The United States and Europe share a long and intertwined history. (1) U.S.-European political,security, and economic relations that today comprise the broad transatlantic relationship have theirmodern origins in post-World War II efforts to deter the Soviet threat and bring security to Europe. NATO, which was created in 1949, and the European Union (EU), the latest stage in a process ofEuropean integration begun officially in 1952, are the two main pillars upon which the transatlanticrelationship still rests. NATO was founded upon a shared commitment to protect common valuesof democracy, individual liberty, and the rule of law; in practice, it sought to do this by providingcollective defense against Soviet expansion through a mutual security guarantee for the United Statesand its European allies. The European integration project was meant to promote peace, politicalstability, and economic prosperity in Europe by entrenching democratic systems and free markets. The U.S. Congress and successive U.S. Administrations have strongly supported both NATOand the EU, believing that both organizations have helped foster democracy, reliable military allies,and strong trading partners. The United States also views the Organization for Security andCooperation in Europe (OSCE) as an important transatlantic forum for promoting democracy andhuman rights both in Europe and in Europe's wider neighborhood, including Russia, Ukraine,Belarus, and the countries of the Caucasus and Central Asia. The United States and Europeannations also share membership in other major international organizations such as the World TradeOrganization (WTO) and the United Nations. Since the end of the Cold War, both NATO and the EU have evolved along with Europe'schanged strategic landscape. While NATO's collective defense guarantee remains at the core of thealliance, members have also sought to redefine its mission as new security challenges have emergedon Europe's periphery and beyond. At the same time, EU members have moved beyond economicintegration and have taken steps toward political integration with decisions to develop a commonforeign policy and a defense arm. Both organizations have also enlarged in recent years toencompass many Central and East European states, bringing the number of NATO and EU membersto 26 and 25 respectively. The United States was a key proponent of NATO expansion and a firmbacker of EU enlargement, viewing these twin efforts as serving U.S. interests by consolidating a"Europe whole and free, at peace with itself and with the world." Meanwhile, the U.S.-European economic relationship has continued to grow. The UnitedStates and the EU share the largest trade and investment relationship in the world. Annual two-wayflows of goods, services, and foreign direct investment exceed $1.1 trillion. The total stock oftwo-way direct investment is estimated to be over $1.6 trillion, making this huge investment positionperhaps the most significant aspect of the relationship. Although some prominent U.S.-EU tradedisputes exist, the vast portion of this bilateral economic relationship is harmonious. Some analystsestimate that trade tensions involve only 1-2% of transatlantic commerce. (2) Despite the shared history and close economic ties, the transatlantic partnership has beenfundamentally challenged in recent years. The September 11 terrorist attacks on the United Statesprompted an initial display of transatlantic solidarity, but much of the goodwill has since dissipatedas numerous trade and foreign policy disputes have emerged. The crisis over Iraq is most notable,but the list of disagreements is wide and varied. Although Europeans are not monolithic in theirviews, most states -- including those such as the United Kingdom, Spain, Italy, and Poland thatsupported the U.S. intervention in Iraq -- object to at least some elements of U.S. policy on a rangeof issues, including the Israeli-Palestinian conflict, the treatment of Al Qaeda prisoners atGuantÃ¡namo Bay and the U.S. practice of rendition, missile defense, genetically-modified food, andthe U.N. Kyoto Protocol on climate change. The Bush Administration says it will make mendingtransatlantic relations -- in both NATO and the EU -- a priority in its second term. Nevertheless, a debate is reemerging in policymaking and academic circles on the value andpurpose of the U.S.-European relationship. While many would argue that much still binds the twosides of the Atlantic, others worry that the relationship is in trouble. Some U.S. critics question theextent to which the European allies share U.S. threat perceptions of the challenges posed by Islamistterrorism or the proliferation of weapons of mass destruction (WMD). Even if the allies agree onthe necessity of tackling such problems, U.S. and European tactics are often at odds; Europeangovernments remains firmly wedded to managing international crises through multilateralinstitutions, while the United States views this approach as only one option. The BushAdministration and Members of Congress are also concerned that deficient European militarycapabilities hinder the allies' ability to share the security burden with the United States. Otherssuggest that U.S. actions in the prosecution of the war on terrorism and in Iraq have prompted someto question whether the two sides of the Atlantic still share enough values and interests to make thetransatlantic partnership work. This report assesses the present state of the U.S.-Europeanrelationship and reasons for current frictions, and provides, for the purpose of analysis, a spectrumof options for U.S. policymakers in considering the future shape of the political and strategicdimensions of the transatlantic partnership. Historically, U.S.-European relations have experienced numerous ups and downs. Duringthe Cold War, even with the unifying pressure of a common military threat, transatlantic tensionsflared from time to time over controversial issues such as Vietnam and the stationing of U.S. ballisticmissiles in Europe. Ineffective and tentative international responses to the Balkan conflicts in theearly 1990s prompted serious questioning of NATO's role in the post-Cold War era, and of Europe'sability to manage crises on the European continent. Proponents of the alliance have always stressed,however, the underlying solidity of the transatlantic relationship given its basis in common valuesand shared interests. Thus, conventional wisdom dictates that frictions merely representdisagreements among friends characteristic of U.S.-European "business as usual." Many Europeansacknowledge that criticism of U.S. policies in Iraq and the Middle East has been fierce recently, butclaim that they have only felt free to express their views because U.S.-European relations are soclose, and honesty is a hallmark of true friendship. Even without the Soviet threat to unite the two sides of the Atlantic, the United States andits European allies face a common set of challenges -- from countering terrorism and WMDproliferation to ensuring the stability of the global financial markets -- and have few othercomparable partners. Supporters of strong transatlantic ties argue that neither the United States norEurope can adequately address such diverse concerns alone and that the track record shows that theycan accomplish much more in the world when they work together rather than at cross purposes. U.S.and European forces are promoting peace and stability in the Balkans and Afghanistan. U.S. andEuropean law enforcement authorities have sought to intensify police and judicial cooperation sinceSeptember 11 to root out terrorist cells in Europe and elsewhere. U.S.-European cooperation hasalso been critical in making the world trading system more open and efficient. In addition, proponents stress that the trust and habits of political and military cooperationthat have developed among the allies, and especially within NATO, over the last 50-plus years areunique in international relations and continue to serve U.S. interests. NATO's organizationalstructure provides a forum in which differences among allies can be discussed and narrowed. Thealliance has also fostered a beneficial "Atlantic loyalty," especially in times of extreme adversity, asevidenced by the invocation of NATO's Article 5 defense guarantee after September 11. (3) As noted above, the United States and the EU share a huge and mutually beneficial economicrelationship that is increasingly interdependent. Reports indicate that the transatlantic economyemploys 12 to 14 million workers, and that most U.S. and European investments flow to each otherrather than to lower-wage developing nations. Europe remains the most important foreign sourceof global profits for U.S. companies, accounting for over half of U.S. firms' total annual foreignprofits. Similarly, the United States is the most important market in terms of earnings for manyEuropean multinationals. Between 1990 and 2000, for example, U.S. affiliate income of Europeancompanies increased from $4.4 billion to nearly $26 billion. Although transatlantic mergers andacquisitions have slowed since the 2001 economic downturn, the boom of the late 1990s has leftEuropean firms more engaged in the U.S. economy than ever before. (4) This economicinterdependency, some argue, is a key reason a transatlantic divorce would be impossible. U.S. and European policymakers are keen to stress that working relations between U.S. andEuropean officials remain close, and have not been impeded by the highly charged politicalconfrontations over issues such as Iraq. Some commentators suggest that without the Soviet threat,European allies feel freer to voice more robustly their own views; European officials suggest thatthis simply represents the transatlantic alliance's evolution into a more mature, frank, and openrelationship. U.S. officials also note that some bumps in the relationship are to be expected as theUnited States and the European allies slowly chart new territory in grappling with how to addresssignificant challenges outside of Europe. In their view, for the first time since World War II, aEurope is rising that is increasingly concerned with events beyond Europe, in part because EUenlargement and the internal stabilization of the continent are nearly complete. The currentdifficulties in the transatlantic partnership are thus just "growing pains" in the relationship that needtime to be worked out. (5) Despite the ties that bind, the events of September 11 and the crisis over Iraq have helpedspark significant changes in the U.S.-European political and strategic relationship. Some observersargue that the recent U.S.-European frictions are largely driven by personality differences amongU.S. and European leaders. Many analysts contend, however, that the underlying causes are deeperand structural, and that September 11 merely kicked into high gear changes that had already beenset in motion by the end of the Cold War and the demise of the Soviet Union a decade earlier. Suchstructural changes include different policy preferences, the U.S.-European defense capabilities gap,and Europe's ongoing but unfinished integration. Others ponder whether U.S. and European interestsand values have diverged to such an extent as to call into question whether sufficient commonalitystill exists to make the broad transatlantic partnership desirable and beneficial for both sides. Leadership Issues. Numerous observers attributecurrent transatlantic tensions to European perceptions of the Bush Administration as inclined towardunilateralism and largely uninterested in Europe. It should be noted, however, that such Europeancharges of U.S. unilateralism are not completely new. Many Europeans in the 1990s complained thatCongress and the Clinton Administration often acted unilaterally, citing, for example, the defeat ofthe Comprehensive Test Ban Treaty and U.S. sanctions related to Cuba, Iran, and Libya. Regardless, European governments from the start of the Bush Administration seized on itsrejection of international treaties such as the U.N. Kyoto Protocol and its decision to proceed withmissile defense as evidence of a new, broader U.S. unilateralism. They were also extremely waryabout the new administration's commitment to Europe, given that officials during the campaign hadquestioned the need to keep U.S. troops in the Balkans and seemed to place greater emphasis onother regions of the world, such as Asia. The September 2001 terrorist attacks swept such frictionsunder the rug for a while as European governments, NATO, and the EU condemned the attacks andexpressed complete solidarity with the United States. At the same time, the initial U.S. decision toforego using NATO forces, planning, or logistical resources in the war in Afghanistan began stirringEuropean concerns about NATO's relevance to the Bush Administration and U.S. securityinterests. (6) In 2002-2003, U.S.-European tensions reemerged on a wide range of trade and foreign policyissues. U.S. moves in the first half of 2002 such as rejecting the International Criminal Court andseeking to exempt U.S. soldiers from its jurisdiction, as well as imposing steel tariffs, reignitedEuropean concerns that the Bush Administration was not interested in working with its long-timeallies. Perhaps most unsettling for many Europeans was the emergence in early 2002 of aconfrontational U.S. policy toward Iraq, which culminated in the U.S.-led decision to go to waragainst Saddam Hussein in March 2003. Many Europeans perceived the United States as acting withlittle regard for the views of the international community and without much concern for the need togain U.N. approval for the use of force. As a result of Europe's own bloody history, European alliesplace great emphasis on multilateral institutions as a means for managing international crises andlegitimizing the use of force. This is as true for the UK and other European countries that ultimatelysupported the U.S.-led intervention in Iraq as it is for France, Germany, and others that opposed U.S.policy. By 2004, critics of the Bush Administration began to contend that the U.S. intervention inIraq and its aftermath were seriously damaging U.S. credibility abroad, including in Europe. TheAbu Ghraib prison scandal stunned and dismayed the European allies. Many Europeans viewed theactions of U.S. soldiers at Abu Ghraib as following directly from U.S. policies in the war onterrorism, such as detaining suspected Al Qaeda terrorists at GuantÃ¡namo Bay. Some charged thatthese actions violated human rights and sacrificed the long-term battle for Muslim "hearts andminds." Opinion polls in Europe indicate declining trust in U.S. leadership. One poll found that anaverage of 58% of Europeans in nine countries believe that strong U.S. leadership in world affairsis undesirable. (7) Andcritics assert that this loss of trust and credibility has made many European allies even less inclinedto shoulder a bigger financial or security role in Iraq. Some Europeans charge that the Bush Administration's pursuit of its goals in Iraq damagednot only the credibility of the United Nations, but also of NATO. They assert that U.S. pressure inearly 2003 to deploy NATO military assets to help Turkey defend itself against a possible attackfrom Iraq forced an unseemly public confrontation within the alliance. Many Europeans also worriedthat the Bush Administration was keen to keep Europe weak and divided. They feared that U.S.Secretary of Defense Rumsfeld's statement shortly before the U.S. invasion of Iraq that dividedEurope into "old" (countries that opposed the invasion) and "new" (those countries, especially inCentral and Eastern Europe, that supported it) signaled an unofficial shift in U.S. policy away fromcontinued support for further European integration. Most European allies, including those includedin the "new" category, such as Poland, were critical of Rumsfeld's comments because they object toany division of the continent and support building "a Europe whole and free." At the same time, many analysts also blame some European leaders, particularly FrenchPresident Jacques Chirac and then-German Chancellor Gerhard Schroeder, for contributing to thebreakdown in transatlantic relations. Chirac has long espoused the concept of "multipolarity" ininternational affairs, but some Bush Administration officials have interpreted this concept as a meansto thwart U.S. predominance. Many viewed Chirac's opposition to the war in Iraq as an attempt toconstrain U.S. power and influence in spite of the threat posed by Saddam Hussein. (8) Relations between PresidentBush and Chancellor Schroeder over Iraq soured in September 2002 when Schroeder begancondemning U.S. Iraq policy to bolster his re-election campaign. Many observers maintain that bothChirac and Schroeder expressed their opposition to the war in Iraq in an undiplomatic andirresponsible way, without due consideration of the implications for the broader transatlanticpartnership. They note that the failure of France and Germany (and Belgium) to clearly and quicklysupport their fellow NATO ally Turkey as the conflict with Iraq loomed left a damaging impressionof allies unwilling to stand together in a time of need, and has caused some in Washington to loseconfidence in NATO. (9) Europeans have welcomed the Bush Administration's efforts in its second term to improveU.S.-European relations and responded positively to the European trips in February 2005 byPresident Bush and Secretary of State Condoleezza Rice. Many believe they have gone a long waytoward improving the atmospherics of the relationship, but transatlantic tensions have notdisappeared,and resolving differences will require a sustained political commitment from both sides. Some observers note that President Bush's visit to the EU's institutions while in Brussels in February2005 and his statement in support of EU integration have helped alleviate some European anxietiesstemming from Secretary Rumsfeld's comments about "old" and "new" Europe. Many point to therecent U.S.-EU cooperation to curb Iran's nuclear ambitions as a tangible positive development thatdemonstrates the value of the transatlantic partnership. Nevertheless, others point out that manyEuropeans still remain skeptical about the degree to which the Bush Administration views itsEuropean allies and friends as full partners. Structural Drivers. Many analysts argue that thereasons for current U.S.-European frictions are largely structural, stemming from the end of the ColdWar and exacerbated by September 11 and its aftermath. In this view, recent tensions are to somedegree inevitable, and go beyond individual leaders and their personal styles. One key structural change often cited relates to alterations in the U.S. security outlook sinceSeptember 11. Some observers note that diverging U.S.-European threat perceptions are not new,and have been emerging since the end of the Cold War. Throughout the 1990s, U.S. policymakersoften complained that Europe was preoccupied with its own internal transformation, and largelyblind to the new global threats. However, the September 11 attacks on New York, Washington, andover Pennsylvania, as well as the still unsolved anthrax attacks of October 2001, had a profoundeffect on America's national psyche, and further widened the gap in U.S.-European threat perceptionsand policy preferences for managing those threats. Many in Europe have been slow to understand that many U.S. actions in the "war" onterrorism are driven by the conclusion that nothing should be left to chance, especially with regardto the possibility of terrorists acquiring WMD. The Bush Administration's promotion of"pre-emptive action" in the face of security threats has been a source of great concern for Europeanallies and partners, especially if undertaken without U.N. authorization. Some claim this is in partbecause European publics do not feel the same sense of urgency regarding the terrorist threat -- evenafter the terrorist attacks in Madrid in March 2004 and in London in July 2005 -- and in part becausemost European governments continue to view combating terrorism primarily as an issue for lawenforcement and "soft power" diplomatic and economic tools. In the post-September 11 world,however, the United States is likely to be much more activist in confronting potential threats andmore inclined to view multilateral efforts to tackle such problems as only one option, regardless ofwho controls the White House. Europeans, for example, took note of Democratic presidentialcandidate Senator John Kerry's statement at his party's convention in July 2004 that he "would nevergive any nation or international institution a veto over our national security." (10) U.S. analyst Robert Kagan attributes the difference in U.S. and European approaches tomanaging threats and using force to a "power problem." In his view, Europe emphasizes multilateralinstitutions, diplomatic pressure, and foreign aid as the best tools to manage crises because mostEuropean countries, with the possible exceptions of the UK and France, lack the military capabilitiesnecessary to project and sustain power, especially outside of Europe. Kagan asserts that Europe'smilitary weakness has produced a "European interest in inhabiting a world where strength doesn'tmatter, where international law and international institutions predominate." (11) Most Europeans reject Kagan's thesis, arguing that they are not pacifists, and citing their rolesin the 1999 NATO-led war in Kosovo and their presence in Afghanistan. They acknowledge,however, the need to improve their military capabilities in order to better ensure their own securityand to enable European forces to continue to operate with U.S. forces. But many experts assert thatoverall levels of European defense spending remain insufficient, and skeptics say that Europeanpromises to spend existing defense resources more wisely have failed to materialize in anysubstantial way. Thus, the U.S.-European capabilities gap will remain a source of contention in thetransatlantic alliance, especially given that U.S. attention for the foreseeable future will likely befocused on threats well beyond Europe. Some assert that Washington will increasingly measureEurope's "value added" in the years ahead by how willing and able the European allies are to helpthe United States manage the security burden not only within, but also outside of Europe. (12) Another major structural factor affecting U.S.-European relations is the European Union'songoing evolution. Since the end of the Cold War, the EU has pursued further integration throughboth widening and deepening. On May 1, 2004, the EU welcomed 10 new members, mostly fromCentral and Eastern Europe. (13) At the same time, EU members over the last decade have takensteps to enhance their economic integration. Twelve EU members have adopted a single Europeancurrency, the euro, and the 10 new members are committed to doing so in the future. Perhaps most important to the future shape of the U.S.-European strategic partnership are EUefforts to build a Common Foreign and Security Policy (CFSP), backed up by an EU defense armcapable of managing a full spectrum of crisis management tasks. These EU initiatives have comefurther and faster in recent years than many EU skeptics expected, but both remain works inprogress. The EU has established new political and defense decision-making bodies, and hassucceeded in forging consensus on common policies related to the Balkans, the Middle East peaceprocess, Iran, and Colombia, to name a few. In December 2003, the EU released its first-eversecurity strategy, which outlines common threats and policy responses. Critics suggest, however,that the EU is still far from speaking with one voice on contentious foreign policy issues, such asIraq, because of competing national interests, sovereignty concerns, and different foreign policypreferences. They also note that efforts to improve EU military capabilities have lagged behind, andthey doubt that current European defense budgets are sufficient to fund all of the EU defense arm'srequirements. Nevertheless, EU efforts to develop CFSP are contributing to current U.S.-European strains. Some see the emergence of an EU "strategic personality" -- a specifically European way ofinterpreting and acting upon perceived threats and foreign policy opportunities that stressesdiplomacy and multilateral solutions -- as diverging from the U.S. strategic position and outlook,which places greater emphasis on the use of force and decisive action. (14) As the EU's "strategicpersonality" continues to strengthen, EU member states are increasingly and reflexively assessingmajor foreign policy decisions from a European perspective, i.e., with an eye toward meetingEuropean strategic goals and establishing a larger role for Europe on the world stage. EU membersconsult with each other on foreign policy concerns to a greater degree than ever before, and oftenbefore consulting with Washington. As a result, Washington does not hold quite the same influenceover the European allies as it once did, and EU member states are quicker to challenge U.S. policieswith which they do not agree. Some analysts also suggest that the EU's progress to date on CFSP, plus the several smallcivilian and military crisis management missions the EU has led in the Balkans, Africa, andelsewhere, have given the organization and its member states a new self-confidence. This is leadingto a more vocal Europe, which is more assertive about its right to an equal decision-making role inthe alliance. Such demands, however, often frustrate U.S. policymakers, who continue to viewEurope's aspirations as outpacing Europe's abilities. As one analyst remarks, "As an unfinishedunion of states, Europe now stands as a power in the world, which gives it a legitimate voice thatAmerica must hear more and more clearly than has been the case to date; but lacking the capabilitiesrequired for military action when necessary, it is not, or not yet, the world power that it claims to be,and the price of consultation is not always worth the benefits it brings." (15) Regardless, the EU is likely here to stay as an actor in the foreign policy, security, anddefense field. Some contend that a larger, more united, and more confident EU may seek to rivalthe United States and could weaken NATO and the transatlantic link. The Bush Administrationreacted coolly to former German Chancellor Schroeder's statements in February 2005 in which heeffectively proposed a stronger role for the EU in transatlantic policy-making. His remarks wereinterpreted by many as suggesting that the evolving EU, rather than NATO, should be the primaryforum for discussions on international security and political issues such as Iran or China. U.S.officials were concerned that a wide-ranging or formal strategic dialogue with the EU couldultimately erode NATO, where the United States has not only a voice but also a vote. Many experts maintain that most EU members do not support developing the EU tocounterbalance the United States and continue to view NATO as their ultimate security guarantee. In addition, EU momentum in the foreign policy and defense fields may be in for a period ofstagnation following the rejection in the spring of 2005 by French and Dutch voters of the EU'sconstitutional treaty. Some observers expect EU attention in the near to medium term to be focusedon internal reforms rather than external challenges. Others argue that a Europe able to "speak with one voice" on foreign and security policy maybe a more credible and reliable partner for the United States in both maintaining European securityand tackling global challenges. During President Bush's February 2005 trip to Brussels, he assertedthat "the United States wants the European project to succeed" and that a strong Europe is in U.S.interests. (16) At the sametime, a more unified and self-assured EU may reduce U.S. leverage on individual member states,thus complicating U.S. efforts to rally support for its initiatives in NATO or at the United Nations. To a large extent, however, the EU's ability to become a stronger security partner for theUnited States will depend on the degree to which the EU succeeds in improving its defensecapabilities and whether the operational and institutional links established between the EU andNATO continue to function smoothly. The EU's assumption of NATO's mission in Bosnia inDecember 2004 is viewed as an important test of Europe's ability to shoulder a greater degree of thesecurity burden. Moreover, the EU's future evolution as a foreign policy actor will also depend ondomestic politics in individual member states and the political parties in power. For example, UKPrime Minister Tony Blair has been instrumental in forging CFSP and the EU's defense arm, but afuture, euro-skeptic Conservative-led UK government may attempt to put some brakes on further EUpolitical integration. Diverging Interests and Values? Commoninterests and shared values have always been the cornerstone of the transatlantic partnership. In lightof the numerous disagreements of recent years, some analysts and policymakers on both sides of theAtlantic increasingly question whether the United States and a more integrated and assertive Europecontinue to share the same interests and values. The answer, however, depends in part on howinterests and values are defined. On the broadest level, most analysts agree that the United States and its European alliesremain committed to the shared values of democracy, individual liberty, and free market economies. On a policy level, however, whether the United States and the allies share common interests andvalues varies depending on the specific issue in question. On many important issues, such ascountering terrrorism and WMD proliferation, promoting Middle East stability, or fostering moreopen global markets, U.S. and European interests are largely the same, even if tactics or policypreferences diverge. The EU's new security strategy was welcomed by many U.S. officials becauseit seemed to signal a transatlantic consensus on security threats, even if views on the best means tocombat them differed. The EU strategy cited terrorism, weapons proliferation, regional conflicts,failed states, and organized crime as key global threats. Nevertheless, U.S. interests and values do seem to differ on a range of other issues, includingapproaches to international legal regimes, environmental standards, social welfare, andgenetically-modified food. The priority that most European countries place on social spending, forexample, is often cited as a primary reason why European defense budgets remain flat. (17) Many Europeans areincreasingly wary of what they view as a widening transatlantic divide over concepts of justice andU.S. tendencies toward retribution rather than rehabilitation. Some struggle to understand thepractice of capital punishment in the United States, which they associate with undemocratic andauthoritarian societies. A current and key distinction between the two sides of the Atlantic relates to the role ofmultilateral institutions and the use of force. Some analysts assert that the different U.S. andEuropean perspectives on these issues only represent different policy preferences, thereby suggestingthat the positions of the two sides of the Atlantic can be managed by skillful diplomats. Otherssuggest, however, that the divide is deeper and goes to each side's core beliefs and values. Theyclaim that Europe increasingly views multilateralism not only as a policy preference but as aninterest and value to pursue in and of itself because it represents the best way to ensure Europeanpeace, security, and prosperity. In contrast, a number of experts assert that the United States harborsa stronger belief in the value of the use of force as a tool for protecting U.S. interests. As a result, some question whether the diverging views of the United States and Europe onthe value of international institutions and the appropriate role of the use of force can be reconciled,and whether the allies can go forward together in tackling global challenges in a cooperative anddetermined way. Henry Kissinger observes, "The most important event in Europe is the progressiveerosion of the nation-state...European diplomats seek to apply their new domestic experience in theinternational arena. They insist that resorting to military force is legitimate only if sanctioned by theU.N. Security Council.... By contrast, America remains a traditional nation-state, insistent onsovereign freedom of action." He goes on to assert that the EU's resistance to the use of forcewithout U.N. authorization deprives the Atlantic alliance of its "special status" and that "Thechallenge of Atlantic policy is whether the nations of the alliance can regain a sense of commondestiny." (18) Human rights, civil liberty, and rule of law issues related to GuantÃ¡namo Bay and AbuGhraib have also led some Europeans to charge that the United States has lost its moral authority. European officials and parliamentarians have also expressed concerns about a November 2005 Washington Post report of alleged "secret" CIA prisons for terrorists in some eastern Europeancountries and the possible use of European airports as transit points for U.S. flights transportingabducted terrorist suspects. While some observers argue that such issues do not rise to the level ofthreatening the broader transatlantic security and economic relationship, others are less sanguine. They believe that these issues are feeding the public perception that the United States and Europeno longer share the same values; in the longer term, they worry that this perception will cause leaderson both sides of the Atlantic to question whether the benefits of the alliance outweigh the constraintsit imposes. Many also fear that as such differences proliferate, younger American and Europeanpolicymakers, farther removed from World War II and the Cold War, will not share the sameconviction as previous generations about the need for a close and intertwined political and strategictransatlantic relationship. Others contend that although Europe may be looking increasingly outward, it does not shareU.S. global concerns to the same extent. The EU is primarily focused on its own "neighborhood": the Middle East and North Africa, as well as Russia and the Caucasus. Developments in Asia,however, remain of lesser concern, in large part because Europe, unlike the United States, does nothave the same military commitments there. And the rise of China, the stability of the KoreanPeninsula, and India-Pakistan relations may increasingly preoccupy Washington. (19) Some analysts also maintain that Europe remains largely preoccupied with its own internaltransformation, and even though European officials claim to recognize the increasing threat posedto European societies by Islamist terrorism or WMD, they still do not perceive the threat to be quiteas severe. They believe such notions contributed, for example, to the French and Germanassessments that Saddam Hussein was a threat that could be managed without resort to the use offorce, and extends to some EU members' strategic myopia with respect to Turkey, and their qualmsabout Turkey's EU aspirations. At the same time, a number of pundits question the U.S.commitment to Europe, especially in light of Bush Administration plans to pull up to a third of U.S.troops out of European bases over the next seven to 10 years. U.S. officials point out, however, thatthese cuts would be part of a global military repositioning scheme aimed at increasing U.S. militaryflexibility and rapid response capabilities. The constellation of reasons outlined above for current U.S.-European frictions and arelationship in flux are also driving the emerging debate on the future of the transatlantic partnership. The question arises, however, what forces might transform this theoretical debate into a true policydebate, and prompt serious and sustained U.S. consideration about reorganizing or reinvigoratingthe transatlantic relationship. Some suggest that it may simply be a natural evolution, followingfrom the structural changes since the end of the Cold War and the events of September 11. Othersposit that much will depend on the perspective and vision of leaders on both sides of the Atlantic,and the degree to which they are supported by their respective legislatures and publics in embarkingon a new course. The extent to which each side perceives the need for a new course will also likelydepend on future events, in particular, if another catastrophic terrorist event occurs. For example,some suggest that a terrorist attack in Europe similar in scale to the 2001 attacks on the United Statesmight prompt a change in European thinking about the use of force and help bridge certaintransatlantic gaps. Other pundits, including many critics of the Bush Administration, say a drivingforce may be the decline in U.S. influence in the world and the growing realization that the UnitedStates cannot manage all aspects of all conflicts alone. For the purpose of analysis, the following five possible options offer different scenarios forthe future transatlantic partnership; they focus primarily on the political and strategic dimensions ofU.S.-European relations. Despite some trade and economic frictions, it would be nearly impossibleand in neither side's interest to actively pursue less robust trade and investment relations. Thus, theoptions below touch upon the economic aspects of the partnership only to the extent that they haveimplications for transatlantic trade and investment. Additionally, the options are meant to beillustrative guideposts in considering the future direction of U.S.-European relations, rather thandefinitive, exhaustive predictions or stark choices. They should be viewed along a spectrum; thefuture transatlantic relationship, in reality, will likely evolve over time and fall somewhere betweenany two given options, or combine different elements from more than one scenario. Although these selected options are presented as choices for the United States, the futureshape of the U.S.-European relationship is not solely a U.S. decision. Much will also depend onoutside circumstances, European assessments about Europe's new strategic reality and the value ofits partnership with the United States, as well as on the EU's evolution and its future ambitions. This option essentially represents an end to the political and strategic transatlantic allianceas it exists today, although the vast trade and investment relationship would remain intact. Thosewho support such a political and strategic distancing do not necessarily advocate a return toAmerican isolationism or a strictly unilateralist U.S. path. Rather, they claim that U.S. interestswould be best served by concentrating U.S. efforts on developing new strategic partnerships withemerging powers such as Russia, China, and India that may be more capable and better suited to helpthe United States confront the new global challenges of terrorism, weapons proliferation, and theproblems of the greater Middle East. Unlike during the Cold War, Europe is not the central frontof such struggles, but currently still constrains the U.S. freedom of action at times. Proponents ofthis option assert that it would not preclude the United States from working closely with Europeanpartners, like the British, whom they view as sharing U.S. goals and who are able to make seriousmilitary contributions. NATO may even remain as an organization but would effectively bedowngraded into a forum for discussion rather than decision-making. (20) Pros. One possible benefit for the United Statesof this option is that it would free Washington from transatlantic decision-making constraints. Thisapplies both to the broad political level and on the NATO military level. Some analysts suggest, forexample, that pressure from the European allies to gain U.N. authorization for the use of force in Iraqneedlessly delayed U.S. intervention there in 2003. In addition, many U.S. officials are increasinglyfrustrated with NATO's cumbersome, often time-consuming decision-making procedures that requireconsensus, and are viewed by some as an impediment to quick action. (21) De-emphasizing theEuropean allies as the automatic first partner of choice would also allow the United States morelatitude in crafting responses to global trouble spots, and potential partners such as Russia or Chinamay have fewer qualms about the use of military force. Others suggest that a U.S. de-emphasis ofEurope may force the European allies to take more responsibility for ensuring their own security andprovide the needed impetus for real European defense capability improvements. (22) Cons. Skeptics argue that the European alliesremain the most feasible partners for the United States in tackling global and regional challenges. The benefits derived from the alliance's institutional architecture and the well-honed habits ofpolitical and military cooperation should not be underestimated and cannot necessarily be duplicatedelsewhere, especially with countries that do not share the same U.S. commitment to freedom,democracy, human rights, and the rule of law. (23) U.S. alignment with states that are not highly regarded for theirrespect of human rights may also further erode U.S. credibility in areas of the world, such as theMiddle East, where it must be reclaimed in order to fulfill U.S. strategic goals. In addition, it isunclear to what extent countries like Russia or China would be reliable or even receptive partners. And if such countries were receptive, they would most likely expect some concessions in return,which could conflict with other U.S. interests. India, for example, might demand a less robustU.S.-Pakistani relationship, even though the United States views Pakistan as an important ally incombating Al Qaeda. Furthermore, critics assert that if the United States were to take steps to distance itselfpolitically and strategically from Europe, this could negatively affect the U.S.-European economicrelationship in the longer term. Over time, a more distant political relationship could infect theeconomic partnership with growing distrust, thereby complicating efforts to resolve U.S.-EU tradedisputes, or to sustain U.S.-EU cooperation in multilateral trade negotiations. Similarly, some fearthis option would also lead to an erosion of close U.S.-European cooperation against terrorism,especially in terms of intelligence-sharing. This option would also likely encourage the EU todevelop as a political counterweight to the United States. (24) In this option, the United States would continue to "muddle through" with the European alliesand maintain an uneasy, tension-filled partnership. Both sides of the Atlantic would continue toproclaim rhetorically that the U.S.-European partnership is irreplaceable, and decision-making byconsensus would remain the norm in NATO. However, disagreements and differences would likelypersist. Pros. By maintaining the essential structures ofthe Atlantic alliance, this option hedges against future strategic uncertainties, particularly a resurgentRussia, and leaves open the possibility of the alliance eventually evolving into a more useful tool tocombat global challenges, thereby relieving the U.S. security burden. Supporters of preserving thestatus quo point out that despite the current difficulties, the transatlantic partnership continues tofunction, and produces tangible benefits. For example, NATO has taken over the InternationalSecurity Assistance Force (ISAF) in Afghanistan, and has been working to extend ISAF beyondKabul and Kunduz to promote stability and reconstruction in other parts of the country. U.S.-European law enforcement efforts against terrorism have remained robust, despite the tensionsover Iraq. And NATO-EU cooperation is enabling the EU to take on a bigger role in ensuring peaceand security in the Balkans. Maintaining the status quo would also provide U.S. policymakers timeto pursue any changes step-by-step, as well as time to assess the EU's development and the degreeto which EU member states are able to bridge the gap between their aspirations and capabilities. (25) Cons. Some analysts assert, however, that blindlypreserving the status quo will inevitably waste policymakers' time and energy as they seek to managethe constant bickering among the allies. On the U.S. side, this may detract from U.S. efforts to tackleother, more immediate challenges that threaten U.S. interests. New disputes could arise at any timethat could further destabilize and erode the relationship. And the effort needed to maintain the statusquo may still constrain U.S. policies as leaders try to accommodate the need within the alliance for consensus, or attempt to avoid U.S.-EU policy confrontations. (26) The "coalitions of the willing" concept for the transatlantic alliance has been debated sinceat least the mid-1990s. The Balkans problem prompted a debate about the use of NATO for so-called"out of area" or "non-Article 5" operations that were not of a collective defense nature. Severalobservers at the time suggested that decision-making unanimity should not be required for suchmissions because of the absence of an overwhelming threat in which the demonstration of alliancesolidarity was crucial. Since then, some argue that even though the alliance has remained weddedto consensus decision-making, this does not obligate every member state to contribute militarily toa given NATO operation, and therefore, "coalitions of the willing" exist in practice. The Bush Administration has contended that NATO military actions should mostly beconducted by "coalitions of the willing," which would enable the United States to pursue action withthose allies that agree upon the threat and have the means to counter it. Formalizing this optionwithin the alliance may entail changing alliance decision-making procedures and moving away fromthe consensus decision-making principle. (27) More broadly for the transatlantic relationship, a "coalitions ofthe willing" approach would essentially mean that the United States and its European partners wouldcooperate where possible and agree to disagree on contentious issues. Pros. Proponents believe this concept would helpminimize transatlantic quarrels and free the United States from European constraints on issues uponwhich agreement proves elusive. Bitterness would be defused by acknowledging that differenceson certain international problems were irreconciable. Cooperation would proceed on thosechallenges in which the United States and the Europeans could agree on the threats posed and thebest ways to address them. On the NATO decision-making level, this option would allow the UnitedStates to avail itself of European assistance from those allies willing and able to provide it, therebyhelping relieve some U.S. security burdens, although not all. Supporters view it as a more realisticand effective option, especially given the U.S.-European military capabilities gap and the lack ofsignificant numbers of rapidly deployable European forces. They claim it might also give individualEuropean partners more freedom of action to join with the United States, and as a result, it mayweaken the development of an "EU caucus" -- pre-negotiated, common EU positions -- withinNATO. (28) Cons. Skeptics assert that this option on thebroader transatlantic partnership level would not produce a coordinated strategy with which tomanage the full spectrum of global challenges, and could result in allies working at cross-purposesor feed U.S.-EU rivalry. Furthermore, they claim that this option may be interpreted by Europeanallies as a U.S. attempt to keep Europe weak and divided because the United States would invariablytry to sway certain EU member states to its point of view. Some observers assert that this is exactlywhat happened with the Iraq issue, which split EU member states between those that supportedWashington's approach and those that opposed it, and was one reason why the transatlantic disputeover Iraq was so divisive. In this view, pursuing "coalitions of the willing" could increase rather thandecrease transatlantic tensions. (29) On the NATO level, U.S. critics and many Europeans believe that this option wouldessentially signal the end of the alliance's consensus decision-making approach. This, in turn, wouldundermine alliance solidarity by weakening the long-held principle that all members have an equalstake in alliance security, and that the sum of the alliance is greater than its parts. In this view,alliance consensus connotes a certain international "legitimization" of a policy, especially if itinvolves the use of military force. Over the longer term, they worry it could weaken the transatlanticlink and decouple North American and European security. In addition, the "coalitions of the willing"approach may not give the European allies sufficient incentives to significantly improve their defensecapabilities because they would be reluctant to be viewed as a "toolbox" that the United States usesas it pleases. Like the "coalitions of the willing" concept, this option has been the subject of considerabledebate on both sides of the Atlantic for some time. This option focuses mostly on themilitary/security dimensions of the transatlantic relationship. Several variations exist, although mostput the NATO-EU relationship at the core of any transatlantic division of labor. Some analysts haveproposed a division based largely on geography: the European allies and/or the EU would essentiallybear the primary burden for maintaining security within Europe and on its periphery, including inthe Balkans, and perhaps for managing small crises in the Maghreb or in Africa; meanwhile, theUnited States would assume responsibility for handling international crises elsewhere in the world,especially in the Persian Gulf and in Asia. In such a geographic division, Europe would most likelydesire, and the United States would most likely insist on, joint responsibility within the NATOcontext for managing crises involving Russia and the Caucasus. The difficulties in drawing such stark geographic dividing lines, however, have led many tofavor instead a functional division. The European allies and/or the EU would concentrate on "lowerend" humanitarian assistance, crisis management, and civilian reconstruction tasks, while the UnitedStates and perhaps more capable allies such as the UK and France would undertake "higher end"combat activities and peace enforcement operations. Additional permutations of the division oflabor approach that combine different geographic and functional elements may also be found in thesecurity literature. For example, one analyst has proposed a construction in which the Europeansprepare to undertake stability operations on their own primarily in or near Europe, but would alsodevelop the capacity to participate in higher-intensity conflicts anywhere in the world with theUnited States. (30) Pros. Supporters argue that a functional divisionof labor already exists in practice. To a large extent, U.S. forces have been assuming the bulk ofhigher-end, war-fighting tasks. EU military missions to date have focused on lower-end stability andhumanitarian operations. Moreover, the EU is much better equipped, given its full range of politicaland economic tools, to undertake peacekeeping and reconstruction tasks than is the U.S. military. By acknowledging that the United States and Europe have different strengths, this option wouldmake better use of these comparative advantages in a more coordinated strategy. Proponents claimthat this is the most feasible option because it would increase European burden-sharing whilelowering unreal U.S. expectations for significant European military capability improvements,especially given the dim prospects for any substantial near-term increases in European defensebudgets and the already wide U.S.-European capability gap. Reducing U.S. expectations of EUcapabilities, particularly for high-intensity conflicts, might also remove a continuous source ofU.S.-European friction. Moreover, this option would preserve the transatlantic partnership. NATOwould likely remain intact, serving as a continued symbol of alliance solidarity and also as an"insurance policy" for Europe; NATO could also be used to manage the division of labor betweenthe European allies and/or the EU and the United States. Cons. Rather than increasing burden-sharingbetween the two sides of the Atlantic, critics argue that a functional division of labor wouldinstitutionalize inequality because American forces would be left with the much more dangerous anddifficult military tasks. They worry it would ultimately undermine alliance solidarity as U.S. soldierswere repeatedly put in harm's way, while European forces handled the relatively easier and lessconflict-intense tasks associated with peace stabilization and reconstruction. Furthermore, thisoption would likely do little to encourage the allies to enhance their defense capabilities. If ageographic division of labor were pursued, in which Europe had primary responsibility formaintaining its own security, opponents say this would only serve to reinforce European inwardnessand encourage an abdication of European responsibility for global security. Finally, critics assert thata U.S.-European military division of labor, be it geographical or functional, does not provide acoordinated strategy to manage global problems. In their view, it would do little to bridge thepolitical and policy gaps between the two sides of the Atlantic on a range of issues, such as theMiddle East peace process or Iran, nor would it adequately address U.S.-European differences overthe use of force. As with the previous two options, devising a new strategic bargain for the transatlanticrelationship has been proposed by committed Atlanticists for many years. Initially, such proposalswere made as ways to keep the alliance, and especially NATO, "in business" in light of the demiseof the Soviet threat. With the reemergence of serious U.S.-European frictions, many variations ofthis option have been offered recently to help put the relationship on a better footing. Most of theseproposals place the NATO-EU relationship at the core of a renegotiated partnership, and advocatea more equal sharing of responsibilities both within and outside of Europe. Other common elementsoften include a U.S. commitment to a strong and coherent Europe and a European commitment tobuilding the EU as a partner rather than a rival to the United States; a U.S. pledge to give theEuropean allies a larger decision-making role, in exchange for a European pledge to do more to helpensure peace and security beyond Europe's borders; and an increased European understanding thatmultilateral solutions often require the credible threat of force, in exchange for U.S. recognition ofthe benefits that multilateralism may bring in terms of helping to "legitimize" U.S. policiesinternationally. Politically, for a new bargain to work, advocates believe that new U.S.-European deals, orat least some sort of accommodation, would have to be struck on a host of contentious issues,including, for example: Iraq; the Israeli-Palestinian conflict; efforts to curb radical Islam andtransform the broader Middle East; Iran; and the status of a number of international treaties such asthe U.N. Kyoto Protocol and the International Criminal Court. Militarily, in order to promote a fullersharing of tasks and responsibilities, many believe that a new bargain must also include enhancedEuropean defense capabilities, especially for higher-end tasks, and greater U.S. recognition that crisismanagement and post-conflict reconstruction skills are equally important. One analyst sums up hisview of a new transatlantic security deal as one "in which Americans learn to peacekeep andEuropeans re-equip to fight." (31) An extremely ambitious "new bargain" could also seek to set upnew institutional arrangements for the transatlantic commercial relationship. Some U.S. andEuropean officials might support creating a Transatlantic Free Trade Agreement to both contain tradedisputes and bolster U.S.-European political cooperation. Pros. Supporters assert that this option wouldhelp ensure a stronger and deeper transatlantic partnership that would better serve U.S. globalpolitical and security interests, and protect ongoing close U.S.-European economic relations. Establishing the parameters of such a new bargain would likely entail a comprehensiveU.S.-European strategic dialogue, which would help guarantee greater complementarity, if notcommonality, of policies and decrease transatlantic frictions. Proponents believe this option wouldpromote more equitable burden-sharing, encourage the European allies to build more robust militarycapabilities, and discourage the development of U.S.-EU rivalry. They claim that the European allieswould not be required to match U.S. military capabilities exactly -- which is viewed as anincreasingly impossible task -- but the allies need to be able to do more, both on their own and withU.S. forces. Cons. Critics are skeptical about the realisticprospects for reaching a U.S.-European political agreement on such a new bargain, and about thedegree to which it could be implemented in practice. This option would likely require the UnitedStates to relinquish some decision-making authority within the alliance; furthermore, it would alsoprobably require certain U.S. compromises on issues of particular importance to Europe, such asclimate change or international law, and a U.S. re-commitment to the pursuit of multilateral solutionsand international institutions. Some analysts doubt, however, that the United States would berewarded for such concessions that could constrain U.S. policies and slow decision-making giventhat, in their view, Europe will remain unable to squeeze more money for defense out ofalready-strapped European budgets. They also note that the EU may be skeptical that the UnitedStates would keep up its side of the bargain, and could view it as a U.S. scheme to keep EUambitions on a tight leash. Others note that the chances of reaching an accommodation with"Europe" on issues such as Iraq would be complicated because differences still exist within the EUand among European allies. As noted earlier, the options discussed are illustrative guideposts meant to facilitateconsideration of the future shape of the transatlantic relationship. Each potential option containsboth pitfalls and promises for the United States. However, the bulk of the analysis suggests thatmaintaining the U.S.-European political and strategic relationship in some form would continue tooffer the United States certain tangible benefits and serve to buttress at least some U.S. foreign andeconomic policies. All of the options, with the possible exception of maintaining the status quo,would require serious and sustained U.S.-European dialogue and consultation; this would also betrue for "de-emphasizing Europe" in order to insulate the trade and investment relationship frombeing negatively affected by any political distancing. The reality of the future shape of the transatlantic relationship may be most likely to surfacesomewhere between any of the two given options and combine different elements. For example, themultitude of security challenges facing both the United States and Europe argue that neither side cando all, and that there is bound to be some sort of division of labor, especially given currentdifferences in U.S. and European military strengths. At the same time, politics and ambitions onboth sides of the Atlantic impede a stark division of labor because neither the United States norEurope would want to relinquish segments of its security interests to the other. (32) Thus, these factors couldprompt a new bargain to be reached at the political level -- entailing perhaps a statement ofU.S.-European solidarity in confronting global and regional challenges, and an elaboration of jointpolicies to address issues such as Iran or the Middle East peace process -- while a division of laboris practiced and managed on a case-by-case basis as the need for a specific mission arises. It is alsopossible that any given option may evolve over time, or that different options may be possible orsuitable depending on the specific issue facing the alliance. U.S.-European security and economic relations represent areas of long-standingcongressional interest. Many Members of Congress share the overarching goal of successiveAdministrations of a "Europe whole and free." Traditional congressional concerns have focusedmostly on the degree to which the European allies are willing and able to share the security burdenwith the United States. Members of Congress have strongly supported the two most recent roundsof NATO enlargement in 1998 and 2003 as a means to promote European stability and bolsterdemocracy in Central and Eastern Europe; they also welcomed the EU's enlargement on May 1,2004. Congress has been actively engaged in the evolving NATO-EU relationship, and hassupported EU ambitions to build a defense arm as a way to improve European defense capabilities,provided that the EU project remains tied to NATO. Members of Congress have also encouragedEU efforts to enhance its counterterrorism capabilities and to improve cooperation in the police andjudicial fields with the United States since September 11. Issues in the U.S.-EU trade andinvestment relationship -- such as aircraft subsidies, genetically-modified food products, the EU'sCommon Agricultural Policy (CAP), e-commerce and data privacy, and harmonizing regulatory andcompetition policies -- also frequently occupy the attention of U.S. lawmakers. In the aftermath of the transatlantic crisis over Iraq, some Members have also taken aninterest in the broader shape of the future transatlantic relationship. Hearings on this issue were heldin 2003, 2004, and most recently in February 2005. (33) On November 5, 2003, the House passed H.Res. 390 (introduced by Representative Doug Bereuter, October 2, 2003) recognizing the continuedimportance of the transatlantic relationship and reaffirming the need for a continued and meaningfuldialogue between the United States and Europe; on May 11, 2004, the House passed H.Res. 577 (introduced by Representative Doug Bereuter, March 25, 2004) celebratingthe 50th anniversary of U.S.-EU relations and encouraging enhanced U.S.-EU strategic discussionsand international cooperation. In considering any significant reorganization of the transatlantic relationship, ensuringcontinued and close U.S.-European economic relations and counterterrorism cooperation wouldlikely be two areas of concern for Congress. Members would also likely want assurances that anyefforts to enhance the transatlantic partnership, especially those that may entail U.S. politicalcompromises, would result in more robust European military capabilities and a strengthenedEuropean commitment to work with the United States to tackle global challenges. Many Members,in any "new bargain" approach, may desire a European recognition that a transatlantic "consensus"provides sufficient "legitimization" and a U.N. mandate should not be a prerequisite for action;Congress would probably resist any efforts to make U.S. soldiers subject to the InternationalCriminal Court's proceedings. Members of Congress could play a role in shaping the transatlantic debate over the future ofU.S.-European relations through discussions with European counterparts in the existing NATOParliamentary Assembly, the OSCE Parliamentary Assembly, and the U.S. Congress-EuropeanParliament Transatlantic Legislator's Dialogue (TLD). On February 9, 2005, Representative Jo AnnDavis introduced H.Res. 77 recognizing the 10th anniversary of the New TransatlanticAgenda, acknowledging the continued importance or the transatlantic partnership, and promotingnew initiatives to strengthen the partnership, including by enhancing the dialogue between the U.S.Congress and the European Parliament through the TLD. In May 2005, Members of Congressestablished a Congressional Caucus on the EU to promote a better understanding of the EU andincrease dialogue and other exchanges with a wide range of EU officials. On June 20, 2005, SenatorRobert Bennett introduced S.Res. 178 on the occasion of the U.S.-EU summithighlighting the importance of U.S.-EU cooperation and calling for expanded political and securitydialogue between the Congress, the European Parliament, and the EU more broadly; S.Res.178 passed the Senate on the same day by unanimous consent. In addition, several congressional caucuses focus on bilateral U.S.-European relations anddifferent aspects of the broader transatlantic relationship; examples include the Congressional FrenchCaucus, the Congressional Caucus on Central and Eastern Europe, and the Congressional Caucuson Turkey and Turkish Americans. Members of the U.S. Senate and House of Representatives arealso active on the Commission on Security and Cooperation in Europe that monitors and encouragescompliance with OSCE political and human rights commitments. Such forums may provide usefulopportunities for enhancing transatlantic dialogue on where the U.S.-European relationship stands,in what ways U.S.-European interests coincide or diverge, and what direction should be pursued inthe future in order to continue to promote security and prosperity on both sides of the Atlantic. Appendix A: Membership in NATO and the EuropeanUnion Appendix B: Spectrum of Possible Options for U.S. Policy Toward Europe 

Summary: The United States and Europe share a long and intertwined history, replete with many upsand downs. The modern transatlantic relationship was forged in the aftermath of World War II todeter the Soviet threat and to promote security and stability in Europe. NATO and the EuropeanUnion (EU), the latest stage in a process of European integration begun in the 1950s, are the two keypillars upon which the U.S.-European partnership still rests. The U.S. Congress and successive U.S.administrations have supported both organizations as means to nourish democracy, foster reliablemilitary allies, and create strong trading partners. Despite the changed European security environment since the end of the Cold War andcurrent transatlantic frictions, many observers stress that the security and prosperity of the UnitedStates and Europe remain inextricably linked. Both sides of the Atlantic continue to face a commonset of challenges -- from countering terrorism and weapons proliferation to ensuring the stability ofthe global financial markets -- and have few other comparable partners. The United States and theEU also share the largest trade and investment relationship in the world; annual two-way flows ofgoods, services, and foreign direct investment exceed $1.1 trillion, while the total stock of two-waydirect investment is over $1.6 trillion. Nevertheless, the transatlantic partnership has been fundamentally challenged in recent yearsas numerous trade and foreign policy conflicts have emerged. The crisis over Iraq is most notable,but the list of disagreements is wide and varied. It includes the Israeli-Palestinian conflict, the EUarms embargo on China, the role of multilateral institutions and the use of force, the U.S. treatmentof prisoners in Iraq and at GuantÃ¡namo Bay, aircraft subsidies, and trade in genetically-modifiedfood. These disputes have been driven partly by leadership frictions and European perceptions ofU.S. unilateralism, and partly by structural issues -- different policy preferences for managing threats,the U.S.-European defense capabilities gap, and the EU's political evolution -- set in motion by theend of the Cold War and September 11. These factors are also prompting some Americans andEuropeans to question whether the two sides of the Atlantic still share the same values and interests,and whether enough commonality remains to make the partnership work. This report assesses the present state of the U.S.-European relationship and the reasons forcurrent frictions. To stimulate debate and for the purposes of analysis, it also offers a spectrum ofpossible options for U.S. policymakers in considering the future shape of the political and strategicdimensions of the transatlantic partnership. These selected options should be viewed as illustrativeguideposts, however, rather than definitive, exhaustive predictions or stark choices. This report willbe updated as needed. For additional information, see CRS Report RL32342 , NATO and theEuropean Union , by [author name scrubbed] and [author name scrubbed]; CRS Report RS21372 , The European Union:Questions and Answers , by [author name scrubbed]; CRS Report RS21864 , The NATO Summit at Istanbul,2004 , by [author name scrubbed]; and CRS Issue Brief IB10087, U.S.-European Union Trade Relations: Issuesand Policy Challenges , by Raymond Ahearn.