attacks. These discrepancies clearly signal America contributes far more both in total and relative to other countries when it comes to maintaining international security, and it may be time for the European countries to allocate more money towards security.

Since money dedicated to ensuring international security covers such a wide variety of topics and is often preventative spending, it is very difficult to quantify effectiveness. While agreement between 28 member states upon how to spend the money may be impossible, there is one scenario that all states should prioritize and support: NATO defense money should primarily be put towards ensuring that the alliance can respond to crises. A few examples of areas crucial in the event of a catastrophe are “the speed with which combat troops and their heavy equipment can be deployed; the number of tactical aircraft and major warships…; the experience of pilots…; the age of its technology for reconnaissance, surveillance and other such tasks; and the percentage of defense spending on cybersecurity, and research and development” [3]. If these areas are not well prepared, NATO is essentially useless.

In a May 2017 visit to the NATO headquarters in Brussels, President Trump spoke to other foreign leaders and attempted to spark some change. Under a new plan for the organization, “NATO’s members would be required to submit national blueprints detailing how they will meet alliance targets” [4]. The results from this commitment will not be instantaneous, however, the discussions are beneficial and will hopefully create a climate where countries feel an obligation to contribute more funding in exchange for their security.

While the President’s campaign rhetoric was perhaps too critical of NATO, his idea that the rest of the world needs to contribute more to the cause in a world with concerns such as a rising China and an unstable Middle East is the approach the United States should take towards this international institution. Hopefully, the recent commitments of more funding towards defense expenditures from multiple states will create one of those “wins” he often promised on the campaign trail for both the United States and the world. If not, the administration should reevaluate our position in NATO.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

 

References

  [1] “Defence Expenditures of NATO Countries (2009-2016),” North Atlantic Treaty Organization, July 4, 2016.

http://www.nato.int/nato_static_fl2014/assets/pdf/pdf_2016_07/20160704_160704-pr2016-116.pdf

  [2] “Military Spending by NATO Members,” The Economist, February 16, 2017.

https://www.economist.com/blogs/graphicdetail/2017/02/daily-chart-11

  [3] The Editors, “NATO Allies Can Spend More Money, More Wisely,” Bloomberg, May 31, 2017.

https://www.bloomberg.com/view/articles/2017-05-31/nato-allies-can-spend-more-money-more-wisely

  [4] Julian E. Barnes, “NATO to Take Action on Trump Spending Call,” The Wall Street Journal, May 21, 2017.

https://www.wsj.com/articles/nato-to-back-trump-call-for-more-spending-1495364360?mg=prod/accounts-wsj

  [5] “Defence Expenditures of NATO Countries (2009-2016),” North Atlantic Treaty Organization, July 4, 2016.

http://www.nato.int/nato_static_fl2014/assets/pdf/pdf_2016_07/20160704_160704-pr2016-116.pdf

  [6] Adam Taylor and Laris Karklis, “This remarkable chart shows how U.S. defense spending dwarfs the rest of the world,” The Washington Post, February 9, 2016.

https://www.washingtonpost.com/news/worldviews/wp/2016/02/09/this-remarkable-chart-shows-how-u-s-defense-spending-dwarfs-the-rest-of-the-world/?utm_term=.fc0c0385d7ea

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