~ Sunday, June 15, 2003
France Looks to Mend U.S. Ties
As Exports to America Drop Off


PARIS -- A French official concerned that some American companies and U.S. consumers still were angry at France for its stand on Iraq could do worse than to call Ben Franklin to his defense.

At a dinner in the ornate salons of France's foreign ministry Thursday, Prime Minister Jean-Pierre Raffarin gave his American guests copies of a 1781 letter from Franklin hailing the junction of French and U.S. troops at Yorktown.

It was part of a French charm offensive to get back in America's good graces amid signs that the diplomatic rift over Iraq has taken a toll on some French exports to the U.S., just as strikes at home weaken France's economy.

The French are "more worried" than Americans about the impact of the Iraq clash on Franco-U.S. business and trade, said U.S. Chamber of Commerce President Thomas Donohue, one of about 25 American business and political figures who attended the dinner and a series of meetings hosted by the French-American Business Council in Paris last week.

That is because recent data seem to show that French business is suffering the most from the countries' soured political relations. Wine, for many the very emblem of France , is one example. Exports of French wine to the U.S. dropped 17.6% in March by volume and 9.6% during the first quarter, suggesting that American consumers have acted on calls to boycott French goods.

Catherine Baudry, an official with the French Wine and Spirits Exporters Federation, said the decline continued "seriously" in April and across "nearly all" of France's wine regions, though definitive April figures won't be out for another week. She said the drop-off, which the wine federation attributes to continuing American resentment of France's opposition to the U.S.-led war, is worrying French vintners.

Overall French exports to the U.S. fell 17.2% during the three months from February to April compared with the same period last year, according to the French customs service. In April, France posted a &euro:202 million ($240 million) trade deficit with the U.S., confirming the trend of falling French exports to America.

Though France's biggest trading partner by far is the European Union, the U.S. is also a major destination of French goods, accounting for about 10% of France's exports. Bilateral trade between the countries is valued at about $50 billion (€42 billion) a year and companies in both France and the U.S. employ about half-a-million of the other country's citizens.

In late April, Ernest-Antoine Seilliere, president of the principal French employers' association, said he was worried that anti-French sentiment in the U.S. was "much stronger than we want to admit and that worries our companies." He called on American consumers not to take their anger out on French businesses but instead "send telegrams to our embassies."

The same desire to patch things up was evident in Paris last week. Reminding his dinner guests that France was the first country to recognize American statehood through the 1778 Treaty of Friendship and Commerce, Mr. Raffarin said France continued to welcome "with the same pleasure and the same hunger the energy, the ideas and the creativity of American companies."

Thirty-two French CEOs, the governor of the Bank of France and the French finance minister attended the two days of meetings. But despite the red-carpet treatment, the American contingent was thin. Only five U.S. corporate chiefs bothered to make the trip, among them FedEx Corp.'s Fred Smith -- who, with Publicis Groupe SA Chief Executive Maurice Levy, is co-president of the council -- and Citigroup Inc.'s Sanford Weill. Most of the other American companies represented sent lower-level executives, though the U.S. delegation was anchored by Secretary of Commerce Don Evans.

The poor U.S. showing extended to the Paris Air Show, which opened Sunday, in part because the U.S. Defense Department cut back drastically on its number of representatives at the show this year in what , in what many aerospace-industry executives believe is retaliation for France's Iraq stance. As a result, the CEOs of Boeing Co., Lockheed Martin Corp., Raytheon Co. and Northrop Grumman Corp. were all absent from the show.

French anxiety about strained business ties with the U.S. has been compounded by a series of domestic strikes, fueled by planned pension revisions, that have begun to take an economic toll. The national railroad, SNCF, has lost about €260 million in revenue because of the strikes, which have involved more than 60% of its staff. Air France SA has lost about €40 million in revenue. Even non-state-owned companies are feeling the pinch: Steel company Arcelor SA says the strikes will cost it millions of euros because of delayed train shipments to its factories.

The strikes, which have been joined by postal workers, air-traffic controllers, teachers and sanitation workers, had waned by late last week. But more waves of work stoppages are considered likely, as the planned pension reforms that prompted the labor strife won't be voted on by parliament for several weeks. Some unions have announced plans to strike again this week.

--Kevin J. Delaney contributed to this article.

Write to John Carreyrou at john.carreyrou@wsj.com and Jenny E. Heller at jenny.heller@wsj.com

Updated June 16, 2003

June 14, 2003
The Boys Who Cried Wolfowitz

e're now up to Day 87 of the largely fruitless hunt for Iraq's unconventional weapons. Allegations keep piling up that the Bush administration tried to scam the world into war by exaggerating evidence of the Iraqi threat. One critic has pronounced it "arguably the worst scandal in American political history." So you might reasonably ask a supporter of the war, How do you feel about that war now?

Thanks for asking.

One easy answer is that between the excavation of mass graves, which confirms that we have rid the world of a horror, and President Bush's new willingness to engage the thankless tangle of Middle East diplomacy, which raises the hope that Iraq was more than a hit-and-run exercise, the war seems to have changed some important things for the better. This is true, but not quite enough.

Another easy answer is that it's not over yet. Just as we have yet to prove that we can transform a military conquest into a real Mission Accomplished, we have yet to complete our search of a country that, as Californians must be very tired of hearing, is the size of California. This is also true, but likewise inadequate.

I supported the war, with misgivings about the haste, the America-knows-best attitude and our ability to win the peace. The deciding factor for me was not the monstrosity of the regime (routing tyrants is a noble cause, but where do you stop?), nor the opportunity to detoxify the Middle East (another noble cause, but dubious justification for a war when hardly anyone else in the world supports you). No, I supported it mainly because of the convergence of a real threat and a real opportunity.

The threat was a dictator with a proven, insatiable desire for dreadful weapons that would eventually have made him, or perhaps one of his sadistic sons, a god in the region. The fact that he gave aid and at least occasional sanctuary to practitioners of terror added to his menace. And at the end his brazen defiance made us seem weak and vulnerable, an impression we can ill afford. The opportunity was a moment of awareness and political will created by Sept. 11, combined with the legal sanction reaffirmed by U.N. Resolution 1441. The important thing to me was never that Saddam Hussein's threat was "imminent" — although Sept. 11 taught us that is not such an easy thing to know — but that the opportunity to do something about him was finite. In a year or two, we would be distracted and Iraq would be back in the nuke-building business.

Even if you throw out all the tainted evidence, there was still what prosecutors call probable cause to believe that Saddam was harboring frightful weapons, and was bent on acquiring the most frightful weapons of all. The Clinton administration believed so. Two generations of U.N. inspectors believed so. It was not a Bush administration fabrication that Iraq had, and failed to account for, massive quantities of anthrax and VX nerve gas and other biological and chemical weapons. Saddam was under an international obligation to say where the poisons went, but did not.

What the Bush administration did was gild the lily — disseminating information that ranged from selective to preposterous. The president himself gave credence to the claim that Iraq was trying to buy uranium in Africa, a story that (as Seymour Hersh's investigations leave little doubt) was based on transparently fraudulent information. Colin Powell in his February performance at the U.N. insisted that those famous aluminum tubes Iraq bought were intended for bomb-making, although the technical experts at the Department of Energy had made an awfully strong case that the tubes were for conventional rocket launchers. And as James Risen disclosed in The Times this week, two top Qaeda planners in custody told American interrogators — one of them well before the war was set in motion — that Osama bin Laden had rejected the idea of working with Saddam. That inconclusive but potent evidence was kept quiet in the administration's zeal to establish a meaningful Iraqi connection to the fanatical war on America.

The motives for the dissembling varied. The hawks hyped the case (profusely) to prove we were justified in going to war, with or without allies. Mr. Powell hyped it (modestly) in the hope that the war, which he knew the president had already decided to wage, would not be a divisive, unilateral exercise. The president either believed what he wanted to believe or was given a stacked deck of information, and it's a close call which of those possibilities is scarier.

Those who say flimflam intelligence drove us to war, though, have got things backward. It seems much more likely that the decision to make war drove the intelligence.

The origins of this may be well intentioned. Deputy Defense Secretary Paul Wolfowitz, the most dogged proponent of war against Iraq, is also a longtime skeptic of American institutional intelligence-gathering. He has argued over the years, from within the government and from outside, that the C.I.A. and its sister agencies often fail to place adequate emphasis on what they don't know, and that they "mirror-image" — make assumptions about what foreign regimes will do based on what we would do.

One tempting solution has been to deputize smart thinkers from outside the intelligence fraternity — a Team B — to second-guess the analysis of the A Team professionals. Mr. Wolfowitz was part of a famous 1976 Team B that attacked the C.I.A. for underestimating the Soviet threat. These days the top leadership of the Defense Department is Team B. Mr. Wolfowitz and his associates have assembled their own trusted analysts to help them challenge the established intelligence consensus.

Who would argue that the spooks' work should not stand up to rigorous cross-examination? But in practice, B-Teaming is often less a form of intellectual discipline than of ideological martial arts.

Here's how it might have worked in the Bush administration:

The A Team (actually, given the number of spy agencies that pool intelligence on major problems, it's more like the A-through-M team) prepares its analysis of, let's say, the Iraqi nuclear program. The report is cautious, equivocal and — particularly since U.N. inspectors left Iraq in 1998 — based on close calls about defector reports, commercial transactions and other flimsy evidence.

The B Team comes in with fresh eyes, and fresh assumptions. One assumption, another Wolfowitz mantra, is that more weight should be given to the character of the regime — in Saddam's case, his transcendent evil and megalomania. While the C.I.A. may say that we have insufficient evidence to conclude that Saddam has reconstituted his nuclear program, Team B starts from the premise that it is just the kind of thing Saddam would do, and it is dangerous to assume he didn't.

Then Team B dips into the raw intelligence and fishes out information that supports its case, tidbits that the A Team may have rejected as unreliable. The Pentagon takes this ammo to an interagency review, where it is used to beat the A Team (the C.I.A. and the Defense Intelligence Agency) into submission. Maybe the agencies put up a fight, but (1) much of their own evidence is too soft to defend with great conviction, and (2) by this time the president has announced his version of the facts, and the political tide is all running in one direction.

When Team B seems to have the blessing of the boss, it goes from being a source of useful dissent to being an implement of intimidation. As formidable a figure as Mr. Powell, who resisted pressure to include the most arrant nonsense in his U.N. briefing, still ended up arguing a case he told confidants he did not entirely believe, specifically on the questions of Iraq's nuclear program and connections with Al Qaeda.

By the time a Team B version of events has been debunked, it has already served its purpose. That 1976 Team B, by assuming the most dire of Soviet intentions and overlooking the slow collapse of the Soviet economy, came up with estimates of Soviet military strength that we later learned to be ridiculously inflated. But the cold warriors who ran it succeeded in setting back détente and helped to elect Ronald Reagan. The 2003 Team B seems to have convinced most Americans that Saddam had nuclear arms and was in bed with Osama bin Laden.

But the consequences of crying wolf — and the belief is widespread among the dispirited spies of the A Team that the administration did exactly that — are grave. Honest, careful intelligence is our single most important weapon in the global effort against terrorism. It is also critical to winning the support of allies against nuclear proliferation, most urgently in North Korea and Iran. Already rather compelling evidence of Iran's development of nuclear weaponry is being dismissed as just more smoke from the Bush propaganda machine.

So far, the passion to investigate the integrity of American intelligence-gathering belongs mostly to the doves, whose motives are subject to suspicion and who, in any case, do not set the agenda. The pro-war Democrats are dying to change the subject to the economy. The Republicans are in no mood to second-guess a victory. Just when we really need some of that Team B spirit, the hawks have chickened out.

The truth is that the information-gathering machine designed to guide our leaders in matters of war and peace shows signs of being corrupted. To my mind, this is a worrisome problem, but not because it invalidates the war we won. It is a problem because it weakens us for the wars we still face.

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