Trump-Nato summit: What is on the agenda and why is the US president so critical of the alliance?

Donald Trump has repeatedly criticised the US-European National Atlantic Treaty Organisation (Nato) alliance since his presidential campaign, which has contributed to a strained relationship in recent months.

The US president called the alliance “not fair to the US taxpayer” in a recent Twitter post, complaining about the financial burden America carries, further cementing his fierce rebukes of other members who he claims do not pay enough for their defence.

“NATO countries must pay MORE, the United States must pay LESS,” Mr Trump tweeted. “Very Unfair!” This, combined with Mr Trump's isolation at the recent G7 summit thanks to the threat on US tariffs on EU goods, will mean a somewhat difficult trip for the president.

What is Nato, and its crucial Article 5 clause?

The security alliance was formed with Canada and several European nations in 1949 and now contains 29 states. It serves as a safeguard for its allied nations provided by its central purpose highlighted in Article 5 that an attack on one ally is an attack against all – and that every ally provides defence no matter what. But Mr Trump has previously tried to use that clause as a way to get other nations to increase their defence spending.

In May last year, Mr Trump stunned top national security aides when he did not explicitly commit to Article 5 in a speech in Brussels, though he later affirmed his commitment in a press conference the following month. Prior to that, Mr Trump notably referred to Nato as “obsolete,” but later took back those comments. Mr Trump attributed his new stance to his belief the alliance had improved its efforts to “fight terrorism.”

He has also previously suggested he would not help allies via Article 5, if they did not spend enough on defence.

What will be discussed at the summit?

The two-day summit in Brussels, from 11 to 12 July will cover a number of issues. But beyond the agenda, Mr Trump will have to deal with a number of allies annoyed at US protectionism - such as the tariffs, which will hit trade with a number of nations. Mr Trump also has a habit of singling out allies in public if he has an issue in mind - which will not help.

The main item on the agenda will be the defence spending and burden sharing. Mr Trump has mainly assailed allies for not spending more on defence, insisting they should make the two per cent target set forth by the alliance in 2014. The agreement stated that ally nations spending less than the Nato guideline of two per cent of their GDP should “aim to move towards the two per cent guideline within a decade…” Mr Trump has called the two per cent guideline a “bare minimum.”

Leaders will also take decisions to step up Nato’s role in the fight against terrorism. Allies will agree more support for key partners in the Middle East and North Africa, including Iraq Tunisia and Jordan. To strengthen deterrence and defence, particularly given the low state of relations with Russia, leaders are expected to adopt a "readiness Initiative".

“This is a commitment to have by 2020: 30 mechanised battalions; 30 air squadrons; and 30 combat vessels, ready to use within 30 days or less,” a pre-summit release says.

The nations will also discuss Afghanistan, as well as the issue of membership for Macedonia.

Are President Trump's claims over defence spending true?

According to NATO estimations in March, the US spent more on defence than its allies reaching 3.57 percent spending of GDP in 2017. Three other nations made the 2 per cent target that year; Greece, UK and Estonia all hit the benchmark with Poland reaching 1.99 per cent.

“We expect eight allies to spend at least two per cent of GDP on defence this year, compared to just three allies in 2014,” said Nato Secretary General Jens Stoltenberg, ahead of the summit. He noted that allies are also investing billions in new equipment and stepping up their contributions to missions and operations. “We estimate that European allies and Canada will add an extra $266 billion to defence between now and 2024,” he said.

Last month, Mr Trump sent letters to a number of leaders of Nato countries addressing their respective country's underspending on defence and warning them about "growing frustrations" in the US.

But Mr Trump is making assumptions about direct and indirect - such as defence spending - costs for countries in Nato. In direct costs, the US currently pays about 22 per cent of Nato’s “principal budgets” that are funded by all alliance members based on a cost-sharing formula that factors in the gross national income of each country.

“Direct contributions are made to finance requirements of the Alliance that serve the interests of all 29 members — and are not the responsibility of any single member — such as Nato-wide air defence or command and control systems,” the alliance says. “Costs are borne collectively, often using the principle of common funding.”

Mr Trump, however, is mainly referring to indirect spending on defence budgets. He has claimed the US is paying "90 per cent" of Nato costs, but that figure is too high.

In a June 27 update on spending, Nato said: “Today, the volume of the US defence expenditure effectively represents some 67 per cent of the defence spending of the Alliance as a whole.” That disparity “has been a constant” and has only grown since the US began increasing its defence spending after the terrorist attacks on September 11, 2001.

All together, the 29 alliance members spent an estimated $917 billion on defence in 2017, and the US portion was about $618 billion.