Features, canada, defence, north america, europe

By Jon Elkin | July 9, 2018

The 28 member states of NATO will be meeting in Brussels on July 11 and 12.

The Trump administration has routinely criticized their NATO allies for underspending on military and defence. Is this a fair criticism? And what are NATO defence spending, initiatives, and strategic trends like for the future?


First of all, what's on the agenda for this summit?

NATO General-Secretary Jens Stoltenberg has said the following items are high on the agenda:

  • A new Atlantic joint force command to protect sea lines of communication between North America and Europe
  • A new support command to improve rapid movement of troops and equipment in Europe
  • NATO officials to meet with EU's vice president to discuss closer NATO-EU cooperation
  • Discussion of NATO's deterrence and defense posture, projection of stability, and fighting terrorism
  • Shifting focus from combat operations to capacity-building


What's the Trump administration's primary complaint?

The Trump administration has frequently stated that they believe the other 27 member states are not meeting their financial or defense obligations to NATO, particularly when compared to the United States.

Trump: "23 of the 28 member nations are still not paying what they should be paying and what they’re supposed to be paying for their defense."

As President Trump said at the previous NATO summit on May 25, "Over the last eight years, the United States spent more on defense than all NATO countries combined. If all NATO members had spent just 2 percent of GDP on defense last year, we would have had another $119 billion for our collective defense." 

This is not the first U.S. administration to voice these complaints - Presidents George W. Bush and Barack Obama have both called for NATO allies to increase military spending in the past.


What are Trump's complaints founded upon?

NATO has a common budget for shared civilian and military costs and assets. Member states contribute to this common budget based off their national income. Because the U.S. has the largest national income in NATO, they contribute the largest amount (22%). However, none of the other member states are behind on their obligations.

President Trump is correct when he excoriates the majority of NATO states for not meeting the 2% defence spending target. As per NATO's 2016 Annual Reportonly five countries are currently meeting this: the US, the UK, Greece, Poland and Estonia.

NATO spending

Additionally, countries that spend less than 2% have pointed towards other contributions. Although Germany only spent 1.2% of its GDP on defense, it has argued that its spending on development aid has also contributed to international security.


$3.7 billion in unclaimed defence opportunities  Did you know that Canada's offset policy states that 100% of defence  investments must go back to Canadian businesses? That's$3,735,199,162 of  unclaimed opportunities.   Learn more


So are other NATO members breaking the 2% rule then?

NATO members having to spend 2% of their GDP on defence isn't actually a mandatory obligation, but more of a general target.

In 2006, NATO defense ministers adopted a guideline that suggested each member state spend 2% of its GDP on its military - but this was just a target and it was not endorsed by the heads of state.

It took 2014, after Russia's annexation of Crimea and intervention in Ukraine, for NATO to formally agree to aim for the 2% target by 2024 - which is still seven years away.


What's the trend on NATO military spending?

Since five years of declining military spending from 2009 to 2014, there have been three years of increased spending from 2014 to 2017.

In the 2016 Warsaw Summit, NATO members reiterated their commitment to reaching the 2% target. Defence spending by European members and Canada increased by 3.8% or approximately USD$10 billion. Twenty-three of twenty-eight member states increased their spending in real terms for the year.

Ten member states in 2016 met the NATO guideline of spending 20% or more of their defence budget on major equipment - up from eight the previous year.

Earlier this year, NATO's General-Secretary Jens Stoltenberg projected that 15 of the 29 member states would reach the 2% target by 2024. 22 member states are expected to spend 20% or more of their defence budget on major equipment by 2024.

You may be interested in reading about OMX's previous feature, "Trends in global military spending by country and region."


How does NATO defence spending break down? And why does the U.S. spend so much?

From NATO's 2016 Annual Report:

 share of nato spending


The majority of increased American military spending happened due to wars in Afghanistan and Iraq, which was instigated by the U.S. and not NATO. In 2006, even as U.S. was ramping up their military spending, European allies were downsizing theirs.


Recommended further reading

Canadian Global Affairs Institute's NATO Series Papers

Sharing the Burden?: NATO and its Second-Tier Powers by Benjamin Zyla


Jon Elkin

Jon graduated from Queen's University with a degree in Political Studies and then went on to earn his Master's Degree in War Studies from the Royal Military College of Canada. He is an active member of the NATO Association of Canada, and outside of work enjoys skiing, running and mountain biking.

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