June 13, 2003

To: CFR Task Force on Transatlantic Relations

From: Stephen Walt
Kennedy School of Government
Harvard University

Re: Recommendations for Report

Due to a prior professional commitment, I am unable to join you for the discussion on June 16. Given that the discussion will focus on recommendations, I am especially sorry to miss it. Here are some thoughts on what we should include in the report.

1. Make the case for why close transatlantic cooperation is still in Europe and America's interest. As several of our readings note, there are many areas where U.S. and European interests are largely identical (e.g., control of WMD, counter-terrorism, international crime, promotion of democracy and human rights, etc.) Moreover, several of these areas—and especially those lying at the intersection of global terrorism and WMD—are more important today than they were in the past. Because progress in these areas will require close cooperation among all the major powers, it follows that the United States and Europe have a vital interest in preserving a solid relationship. Because it is not obvious that key elites (including some top U.S. officials) genuinely recognize this, we would do a great service by making this case as clearly and powerfully as we can.

2. Recognize that the existing structure of power creates new tensions in the alliance. As I outlined in our first session, there are powerful structural forces pulling the United States and Europe apart, and the unifying forces that once existed have grown weaker. Current transatlantic tensions are not simply the result of inept diplomacy, careless rhetoric, or ideological extremism; they also reflect underlying America's current position of dominance and European concerns for the ways that US power may be used. These facts do not mean that NATO has no future or that Europe and the United States are destined to divorce, but our report should acknowledge that preserving close cooperation is going to be more difficult in the future than it was in the past. Paradoxically, Europeans and Americans will have to put more effort into alliance management in the future.

3. Emphasize areas of agreement. As noted above, there are many areas where European and U.S. interests are nearly identical. Transatlantic diplomacy (and cooperation) should focus on these areas of agreement, while "agreeing to

disagree" in areas where our interests obviously conflict. We should commit
greater effort (and resources) to these areas, and encourage Europe to do the
same.

4. Make the "road map" a reality. The continued conflict between Israel and the Palestinians is tragedy for both sides, a liability in the war against global terror and has increasingly corrosive effects on U.S. relations with Europe. Ending this conflict is thus a vital national security interest for the United States. Europe and the United States agree that there should be a two-state solution, but Europeans oppose Israeli settlements and favor a return to the pre-1967 borders (possibly with minor modifications). It is not clear if the United States favors this or not, especially at present, and it is not clear if the Bush administration is willing to fully commit to making the "road map" work. Yet close cooperation between the United States and Europe could play in invaluable role. Specifically, European aid and pressure could be used to encourage greater efforts to control Palestinian violence against Israel and to obtain key Palestinian concessions (such as indemnification for the "right of return). Similarly, U.S. pressure will be necessary to obtain the "painful concessions" that the Sharon government has promised. The necessary ingredients for a solution may in fact be present; what has been lacking (for years) is the political will to use them.

5. *Lower the rhetorical temperature.* Recent disagreements over policy have been exacerbated by a level of scorn, rancor and contempt on both sides of the Atlantic. It is not clear if these statements reflect a genuine desire to downgrade the alliance, or merely a mistaken belief that tough talk and demeaning rhetoric is the best way to keep one's allies in line. This sort of "big-stick" diplomacy is unlikely to work against democratic countries, however, because inflaming public opinion makes it harder for foreign leaders to cooperate with the United States and gives them a greater incentive to distance themselves publically. I hope our report will condemn this behavior and call for greater rhetorical restraint and mutual respect in subsequent transatlantic discussions.

Needless to say, this list of possibilities barely scratches the surface. Nonetheless, I hope that these ideas contribute to the discussion and I am sorry I am not there to learn from the other members of the task force. I look forward to reading the draft report, and will make a point of being present at our final session.

The following European Reply to the CSIS Joint Declaration of May 2003 appeared in Corriere Della Sera and Le Monde, published on 14 June 2003. The 17 former European officials who signed this declaration are listed below.

RENEWING THE TRANSATLANTIC PARTNERSHIP
A EUROPEAN REPLY TO THE JOINT AMERICAN DECLARATION

We have read with appreciation a joint declaration endorsed by a bipartisan group of prominent American figures which underscored the importance of the transatlantic link. We share the view that, even after the end of the Cold War, the renewed Transatlantic Alliance remains the main pillar of the Euro-American partnership, as well as the belief that the basic premise of a strong transatlantic partnership is a stable Europe, a cohesive and dynamic European Union.

In particular, we agree with the conclusion of the joint declaration that neither the United States nor Europe is omnipotent, both will need help in ensuring their own physical and economic security, let alone threats beyond their respective borders. That help is most logically sought from the nations with which we have most in common. Accordingly, whatever the merits of our respective positions, it is incumbent upon us all to make of the renewal of the transatlantic partnership an urgent priority.

The existence of a united Europe would not have been possible without the decisive role played by the United States in helping us to defeat totalitarianism: Europeans will never forget this and they appreciate American support to the Union, especially in this defining moment of their history. Thus, Americans will always be welcome in Europe.

In the late 1940's the Founding Fathers of Europe envisaged the creation of a long term union among Europeans; this project drew its inspiration from the lessons of history and from the determination that war between European countries should never again be possible.

Now that Europeans have joined their forces in the European Union and have established a single market and a single currency, there is a widespread consensus that this process of integration should progress further. Although each European country is proudly unique, EU members share interests, values and a way of life.

The European Convention is the expression of our determination to move even further along this path: it has the task of defining Europe's role in the XXI century and of creating a genuine political community. It is a major effort and we are confident that it will succeed – in particular in defining the international role of Europe, aiming at a just and fair world order. We are equally confident that the US will support this project, as it is in the best interests of the West as a whole.

The process of European integration is based on democracy, freedom, market economy and social solidarity, on the universal application of human rights, on a deep awareness of the many problems that can destabilize the international community: the North-South divide, the environment, the spread of weapons of mass destruction, the scourge of terrorism as a threat to all of us, international crime and drug trafficking. Europeans believe that such problems can only be dealt with in a multilateral framework as provided by the United Nations. To this end, US-European cooperation and sustained engagement are necessary conditions.

The European Union is now a reality. It was not founded in opposition to America, and it will work closely with the United States.

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Our main partner across the Atlantic has been faced with a twofold reality for several years: it deals with a plurality of friendly States on the one hand, and with the European institutions on the other. With the latter it negotiates a range of issues, from international trade to competition.

This reality is still incomplete, but a full-fledged European player will soon be the main reference in transatlantic relations. The role of the individual European states in foreign policy will remain strong, but the European Union, as depository of common interests and a shared vision, will increase its profile and weight.

We are convinced that the development of an effective European defense does not endanger NATO; on the contrary, it may make NATO stronger if so the two sides of the Atlantic firmly want.

Our values and basic political aims are shared by the United States. No major problem in the world can be solved without a joint US-European commitment; no problem is unsolvable when we tackle it together. Such awareness can strengthen the policy of transatlantic cooperation. The next EU-US summit should be the occasion to concentrate on an ambitious common agenda of tasks to be carried out on the basis of strong complementarity.

We believe that, especially with the advent of a new generation of political leaders in Europe and in the United States, we should draw strength and inspiration from the past but look to the future: we should thus focus on the challenges and threats of the 21st Century, which require a full joint commitment. North America and Europe are depositories of democracy and freedom. Together we will be able to share these values with the rest of the world. By joining forces we will further stabilize the international community and give dignity to all human beings.

It would be a grave mistake for the very countries who forged close bonds fifty years ago, when interdependence was hardly existent, to relinquish these precious bonds in the age of globalization.

Although it is not the first time that the transatlantic partnership has raised questions on both sides of the Atlantic, short term divisions have never prevailed over the core of common values and interests which still define the Western world.

In connection with the war in Iraq and because of disagreements which have come to the fore in the aftermath of September 11th, the unity of the Western world is now being openly questioned.

The debate has become harsh. Some observers and sectors of public opinion have over-simplified it into the assumption that Americans are from Mars and Europeans from Venus.

We have been involved in transatlantic cooperation for many years and we refuse to believe that the Atlantic is getting wider. Americans and Europeans have disagreed in the past and may disagree in the future. The question is whether the disagreements will touch upon essential concerns or be limited to specific and manageable issues.

Our firm answer is that the American and European democracies are united by their values. They cannot succeed in isolation from each other, let alone in opposition. Working in partnership on the basis of their common roots and shared objectives, and of mutual respect, they will never antagonize each other on vital issues.

United, we are seen by the rest of the world as interpreters of a great vision and of great wisdom; divided, we shall be losers. It is up to us to make the best of this great asset.

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This declaration was signed by the following:

* Susanna AGNELLI former Italian foreign minister

* Giuliano AMATO vice president of the EU Convention on the Future of Europe and ex-Italian premier

* Raymond BARRE former French prime minister

* Carl BILDT ex-Swedish prime minister

* Emilio COLOMBO ex-Italian premier

* Jean-Luc DEHAENE former Belgian prime minister and deputy EU Convention chairman

* Bronislaw GEMEREK former Polish foreign minister

* Hans Dietrich GENSCHER former German foreign minister

* Valery GISCARD D'ESTAING former French president and current chairman on the EU constitutional convention

* Felipe GONZALES ex-Spanish prime minister

* Douglas HURD former British foreign secretary

* Helmut KOHL former German chancellor

* Giorgio NAPOLITANO ex-Italian parliament speaker and president of the European Parliament commission on Constitutional Affairs

* Helmut SCHMIDT former German chancellor

* Carlo SCOGNAMIGLIO former Italian defense minister

* Eduardo SERRA former Spanish defense minister

* Hans VAN MIERLO former Dutch foreign minister

EU/US Enhanced Economic Cooperation

HM Treasury, 1 Horse Guards Road, London SW1A 2HQ

The UK believes strongly in a European Union that is open and outward looking, and takes
the lead in establishing a stable and sustainable global environment through its bilateral
and multilateral relationships, particularly with the United States. To deliver effective
global economic leadership - helping to underpin the wider foreign policy relationship -
the US/EU relationship should be one of cooperation, not confrontation.

In addition, the scale of the transatlantic economic relationship means there are huge potential benefits to both the EU and US from closer economic cooperation. Bilaterally, the EU and US are each other's largest trading partners. Over 20 per cent of EU exports are to the US, while over 25% of US exports are destined for the EU. And these figures are dwarfed by the investment relationship. A recent study¹ estimates that in 2000, foreign assets held by US companies in Europe totalled some $5.2 trillion - roughly 58% of their total overseas holdings. As US Under-Secretary of Commerce Grant Aldonas recently remarked, "When there are political differences, those of us on the economic side of the house need to tack against the wind ... you have to do something that provides a bit of a counterweight."²

At present, the US and EU already work closely together in international fora. High profile trade disputes tend to cloud what remains an essentially healthy relationship, affecting only around 1-2 per cent of transatlantic trade and investment. But this masks the challenge presented by regulatory disputes, rather than tariffs, that will become the main barriers to trade - regulatory issues often adopted for legitimate domestic concerns, but which inadvertently erect new trade barriers.³ We believe, therefore, that the EU and US should build upon the 1998 Transatlantic Economic Partnership, developing an enhanced agenda for economic cooperation - recognising:

* the need to ensure a successful WTO Round, and to allow developing countries to play their full part in the global economy;

* the benefits of further bilateral trade liberalisation, particularly in those areas where the multilateral process is not well-suited to progress, such as capital market liberalisation;

* that in an increasing integrated global economy, economic cooperation must extend beyond trade to investment, macroeconomic policy, competition policy, and international development; and,

* the case for improving dialogue and methods of governance in the face of changing trade disputes, and increasingly integrated economies - implying that trade discussions must better address those sectors that have not traditionally been the focus of trade discussions, such as services.

¹ "Drifting Apart or Growing Together? The Primacy of the Transatlantic Economy" Center for Transatlantic Relations, Johns Hopkins University, 2003. Available at: http://sais-jhu.edu/transatlantic/Quinlan%20Text.pdf

² Grant Aldonas, comments in Brussels 28 April 2003, reported in the Financial Times

³ In financial services, for example, there is increased recognition that many financial sector issues require international solutions, and cannot be resolved by the EU or US on their own.

Detail

HM Treasury, in partnership with the Netherlands Ministry of Finance, commissioned two studies: from the Centre for Economic Policy Research (CEPR) on the potential benefits of greater EU/US trade liberalisation; and from the European University Institute (EUI) on the political economy of the transatlantic relationship. These studies were published on 29 May 2003, and are available from: http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2003/press_64_03.cfm.

A key finding of the CEPR study is that the full liberalisation of transatlantic trade would lead to an annual income gain to the EU of up to 2 per cent of GDP (or €140 billion) and for the US of up to 1 per cent of GDP. The additional benefit to the EU would arise because of the positive impact US competition would have on economic reform in Europe.

These studies make a powerful case for further work. The following presents a summary of our preliminary proposals for greater EU/US economic cooperation – in many cases, we have also posed questions about which, we believe, the Council for Foreign Relations task force could make a significant contribution. More generally, we hope this may provide a framework for discussion, and

The UK believes that the EU and US should:

* Cooperate to ensure the success of the Doha Development Round, through a firm commitment to the WTO.

How do you recommend that this best be achieved? Are there reforms/improvements to the WTO process that would facilitate a more positive cooperative relationship? Would you recommend that the EU and US look to a bilateral agreement to supplement the WTO process?

* Complementary to the multilateral trade agenda, examine the case for further bilateral trade liberalisation and regulatory cooperation, significantly broadening the scope of the Positive Economic Agenda⁴;

Is existing research sufficient to identify the benefits of greater liberalisation, and the specific sectors in which it should be pursued as a priority? If not, how could you involve governments and business in taking such work forward?

* As a priority, enhance and strengthen the current financial services regulatory dialogue, to adopt a more forward-looking approach to financial services regulation;

The existing ad-hoc regulatory dialogue between the EU and US administration tends to deal (too late) with issues where the impact of legislation on each other's jurisdiction has not been thought through. The UK believes there is a need to formalise this dialogue,

⁴ The Positive Economic Agenda is a programme of bilateral cooperation in 7 specific sectors, announced at the May 2002 EU-US summit – including financial markets, organic produce and e-procurement.

providing a forum to catch such regulatory issues early – and provide a framework through which both sides can gain a better understanding of each other's regulatory and legislative approaches.

* Commit to the completion of a study into the benefits of capital market liberalisation between the EU and US (as recommended by the TABD), taking into account the Steil Report into the benefits of transatlantic securities exchange access;

* Renew and reinvigorate the Transatlantic Business Dialogue (TABD);

Businesses are often best placed to identify key regulatory barriers and it is they who suffer the most from trade disputes and retaliations – their role in early warning and identifying trade barriers should be maintained. How, if at all, would you develop the business dialogue? How should this feed into any improved, broader economic dialogue between the EU and US?

* Develop joint approaches to development goals, including cooperation on the proposed International Finance Facility;

Designed specifically to help meet the internationally agreed Millennium Development Goals, the UK has proposed the creation of the International Finance Facility⁵ – to provide long-term, but conditional, funding guaranteed to the poorest countries by the richest. Are there other areas in which you believe the EU and US could cooperate on joint approaches to achieving development objectives?

We would, of course, be willing to discuss these points in more detail with you.

We would also strongly encourage the CFR task force to consider other means of improving the economic relationship – in this regard, the EUI report on the Political Economy of the Transatlantic Relationship may provide some useful input. Our firm view is that the economic sphere is an area where deeper cooperation has clear economic benefits to the US as well as the EU – in addition to the vital role it can play in supporting the wider political relationship.

**Ed Balls**
Chief Economic Adviser
Ed.Balls@hm-treasury.gov.uk

For further detail, please also contact:

**Richard Salt**
Economic Adviser – EU US Economic Cooperation
Richard.Salt@hm-treasury.gov.uk

⁵ See: http://www.hm-treasury.gov.uk/documents/international_issues/int_gnd_intfinance.cfm

CENTRE FOR EUROPEAN REFORM
NEW IDEAS FOR A NEW EUROPE

(L)

# SUMMARY OF RECOMMENDATIONS

## FROM THE FORTHCOMING CER PAMPHLET
### 'TRANSATLANTIC RIFT: HOW TO BRING THE TWO SIDES TOGETHER'

By Charles Grant, Director, Centre for European Reform

**For the Americans:**

**1. Be aware that unilateral actions carry costs.**

There will be times when the US ignores its allies, the UN or international agreements. But the US should be aware that there is a price to be paid for acting unilaterally. The more the US behaves in a unilateral manner, the more its 'soft' power – the ability to affect events through persuasion rather than coercion – is liable to diminish. Unilateral actions will often lead to more anti-American sentiment; make it harder for the US to put together international coalitions; and increase the chances of other governments thwarting US objectives in international fora. Conversely, if the US seeks to play an active and constructive role in the UN, and if it shows greater respect for international law, it will boost its moral authority.

**2. Remember that the style of your diplomacy affects outcomes.**

The Bush administration's diplomacy – or the lack of it – has on several occasions led to results that are harmful to US interests. The president's decision to cut off contact with Chancellor Gerhard Schröder, to punish him for an anti-American election campaign, contributed to Germany lining up behind France on Iraq. And then in early 2003 Defence Secretary Donald Rumsfeld's attack on France and Germany as 'Old Europe', and his comparison of Germany to Cuba and Libya, made it harder for the US and the UK to achieve a new United Nations Security Council (UNSC) resolution on Iraq. The mishandling of Turkey has sapped the loyalty of one of America's closest allies. Senior figures in the Bush administration need to travel, listen and consult more than they have done. And they should not try to punish errant allies if they want them to cease erring.

**3. Use the reconstruction of Iraq as an opportunity to revive transatlantic co-operation.**

The US should re-examine its current policy of minimising the UN's role in Iraq and excluding opponents of the war from involvement in the reconstruction. The ambiguities in UNSC resolution 1483, passed in May 2003, should be resolved in favour of an enhanced role for the UN in the government of Iraq. An Iraqi government that is appointed by the UN rather than the US would have more authority. The running and rebuilding of Iraq is an enormous task, and the Americans will need all the money and expertise that others are able to contribute. If France, Germany, Russia and others who opposed the war are to be involved, their companies cannot be excluded from the economic benefits. Iraq will require tens of thousands of international peacekeepers for many years to come. A NATO force would have more legitimacy in the eyes of Iraqis than a mainly American force. If French and German troops were involved in such a force, NATO would regain some badly-needed vitality.

4. Be even-handed in the Middle East.

In most countries people think the US is prepared to be tough on the Palestinians but not on the Sharon government. This perception has a huge impact on America's prestige and reputation, not only in Arab countries but all over the world. President Bush will not be able to alter this perception unless he is prepared to get tough with the Likud government. He should also recognise - as the State Department certainly does - that the US can achieve more by working with the EU and the other members of the 'Quartet'. American influence in the region has suffered from the State Department and the Pentagon running rival foreign policies. The president needs to clarify that the State Department is in charge. If he can maintain a commitment of time and energy, in an even-handed manner, he will disarm his European critics and, more importantly, increase the chances of peace in the region.

5. Don't jiggle the knife in the wound between 'New' and 'Old' Europe.

Most of the fundamental interests of New Europeans and Old Europeans are similar, and in the long run - when emotions over Iraq have subsided - the wound is likely to heal. In any case, even if US policy succeeded in keeping the wound open, the consequences would be bad for America. For if one group of European states supports the US, the opposing group, with real economic and diplomatic clout, will be actively hostile. That would make it harder for the US to build alliances and gain the support of international organisations - without which it cannot tackle a host of global problems. The US should also remember that in a divided Europe Britain, its best friend in the EU, would suffer a loss of influence. The British cannot achieve their objectives - such as a radical reform of the Common Agricultural Policy, structural economic reform across the EU, or effective institutions which respect the role of national governments - without the co-operation of the French and the Germans.

For the Europeans:

1. Adopt new economic policies, to encourage higher growth

The continuing under-performance of the European economy has strategic costs. A strong European foreign and security policy requires robust economic growth: not only the instruments of hard power, but also those of soft power - such as development assistance - cost money. Europe should also improve its economic performance to gain more respect from the Americans and restrain their triumphalism. So the EU governments must push ahead with the 'Lisbon agenda' of economic reform, in particular by liberalising financial services, transport and labour markets. They also need to grasp the nettle of pensions reform. EU finance ministers should make the rules of the Stability and Growth Pact more flexible, so that they do not unduly constrain countries which have sound public finances. The European Central Bank should try to support economic growth with as much determination as the US Federal Reserve.

2. Enhance your military capabilities

The Europeans will not convince anyone in Washington that they are serious about the European Security and Defence Policy (ESDP) unless they spend more money on defence. All EU governments should raise their defence budgets to at least 2.5 per cent of GDP (the British and French levels), and they should ensure that a third of the budget is spent on procurement and R&D. Many EU countries need to invest in equipment that Europe lacks, such as transport planes, secure communications systems and satellite-guided bombs. But they also need to invest in professional forces that can be deployed to a distant crisis at short notice. A new EU agency should put pressure on governments to fulfil their promises on capabilities, to harmonise military requirements, to co-ordinate their R&D and to align their procurement procedures. The Europeans should be bolder in trying to pool capabilities, for example in air transport.

3. Overhaul the institutions of your foreign policy.

The Convention on the Future of Europe has proposed a full-time chairman for the European Council, to speak for Europe at the highest levels, broker compromises and encourage strategic thinking. It has also called for the jobs of the High Representative for foreign policy and the commissioner for external relations to merge. The new EU 'foreign minister' would tie together the two sides of EU foreign policy, now located in the Council and the Commission, and chair the meetings of foreign ministers. These sensible reforms would diminish the role of the six-monthly rotating presidency, which is a third-rate method of representing the Union to other countries, and also make clear that the Commission was not in charge of EU foreign policy. Many small member-states oppose the idea of a European Council chairman, fearing that he or she would weaken the Commission. But they should recognise that, while the Commission has many important roles to play, it cannot take the lead on foreign policy; and that in a 25-country EU, the European Council will not be able to lead the Union without a full-time chairman. The EU should also go further than the Convention's proposals by extending the use of majority voting in foreign policy. All these changes would make it easier for Europe to act strategically and to be a more effective partner for the US.

4. Stabilise the 'arc of instability' that runs around your eastern and southern flanks.

The EU needs to build closer links with the countries that will soon become its neighbours, to help them to develop in peaceful and prosperous ways. A Union that can counter threats of economic and political instability in its neighbourhood would win plaudits in Washington. The Commission proposal for the EU to agree an 'action plan' with each neighbour is a good one. These plans should focus on aligning the neighbours' legislation with that of the EU; helping to train their police forces and border guards; and holding out the prospect of participation in EU programmes in areas like research, the environment and education. For the more prosperous neighbours, membership of the European Economic Area - in essence, the single market - should be on the agenda. But this neighbourhood policy will not succeed unless the EU is prepared to use sticks as well as carrots. The action plans should set out political and economic benchmarks, and make explicit that the neighbours will not receive trade privileges and financial assistance unless they meet those targets.

5. Work hard to overcome the division between 'New' and 'Old' Europe.

All EU governments should refrain from provocative actions that widen the fissures, like signing letters, trading insults and holding divisive summits. Britain, France and Germany, the member-states with the greatest diplomatic and military clout, have a special responsibility to give a lead in restoring European unity, and in particular to develop a common approach on how to deal with the US. They should consult more often à trois, informally, on the big strategic questions. When they cannot agree they should discuss how to limit the damage. The new European Council chairman, or the new EU foreign minister, should attend such meetings to remind the big three of the other viewpoints and to keep the smaller countries informed. At some of these meetings it may be appropriate for the other large countries - Italy, Poland and Spain - to take part. If the larger countries are able to reach a common position on strategic questions, the other member-states are likely to follow.

For both Europeans and Americans:

1. Insulate the management of the global economy from arguments on security issues

A successful Doha trade round requires political leaders to avoid provocations and resist sectoral lobbying - whether from French farmers who oppose reforms to the Common Agricultural Policy, or from US drug companies which oppose relaxing intellectual property rules for developing countries. Governments on both sides of the Atlantic should put their arguments over Iraq behind them, and remember that a successful trade round would bring higher growth for all countries, especially the poorest ones. The world's richer countries

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need to work together to increase the resources that are available for boosting economic development, alleviating the ravages of disease and improving governance in the poorer states. Such efforts would not only bring humanitarian benefits, but also help to revive economic growth and enhance global security. The rich countries also need to find new ways of addressing the growing problem of global warming.

## 2. Work out a common approach to Iran

Iran may become the next big crisis in transatlantic relations. Europeans and Americans need to forge a common strategy – and they should involve the Russians, too, because of their close ties to Iran. They should urge Iran to respect human rights better, cease to support terror groups, and resist the temptation to destabilise Iraq and Afghanistan. Iran should sign the Nuclear Non-Proliferation Treaty's 'additional protocol', which would subject it to more intrusive inspections from the International Atomic Energy Authority. Washington should stop trying to force the Europeans to isolate Iran. But in return the Europeans should make clear that their 'conditional engagement' really is conditional: if Iran presses ahead with its nuclear weapons programme, they should cut political and commercial ties. If the Europeans (and the Russians) are not prepared to get tough with Iran, the Washington hawks are more likely to pursue a policy of regime change on their own.

## 3. Reach an understanding on weapons of mass destruction

The Europeans have made a promising start in their effort to draw up a common security strategy. If they can align their views on the nature of new security threats and on how to deal with them, they will be less likely to fall out as they did over Iraq. A common EU strategy requires the more pacifist member-states to accept that, in the last resort, force may have to be used against weapons of mass destruction (WMD). The Europeans should offer more cash for dealing with the problem of Russia's nuclear weapons facilities; support tougher sanctions against countries that allow proliferation; and, when there is a convincing case for pre-emptive action, join the US in military missions to destroy WMD. For their part the Americans need to accept that many arms control treaties can be useful, and sign up to more of them (including the Comprehensive Test Ban Treaty). Europeans and Americans should also push for the UNSC to authorise the boarding of ships and planes that are suspected of carrying WMD.

## 4. Discuss the principles of intervention

The Europeans remain attached to the principle that military intervention requires some kind of legal justification. But ever since September 11th the Americans have become less fussy about international law, when faced with the apparent threat of terrorism or WMD. This divide could destabilise transatlantic relations again and again, as it did over Iraq. European and American leaders should meet in an informal setting to discuss whether – given the challenges of terrorism, WMD and violations of human rights – the rules of international law on the legitimacy of military action need re-examination. They might not agree, but it would be useful if they understood each other better. In the long run, Europeans and Americans could aspire to develop a common approach, and even to draw up guidelines to govern such interventions. This will not be feasible unless some Europeans become more willing to accept the possible need to resort to force; and unless some Americans accept that interventions require legitimation.

### Britain and France:

The Europeans will not succeed in developing common foreign and security policies unless France becomes less instinctively anti-American, and Britain less unconditionally pro-American.

**France should:**

* Oppose the US on big issues rather than small ones. If the Americans want to start a war of which France disapproves, France should of course oppose it. But France has tended to oppose the US on rel-

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atively minor security issues, such as when it blocked NATO aid for Turkey in January and February 2003. France's prickly behaviour over many years has annoyed its allies and deepened the well of anti-French sentiment in the US.

★ Use a different kind of language. If Jacques Chirac talked more about partnership and working together to solve common problems, he would disarm many of his critics in Washington. In particular, he should avoid talking about the need for a 'multipolar' world. Multipolar is a word which divides Europeans, while multilateral is a word which brings them together.

★ Avoid actions which divide Europe. Chirac should abandon whatever plans he may have for the establishment of a 'core' Europe. If Chirac tried to lead a mini-Europe, built around the six founding members, he would by definition be unable to lead Europe as a whole. And so long as core Europe had an anti-American flavour, most EU countries would shun and oppose it.

★ Learn to make friends in Central and Eastern Europe. France cannot aspire to lead Europe unless it improves relations with the Central and East Europeans. France's leaders need to accept the reality that eight Central and East European states – with many votes in the Council of Ministers – will soon be members. They will not want to be allies of a France that is hostile to the US.

Britain should:

★ Be less uncritical and unconditional in its support of the US. Tony Blair has been reluctant to criticise the US in public, on the grounds that he has more influence if he is publicly supportive. That is surely correct. But many people on the continent, and not only in 'Old Europe', doubt that Blair and Britain are fully committed to the EU and its objectives. Blair needs to do more to demonstrate his European credentials. He will have to take some moderate risks in his relationship with George Bush.

★ Tell a different story about British foreign policy. On most of the key foreign policy issues, Britain agrees with its European partners. But Blair and his ministers seldom make speeches that highlight this truth. They need to spell out that the UK is with its European partners on the Balkans, Israel-Palestine, the International Criminal Court, the Kyoto protocol and so on. On some of these issues they will need to stress that the UK/European line is different to that of the US.

★ Avoid actions that risk dividing Europe. The 'letter of eight', which Britain signed, aggravated the rift between New Europe and Old Europe. And at the time of the Iraq war some ministers' attacks on the French were over-the-top and unhelpful.

★ Demonstrate that Britain is enthusiastically committed to the ESDP. Blair needs to convince his European partners that he is faithful to the objectives of the St Malo summit, which include an EU that can run autonomous military missions. British support for the ESDP needs to be more unequivocal, constant and public. That is the best way of dissuading other governments from divisive initiatives such as April's four-nation defence summit.

The French and the British should jointly back the idea of a stronger Europe, that is usually supportive of US policies; but a Europe which can act autonomously, and which on matters of vital importance is capable of opposing the US. If the British and the French could accept that compromise, the other Europeans probably would too.

10 July 2003

THE ATLANTIC COUNCIL
OF THE UNITED STATES

Bulletin

June 2003

Vol. XIV, No. 2

* Regulation-based disputes are likely to grow in number and importance as the U.S. and European economies become ever more closely integrated.

* Fundamentally different views on precaution versus science are at the heart of transatlantic tensions in a number of sensitive areas.

* U.S. and EU regulatory policies have increasingly international implications — the rules made in Brussels and Washington often become de facto rules around the world.

* As long as regulations on both sides of the Atlantic are developed in isolation, the potential for misunderstanding and conflict will remain great.

# Managing Risk Together:
U.S.-EU Regulatory
Cooperation

Following the publication of the Atlantic Council policy paper, Risk and Reward: U.S.-EU Cooperation on Food Safety and the Environment, the Council, in collaboration with the European Policy Centre, organized a workshop in Brussels to discuss the report and its recommendations. A delegation of leading U.S. trade experts — all involved with the creation of "Risk and Reward" — traveled to Brussels for detailed discussions with European policy makers and representatives of the corporate and nongovernmental sectors. This bulletin presents a summary of the conclusions and recommendations of that workshop.

Differences in regulatory policies have become central to transatlantic tensions in the economic arena. As the current disputes over taxation of corporate sales abroad and genetically modified food and crops demonstrate, "trade politics" is less and less about tariffs and quotas, and more and more about the rules governing economic activity. In the past, such regulatory issues were regarded as domestic matters, with little thought given to any international impact. This is no longer the case. Recently, transatlantic tempers flared over the auditing rules imposed on European and other foreign firms operating in the United States in the wake of the Enron and other corporate scandals.

As for the future, tensions are already developing over European efforts to rewrite the regulations governing the licensing and handling of chemicals. Such regulation-based disputes are likely to grow in number and importance as the U.S. and European economies become ever more closely integrated. Moreover, differences in regulatory policy affect the entire spectrum of transatlantic economic activity, hindering not only the free movement of goods, but also the provision of services and the growth of investment (including mergers and acquisitions), as well as the development of capital markets.

2

Atlantic Council Bulletin: Vol. XIV, No. 2

GMO foods are only the tip of the proverbial iceberg; transatlantic differences are already emerging over genetically engineered pharmaceuticals, GM animals, and genetic modification of human tissue.

The consequences of differing regulatory policies are seen most sharply in the acrimonious transatlantic dispute over European regulations governing the approval of genetically modified organisms (GMOs), for use either in animal feeds or in products for human consumption. This dispute has amply demonstrated the difficulties that arise when domestic politics surrounding sensitive regulatory issues collide with international trading obligations. It has also underscored differing U.S. and European experiences with food safety and the credibility of government agencies charged with this responsibility.

The EU moratorium on new GMOs — which precludes the import into Europe of products containing these GMOs — arose largely in response to public concerns following a series of food-safety related crises, none of which had anything to do with GMOs. The United States has viewed the moratorium as a violation of the EU's international obligations and threatened to start dispute settlement proceedings at the World Trade Organization (on May 13, the United States and several other countries announced they would begin WTO proceedings against the EU moratorium). The EU currently has under consideration legislation on labeling and traceability of GMOs that EU leaders argue is needed to restore public confidence. Once that is passed, possibly by late 2003, European officials believe the moratorium is likely to be lifted.

Even if the current dispute over the moratorium is resolved, however, the larger issue will still be far from over. First, it is unclear whether the proposed EU laws on labeling and traceability of GMOs can be implemented in a practical and nondiscriminatory manner, although there has been some progress in clarifying how it is intended to work. Moreover, GMO foods and feed are only the tip of the proverbial iceberg; transatlantic differences are already emerging over genetically engineered pharmaceuticals, GM animals, and genetic modification of human tissue through cloning and stem cell research. The need for more compatible U.S. and European regulatory regimes in this area is clearer than ever.

Although less visible than the GMO issue, environmental protection is another area in which distinctive regulatory regimes have caused transatlantic quarrels. Tensions over “hushkits” (devices intended to reduce aircraft noise pollution), electronic waste, and ozone depleting substances amply demonstrate how “domestic” regulations can cause much international misunderstanding. The U.S.-EU disagreement over the Kyoto Protocol on climate change has exacerbated those tensions, convincing many on both sides that the United States and the EU are headed in opposite directions on environmental protection, and leading them to view the prospect of cooperation with suspicion. Yet, increasingly, the regulations of one have a significant impact on the corporations, markets, and practices of the other. In fact, there is much they can learn from each other about different regulatory approaches and their effectiveness in protecting the environment. In the immediate future, EU efforts to construct major

Managing Risk Together

Risk and Reward

A recent Atlantic Council report, *Risk and Reward: U.S.-EU Regulatory Cooperation on Food Safety and the Environment*, argues that the GMO issue will be a precursor of future disputes if the United States and the EU do not build more effective regulatory collaboration. The report examines efforts to manage risk in the areas of food safety and environmental protection and concludes that, to avoid more major conflicts, both sides must exercise leadership together, developing strategies for reconciling distinctive regulatory systems in a way consistent with international trading obligations.

On food safety and GMOS, the report concludes that consumer confidence will be critical. How the United States and the European Union resolve their current bilateral dispute will have significant implications for the global future of agricultural biotechnology. On the environment, the report concludes that although these issues had not been as visible as GMOS, the distinctive U.S. and European approaches to environmental regulation and the political sensitivity among the public make the potential for disputes large and growing. The report includes a number of recommendations for policy adjustments on both sides of the Atlantic that could help address these concerns.

The full text of the report is available online, in the "Publications" section of the Atlantic Council's website, at www.acus.org

legislation dealing with the licensing and handling of hazardous chemicals may offer opportunities for either enhanced cooperation or greater tensions. In the longer term, legislation and regulations concerned with environmental protection are sure to continue evolving in both the United States and Europe. Greater transatlantic cooperation in the regulatory arena could make this evolution less contentious and perhaps even mutually beneficial.

The need for more compatible U.S. and EU regulatory regimes is thus clear. As long as regulations on both sides of the Atlantic are developed largely in isolation, the potential for misunderstanding and even conflict will remain great. Moreover, with the U.S. administration seeking to reduce the regulatory burden and the EU focused on reform of its own regulatory process, this should be an auspicious time to move regulatory regimes in a more compatible direction and perhaps even establish some genuinely collaborative rulemaking efforts. Both sides recognize that simplicity, transparency, market incentives, and consumer confidence are in principle necessary qualities of good regulation. The challenge is to apply these qualities to specific areas of regulation in ways that will enhance transatlantic cooperation, rather than to focus exclusively on existing disagreements and the tensions they produce.

Nevertheless, some serious obstacles remain:

* Although the United States and the European Union are both partners and competitors, the competitive relationship tends to dominate in the economic and regulatory arenas. The political dialogue (especially among legislators) that could help move the relationship from competition to partnership is still weak.

Legislation and regulations concerned with environmental protection are sure to continue evolving in both the United States and Europe. Greater transatlantic cooperation in the regulatory arena could make this evolution less contentious.

4 Atlantic Council Bulletin: Vol. XIV, No. 2

The relationship between precaution and science is an issue that heightens transatlantic tensions and will undoubtedly complicate any attempts at building regulatory compatibility.

A lack of public confidence in government motivations and institutions can quickly limit the options available to those writing regulations.

* There are significant differences in U.S. and European attitudes toward the role of regulation. In Europe, promoting regulation at the level of the Union has been a key element in the process of integration, both in establishing the policymaking role of European institutions and in establishing a European identity based on certain values, such as environmental protection. This may have been true at one time in the United States, but now regulation is often perceived as a burden imposed by the federal government rather than as part of building a new political entity.

* U.S. and European differences over precaution and the role of science have persisted across several issues, especially in biotechnology. While the EU has consistently advocated that a generalized precautionary principle should be agreed within the international system, the United States has argued that precaution should be applied only in specific situations when the scientific evidence is not definitive. The relationship between precaution and science is an issue that heightens transatlantic tensions and will undoubtedly complicate any attempts at building regulatory compatibility.

* The international implications of U.S. and EU regulatory policies are increasingly apparent — in many cases, the rules decided in Brussels and Washington become de facto rules around the world. This makes transatlantic cooperation even more desirable, but also much more difficult, as the stakes involved are truly global.

## Lessons

An examination of past and current regulatory conflicts in the areas of biotechnology and environmental protection supports some lessons that will be relevant to any effort to build greater transatlantic cooperation:

* *The importance of consultation.* It is far easier to modify rules before they have received the required approvals, both executive and legislative. Thus, early consultations are key to developing regulations that are compatible with international obligations. It will not work in all cases, and there will always be rules that arise suddenly from unexpected quarters. But regular and early consultations may allow effective input while rules can still be altered.

* *The importance of consumer confidence.* Whether in biotechnology or environmental protection, consumers must be sure that the regulations adequately safeguard their health and safety. A lack of public confidence in government motivations and institutions can quickly limit the options available to those writing regulations.

* *The importance of involving regulatory agencies.* Regulatory disputes sometimes arise simply because the agency responsible for the rule considered only its domestic impact. A promising tool in developing regulatory cooperation seemed to be mutual recognition agreements (MRAs), in which the standards of one government are deemed by another to be sufficient. Unfortunately, recent transatlantic attempts at developing MRAs

Managing Risk Together 5

have been stymied by the refusal of domestic
regulatory agencies on both sides of the Atlantic
to recognize foreign standards.

* The importance of implementation. Just as differences in regulations can lead to conflict, so can the failure to implement regulations, especially if that failure is perceived to provide a competitive advantage. Both the United States and the European Union have been hindered at times by a lack of resources for implementation and by having to rely on the states or the member states to enforce implementation. The EU, especially, has struggled to establish adequate oversight and enforcement of implementation by member states, while the United States and others have found the range of effective implementation within the EU to be problematic.

The United States and European Union have much to learn from each other in developing regulatory policy. Both have made mistakes and both have had successes. Comparisons of regulations in specific areas can reveal valuable and appropriate examples of "best practices." Comparisons of regulatory methodology can be even more important. For example, lessons from the U.S. application of cost-benefit analysis may be relevant to the development of impact analysis now underway in the European Commission. Of course, not all practices translate well — Europeans may find that the U.S. practice of judicial review of regulations is useful, but be less eager to adopt the practice of assessing liability through the court system.

## Recommendations

Developing greater cooperation on regulatory policy will not happen overnight, nor will it be a quick panacea for current disputes, such as GMOs. Even under the best of circumstances, such cooperation will develop only gradually, and new problems will continue to arise as more regulations are written (or, in some cases, removed). Nevertheless, it is not too soon to identify some initial steps toward building that cooperation. The following recommendations are intended to suggest some specific measures the United States and the European Union should take to further that aim.

* Establish a formal notification process for impending regulations. Just as corporations, NGOs, and others are domestic stakeholders, both the U.S. and EU are important stakeholders in each other's regulatory process, and

## Next Steps

* Implement a system of reciprocal formal notification of draft regulations, at a point in the process when revisions are still possible.

* Create strong links between the new European Food Safety Authority and the U.S. Food and Drug Administration through exchanges, joint workshops, and collaborative risk assessments.

* Pursue transatlantic consultations on new regulatory fields, such as genetically engineered pharmaceuticals, gene therapies, noise pollution, and materials use and packaging.

* Establish joint procedures for including additional chemicals on the list prohibited by the Persistent Organic Pollutants (POPS) treaty.

* Collaborate in the identification of technologies with benefits for the environment and public health; for example, hydrogen as a fuel.

* Encourage the U.S. Congress and the European Parliament to compare "best practices" in regulatory policy and in rule-making.

* Work to reverse the current resistance of domestic regulatory agencies towards mutual recognition agreements.

* Cooperate in providing the technical assistance necessary to allow developing countries to grow GM crops in an environmentally responsible manner and consider the establishment of a multilateral certification and testing process to make compliance with EU traceability legislation feasible for all countries.

6

Just as corporations, NGOs, and others are domestic stakeholders, both the U.S. and EU are important stakeholders in each other's regulatory process, and should be treated as such.

Since building regulatory cooperation will be difficult enough, the focus should be on the many issues that merit attention, but that have not yet become divisive.

should be treated as such. They should receive formal notification of draft regulations at a time and in a manner that allows for effective comment. In short, this notification should occur before the process of approving the draft rules has gone so far that further revision is difficult.

* *Work together to build public confidence.* This is especially important in the area of biotechnology, but may apply in other areas as well. Specifically, the United States and the EU should do everything they can to bolster the credibility of the new European Food Safety Authority and create strong links between that institution and the U.S. Food and Drug Administration. Exchanges, joint workshops, and eventually collaborative safety assessments, should help create a common culture based on scientific risk assessment. This in turn will help boost public confidence in the ability of government to assure safety in foodstuffs and other products.

* *Focus on policy areas where the rules have not yet been written.* Revising established regulations is always much more difficult than writing new regulations on topics that have not yet become politicized. Since building regulatory cooperation will be difficult enough, the focus should be on the many issues that merit attention, but that have not yet become divisive. For example, transatlantic consultations on genetically engineered pharmaceuticals and on gene therapies should be pursued. In the environmental area, a number of issues are likely to face regulatory action in the next few years, including noise pollution, materials use/packaging, and drinking water standards. The United States and EU could also work together to establish procedures for adding chemicals to the list prohibited by the persistent organic pollutants (POPs) treaty.

* *Cooperate to identify transformative technologies.* In rapidly innovating areas such as biotechnology and environment and energy, regulatory policy sometimes struggles to keep up with technological change. Joint efforts to identify technologies with benefits for the environment or public health and safety could help move the transatlantic debate beyond current regulatory differences. Energy technology may be especially ripe for such collaboration. Specifically, Europeans should take seriously President Bush's interest in hydrogen as a fuel and pursue joint research efforts in this area with the aim of developing energy technologies that reduce emissions of greenhouse gasses and other pollutants.

* *Strengthen the legislative dialogue.* The U.S. Congress and the European Parliament are key actors in the regulatory process. Without their commitment to building a transatlantic partnership in this area, cooperation will be much harder to achieve. Enhanced discussions about specific pending legislation could help overcome misperceptions. Both legislatures have much to learn from each other in terms of "best practices" in the regulatory sphere.

* *Work together to address the international implications of regulations.* Since either U.S. or EU rules often become the global norm, Washington and Brussels should ensure that the impact of those rules,

Managing Risk Together 7

especially on the developing world, is fair and workable. Most immediately, the United States and the EU should cooperate to provide technical assistance that will allow developing countries to grow GM crops in an environmentally responsible manner, so that they can exploit the benefits of those crops. It is also in the interest of both the United States and the EU to ensure that developing countries have the capacity to comply with EU traceability legislation which may require the establishment of a multilateral certification and testing agency.

Given the current strains in U.S.-European relations generally, creating more compatible regulatory regimes takes on a special significance. A failure to move forward in this area will add significantly to the list of real and potential transatlantic disputes. Greater cooperation in the regulatory arena would not only reduce the risk of conflict but may even reinforce a sense of partnership. ■

*The opinions expressed in this bulletin do not necessarily represent those of the Atlantic Council. Additional information on the Atlantic Council and an electronic version of this bulletin can be found at www.acus.org.*

## Acknowledgements

The Atlantic Council would like to thank the European Policy Centre, particularly Stanley Crossick, Bruce Ballantine, and Lorenzo Allio, for their contributions to the success of the conference "Risk and Reward: U.S.-EU Regulatory Cooperation on Food Safety and the Environment" held in Brussels April 1, 2003. We would also like to acknowledge the invaluable contributions of our European speakers: Malcolm Harbour (Member of the European Parliament); Erika Mann (Member of the European Parliament); Alexander de Roo (Member of the European Parliament); and Martin Power (Commission of the European Union).

Although the views expressed in this bulletin do not necessarily reflect those of each individual who participated in the conference, the Atlantic Council especially thanks the members of the U.S. delegation for the many valuable insights they presented at the conference and which are reflected in this publication.

David L. Aaron
Dorsey & Whitney

William Nitze
Gemstar Group

Michael Fernandez
Pew Initiative on Food and Biotechnology

Peter Scher
Mayer, Brown, Rowe & Maw

C. Boyden Gray
Wilmer, Cutler & Pickering

Bruce Stokes
German Marshall Fund of the United States

Charles Ludolph
Stonebridge International

The conference and this publication were made possible by generous support from the U.S. Mission to the EU and the German Marshall Fund of the United States.

— Frances G. Burwell, project director and rapporteur

Recent Atlantic Council Publications

Missile Defense in Asia, Walter Slocombe, RAPPORTEUR. June 2003.

Chen Shui-bian and Building Democracy in Taiwan, *Atlantic Council Bulletin*. May 2003.

U.S.-Libyan Relations: Towards Cautious Reengagement, *Chester A. Crocker*, CHAIR, *C. Richard Nelson*, PROJECT DIRECTOR & RAPPORTEUR. April 2003.

Transforming NATO Forces: European Perspectives, *C. Richard Nelson and Jason S. Purcell*, EDITORS. January 2003.

Winning the Peace: Managing a Successful Transition in Iraq, *Richard W. Murphy*, CHAIRMAN, *C. Richard Nelson*, PROJECT DIRECTOR & RAPPORTEUR. January 2003.

New Capabilities: Transforming NATO Forces, *Robert Hunter and George Joulwan*, CO-CHAIRS, *C. Richard Nelson*, PROJECT DIRECTOR & RAPPORTEUR. September 2002.

Elusive Partnership: U.S. and European Policies in the Near East and the Gulf, *Rita Hauser, J. Robinson West, Marc C. Ginsberg, Geoffrey Kemp, Craig Kennedy, Christopher J. Makins, and James Steinberg*. September 2002.

These publications are available on the Council's website, www.acus.org.

Suite 1000, 910 17th Street, N.W.
Washington, D.C. 20006

ADDRESS CORRECTIONS REQUESTED

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The End of Atlanticism

Ivo H. Daalder

Relations among the transatlantic allies are in very serious trouble. It has
been a long time since a US Secretary of State spoke of the Alliance
'breaking up,' as Colin Powell did in early February amid the flap over
France, Germany and Belgium's refusal to allow NATO to take preventive
steps to defend Turkey in case of a war against Iraq.¹ As close and long an
observer of US-European relations as Henry Kissinger has even concluded
that differences over Iraq have 'produced the gravest crisis in the Atlantic
Alliance since its creation five decades ago.'²

Is today's crisis in transatlantic relations different from the many that occurred in the past? Some, like Robert Kagan, argue that the changing structure of US-European relations – and especially the great and growing imbalance of power – make this crisis different. 'Americans are from Mars and Europeans from Venus', Kagan writes pointedly. 'This state of affairs is not transitory – the product of one American election or one catastrophic event. The reasons for the transatlantic divide are deep, long in development, and likely to endure'.³ Others have a more optimistic view. For all their differences, notes Philip Gordon, 'basic American and European values and interests have not diverged – and the European democracies are certainly closer allies of the United States than the inhabitants of any other region'. The differences that do exist, Gordon argues, are the result largely of a sharp policy shift in Washington under President George W. Bush. But only 'if policymakers on both sides of the Atlantic act on the assumption that fundamentally different world-views now make useful cooperation impossible' is a transatlantic divorce conceivable.⁴

Rather than conflicting, both contentions are in fact on the mark. There
has been a profound change in the structure of US-European relations,
though the differentiation of power is only one, and not the most
important, factor accounting for this change. One crucial consequence of
this transformation is the effective end of Atlanticism – American and
European foreign policies no longer centre around the transatlantic alliance

Ivo H. Daalder is a senior fellow in Foreign Policy Studies at The Brookings Institution. An earlier version of this paper was prepared for the Bertlesmann Foundation's *Project on the Future of Transatlantic Relations*.

*Survival*, vol. 45, no. 2, Summer 2003, pp. 147-166 © The International Institute for Strategic Studies

148 Ivo H. Daalder

to the same overriding extent as in the past. Other concerns – both global and local – and different means for addressing them have now come to the fore. As a result, it is no longer simply a question of adapting transatlantic institutions to new realities – to give NATO a new mission or purpose. The changing structure of relations between the United States and Europe means that a new basis for the relationship must be found, lest the continued drift ends in separation and, ultimately, divorce.

The policies of the Bush administration will, for now, be determinative for the future of US-European relations. Nothing in the new structure preordains an end to transatlantic cooperation and partnership. But the gratuitous unilateralism that has marked the Bush administration's first two years in office – the embrace of American power as means to all ends and the deliberate neglect of international institutions and other structures of cooperation – has had a profoundly negative impact on European elite and public opinion. Bush's personal style has only made matters worse. The swagger, pugnacious language and the deep religiosity of his main message strikes Europeans as profoundly foreign. Many no longer see a common basis for action – and not a few now fear the United States more than what, objectively, constitute the principal threats to their security.

American policy toward Europe and the Atlantic Alliance represents the tipping point determining the future of a drifting relationship between the United States and Europe. Wise policy can help forge a new, more enduring strategic partnership, through which the two sides of the Atlantic cooperate in meeting the many major challenges and opportunities of our evolving world together. But a policy that takes Europe for granted – that routinely ignores or even belittles European concerns – may drive Europe away. For under circumstances like these, Europeans may come to resent being dragged into problems that are not of their own creation. There may come a point, perhaps sooner than many think, when Europe says: *Basta! Fini! Genug!* even *Enough!* – when Europe refuses to continue sharing the risks of international engagement without having an equal share in decisions that create those risks.

There is nothing inevitable about this sober conclusion, but the US-European relationship cannot sustain the kind of beating it has endured these past few years for much longer. The aftermath of the Iraq war, in fact, may turn out to be the test case for the sustainability and longevity of the relationship. An effort to forge complementary and mutually supportive policies to rebuild Iraq and stabilise and reform the Middle East may solidify the faltering relationship, while a determination by the US to go it alone may push it over the edge. Either way, US-European relations will be profoundly different for it.

The End of Atlanticism 149

## Shifting priorities

For over half a century, American and European foreign policy has centred around the transatlantic axis. For America, Europe and the allies stood centre stage – Europe was both the locus and the focus in America's confrontation with the Soviet Union. For Europe, America was its guardian and protector, enabling it to emerge from the ravages of war and providing it with the confidence necessary to overcome the stark differences that had produced two bloody world wars in three decades. The success of American and European policy helped end the Cold War confrontation with a whimper rather than a bang. And once this victory was consolidated during the 1990s, the structurally determined need to mediate US and European foreign policy through the transatlantic prism effectively came to an end. America's and Europe's immediate concerns have increasingly diverged – one focusing globally, the other locally. And the differences between them have been further accentuated by diverging perspectives of what drives the new age of global politics that replaced the familiar transatlantic world of the Cold War.

The fundamental purpose of American foreign policy for most of the past century was to ensure that no single power would dominate the Eurasian landmass. As the British geographer Sir Harold Mackinder theorised at the outset of the last century, power in international politics depends crucially on who controlled this area, for he who ruled the 'Heartland' would ultimately rule the world.⁵ This reality was not lost on America's statesmen. Three times during the last century, they sent massive numbers of military forces overseas to defeat those who sought dominion of the Eurasian heartland – in the First World War, the Second World War and during the Cold War, which was to last the better part of half a century. Together, these interventions constituted what Philip Bobbitt has aptly called the 'Long War'.⁶ Once the Soviet empire was no more, the last serious challenge for territorial dominion over the Eurasian landmass had been removed. The primary purpose of American foreign policy had thus been achieved.

It took some years to realise how much Europe's strategic relevance to the United States had been reduced. The 1990s (a period now best remembered as the post-Cold War era) were given over to consolidating the victory of the Long War. Together with its European partners, Washington set out to create a peaceful, undivided and democratic Europe.⁷ NATO evolved from a collective defence organisation into Europe's main security institution – helping to stabilise the Balkans, to transforming military practices with no less than 27 partnership countries and forging new relationships with erstwhile opponents. It will have expanded its membership from 16 countries at the end of the Cold War to 26 by 2004. A

150 Ivo H. Daalder

new relationship with Russia emerged after ten years of intensive effort. In 2001, Russia under President Vladimir Putin made a decisive turn towards the West, engaging the United States as a partner in the war on terrorism and negotiating a fundamentally cooperative relationship with NATO a year later. Finally, while pockets of instability remain in the Balkans, the Caucasus and beyond, Europe's main institutions - from the Organization for Security and Co-operation in Europe (OSCE) and the European Union to a revitalised NATO - have proven more than capable of handling such problems. As a result of these efforts, Europe is today more peaceful, more democratic and more united than at any time in history.

The terrorist attacks of 11 September 2001 reinforced America's strategic shift away from Europe. Rather than worrying about a single power's ability to dominate Eurasia, Washington is now focused on trying to defeat the terrible trinity of terrorists, tyrants and technologies of mass destruction. Seen from Washington, Europe can be a partner - even a crucial one - in US efforts to defeat this new threat, but only to the extent that it supports the fundamental course that Washington is embarked upon. As a strategic concern, Europe has moved from being the object of American policy to performing a supporting role.

Europe's shift in strategic priorities has been much less dramatic, at least for now. The principal focus of European foreign policy today is what it has been for more than 50 years - to eliminate the possibility of a return to internecine conflict through an ever greater commitment to sharing sovereignty within a European Union. The EU is the focal point

for European policy and activity over a vast range of areas - from trade and monetary policy to judicial, social and (increasingly) foreign and security policy. For the immediate future, the EU has embarked on a fantastically ambitious phase, encompassing both deeper cooperation among existing members and enlargement of the overall Union to incorporate many of the neighbouring countries in the east. A constitutional convention, to be followed by a decisive intergovernmental conference, will decide the parameters of Europe's union in future years -

including whether Europe will emerge more and more as a single international actor in foreign and security policy, as it has been in the economic sphere. The enlargement project - in which ten countries will join in 2004, to be followed by Romania and Bulgaria a few years later - is equally ambitious. More than 100 million people will be added to the European Union, increasing its overall population by nearly a quarter. Yet, the combined GDP of the countries to be added is only 5% that of

> The EU has embarked on a fantastically ambitious phase

The End of Atlanticism 151

the current members. The costs and consequences of enlargement are
likely therefore to be enormous. By way of comparison, think of the
United States incorporating Mexico into a North American Union.⁸

For at least the remainder of this decade, Europe is likely to remain
focused on completing this ambitious project. So while America's focus has
shifted away from Europe, Europe's focus has shifted ever more inward.

American power and globalisation

The shifting foreign-policy priorities, and potential differences that arise
from them, are accentuated by the diverging ways in which Americans
and Europeans perceive the current international environment. We live in
an age of global politics – an age characterised by two unprecedented
phenomena.⁹ One is the sheer predominance of the United States. Today,
as never before, what matters most in international politics is how – and
whether – Washington acts on any given issue. The other is globalisation,
which has unleashed economic, political and social forces that are beyond
the control of any one country, including the United States.

Americans and Europeans differ about which of these two aspects of our
new age is the most important. Americans, and especially the Bush
administration and its supporters, believe that US primacy is the defining
feature of the contemporary world. 'The collapse of the Soviet empire led to
a fundamental reordering of the international system, and to the current
situation in which American global hegemony is the leading factor that
shapes the present and, almost certainly, the future', argues Robert Kagan.¹⁰
'The unipolar moment has become the unipolar era', wrote Charles
Krauthammer in a recent essay triumphing America's primacy.¹¹ Or, as the
opening sentence of the Bush administration's *National Security Strategy* put
it: 'The United States possesses unprecedented – unequaled – strength and
influence in the world,' which it should use 'to promote a balance of power
that favors freedom'.¹²

Europeans, in contrast, tend to see globalisation – including the
constraints it places on any one nation's power – as the defining feature of
the current era. 'The new era', Christoph Bertram observes,

> can be summed up in one word: globalisation. Just as capital, commerce and
> communication operate around the globe unhindered by distance, so security and
> insecurity have become globalised – they can no longer be defined by reference to
> specific regions and territorial borders.¹³

The sheer speed and volume of cross-border contacts and the fact that
globalisation is occurring across multiple dimensions simultaneously
mean that neither its positive nor its negative consequences can be
managed by individual countries on their own. As a consequence,

152 Ivo H. Daalder

whether the issue is terrorism, organised crime, weapons proliferation, infectious diseases, democratisation, or trade in goods and services, no one country – not even the most powerful – can secure its goals without the aid of others. As British prime minister Tony Blair observed, ‘the lesson of the financial markets, climate change, international terrorism, nuclear proliferation [and] world trade ... is that our self-interest and our mutual interests are today inextricably woven together’.¹⁴

The differing perspectives on what defines the age of global politics are reflected in very different foreign-policy preferences. The Bush administration and its supporters favour what has been called a 'hegemonist' foreign policy, which is based on the belief that the preponderance of power enables the United States to achieve its goals without relying on others. As Krauthammer puts it,

> An unprecedentedly dominant United States ... is in the unique position of being able to fashion its own foreign policy. After a decade of Prometheus playing pygmy, the first task of the new [Bush] administration is precisely to reassert American freedom of action.¹⁵

The terrorist attacks on 11 September 2001 only underscored the vital importance of maintaining the freedom to act as Washington sees fit. As Bush argued, in rejecting advice that he take account of allied views in conducting the war on terrorism, 'At some point we may be the only ones left. That's okay with me. We are America'.¹⁶

The premium hegemonists place on freedom of action leads them to view international institutions, regimes and treaties with considerable scepticism. Such formal arrangements inevitably constrain the ability of the United States to make the most of its primacy. They similarly take an unsentimental view of US friends and allies. The purpose of allied consultations is not so much to forge a common policy, let alone build goodwill, as to convince others of the rightness of the US cause. Finally, hegemonists believe that the fundamental purpose of American foreign policy is to maintain and extend American power for the indefinite future. As Bush argued in June 2002:

> America has, and intends to keep, military strength beyond challenge, thereby making the destabilizing arms races of other eras pointless, and limiting rivalries to trade and other pursuits of peace.¹⁷

In contrast, Europeans favour what has been termed a 'globalist' foreign policy, one that relies on international cooperation as a means to deal with the multiple challenges and opportunities globalisation creates. None of these can be harnessed or blocked by individual states alone. International cooperation is necessary to defeat terrorists, preserve biodiversity, stop the

The End of Atlanticism 153

spread of infectious diseases, halt weapons proliferation, promote
democracy, ensure free trade and deal with the host of other issues on
every nation's foreign policy agenda. In addition, while the United States is
by far the most powerful state in the world today, one important
consequence of globalisation is the diffusion of power
away from states. Non-state entities, ranging from
businesses to transnational citizens organisations, from
crime cartels to terrorist groups, are often more nimble
than states and frequently succeed in frustrating their
policies. The changing policy agenda and rise of these
non-state actors mean that even the most powerful state
is losing its ability to control what goes on in the world.
'In an era of globalization that has dark aspects as well as
bright', Chris Patten, the EU's External Affairs
Commissioner, argues, 'I would strongly argue that
America's national interest are better served by
multilateral engagement. It's the only way to deal with
the dark side of globalization'.¹⁸

The
hegemonists
take an
unsentimental
view of US
friends and
allies

Consequences for transatlantic relations

The main consequence of these changes in US and European policy priorities is to make the transatlantic relationship less pivotal to the foreign policy of both actors. For America, Europe is a useful source of support for American actions – a place to seek complementary capabilities and to build ad hoc coalitions of the willing and somewhat able. But Washington views Europe as less central to its main interests and preoccupations than it was during the Cold War. For European countries, America's protective role has become essentially superfluous with the disappearance of the Soviet threat, while its pacifying presence is no longer warranted, given the advance of European integration. The task of integrating all of Europe into the zone of peace now falls squarely on Europe's shoulders, with the United States playing at most a supporting role. Even the stabilisation of Europe's periphery – from the Balkans in the south to Turkey, the Caucuses, and Ukraine in the East – is one where Europeans will increasingly have to take the lead.

These shifts are becoming apparent in all sorts of ways - from the
mundane to the profound. Diplomatic contact across the Atlantic is
dropping precipitously in terms of quantity and quality, while within
Europe it continues to rise. Take meetings among foreign ministers. During
the 1990s, the US Secretary of State travelled to Europe on average nearly
once a month. There were biannual NATO meetings, and frequent
diplomatic forays interspersed among them - be it for US-EU meetings,

154 Ivo H. Daalder

OSCE summits or issue-specific discussions ranging from arms control to the Balkans. In contrast, Secretary of State Colin Powell travelled six times to Europe in 2001, and only three times last year. Even in the midst of one of the most bitter transatlantic debates in memory, Powell flew to the World Economic Forum in Davos, Switzerland, to deliver a tough speech on Iraq, but he did not stop in any other European capital to make the case in person. To be sure, Powell spends considerable time on the telephone with his European counterparts. But the quick phone call is more useful for delivering a démarche than gaining a true understanding of what it might take to arrive at a common position. Such diplomacy is best conducted in person. The unwillingness to engage in this kind of personal give-and-take underscores the declining importance of Europe to Washington policymakers, and raises questions in Europe about whether the US is more interested in stating firm American convictions than forging common positions.

Contrast the paucity of recent transatlantic personal interactions with the European norm. European foreign ministers see each other as often as three times a month. There are monthly General Affairs Council meetings of the EU, the quarterly meetings of the European Council, biannual and annual meetings of international organisations ranging from NATO to the United Nations General Assembly, and frequent bilateral contacts. Each meeting provides an opportunity to resolve outstanding questions – and often enables countries to pre-empt disagreements that would otherwise occur. Of course, frequent contacts do not guarantee that conflict will be avoided, nor is infrequency of contact a guarantee of conflict. But it helps create mutual understanding, making conflict less, and agreement, more likely.

Just as personal contact is apparently becoming less important across the Atlantic, so NATO, the embodiment of Atlanticism, is beginning to lose its central role. For five decades, the Atlantic Alliance has served the dual purpose of military deterrence and political reassurance. Deterrence operated against the threat from the east, a threat that no longer exists. Reassurance operated across the Atlantic as well as within Europe proper. In both purposes, the Alliance proved to be spectacularly successful. But as priorities and interests have shifted on both sides of the Atlantic, NATO's confidence-building role is being increasingly marginalised. This became especially apparent after 11 September.

Within 24 hours of the horrendous attacks on the World Trade Center and Pentagon, the 19 NATO members did something they had never done before – they invoked Article 5 of the North Atlantic Treaty declaring the attack on the United States an attack against all. But aside from the symbolically important deployment of NATO AWACS surveillance planes to the United States to assist in providing air cover over the country, the Alliance was assigned no role in devising or carrying out a military

The End of Atlanticism 155

response to the terrorist attacks. Plans for retaliating against al-Qaeda
outposts in Afghanistan were drawn up by US military commanders in
secret. And offers of military assistance from allied countries were largely
spurned. 'I don't like this principle that the "mission defines the coalition"',
complained Javier Solana, NATO's Secretary General at the time of the
Kosovo war and now the EU's foreign policy chief, referring to Defense
Secretary Donald Rumsfeld's oft-quoted dictum:

NATO invoked its most sacred covenant, that no one had dared touch in the past, and
it was useless! Absolutely useless! At no point has General Tommy Franks even talked
to anyone at NATO.¹⁹

Iraq, initially, was no different. When Rumsfeld travelled to an informal
NATO defence ministerial meeting in Warsaw in September 2002 and was
asked what role NATO might have in a possible war against Iraq, he
answered: 'It hasn't crossed my mind; we've not proposed it'.²⁰ Two
months later, Bush, while declaring in a speech at NATO's Prague summit
that 'never has our need for collective defense been more urgent',
emphasised that if the peaceful disarmament of Iraq proved impossible 'the
United States will lead a coalition of the willing to disarm Iraq'.²¹ Bush thus
rejected the advice of Czech President Vaclav Havel, offered during a joint
press conference, that in case 'the need to use force does arise, I believe
NATO should give an honest and speedy consideration to its engagement
as an alliance'.²² Perhaps partly in response to these sentiments, the Bush
administration in January formally asked NATO to support a possible war
in Iraq in a number of indirect ways, including deploying AWACS radar
planes and *Patriot* anti-missile systems to enhance Turkey's defence, taking
responsibility for protecting ships in the eastern Mediterranean, providing
personnel to defend US bases in Europe and possibly the Persian Gulf, and
filling other shortfalls that could arise from the redeployment of American
troops to the Middle East. France, Germany and Belgium's wrong-headed
decision to oppose this request, of course, very much undercut European
complaints that it was the Bush administration that was weakening NATO.

Nevertheless, it is clear that the central role NATO once played in US
foreign and defence policy has dissipated in recent years. Part of the
reason, for sure, is the growing capabilities gap separating US and
European military forces. Yet, that gap provides only part of the
explanation. Washington is also extremely wary of having its power tied
down by coalition or alliance considerations. Now that it has the power to
go it largely alone in the military field, few in the current administration
believe there is much to gain from constraining the use of that power by
subordinating the planning and execution of a military campaign to the
dictates of alliance considerations. As Rumsfeld explains:

156 Ivo H. Daalder

I said last year [2001] that the mission defines the coalition, and I think that was not only a correct statement, but it has been an enormously helpful concept in this war on terror. Every nation is different, with different cultures and geographies, and the thought that they should all agree at the same moment how to contribute to this war is nonsense. That will never happen, and it never has. Countries ought to decide individually what they can do. That's not a blow to NATO.²³

From this perspective, the United States, not coincidentally, can do what it wants without regard for the views of others – be they Alliance partners or not. And what of NATO's role? Rather than providing a common front, the Alliance's military utility lies increasingly in providing the Pentagon a 'useful joint-training-and exercise organization from which the United States can cherry-pick "coalitions of the willing" to participate in US-led operations'.²⁴

As US interest in the Atlantic Alliance wanes, Europeans are left with two alternatives. One is to try to reinforce the fraying bonds by emphasising the importance of transatlantic unity and the continued centrality of NATO in US-European relations. Often, this translates into expressing support for US policy, even in otherwise objectionable cases, in order to demonstrate continued fealty to the transatlantic ties. This was at least one reason why eight European allies wrote a newspaper column in late January 2003 in support of a firm response to Iraqi violations of UN Security Council resolutions.²⁵ Moreover, being good allies is, as Tony Blair has emphasised, also the only way in which a weaker partner can effectively influence a powerful country like the United States.²⁶

Another way to fill the void created by America's lessened interests is to try to forge a stronger and closer European Union. 'If we don't speak with a single voice, our voice won't exist and nobody will hear us', warned Romano Prodi, president of the European Commission.²⁷ This impulse often fuels opposition to US policy in an effort to rally a common European position on a particular issue. These efforts are most often successful when the goal is creating new rules, norms, or multilateral institutions to deal with global challenges – as European efforts with regard to global warming, anti-personnel landmines and creating an international criminal tribunal have underscored. But on major security issues – as in the case of Iraq – both tendencies will be reinforced simultaneously. Thus, Britain led the effort to forge a coalition of European countries in support of Washington's policy, while France and Germany tried to develop a common EU position that would set a separate course. Neither has succeeded – leaving Europe divided and the United States with little reason to heed its concerns.

The End of Atlanticism 157

The tipping point

Where does this leave the transatlantic relationship? In a major speech on the impact of Iraq on US-European relations, Powell noted that the transatlantic 'marriage is intact, remains strong, will weather any differences that come along'.²⁸ But some marriages are sturdier than others. Every marriage, moreover, requires a continued commitment by both partners to make it work. And sometimes even the best of marriages end in divorce. What, then, will be the future of the transatlantic marriage?

Will it end in divorce, with the United States and Europe calling it quits after more than 50 years of happy, fruitful, and successful marriage, and each going its own way? Or will the United States and Europe renew their partnership, take their vows anew, and update the relationship in ways appropriate for the new era in which they now live?

> The long drift
> has become
> unsustainable

Ever since the Cold War ended, the United States and Europe have slowly drifted apart, like the couple that has stayed married for all these years, continues to live together, but now communicates less and less as each partner goes his and her own way.²⁹ But the long drift has become unsustainable. Either relations will end in divorce or they will confront a crisis so severe that leaders on both sides of the Atlantic will have to take steps to update and renew the partnership. Which of these outcomes will come to pass will depend to a significant extent on the policy and preferences of the dominant player in the relationship.

Bush, and the policies his administration pursues, represent the tipping point in US-European relations. Nothing preordains the end of this alliance, but Bush's policies – and even more so, his personal style – aggravate the deep fissures that have emerged in transatlantic relations as a result of the structural shifts discussed earlier. There are major differences between the United States and Europe (and, to some extent, even within Europe) about what should be the foreign policy priorities and how these should be pursued. At the same time, in casting many of his positions in black-and-white terms and employing a rhetoric with stark religious overtones, Bush has appeared more interested in demonstrating the righteousness of his positions than finding ways to accommodate other perspectives into US policies. Far from softening this approach, the terrorist attacks against the World Trade Center and Pentagon only reinforced it.

For all the shared sense of shock engendered by the television images beamed across the globe, Europeans and Americans reacted very differently to the 11 September attacks. Whereas little changed in Europe's policy, perspectives and priorities, the impact of the attacks on the United

[L.C.]

158 Ivo H. Daalder

States was truly profound. For the American people, the terrorists shattered a sense of physical invulnerability. For the administration, the attacks came to define its policy, foreign and domestic, in every conceivable dimension. And for Bush, the devastating events provided the fundamental purpose of his presidency. He would destroy the terrorists before they could strike again. He would defeat tyrants who harboured terrorists or ruled rogue states. And he would make sure terrorists and tyrants could not get their hands on the technologies of mass destruction.

Because America and Europe experienced 11 September differently, their policy convergence on dealing with the threat represented by these attacks has been tactical rather than strategic. There is significant cooperation on counter-terrorism between US and European law enforcement agencies, intelligence communities and financial regulators. And there is a joint commitment to weed out terrorist cells before they strike again. But there is no agreement on the broader strategic context of these efforts.

For much of Europe, this fight against terrorism at home must be complemented by a major new effort to tackle the root causes of terrorism abroad – the seething conflicts, poverty and despair, and the constraints on liberty that supplies the terrorist army with its dedicated soldiers. As Tony Blair put it just weeks after the attacks,

> So I believe this a fight for freedom. And I want to make it a fight for justice too. Justice not only to punish the guilty. But justice to bring those same values of democracy and freedom around the world ... The starving, the wretched, the dispossessed, the ignorant, those living in want and squalor from the deserts of Northern Africa, to the slums of Gaza, to the mountain ranges of Afghanistan: they too are our cause.³⁰

For Europe, therefore, diplomacy, peacekeeping and nation-building efforts, economic aid, and democracy-promoting assistance must play as critical a role as brute force in the anti-terrorist campaign.

In contrast, for the Bush administration, the strategic context of what it calls the global war on terrorism is the nexus between terrorism, rogue states and weapons of mass destruction.³¹ Regime change – by force if necessary – represents the strategic thrust of this global war. Once rogue states have been liberated, terrorists will have no place to hide and weapons of mass destruction can be eliminated.

What makes these differences in perspective and approach starker still is Bush's personal style – the certainty with which he holds his views, the manner in which he defends them and above all the religious overtones of his rhetoric. The eleventh of September, in many ways, was an epiphany for George W. Bush – it defined the true purpose of his presidency. 'I think, in his frame, this is what God has asked him to do', a close

The End of Atlanticism 159

acquaintance told the *New York Times* days after the attacks.³² More than a year later, a senior administration official confirmed that Bush 'really believes he was placed here to do this as part of a divine plan'.³³ The 'this' is what Bush refers to as the fight between good and evil – a fight in which America, representing the good, will triumph over the 'evildoers'. Once the world is delivered from evil, the good people everywhere will be able to get on with their lives free of fear. America's mission – George W. Bush's mission – is to make this vision come true.³⁴

The clearly defined mission provides the Bush administration with a great clarity of purpose, and explains the complete conviction on Bush's part that his is not only the right way, but the only way. Supreme self-confidence was a trademark of the Bush presidency even before 11 September – Bush, for example, took great pride in staring down the EU heads of government during their first encounter in June 2001, which was dominated by the US-European disagreement over global warming.³⁵ This self-confidence became complete after the terrorist attacks: there would be no more doubting America's purpose or preferred course of action. America's policy preferences are unquestionably right, and the sole purpose of talking to others is to persuade them of that fact. As Powell told European journalists in summer 2002, President Bush

makes sure people know what he believes in. And then he tries to persuade others that is the correct position. When it does not work, then we will take the position we believe is correct, and I hope the Europeans are left with a better understanding of the way in which we want to do business.³⁶

Because there is only a single correct policy – because, as Bush put it shortly after 11 September, 'either you are with us, or you are with the terrorists'³⁷ – the value of other states, including those allied with the United States, is judged by their fealty to and support for American policy. Thus, when Rumsfeld drew a distinction between 'old' and 'new' Europe, he based the difference on the fact that new Europe supported US policy towards Iraq whereas France and Germany opposed it.³⁸ Indeed, Germany, whose Chancellor, Gerhard Schröder, effectively used his vocal opposition to war in Iraq to secure his re-election in September 2002, has been relegated to the proverbial dog house by the Bush administration – to the point that Rumsfeld even put Germany in the same category as Cuba and Libya as countries unwilling to assist the US in a war with Iraq.³⁹

Rumsfeld may be blunter than most, but he very much reflects the president's view that loyalty to America's cause is a key requirement of allies. As the *New York Times* reported, Bush 'has redrawn his mental map of America's alliances'.⁴⁰ In the wake of the Iraq debate, Bush's ranking

160 Ivo H. Daalder

of allies starts with Blair's Britain (the 'center of his universe'), followed by Poland ('the most gung-ho member of NATO'). Next is Spain (whose leader, Prime Minister José Marie Aznar, is a particular favourite of Bush), followed by Australia, Italy and Russia. Germany and France have fallen to the bottom of the list because, according to a senior Bush aide, both 'failed the Bush loyal test'.<sup>41</sup>

While some European countries have been flattered by their elevation in Bush's rank ordering – and many, especially the newer allies, have sought to ingratiate themselves to Washington by astutely playing to the American president's predilections<sup>42</sup> – most Europeans have experienced the Bush administration's certitude on policy matters with great unease. Even before US-German differences over Iraq boiled over, German officials complained bitterly about Washington's supposed arrogance. 'Alliance partners are not satellites', Foreign Minister Joschka Fisher noted pointedly in early 2002.<sup>43</sup>

But it is the White House's religiosity that is most striking – and disturbing – to many Europeans. The difference in perspective reflects in part a societal gap. Although American and European societies share similar perspectives on the importance of democracy, human rights, liberty, transparency and other socio-political values, they diverge notably on religious and traditional values. The United States is a far more religious country than the countries of Europe, and traditional values find far greater adherence there than in European countries (including Britain and other countries that aligned with Washington over Iraq).<sup>44</sup> Javier Solana has been struck and surprised by the degree religion has permeated White House thinking on core issues. For Washington, 'it is all or nothing', Solana observes. 'The choice of language is revealing', he says – with us or against us, axis of evil, rogue state, evildoers. 'For us Europeans, it is difficult to deal with because we are secular. We do not see the world in such black and white terms'.<sup>45</sup>

There is, of course, nothing new about policy differences between the United States and Europe. These have occurred for as long as the Alliance has existed. What is new, though, is the near-zero tolerance in Washington for those who might see the world differently. Today, terrorism, rogues and weapons of mass destruction are Washington's all-consuming interests. Nothing else matters. 'When people are trying to kill you and when they attack because they hate freedom', Condoleezza Rice observes, 'other disputes from Frankenfood to bananas and even important issues like the environment suddenly look a bit different'.<sup>46</sup> No doubt. But these other issues remain important – and to some countries at some moments perhaps more important than the war on terrorism. It should be possible to discuss

> It is the White House's religiosity that is most striking

The End of Atlanticism 161

different strategies for dealing with common threats without meeting the
opprobrium of the White House or being relegated to a lower rank on the
Bush loyalty list. Style matters, sometimes as much as substance. As Robert
Kagan argued, in concluding his treatise on Europe's weakness and
American's strength, the United States

could begin to show more understanding for the sensibilities of others, a little more of
the generosity of spirit that characterized American foreign policy during the Cold
War. ... It could pay its respects to multilateralism and the rule of law, and try to
build some international political capital for those moments when multilateralism is
impossible and unilateral action unavoidable. It could, in short, take more care to
show what the founders called a 'decent respect for the opinion of mankind'.⁴⁷

A European farewell?

The single-mindedness of Bush's foreign policy may be both its greatest
strength and its greatest weakness. There is little doubting where
America stands these days, no confusion about its goal or purpose. Nor
is there any question that this president does what he says and says
what he does. Such clarity can be welcome in foreign policy. More
problematical, especially for America's closest allies, is the narrowness
of Washington's foreign-policy agenda and the inflexibility that
characterises its foreign-policy approach. This White House knows what
it wants, and nothing or nobody is able to move it off course. To change
direction is regarded as a sign of weakness, not wisdom. Anyone with a
different policy perspective or prescription is either ignored or dismissed
as clearly wrongheaded. Finally, there is little apparent concern about
how America's actions may impact the interests of others.

So far, the immediate consequences of American single-mindedness
have been manageable. Differences between the United States and its
major European allies have continued to grow, but have not yet reached
a breaking point. But that point may be approaching faster than is
generally realised. The current crisis in relations comes at a time when
the centripetal forces keeping the alliance together are probably weaker -
and the centrifugal forces are at least as strong - than at any time since
the Second World War. There is a growing anxiety among many
Europeans that their inability to affect American foreign policy behaviour
renders the costs of alignment with the United States increasingly great -
perhaps greater even than the benefits.

Iraq may become the turning point for many Europeans. Even though
their worst fears – use of weapons of mass destruction, the further
destabilisation of a critical region, and additional terrorist attacks – did
not (as yet) come to pass, there is little doubt that the way Washington

162 Ivo H. Daalder

went to war left deep and lasting scars in Europe's psyche. With time - and astute American care and diplomacy - it is possible that the scars will heal, but there has been precious little of this care and diplomacy to date. As a result, it is becoming quite possible - perhaps even likely - that major European countries will conclude that an overt distancing from US policy is not only desirable, but necessary. In a reverse of George Washington's Farewell Address, Europeans may come to conclude that

> The Great rule of conduct for us, in regard to foreign Nations is in extending our comercial [sic] relations to have with them as little political connection as possible ... [The United States] has a set of primary interests, which to us have none, or a very remote relation. Hence she must be engaged in frequent controversies, the causes of which are essentially foreign to our concerns. Hence therefore it must be unwise in us to implicate ourselves, by artificial ties, in the ordinary vicissitudes of her politics, or the ordinary combinations & collisions of her friendships, or enmities ...Why, by interweaving our destiny with that of any part of [the United States], entangle our peace and prosperity in the toils of [American] Ambition, Rivalship, Interest, Humour or Caprice?<sup>48</sup>

There is nothing inevitable about this scenario. There is a more hopeful, and equally plausible scenario by which the deterioration of US-European relations will lead to a realisation on both sides of the Atlantic that a major readjustment is necessary to renew and update the partnership. Europe would invest in the resources necessary to complement its soft-power with real, hard-power capabilities. The United States would once again come to realise that allies and alliances are assets to harbour and strengthen rather than abandon or take for granted. A partnership of relative equals could emerge from this readjustment to deal with common challenges ranging from terrorism and weapons of mass destruction to energy security, climate change and infectious diseases - provided both sides decided this is what they wanted.<sup>49</sup> What is no longer possible is for the relationship to continue to drift. There is too much resentment, and too many are becoming alienated, for the drifting apart to continue indefinitely.

Relations between Europe and the United States have reached a turning point. Either their long marriage comes to an end, or it will be renewed. Which one of these futures comes true will depend especially on the United States, which, as the senior partner, has the greatest power to put the alliance back on track or to push it off the road completely.

The End of Atlanticism 163

Notes

¹ Quoted in Julia Preston and Steven Weisman, 'France Offering Plan to Expand Iraq Arms Hunt', *New York Times*, 12 February 2003, p. A1.

² Henry A. Kissinger, 'Role Reversal and Alliance Realities', *Washington Post*, 10 February 2003, p. A21.

³ Robert Kagan, *Of Paradise and Power: America and Europe in the New World Order* (New York: Alfred A. Knopf, 2003), pp. 3-4.

⁴ Philip H. Gordon, 'Bridging the Atlantic Divide', *Foreign Affairs*, vol. 82, no. 1 (January/February 2003), pp. 74, 83.

5 Harold Mackinder, *Democratic Ideals and Reality* (New York: Norton, 1962). See also Colin S. Gray, *The Geopolitics of Superpower* (Lexington: The University of Kentucky Press, 1988).

⁶ Philip C. Bobbitt, *The Shield of Achilles: War, Peace, and the Course of History* (New York: Alfred A. Knopf, 2002), pp. 21-61.

⁷ For details, see Ivo H. Daalder, 'The United States and Europe: From Primacy to Partnership?' in Robert Lieber (ed.), *Eagle Rules? Foreign Policy and American Primacy in the Twenty-First Century* (Upper Saddle Rive, NJ: Prentice Hall, 2001), pp. 70-96; and Ivo H. Daalder and James M. Goldgeier, 'Putting Europe First', *Survival*, vol. 43, no. 1 (Spring 2001), pp. 71-92.

⁸ Charlemagne, 'Europe's Mexico Option', *The Economist*, 5 October 2002, p. 50.

⁹ Parts of this section draw on a longer exposition of this argument in Ivo Daalder and James Lindsay, 'Power and Cooperation: An American Foreign Policy for the Age of Global Politics', in Henry Aaron, James Lindsay, and Pietro Nivola (eds), *Agenda for the Nation* (Washington: The Brookings Institution Press, 2003).

¹⁰ Robert Kagan, 'One Year After: A Grand Strategy for the West?',

*Survival*, vol. 44, no. 4 (Winter 2002-03), p. 135.

¹¹ Charles Krauthammer, 'The Unipolar Moment Revisited,' *National Interest*, no. 70 (Winter 2003), p. 17.

¹² *The National Security Strategy of the United States* (Washington: The White House, September 2002), p. 1.

¹³ Christoph Bertram, 'Shaping a Congenial Environment', *Survival*, vol. 44, no. 4 (Winter 2002-03), p. 141.

¹⁴ Tony Blair, 'Building an International Community', Address to the Labour Party Conference, 2 October 2001.

¹⁵ Charles Krauthammer, 'The New Unilateralism', *Washington Post*, 8 June 2001, p. A29.

¹⁶ Quoted in Bob Woodward, *Bush at War* (New York: Simon & Schuster, 2002), p. 81.

¹⁷ President George W. Bush, 'Remarks at 2002 Graduation Exercise of the US Military Academy', West Point, NY, 1 June 2002, available at: http://www.whitehouse.gov/news/releases/2002/06/20020601-3.html (accessed August 2002).

¹⁸ Quoted in James Kitfield, 'Pox Americana?', *National Journal*, 6 April 2002, p. 984.

¹⁹ Quoted in Kitfield, 'Pox Americana?', p. 986.

²⁰ Quoted in Bradley Graham and Robert Kaiser, 'On Iraq Action, US Is Keeping NATO Sidelined', *Washington Post*, 24 September 2002, p. A14.

²¹ George W. Bush, 'Remarks to Prague Atlantic Student Summit', Prague, 20 November 2002, available at: http://www.whitehouse.gov/news/releases/2002/11/20021120-4.html (accessed January 2003); and 'At News Conference: NATO Role vs. Iraq', *New York Times*, 21 November 2002, p. A19.

²² 'At News Conference' (emphasis added).

²³ Quoted in James Kitfield, 'US to NATO: Change or Else', *National Journal*, 12 October 2002, pp. 2978-79.

164 Ivo H. Daalder

24 Kitfield, 'US to NATO', p. 2978.

25 Jose Maria Aznar, et al., 'United We Stand', *Wall Street Journal*, 30 January 2003, p. A14.

26 In a speech setting out Britain's foreign-policy principles, Blair listed as the first principle: 'remain the closest ally of the US, and as allies influence them to continue broadening their agenda'. Tony Blair, 'Britain in the World', speech to the Foreign Office Conference, London, 7 January 2003, available at: http://www.number-10.gov.uk/output/page1353.asp.

27 Quoted in Emma Daly, 'Spain's Chief, on Bush's Side, Comes Under Attack at Home', *New York Times*, 4 February 2003, p. A12.

28 Colin Powell, "Remarks at the Davos Economic Forum", Davos, January 26, 2003, available at: http://www.state.gov/secretary/rm/2003/16869.htm (accessed February 2003).

29 Cf. Ivo H. Daalder, 'Are the United States and Europe Headed for Divorce?', *International Affairs*, vol. 77, no 3 (July 2001).

30 Tony Blair, 'Building an International Community'.

31 For a representative statement, see *National Security Strategy of the United States* (Washington: The White House, September 2002).

32 Quoted in Frank Bruni, 'For President, A Mission and a Role in History', *New York Times*, 22 September 2001, p. A1.

33 Michael Hirsh, 'America's Mission,' *Newsweek: Special Edition* (December 2002–February 2003), p. 10.

34 Laurie Goodstein, A President Puts His Faith in Providence', *New York Times*, 9 February 2003, sect. IV, p. 4.

35 As Bush recalled upon his return from the US-EU summit, 'I think Ronald Reagan would have been proud of how I conducted myself. I went to Europe a humble leader of a great

country, and stood my ground. I wasn't going to yield. I listened, but I made my point. And I... patiently sat there as all 15 [European leaders] in one form or another told me how wrong I was' about the Kyoto accords. 'And at the end I said, "I appreciate your point of view, but this is the American position because it's right for America"". Peggy Noonan, 'A Chat in the Oval Office', *Wall Street Journal*, 25 June 2001, p. A18.

36 Quoted in 'Old Friends and New', *The Economist*, 1 June 2002, p. 28. See also Woodward, *Bush at War*, p. 281.

37 George W. Bush, 'Address to a Joint Session of Congress and the American People', Washington, 20 September 2001, available at: http://www.whitehouse.gov/news/releases/2001/09/20010920-8.html (accessed February 2003).

38 Donald Rumsfeld, 'Press Briefing at the Foreign Press Center', Washington, 22 January 2003, available at: http://www.defenselink.mil/news/Jan2003/t01232003_t0122sdfpc.html (accessed February 2003)

39 'I believe Libya, Cuba and Germany are the ones that have indicated they won't help in any respect, I believe', Rumsfeld told a congressional committee. Not only was the comparison grossly unfair, but it was wrong on the facts given that Germany (like other NATO members such as Spain and Italy) did allow the use of American based and granted overflight rights to US planes during the Iraq war. Germany also deployed 2,500 troops to protect US bases, sent personnel for the *Patriot* anti-missile system and AWACS planes to Turkey, and beefed up its presence in Kuwait during the war. Rumsfeld's statement is quoted in Glenn Kessler and Colum Lynch, 'Powell Lays Out Case Against Iraq', *Washington Post*, 6 February 2003, p. A23.

[LC]

The End of Atlanticism 165

⁴⁰ David Sanger, 'To Some in Europe, The Major Problem Is Bush the Cowboy', *New York Times*, 24 January 2003, p. A10.

⁴¹ Sanger, 'To Some in Europe', p. A10.

⁴² Thus, in early February no less than 18 European countries either signed a newspaper opinion article or open letter expressing their support for the United States over the issue of Iraq. See Aznar, et al., 'United We Stand', and 'Statement of the Vilnius 10 Group', 5 February 2003.

⁴³ Steven Erlanger, 'German Joins Europe's Cry That the US Won't Consult', *New York Times*, 15 February 2002, p. A18.

⁴⁴ 'Living with a superpower', *The Economist*, 4 January 2003, pp. 18–20.

⁴⁵ Quoted in Judy Dempsey, 'Europe's foreign policy chief sees widening gulf with U.S.', *Financial Times*, 8 January 2003, p. 14.

⁴⁶ Quoted in Judy Dempsey and Richard Wolffe, 'Different Views', *Financial Times*, 2 May 2002, p. 12.

⁴⁷ Kagan, *Of Paradise and Power*, pp. 102–103.

⁴⁸ George Washington, 'The Farewell Address,' 19 September 1796, available at: http://gwpapers.virginia.edu/farewell/transcript.html (accessed February 2003).

⁴⁹ The case for an 'elective partnership' has been well-made by James Steinberg, 'The United States and Europe - An Elective Partnership', Paper prepared for the Transatlantic Group meeting of the Bertelsmann Foundation, Florida, 15–17 February 2003.

An Elective Partnership:
Salvaging Transatlantic
Relations

James B. Steinberg

When the United States and Britain finally abandoned their efforts to gain Security Council approval for military intervention in Iraq, their leading officials made clear who, in their eyes, was to blame – not Russia, not China, but a NATO ally, France.¹ The harsh words were a culmination of six of the most challenging months in the history of the NATO alliance – beginning with Vice-President Cheney's speech suggesting that the US might use force unilaterally to disarm Iraq and Chancellor Schröder's decision, in the waning days of the German election, to stake his future on outright opposition to any form of military action against Iraq. Although the unanimous adoption of Resolution 1441 in November 2002 seemed to offer a way out of the deepening rift, by January it was clear that the Alliance was facing its greatest crisis since Suez in 1956. US Secretary of Defence Donald Rumsfeld likened Germany to Libya and Cuba for its lack of support and German Foreign Minister angrily retorted with a blunt 'I am not convinced' at the NATO annual security-policy gathering in Munich.

Of course, there were divisions among European governments as well – eight EU members signed a letter to the *Wall Street Journal* offering support to the United States (pointedly excluding Germany, France and Belgium) and Prime Ministers Tony Blair and José Maria Aznar stood side by side with President George W. Bush on the eve of the war. But European publics were united – in every European NATO country, in the 'new' Europe as well as the 'old', huge majorities opposed the war and what appeared to be the most dramatic instance in series of provocative

**James B. Steinberg** is Vice President and Director, Foreign Policy Studies, The Brookings Institution. From 1996 to 2000, he was Deputy National Security Advisor to President Clinton. This paper was prepared with the generous support of the Bertelsmann Foundation within the framework of the Future of the Transatlantic Project by the Bertelsmann Foundation and the Center for Applied Policy Studies (CAP) and their larger transatlantic initiative on security and on economics, finance and trade.

*Survival*, vol. 45, no. 2, Summer 2003, pp. 113-146 © The International Institute for Strategic Studies

114 James B. Steinberg

unilateral US moves that flew in the face of international law and
international public opinion.

For those who had been predicting that strategic divergence between
the United States and Europe would follow the end of the Cold War, the
proof was plain to see. The conclusion drawn by these NATO-sceptics
was that the transatlantic relationship was a relic of the past, irrelevant
at best to the future security needs of the United States, and at worst a
shackle on needed freedom of action. Other partners whose views
coincided more closely with America's were available; in any event, the
United States possesses the will and the capability to act alone.

The sceptics have it half right. The security environment has changed
profoundly, and important elements of the old transatlantic bargain have
disappeared. The collapse of the Soviet Union and the end of Europe's
East-West divide removed one of the key links binding us together. The
acceleration of the European project of a deeper and wider Europe has
focused Europe's energy inward, while the emergence of the United States
as a superpower with unprecedented military, political and economic
strength has increased its global engagement. Demographic changes linked
to new waves of immigration both in Europe and in the United States have
weakened traditional ties of kinship and culture, while creating new
constituencies with little historical connection to the transatlantic partner.
With the century-long Balkan conflict now drawing to an end, Europe is
entering an era of relative peace, while the United States, for the first time
in its history, is preoccupied with its vulnerability to violence.

But sceptics have it half wrong, too. Both the United States and
Europe face new global threats and opportunities that, in almost every
case, can be dealt with far more successfully if we act together.
Transnational threats, from terrorism and international crime to
environmental damage and disease pose an increasing danger to our
wellbeing. Porous borders and the extraordinary global flows of goods,
money, people and ideas facilitate the spread of economic opportunity –
but also foster the proliferation of technology for weapons of mass
destruction. Weak states threaten our security as much as powerful ones.
Ocean and land barriers offer little protection. Non-state actors – from
business and NGOs to terrorists and money-launderers – play an
increasingly influential role. In the place of geopolitics, a new 'global
politics' is required to address the threats and opportunities that affect us
all. If we can work together, we are likely to be far more successful at
meeting the new global threats, and preserving our freedom and
prosperity, than if we try to achieve these goals alone.

Developing a new, sustainable transatlantic relationship will require a
series of deliberate decisions on both sides of the Atlantic – a partnership of

An Elective Partnership: Salvaging Transatlantic Relations 115

choice, not necessity. For the United States, this means avoiding the temptation, offered by our unprecedented strength, to go it alone in pursuit of narrowly defined national interests. For Europe, the new partnership will require a willingness to accept that the United States plays a uniquely valuable role as a leader in a world where power still matters, and that a commitment to a rule-based international order does not obviate the need to act decisively against those who do not share that vision.

This is not the first time in our histories that the transatlantic bargain has been stressed.² But there is reason to believe that the new challenges facing the United States and Europe are qualitatively different from those that have vexed us in the past. This essay will examine the transformed roots of the transatlantic relationship, and try to set out the parameters of a reformed, 'elective' partnership for the twenty-first century.

## Globalisation and transformation

During the second half of the twentieth century, the transatlantic axis lay at the heart of the world's political and economic relations. The fault line of the strategic competition between the Soviet Union and the West stretched across central and southeastern Europe. Managing the nuclear standoff was the dominant, and most consequential challenge of that time. Although most of the 'hot wars' of the era took place far from Europe's shores, in proxy conflicts from north- and southeast Asia to Africa and Central America, each of them was linked more or less directly to the East-West competition. Western Europe's first steps toward integration were intimately linked to the need to build and maintain the military and economic strength to counter Soviet power, and received support from the United States for that very reason. China's emergence from political isolation came about as a result of Western triangular diplomacy to weaken the USSR.

Security was not the only link. The United States and Europe were each other's preferred trading partners and Europe remained the most important investor for the United States. A transatlantic political elite with close personal ties cemented during the Second World War and the post-war reconstruction period dominated politics and foreign policymaking on both sides of the Atlantic. These links were underpinned on the popular level by large-scale European migration to the United States from the mid-1800s through the mid-1900s, which provided ethnic and cultural bonds. As the world's oldest, most established liberal democracies, we shared common values, rooted in the Enlightenment.

These ties found their institutional expression in the Washington Treaty and NATO, an unprecedented formalisation of a political alliance. Although the United States established military alliances in the Pacific

116 James B. Steinberg

and, for a while, in southwest and southeast Asia, NATO was not just the original but remained the pre-eminent one – a model of the United States' ability to assemble the world's leading democracies, tied together by shared military threats, political cultures and liberal values.

Yet even in the depths of the Cold War, forces were at work to loosen these bonds. Trade was the first obvious sign of shift. Intra-hemispheric trade took on increasing importance for both the United States and Europe, while transpacific flows also grew in importance. Overall trade today between the United States and Asia is about 50% higher than the level of transatlantic trade.³ These changing trade patterns were a function of a revolution in global economic organisation, as the spread of technology and the long-term lowering of trade barriers through successive global trade rounds made it possible to organise production on a world-wide basis to tap the power of comparative advantage – shifting manufacturing to low wage countries along the Pacific Rim, from Mexico to southeast Asia and China, while tightening the economic bonds between importers and exporters.

Europe seems
within grasp
of a 'zone of
peace'

Europeans realised that to compete on a global level, they would have to find new economic efficiencies through scale – a goal that could only be achieved through the deeper integration that culminated in the 1986 Single European Act, which created a single market in goods and services by 1992. With the movement in goods and services came a new movement of peoples. US immigration became dominated by flows from

Latin America and Asia, while for Europe, a new wave of immigrants from the Arab and Islamic world and South Asia began to transform Europe's cities.

These changes accelerated with a vengeance
following the collapse of the Soviet Union and its
external empire in Eastern and Central Europe. The
core, existential threat that brought the United States
and Europe together simply melted away, while the
barrier that kept Europe apart similarly dissolved. The

1990s saw struggles to cope with the immediate political and economic fallout of this remarkable shift – ranging from the virulent wars in the Balkans, to the economic and political challenge of German unification, the transformation of the former communist societies in central and eastern Europe, and the rapprochement with Russia itself.

By the beginning of the twentieth-first century, however, Europe seemed within grasp of a 'zone of peace'. An EU of 25 members will, by 2004, form its core. Its energies will be largely focused on consolidating that achievement, while coping with the political and economic stresses on the social welfare state that were exacerbated by a generation of

An Elective Partnership: Salvaging Transatlantic Relations 117

immigration from the Mahgreb and beyond. Integration proceeded apace, with the establishment of the European Monetary Union, and closer political coordination under the Maastricht Treaty leading to the Common Foreign and Security Policy and 'third pillar' cooperation in justice and home affairs.

For the United States, the world also changed rapidly in the 1990s, but in very different ways. It appeared at first that the United States, too, would turn inward, a sentiment reflected in James Baker's infamous observation concerning the Balkans that 'we don't have a dog in that fight' and candidate Bill Clinton's slogan for wresting the presidency from George H. W. Bush, 'it's the economy, stupid'. But then the forces of change began to draw the United States outward. Growing dependence on foreign trade and investment put international economics at centre of the agenda, from the completion of NAFTA and the Uruguay Round, through trade frictions with Japan, managing the global fallout from the Asia financial crisis of 1997-98, to the integration of China into the WTO. While the end of the Cold War initially brought a sense of heightened security to the United States, it quickly became clear to policymakers and the public that new kinds of threats – not linked to powerful states but closely associated with the new forces of globalisation that were erasing boundaries between countries – could prove equally daunting. Although these threats ranged from international criminal and drug organisations to infectious disease and environmental harm, it became increasingly clear to Americans that the threat of terrorism – from the first World Trade Center bombing in 1993, through the attacks on US troops in Saudi Arabia, to the embassy bombings in Africa in 1998 and the USS Cole in 2000 – was the number one enemy of the new age, a designation that was cemented by the attacks on 11 September 2001.

The consequences for US foreign policy of viewing counter-terrorism as the 'organising principle' of US national security strategy have been profound. In the immediate aftermath of 11 September, Bush, in a speech to the US Congress, announced that henceforth US relations with other countries would be judged by whether they were 'for us or against us' in the war on terrorism.⁴

This doctrine has had direct consequences for a number of important bilateral relations, most notably with Russia and China. During his presidential campaign, then-candidate Bush took a sceptical view of the importance of US-Russian relations, and a confrontational stance toward China, which his campaign labelled a 'strategic competitor.' Following 11 September, these relationships underwent a sea change. Both Russian President Vladimir Putin and Jiang Zemin were granted visits to Bush's

118 James B. Steinberg

ranch in Crawford, Texas (an honour bestowed on only one US treaty ally, British Prime Minister Tony Blair), and the new National Security Strategy announced that for the first time in history, all of the great powers were on the 'same side' – a claim that would have seemed puzzling on 10 September 2001.

Other relationships, too, felt the impact of the dramatic shift in American priorities after 11 September. The United States developed closer ties with states, such as Uzbekistan, Tajikistan and Malaysia, that shared the US commitment to fighting Islamic terrorism, but which had been held at arms length prior to 11 September because of concerns about their leaders' anti-democratic practices. In order to secure Pakistan's cooperation in the war against terrorism, the United States considerably downplayed its concerns about that country's proliferation activities and the continuing restrictions on democracy by a military government. In the Middle East, the United States gave increasingly unequivocal backing to Prime Minister Ariel Sharon's hard-line response to Palestinian suicide attacks largely because the Bush administration saw in Israel's plight a mirror of its own. At the same time, the United States grew increasingly distant from traditional Arab partners, particularly Saudi Arabia, which was seen as being too tolerant – and even indirectly supportive – of the terrorists.

Traditional allies in both Europe and East Asia quickly sided with the United States following the terror attacks. But despite NATO's immediate invocation of Article 5, the US government appeared to accord a secondary role at best to NATO or even to individual allies in the initial phase of the campaign in Afghanistan. Over time, however, the United States began to see both the political and operational benefit of Alliance support. Allies' involvement both in military operations and peacekeeping in Afghanistan began to grow. These developments culminated in the decision to give NATO a formal supporting role for the International Security Assistance Force (ISAF) in Kabul, in NATO's November 2002 Prague Summit commitment to a greater role for NATO in counter-terrorism, and even an exploration of possible NATO involvement in supporting a military operation in Iraq.

From the US point of view, the problem of global terrorism directed at the United States was compounded by the spread of weapons of mass destruction, which itself was in part driven by the diffusion of technology through globalisation. The spread of information technology made it increasingly difficult to control the flow of WMD know-how, while ever more porous borders made the smuggling of dangerous materials easier.

The danger that terrorists would acquire WMD increased the Bush administration's predisposition to unilateralism. In its eyes, the threat to

An Elective Partnership: Salvaging Transatlantic Relations 119

the US was so great that it would be irresponsible to rely heavily on
others - and particularly on international institutions and international
law. America's growing military, spurred on by dramatic increases in the
defence budget after 11 September, also seemed to make the unilateral
option more plausible. The sense of heightened danger led to a growing

emphasis, at least in rhetoric, on pre-emption and
preventive war as tool in America's strategy. While
the United States was not adverse to help from others,
the administration was not prepared to compromise
either its means or its objectives to achieve its
imperative goals. 'Coalitions of the willing' replaced
historical alliances at the core of the US approach.
'Sovereignty' in the form of freedom of action for the
United States became a touchstone, while 'sovereignty'
in the form of non-interference in the territory of
others was increasingly subordinated to the US
perceived need to act against emerging threats.

Europe has its own concerns about the negative
consequences of globalisation generally and about
terrorism in particular. But Europe's response to the

challenge of globalisation has differed markedly from that of the United
States. Europeans have focused on the relative impotence of individual
states in the face of global challenges, and the imperative of cooperation.
This imperative had its roots in Europe's own evolution to more
cooperative arrangements that involved pooling of sovereignty. Coupled
with this willingness to curb individual EU countries' freedom of action
was increasing focus on universally binding norms and institutions. The
US rejection of the Kyoto Climate Change Treaty crystallised a long-
running dispute between Europe and the United States over a series of
international agreements, ranging from the International Criminal Court
and the Landmines Treaty to efforts to enhance verification of the
Biological Weapons Protocol and to limit the spread of small arms.

The difference in perspectives on how to meet global challenges could
be seen in the European response to the 11 September attacks. Although
EU governments and publics wholeheartedly empathised with the
United States, they put considerable emphasis on the importance of
collective action to address the threat (as evidenced by support for
actions at the UN and in NATO), and grew increasingly wary of what
was perceived to be the unilateral US response.

The divergence was compounded by a perception that the United
States was relying primarily on a military strategy to defeat terrorism,
rather than focusing on political, diplomatic and economic measures.

America's
growing
military might
made the
unilateral
option more
plausible

120 James B. Steinberg

Europeans believed that the United States was failing to address terrorism's underlying causes, including lack of political and economic opportunity in the Muslim world, and most importantly, the US failure to play a more assertive role in addressing the conflict between Israel and the Palestinians. Europeans welcomed the formation of the Quartet, which gave both the EU and the UN (along with the US and Russia) a more formal role in the Middle East peace process, but the US refusal to challenge the Sharon government remained a source of serious division, even with key US allies such as the United Kingdom.

For some observers, the United States and Europe may have come to a real parting of the ways, both in their diagnosis of the nature of the challenges facing them and in their prescriptions. This view was articulated in its most stark form by Robert Kagan, in his article 'Power and Weakness', but has been echoed in various ways by others.⁵ For Kagan, Europeans' mistrust of power and excessive faith in the rule of law and consensus has opened an unbridgeable strategic gap with the United States, and rendered Europe incapable of effectively addressing the Hobbesian challenges of terror and rogue states.

This pessimism is flawed, for two key reasons. First, in age of globalisation, most Americans recognise that even with the United States' great military and economic dominance, we cannot secure our key national objectives without the support of others. Second, most Europeans understand and accept that the rule of law and international institutions alone are insufficient to meet many of the most pressing global challenges, and that despite the strengthening of the EU, they continue to value the United States as a partner. The confluence of these two factors provides a fresh basis for reaching a new transatlantic understanding on the core political and economic issues facing us, despite the tensions that seem so overwhelming today.

Yet, to achieve this goal, the United States and Europe must meet two key tests. In the security realm, their joint challenge is to identify core elements of a common vision of threats and opportunities, and strengthen the means of cooperation to address common goals. In the broader political and economic sphere, the United States and Europe must together lead the effort to build the structures of international governance that are necessary to address the transnational challenges of the twenty-first century. The remainder of this essay assesses these two challenges.

## Rebuilding security cooperation for the twenty-first century

The basis for security cooperation between the United States and Europe during the Cold War was self-evident. Partners on both sides of the Atlantic, in virtually all mainstream parties, agreed that the Soviet Union

[L]

An Elective Partnership: Salvaging Transatlantic Relations 121

represented a threat to the security and way of life of the peoples of Western democracies. Equally important, both the United States and Europe agreed on the core strategy of containment to the address the threat.⁶ There were, of course, important disagreements about the best way to implement the strategy.⁷ There were also important disputes about roles and responsibilities, ranging from the debates about appropriate transatlantic sharing of military burdens, to France's withdrawal from the unified military command, to controversies over strategies for assuring strategic nuclear coupling. These disputes reflected a tension between the US leadership role, given its preponderance of military and economic capability, and the European need to preserve a capacity for independent judgment.

But there was an agreed institutional framework – NATO – for addressing these difficulties, which facilitated cooperation both on articulating the strategy and on implementing the necessary political measures. NATO provided at least the *de jure* element of equality through the consensus rule and the European NATO Secretary General, while reflecting the US dominance in command structures led by an American SACEUR. Transatlantic harmony was further facilitated by insulating security cooperation to the European theatre – differences over 'out of area' problems, ranging from Vietnam to the Middle East to the Contra War in Central America may have divided European governments and the United States, but had little spillover effect within NATO itself.

These two elements – an agreed challenge and an agreed mechanism for addressing the challenge – both came under pressure with fall of the Berlin Wall. The debate over mission has been both functional and geographical. First, should NATO remain primarily a military alliance, focusing on facilitating joint military operations to address military threats? Or should it expand its role to include political challenges such as fostering democracy and market economics, and meeting challenges to security (such as terrorism, drug-trafficking and WMD proliferation) that do not rely primarily on the use of military force?

The second question was whether NATO should 'go global' in its military dimension, to address out-of-area problems that may have an indirect impact on the security of NATO's members but do not necessarily represent an Article 5 attack on the members' territory?⁸ The out-of-area debate began with NATO's uncertain engagement in the Balkans in the early 1990s, and accelerated through questions of NATO's role in Afghanistan and a possible role in enforcing Security Council Resolutions concerning Iraq in 2001–02.

Closely linked to the debate over mission was one about whether NATO was the right institution for security cooperation to address these

122 James B. Steinberg

new missions. Some advocated retaining NATO's focus on the historical mission of protecting members against direct attack, while revising old institutions or establishing new ones to deal with the new threats. The evolution of the Conference on Security and Cooperation in Europe (CSCE) into the more institutionalised Organisation for Security and Cooperation in Europe (OSCE) was one such response, which had as its principal attraction that fact that Russia, the other members of the former Soviet Union and the Warsaw Pact countries were all members. Since these new challenges did not distinguish between East and West, a more inclusive approach had appeal. A second response was the drive toward strengthening the EU's own cooperation in security matters, through the Common Foreign and Security Policy (CFSP) and the European Security and Defence Identity (ESDI). Deeper European cooperation was in part a natural complement to Europe's deepening political and economic integration, but it was also impelled by the search for forums to address non-military security threats. This in turn posed the question of how to coordinate EU mechanisms with the United States, a process that played out both in political channels (the creation of the US-EU dialogues, beginning with the Transatlantic Declaration in 1990 and further institutionalised in the 1995 Madrid Transatlantic Declaration)⁹ and military channels (the 'Berlin plus' process for linking NATO and emerging EU military capabilities).

Thus, the question facing the United States and Europe in the security realm is whether these post-Cold War innovations can replicate Cold War NATO's success: an agreed set of challenges and an agreed mechanism for addressing them together. The answer to both is a qualified yes, that common interests are sufficiently strong to make the prospect of security cooperation promising. However, the internal changes in Europe and the United States, the disparity in the strengths of each and the changing nature of international relations will require that security cooperation be more complex and multidimensional than it was during the Cold War.

## Common goals and common interests

On both an objective and a subjective level, there are strong reasons to believe that the security challenges facing the United States and Europe are more shared than divergent, because most stem from global trends that affect us all.

The most dramatic case is terrorism. The threat from terrorist organisations such as al-Qaeda to Europe is not identical to the one facing the United States. The United States, as the self-proclaimed and widely regarded champion of Western values, as well as the sole superpower, with a far more dominant presence in the Arab and Islamic world, is a more attractive target for terrorists. But such events as the attack on the

An Elective Partnership: Salvaging Transatlantic Relations 123

French tanker in the Persian Gulf and French workers in Pakistan, the October 2002 bombing of a Bali discotheque, as well as pronouncements from al-Qaeda leaders themselves, make clear that Europe and other Western democracies are also threatened. Moreover, the global network of the terrorist organisations puts their activities at heart of Western societies, and utilises the tools of modern Western society – financial institutions, the Internet, global transportation networks – to carry out their work.

Closely related is our common interest in halting the spread of weapons of mass destruction. This is most clear in the case of possible terrorist acquisition of WMD. It also applies to proliferation among states, both because these states might intentionally or unintentionally provide WMD capability to terrorists, and because the spread of WMD threatens to turn regional conflicts into wars that could have global consequences.

This commonality of threats is clearly perceived by publics on both sides of the Atlantic. A recent German Marshall Fund-Chicago Council on Foreign Relations poll published shortly before the Iraq crisis heated up in summer 2002 showed that Europeans and Americans 'have common views of threats and the distribution of power in the world'.¹⁰ Specifically, the poll found that both Europeans and Americans placed international terrorism and Iraq developing weapons of mass destruction at the top of their list of perceived threats, with the threat of Islamic fundamentalism not far behind. As late as December 2002, a substantial majority of the publics in Germany (82%), France (67%) and the UK (86%) viewed Saddam Hussein as a 'great' or 'moderate' threat and believed he should be removed rather than disarmed.¹¹

There are other important, shared security interests as well. The transformation of Russia into a stable, cooperative member of the international community is a priority for both the United States and Europe. The reasons include reducing the risk that dangerous Soviet-era WMD materials will fall into the wrong hands, preventing the spread of conflict along Russia's periphery, which could destabilise neighbouring countries and provide havens for terrorists, and assuring that Russia does not adopt revanchist ambitions as its economy and society begin to recover from the Soviet and post-Soviet meltdown. The United States and Europe also have an interest in promoting a stable, democratic and law-abiding Ukraine, which otherwise risks becoming an important source of WMD technology and material transfers and a haven for international criminal organisations. In the Caucasus and Central Asia, we

> A
> commonality
> of threats is
> clearly
> perceived by
> publics

124 James B. Steinberg

share a stake in promoting political and economic transformation and integrating these states into larger communities, like the OSCE, Partnership for Peace and the Euro-Atlantic Partnership Council, lest this region become a haven for, and source of terrorism and instability.

Similarly, we both have a stake in completing the integration of the Balkans, not only to prevent regional conflict re-igniting, but also to deprive terrorists and international criminals of a foothold. Finally, both Europe and the US have a stake in the successful emergence of a secular, democratic and prosperous Turkey, as a model for other countries in the Islamic world and as a bulwark against the spread of anti-Western Islamic militancy.

This does not mean that there are no differences between American and European security interests, actual and perceived. Although security challenges are increasingly global in character, geography has not entirely lost its relevance. US security interests in East Asia, including treaty alliances with Japan and Korea, and a strong historical connection to Taiwan, mean that the United States will have a greater stake than Europe in managing the complex transition in East Asia involving the growing strength of China and the likely unification of the Koreas.¹² It is noteworthy that in the Chicago Council-German Marshall Fund poll, 56% of Americans said that the 'development of China as world power' was a critical issue, as against only 18% of Europeans.

Similarly, while the United States and Europe are both committed to supporting a secular, democratic Turkey, there have been tensions between the United States and Europe over the speed of Turkey's acceptance as a candidate for membership in the EU. European concerns about Turkish immigration, its adherence to European standards on human rights and the impact of Turkey's membership on the functioning of EU institutions have led to consideraable caution. Washington, on the other hand, sees Turkey's EU membership as a carrot for greater Turkish cooperation on issues of importance to the United States, including Cyprus and the Middle East.

An important source of tensions is the Middle East, where for at least the past thirty years the United States has played the dominant role. US perspectives have been shaped above all by the security partnership with Israel; at the same time, historical ties buttressed by new links through immigration have given several European states a keen interest and distinctive perspective on the region in general and on the Arab-Israeli peace process in particular. On the whole, these European governments have been more sympathetic than Washington to the positions of Arab governments and the Palestinians.¹³ These transatlantic differences are also reflected in public opinion.¹⁴

Yet even in the Middle East, the transatlantic allies share important interests. These include a powerful interest in assuring stable, affordable

An Elective Partnership: Salvaging Transatlantic Relations 125

supplies of energy from the region, and a common stake in the economic and political reforms that are needed to reduce the region's role as an importer of WMD and an exporter of terror. While European concerns about Arab emigration, particularly from the Mahgreb, are more immediate than the American concerns, both have an interest in providing economic opportunities to ease the pressure of burgeoning populations.

At least in principle, then, it seems clear that the range of common security interests is broad enough to warrant a serious effort at transatlantic cooperation. But to achieve cooperation in practice, the two sides must have effective means of working together. And there are several barriers that stand in the way of making security cooperation work at an operational level. The first is the absence of agreed, effective mechanisms for reaching common decisions about what to do. Second, and closely related, are differing assessments of the efficacy of various tools and strategies to meet common threats. The third is a gap in capabilities, which can inhibit cooperation even when both the goals and the strategies are agreed.

## The mechanism: a new NATO or a new approach?

The debate over the mechanism of cooperation has centred around whether NATO, suitably adapted, should continue to be the favoured forum or whether new approaches are necessary, to reflect changes within Europe and the world.

Those who favour retaining NATO as the key institution of cooperation focus on five arguments. First, they point to the long history of NATO not simply as a place to discuss anti-Soviet military cooperation, but as the preferred forum for consultation among democratic governments on a range of political challenges. Second, they note that it is a forum where all members come together as independent and equal states, with no internal 'caucus' that excludes some from policy deliberation. Third, they argue that the expansion of NATO, along with close ties with Russia and other non-member states means that all the key actors are present within the institution broadly defined. Fourth, they assert that while the political dimensions of security challenges may be growing in importance, military cooperation will continue to be essential in meeting many of these new challenges, as the conflict in Afghanistan and war with Iraq (not to mention lesser contingencies, like Sierra Leone or the Ivory Coast) make clear. Only NATO has the kinds of mechanisms - including command structures, common operating principles and shared assets - that can make on-the-ground military cooperation effective. Finally, they note that NATO has been the predicate for US on-going

126 James B. Steinberg

involvement in European security affairs and that diminishing NATO's role as the preferred forum for US-European security cooperation will inevitably lead to US disengagement from Europe.

Those who argue for a new approach see the flip side to each of those arguments. First, they note that NATO has played a limited role in non-European security issues, particularly those with a political dimension. Second, they argue that the evolution of the EU – in particular, its efforts to develop common foreign, security and defence policies – requires the EU member states increasingly to develop common positions among themselves. A larger forum of 19 (and rather soon, 26) member states not only fails to reflect this EU evolution, but tends to undermine European integration in the security realm. Third, they argue that the expansion of NATO and its ancillary bodies dilute the core US-European cooperation through the involvement of peripheral countries, such as states in the Caucasus and Central Asia, that share neither our values nor our interests. On the question of military effectiveness, they point to the lengthy and ultimately successful discussions that arrived at a blueprint – the so-called ‘Berlin Plus’ arrangements – for assuring that military cooperation can take place across the NATO-EU boundary. Finally, they insist that new US-EU links can provide an alternative basis for US engagement in Europe.

There is no unambiguously right conclusion to this debate. But the weight of argument would appear to favour retaining a core role for NATO, suitably rebalanced to meet the new missions and the new political realities of European integration. The agreements reached at the Prague Summit indicate a recognition on both sides of the Atlantic of the continuing importance of transatlantic security cooperation, based on the participation of each sovereign government, not two blocs (the European Union and United States). This perspective is reinforced by the largely overlapping processes of NATO and EU enlargement.¹⁵ Moreover, most new EU members are more ‘transatlantic’ in orientation than many of the older members.

So long as the security dimension of the EU remains intergovernmental and largely based on consensus rather than majority voting, there is no deep tension between the NATO format and the EU's own processes. Moreover, the established military dimensions of cooperation would be difficult to replicate without NATO. Conversely, a diminished reliance on NATO as an institution, particularly in dealing with global security challenges, would push the United States more and more toward the strategy of ‘coalitions of the willing’, diminishing Europe's influence and enhancing the chances that the United States and Europe would take divergent approaches, to the detriment of both.

An Elective Partnership: Salvaging Transatlantic Relations 127

Other transatlantic institutions can supplement the role of NATO in the security sphere. The evolution of NATO has reduced the importance of the OSCE as an inclusive forum for resolving political and security questions. The OSCE can play a helpful role, however, in continuing to develop norms on human rights and the rule of law and monitoring states' performance, and may offer an alternative 'chapeau' for sending in unarmed or lightly armed security forces as an element of post-conflict stabilisation (particularly in the states of the former Soviet Union) when 'military' forces are unnecessary and perhaps inappropriate.

**Unilateralism, multilateralism and international institutions**

Even if there is agreement in principle on the need for cooperation and the mechanism to pursue it, are differences in worldview becoming so wide that cooperation will remain difficult in practice? This is the argument of Kagan. But the German Marshall Fund(GMF)-Chicago Council poll strongly suggests that this is an exaggerated and rather inaccurate picture of public attitudes both in the United States and in Europe. Contrary to Kagan's argument, the poll shows that '[b]oth sides strongly support a multilateral approach to international problems and the strengthening of multilateral institutions'. Even after the debacle at the UN in March 2003, an identical number of Americans (54%), Britons (54%) and French (55%) said that the UN was 'still important', and most Americans (54%) wanted a UN Security Council resolution and more international support before going to war.¹⁶ Conversely, in the GMF Poll mentioned previously, majorities on both sides show a strong readiness to use military force for a broad range of purposes, and support NATO and its expansion.' Large majorities of Europeans as well as Americans favoured the use of force against terrorist training camps and facilities, and to uphold international law.

At the same time, substantial majorities on both sides of the Atlantic (84% in Europe, 66% in the United States) say that economic strength is more important than military strength in determining a country's overall power and influence in the world. An overwhelming number of both American (77%) and Europeans (75%) say the United Nations needs to be strengthened. The poll suggests that Europeans and Americans are from *both* Venus and Mars.

To be sure, recent events concerning Iraq raise questions about future US attitudes toward the role of the UN and formal alliances such as NATO. On the one hand, the Bush administration's decision to resort to the UN in September 2002 reflected recognition that the US was more likely to gain international support for its objectives by seeking to use multilateral mechanisms. But the acrimonious collapse of those efforts has

128 James B. Steinberg

strengthened the hand of those in the administration who see the UN as feckless at best and a dangerous trap at worst. Similarly, the divisive NATO debate about NATO involvement in the run up to the war in Iraq has dashed (at least for the time) hopes raised by the Prague Summit that NATO could play a role in out-of-area contingencies, and reinforce the administration's proclivity to rely on coalitions of the willing.

## The capabilities gap

A third potential barrier to security cooperation is the growing divergence in military capabilities between the United States and Europe. The argument by now is a familiar one, and concerns growing divergences between the United States and Europe on overall levels of defence spending, exacerbated by particularly acute gaps in high technology, mobility and readiness. As a result, proponents of this thesis argue that even if the United States and Europe agree on the need to use force, they will be unable to work together. Some go on to argue that the very fact of Europe's relative military weakness will lead it to favour diplomacy over force, thus exacerbating policy differences with the United States. From the US perspective, those who worry about the gap contend that European weaknesses will make Europe a less valuable partner, leaving the United States free to ignore European views, and to develop closer relationship with more strategically relevant partners, such as Russia and the states of Central Asia.

These concerns, while real, seem seriously overstated. Most military operations do not require 'high end' forces at all - recent interventions of British forces in Sierra Leone and French forces in the Ivory Coast are but

two recent examples. Even in high-end contingencies, not all central military roles require the most technologically sophisticated forces - consider the role of the Northern Alliance in the Afghanistan conflict. In more challenging military circumstances, at least some elements of the European forces are capable of operating effectively with the United States, as has been the case with Special Operations Forces in Afghanistan and naval forces in the Persian Gulf and off the coast of Africa. Finally, key deficiencies in European forces - lack of mobility, scarcity of

> Most military
> operations do
> not require
> 'high end'
> forces at all

precision-guided munitions - can be rectified without dramatic increases in European defence budgets. Greater US willingness to transfer technology to allies could also help in reducing the magnitude of the capabilities gap. Thus this issue by itself need not be a serious barrier to US-European security cooperation.

An Elective Partnership: Salvaging Transatlantic Relations 129

The preceding discussion goes a long way toward demonstrating that the United States and Europe have considerable potential to pursue common security interests well into the next century. But to achieve this promise, it will not be enough to rely on an invisible hand. Several key steps must be taken to make this potential a reality. First, it is critical to avoid the trap of 'division of labour' in the security realm. Despite the US strong lead in military capabilities, and a greater European willingness to engage in 'nation-building',¹⁷ an arrangement where 'the United States does the cooking and Europe the washing-up' could be devastating for the prospects of future cooperation. Put broadly, a sharp division of labour will almost inevitably lead to diverging perceptions of how to manage crises in the future. If the United States abjures responsibility for managing the results of using force, then the United States will almost inevitably underestimate the costs and consequences of the military option. Conversely, if Europe fails to share in the military and political burdens associated with the use of force, European voices will be given little consideration by US policymakers, and Europeans will tend to downplay the efficacy of force as an option.

Second, and closely related to avoiding division of labour as a matter of policy, is the crucial necessity for Europe to develop at least some 'high-end' military capabilities to allow European forces to operate effectively with the United States. The specific commitments from European member states to fill shortfalls, offered at the Prague Summit, were a step in the right direction; as with past commitments, however, it remains to be seen whether the reality will follow the promise.¹⁸

Third, and the flip side of Europe's developing high-end capabilities, is the need for both the United States and Europe to enhance their ability to contribute to peacekeeping and post-conflict stabilisation and reconstruction. This includes training and equipping conventional military forces for these roles and, perhaps more importantly, the development of specialised capabilities (including paramilitary capabilities such as the Italian carabinieri and France's gendarmarie) to meet the unique security depends these missions entail.¹⁹

Fourth is the importance of preserving consensus at the heart of alliance decision-making. Some have argued that with the expansion of NATO, the time has come to reconsider the consensus rule. Proponents argue that with 26 members, consensus will become gridlock, hobbling NATO's ability to react in a timely and effective way to new challenges. But the cost of substantial departure from consensus is likely to be even more devastating to NATO's relevance. Political solidarity as much as military muscle has been the key to NATO's success, from the Cold War to the conflict in Kosovo. In practice, NATO has always been able to

130 James B. Steinberg

develop means to allow the most powerful states to play a proportionately influential role – for example, the role of the 'quint' during the Kosovo War – and to prevent dissenters from paralysing NATO action. One way to increase efficiency without destroying consensus would be to strengthen the role of the Secretary General in managing the internal and administrative affairs of the alliance, while reserving policy for the members.

Fifth is the need to make further progress on linking and deconflicting NATO and EU military capabilities. The long run from the 1996 Berlin Ministerial meeting has been cluttered with the political and operational minefields associated with fostering the EU's ability to provide effective military forces, without unnecessarily duplicating NATO capabilities or creating transatlantic ruptures. With the apparent resolution of the Greece–Turkey blockage on the so-called 'Berlin plus' arrangements that allow the EU to use NATO assets when NATO as a whole is not involved,²⁰ it is possible to move forward. A key test will be to develop the proposed NATO Response Force (endorsed at Prague) as a complement to the EU Headline Goal. This also means strengthening the political linkages between the EU institutions of ESDP and NATO.

Sixth is the need for enhanced transatlantic defence industrial cooperation. This has been a longstanding goal at NATO, repeatedly stymied by domestic politics and the dramatically larger US market for high-end military equipment. But more can be done, particularly in the area of technology transfer. Despite the real and growing concerns about leakage of highly sensitive technology to dangerous states and terrorists, efforts such as the Clinton administration's Defence Trade Security Initiative, which relaxed restrictions on technology transfer to European allies, can help build transatlantic cooperation while providing necessary security.²¹

Given the changing nature of our security threats, defence-industrial cooperation should not be limited to traditional military acquisition. In the United States, a major push is underway to harness our scientific and engineering community to develop new technologies and apply old ones to the protection of the homeland. This too is a promising opportunity for transatlantic cooperation, although similar problems of security and technology transfer will need to be addressed if the collaboration is to be fruitful.²²

## Building the infrastructure of global governance

In the emerging global politics, many of the key risks and opportunities lie outside the realm of security, even broadly defined. For the non-security realm as well, the consequences of globalisation make international cooperation imperative, and in many areas the common US-European interests are even more profound.

An Elective Partnership: Salvaging Transatlantic Relations 131

Both the United States and Europe are among the principal beneficiaries of the dramatic increase in speed and volume of movement in people, goods, services and ideas. Trade has become an increasingly important component of our economic growth, and a major factor in productivity increases. Immigration, particularly in the United States, has played a significant role in our recent economic strength. The demographic gains help offset trends toward an aging population, easing the strains of future taxpayers and providing a more sustainable base for pensions. Both the United States and Europe depend heavily on inward and outward capital flows, and the rapid exchange of ideas is not only fuelling innovation, but also helping to propagate our values around the world.

But the benefits of globalisation are not fully shared, either within our own societies, or around the world – where the disparities are far more dramatic. Inequalities within our societies have hit some segments of our populations hard (including workers in manufacturing centres whose jobs have moved to less developed countries and, in Europe, immigrant populations, particularly from the Arab and Islamic world). Domestic instability, crime and political alienation are among the consequences. Abroad, some developing countries, notably China and more recently India, have begun to tap into globalisation to spur growth, but those outside the global web have fallen further and further behind. Even within successfully globalising developing countries, internal divides seriously threaten social stability.

The tensions that grow out of these disparities in sharing the benefits of globalisation have serious, shared consequences for the United States and Europe. At home, a backlash against globalisation can lead to policies, such as protectionism and anti-immigrant movements, that threaten our ability to sustain the growth that globalisation fosters. Abroad, the failure of many to reap the benefits of globalisation undermines efforts to gain broad international support to extend and sustain an open trade and investment system. It fosters instability in countries left behind, contributing to conflict, the spread of infectious disease and environmental harm, and criminal activity. It breeds deep resentments against the 'haves' and their system, which can foster terrorism and the desire to acquire dangerous weaponry to offset the power of the West.

For this reason, the United States and Europe share a common strategic as well as a humanitarian interest in addressing this global challenge. In part the answer is a fairer global economic system (to be discussed below). But perhaps even more important is the need to help developing countries tap into the global systems of intellectual and

> Those outside
> the global web
> have fallen
> further and
> further behind

132 James B. Steinberg

material interchange. This means effective strategies of development
assistance to help build strong governance, vibrant civil societies and
healthy, educated populations in countries that lack them today.

Despite the shared interest in achieving these objectives, transatlantic cooperation in this area is limited at best. The United States and Europe are of course key actors in the principal global development organisations, such as the World Bank, regional development banks, the IMF and UN bodies, as well as global efforts such as the 2002 International Conference on Financing for Development summit in Monterrey, Mexico. Through the G-7, the United States and Europe play an important policy-setting role, leading to initiatives such as the debt-relief programme for heavily indebted poor countries (HIPC). But to date, there have been limited and only sporadically effective efforts to coordinate bilateral assistance. The Bush administration's recent decision to launch the $5 billion Millennium Challenge Account as a bilateral programme with its own criteria, essentially independent from the efforts or objectives of multilateral development organisations, reflects the failure to see this problem as one that requires more, rather than less coordination with key other donors.

Thus, one future pillar for transatlantic cooperation is to strengthen US-European coordination to address this unmet challenge.²³ In many cases, of course, the best means of carrying out joint strategies will be through multilateral organisations, such as the Development Assistance Committee of the OECD, the G-8 and the UN institutions, not only because there are other important donors (notably Japan) but also because the multilateral organisations can give voice to the interests and perspectives of the developing countries themselves, enhancing both the effectiveness and legitimacy of the aid efforts. But without the concerted efforts of the United States and Europe, the overall effort will be fragmented, under funded and thus of limited effectiveness.

Strengthening the global economic infrastructure

The ability of the United States and Europe to continue to reap the benefits of globalisation depends on the robust flow of trade and investment. As the Asian financial crisis of 1997-98 threatened developing markets around the world, and caused anxiety in developed countries, it became increasingly clear that the institutions and rules governing global commerce were inadequately adapted to the speed and volume of today's financial markets. Although there have been some efforts to address the issues raised by the crisis – for example, new capital adequacy standards, discussions of new workout or quasi-bankruptcy

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procedures for distressed developing countries – considerable complacency has set in and the possibility of future shocks remains substantial.²⁴

Following the 1997–98 financial crisis, the world economic system sustained a second, political shock in 1999 with the World Trade Organisation summit in Seattle. The failure to reach agreement exposed deep underlying tensions in the world trade system, both between developed and developing countries, and within developed countries. Part of the problem was substantive – disagreements about whether trade agreements were unfairly skewed against developing countries, creating obligations which strained the fabric of developing societies without corresponding concessions from developed countries on key issues such as agriculture, textiles and intellectual property. But there were important institutional issues as well – lack of transparency, inability of developing countries to participate meaningfully because of cost and lack of expertise, inadequate opportunities for other concerned parties (such as environmental and consumer groups) to participate. Although substantive progress was made at the November 2001 WTO summit in Doha, Qatar, to launch a new round, these underlying issues remain very much unresolved.

More broadly, the globalisation of commerce, and in particular, the growing importance of transnational services has challenged the capacity of the international system to provide an adequate predictable regulatory framework to facilitate these vital flows. This lack of agreed frameworks has had a particularly pernicious impact on US-European relations. On issues ranging from competition policy to privacy regulation, to rules for emerging sectors such as biotechnology, incompatible and sometimes conflicting approaches have had serious economic consequences for both partners, and have generated deep political friction. The conflict has been especially acute because this is an area where the EU most clearly acts as a single entity under powers granted to the Commission.

Over the years, a number of efforts have been made to address these difficulties. The 1995 Transatlantic Declaration committed the US and EU to 'strengthen the multilateral trading system', to create a 'New Transatlantic Marketplace' by 'progressively reducing or eliminating the barriers that hinder the flow of goods, services and capital' across the Atlantic, and to strengthen regulatory cooperation. The New Transatlantic Agenda led to the formation of the Transatlantic Business Dialogue, which in turn helped spur the valuable 1998 US-EU Mutual Recognition Agreements eliminating duplicative testing and certification processes in a number of key sectors.²⁵ This in turn led to the 1998 Transatlantic Economic Partnership covering both bilateral and multilateral trade and investment issues, including regulatory issues. These various initiatives have spawned a whole series

134 James B. Steinberg

of bilateral meetings on both the government-to-government²⁶ and the private sector level (the Business Dialogue has a companion in the Transatlantic Consumer Dialogue).

These efforts have an ameliorative effect, but the lack of high-level commitment to policy coordination remains apparent, as in the cases of steel, biotechnology and agricultural subsidies. Good personal and working relations between the US Trade Representative Robert Zoellick and EU Trade Commissioner Pascal Lamy have helped mitigate the

potential long-term harm from these disputes, but that is no substitute for a more institutionalised, enduring effort that depends less on personalities. Frequent resort to the WTO dispute resolution mechanisms has not only failed to depoliticise trade differences, but, in some cases, has actually exacerbated the conflict. This has led some commentators to call for a moratorium on new transatlantic WTO cases and a greater recourse to political dialogue.²⁷ Collaborative efforts, such as the 'safe harbour' agreement that defused a potential US-EU conflict over information privacy requirements, demonstrate the range of the possible when the two sides engage at a high level to resolve differences.²⁸ More generally, deepened collaboration among regulators on both sides of the Atlantic can lead to common solutions to transnational issues without the need for supranational institutions.²⁹

Nearly
identical
percentages of
Americans
and
Europeans
describe
global
warming as
'critically
important'

## Sustaining the global ecosystem

In recent years, few subjects have caused as much contention in the transatlantic relationship as disputes over environmental policy. Even before the Bush administration announced that the Kyoto Protocol was 'dead', controversies over key provisions of the agreement, such as emissions trading and credit for carbon sinks (for example, forests) stymied progress at successive conferences. Moreover, deep opposition in the United States Senate made the prospect of US ratification unlikely at best without significant modification of the agreement with respect to the level of reductions and the obligations of developing countries.

The Kyoto controversy is but one of many transatlantic environmental disputes, ranging from controversies over biodiversity, to the environmental consequences of genetically modified organisms, to the broader question of the role of the 'precautionary principle' and the argued need for a multilateral environmental organisation to complement

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the World Trade Organisation. Yet despite deep differences between governments, popular sentiment again seems much closer than assumed by conventional wisdom. In the Chicago Council-GMF poll, nearly identical percentages of Americans (49%) and Europeans (46%) describe global warming as 'extremely important' or critical. Although a clear majority of Europeans oppose the use of biotechnology in agriculture and food production (by 62% to 33%), American anxieties are much higher than commonly supposed (especially by Europeans). Only a small plurality of Americans (48-45%) support agricultural biotechnology, and a clear majority support the right of Europe to impose a labelling requirement.

Given the fundamental commonalities in European and American attitudes to environmental issues, more effective mechanisms are needed to coordinate policy approaches.³⁰ The first step is to try to achieve greater scientific consensus on the underlying issues. Such a consensus can be a powerful tool for policy coordination – for example, the international community was driven to take dramatic actions on CFCs in the Montreal Protocol once they were determined to be a clear source of ozone depletion. The efforts of the Intergovernmental Panel on Climate Change (IPCC) have also had an impact on the United States (at least in rhetoric; even the Bush administration has had to concede the role of human activities in global warming).³¹

Given the current standoff on key environmental issues, it is easy to be pessimistic about the prospects for transatlantic cooperation. No amount of consultation will bridge fundamental differences over policy. Yet, the objective realities of environmental risk inevitably will force both the United States and Europe to work more closely together – the main question is whether this will be sooner rather than later. In the end, global environmental problems can only be addressed through effective global action. But enhanced US-European cooperation is an essential precondition for the broader global efforts to succeed. European efforts, may, for example, help to bring about the coming into force of the Kyoto Protocol, but it will have marginal benefits if the United States stays outside. Conversely, continued US-European disputes can magnify international disagreements, as each side seeks to line up supporters in both the developing and developed world.

## Combating terrorism and international crime

With the receding threat of interstate conflict among great powers, the challenges posed by non-state actors – terrorists, drug dealers, international criminal syndicates – pose the greatest near-term threat to our security. While NATO can and should play an important role in coordinating the military and some aspects of the diplomatic strategy to engage these threats,

136 James B. Steinberg

the policy tools, and thus the range of actors involved suggest that
mechanisms for transatlantic cooperation must extend beyond NATO.

The EU's own progress in deepening cooperation on the so-called
'third-pillar issues', related to justice and home affairs, offers an
important opportunity to strengthen US-EU cooperation as well. On
issues such as arrest warrants and evidentiary legal assistance, the
prospect that Europe will adopt a common standard (as evidenced by the
recent success toward harmonising trans-EU arrest warrants)³² makes it
more likely that the United States and EU can cooperate. Similarly, US-
EU cooperation on money laundering (working through the G-7 and the
Financial Action Task Force) has gradually led to widely accepted global
standards to deal with terrorist and criminal finance.

The 11 September attacks have dramatically increased the pace and scale of US-EU cooperation on terrorism. Just one month after the attacks, an EU delegation representing the Presidency, the Commission, the European Council and key EU agencies met with a high-level US interagency group from the Justice Department, Treasury, the FBI, Secret Service and State Department to discuss counter-terrorism cooperation.³³ On 6 December 2001, Secretary Powell signed the EUROPOL-US agreement to foster further cooperation at a meeting with the EU's Justice and Home Affairs Council.³⁴

There remain many barriers. In the case of terrorism, we have seen that
the availability of the death penalty in the United States, and European
unease at some of the investigatory tools used by the United States in the
wake of the 11 September attacks have threatened to derail cooperation on
highly visible cases. Information sharing is hobbled by European claims of
lack of reciprocity, and US fears that valuable investigatory information
will not be adequately protected. The new spirit of cooperation needs to
be supplemented by NATO-like procedures for sharing and protecting
classified information, and the EU-wide harmonisation efforts must be
extended to transatlantic US-EU agreements on mutual legal assistance to
supplement bilateral agreements with individual countries.

Strengthening the mechanisms of cooperation: internal EU reform and transatlantic arrangements

All the challenges discussed in this essay affect the world more broadly,
and thus cannot be settled by the United States and Europe alone. But
without our leadership, nothing can go forward. To translate the
potential of the transatlantic relationship into a more positive reality will
require two kinds of developments. First, the European Union itself
must take further steps to institutionalise its own capacity to act in these
areas. Second, the United States and Europe need to establish more
formal, effective mechanisms for consultation and even decision-making.

An Elective Partnership: Salvaging Transatlantic Relations 137

The issue of Europe's capacity to act on the global stage is front and centre in Europe's own debates today. As German Foreign Minister Joschka Fischer has observed, Europe's task is 'a Union for the whole of Europe capable of global action'. There is little doubt that in the field of trade, the EU already possesses the capacity to act globally, and in the area of development assistance the EU has similarly established itself as a global player.

Foreign policy, and especially defence policy, remain the areas where the future of a 'European' voice is most uncertain. The CSFP has certainly expanded its scope over the past half-decade to encompass global issues as well as regional ones. The EU member states have moved gradually, from the Petersburg WEU Council meeting in 1992 to the Helsinki Summit in 1999, to give the EU capacity for autonomous military action, and have developed new internal arrangements, beginning with the High Representative for CSFP and including a new Political and Security Committee and a Military Committee (with associated military staff). The active engagement of the High Representative in the Balkans and the Middle East (culminating in the representation of the EU, rather than individual European countries, in the Quartet) shows the potential for the emergence of the EU as an international actor in its own right. But the requirement for unanimity on important decisions and the desire of the member states to retain considerable autonomy in the area of foreign policy (as evidenced so vividly in the case of Iraq) has made progress slow, and reinforced the American sense that the real decision-making – and therefore the real locus of consultation, when it takes place – is with national governments individually.

The issues at stake in the current EU constitutional convention will have important ramifications for the future of transatlantic cooperation. For example, the rotating EU presidency has been a significant obstacle to sustained transatlantic cooperation. The existence of the Troika (made up of past, current and next holders of the presidency) and the ongoing participation of the Commission President in the biannual US-EU summits give some element of continuity to the transatlantic dialogue at the head of state/government level, but the reality is that each EU presidency country has its own priorities, and each bureaucracy its own interest in putting a national stamp on the outcomes. This problem can only get worse with EU enlargement – and the prospect of a succession of small countries (Latvia, Lithuania or Luxembourg, for example) holding the presidency could undermine efforts to get the US president to take these meetings seriously.

To the extent that the outcome of the Convention leads to the creation of a stronger executive (either by direct election or selected by the EU

138 James B. Steinberg

countries who can at least shape the agenda, if not the policy outcomes, of the US-EU dialogue), there is greater opportunity for long-range coordination. Continuity in the executive can also provide greater follow-up, which has been the most visible failing of the many laudable US-EU initiatives to date.

Other decisions pending before the Convention can also have an impact on the prospect of transatlantic cooperation. One particular area of concern within Europe is the so-called democratic deficit in EU institutions. Over recent years, one response to this problem has been to strengthen the role of the European Parliament, and proposals before the Convention could go even further to enhance the parliament's role. But the American experience shows that a more active parliament can lead to new difficulties in achieving transatlantic cooperation, as is evident from the opposition in the US Senate to the Kyoto Treaty, for example. The European Parliament's resistance to the Commission's effort to defuse the transatlantic controversy over genetically modified organisms could be a harbinger of difficulties to come.

Over the last decade an elaborate mechanism has been developed to support the semi-annual US-EU summits.35 But this approach suffers from many of the same problems afflicting a comparable summit exercise, the G-8. Under the best of circumstances, G-8 meetings offer an opportunity for leaders to highlight policy initiatives and priorities. But

the summit process is ill-suited for the ongoing, long-term policy development and implementation that would be necessary to sustain a new, higher level of transatlantic cooperation.36

Improving the dialogue at the head of state/government level is only the first step towards improving transatlantic cooperation. It is at the working levels where the details of policy coordination must be worked out. The establishment of the EU High Representative for CFSP has given an important additional point of contact, but continued confusion over

the respective responsibilities of the High Representative and the Commissioner for External Affairs provides additional complication and confusion. Further complicating the picture is the role of the EU's Political Security Committee.37 Both in the United States and Europe, the tendency is to sort out internal differences first (inter-agency in the case of the United States, inter-government in Europe) and only then engage with transatlantic counterparts, making accommodation of other's viewpoints difficult at best.

The NATO example suggests the need for more regularised structures for dialogue among transatlantic partners. Although the US Mission to the

> A more active
> European
> parliament
> can lead to
> new difficulties

[LC]

An Elective Partnership: Salvaging Transatlantic Relations 139

EU has attempted to shoulder some of this burden, the mission is simply too removed from the centre of action in Washington to allow for effective dialogue with key decision-makers. Nor will it be sufficient for the State Department's European Bureau or, on the European side, the High Representative or the Commissioner for External Relations, to provide the sole channel for fostering cooperation. There is a need for ongoing transatlantic deliberative committees on priority policy issues that can function as the transatlantic equivalent of the interagency process. Joseph Nye has suggested harnessing the power of new telecommunications technology to allow regular, virtual meetings among key actors on both sides of the Atlantic, both before decisions are made and during implementation.38 This approach could allow both the EU and representatives of the member countries to participate, reflecting the reality that on many of the key issues of concern, competence is and will remain shared between the EU and member states.

This does not mean that we will agree in every instance, or that our interests will always coincide. Debates over difficult issues such as climate change or genetically modified organisms or privacy are not simply questions of economics and science, but also touch on different values and histories. Our political perspectives have much in common, but are not identical. But without more structured efforts to address these types of issues, US-European conflict will grow, not because our interests differ that much, but because the lack of structures to coordinate our policies lead to divergence. Harmonising our approaches to these issues will be difficult, but failure to do so will be costly.

We also must be wary of deepening our collaboration in ways that appear to marginalise the rest of the world. A G-2 that appears to pursue our interests at the expense of others will not only fail to meet global challenges but also generate a backlash that could make the achievement of our objectives more difficult.39 But the overriding danger remains too little transatlantic cooperation, not too much.

## Conclusion: it's not too late

Has the bitter conflict over Iraq caused such deep acrimony so as to overwhelm the strong case for cooperation? There are two reasons for concern. First, if European leaders conclude that Europe must become a counterweight to the United States, rather than a partner, it will be difficult to engage in the kind of open search for common ground that an elective partnership requires. Second, there is a risk that post-Iraq public opinion in both Europe and the United States will make it difficult even for leaders who want to forge a new relationship to make the necessary accommodations.

140 James B. Steinberg

But whether Iraq is a turning point is not foreordained. Most European leaders opposed the efforts of President Jacques Chirac to define the conflict as one centring on US unilateralism, rather than Saddam Hussein's defiance of the international community. If the Bush administration now actively works to heal the breach (for example, by involving NATO in the post-war stabilisation effort and cooperating with the EU on reconstruction), rather than focusing on punishing and isolating those who opposed the US, a new opportunity can be created. On the European side, especially in France and Germany, there is an equal need to recognise Europe's interest in a successful outcome in Iraq, rather than standing aloof because they opposed the war in the first place.

As for the publics, there is also reason for cautious optimism, particularly if US and European officials show leadership rather than catering to the raw public sentiment of the moment. Just before differences over Iraq captured the public mood, citizens on both sides of the Atlantic believed that we still matter to each other. In the German Marshall Fund/ Chicago Council poll, 58% of Americans said that Europe was more important to the US than Asia, up from 42% in 1998. Europeans, in turn showed continued warm feelings toward the United States.⁴⁰ Sixty-four percent of Europeans support a strong US leadership role in world affairs. The Iraq war clearly has had a sharply chilling effect on transatlantic publics' regard for one another.⁴¹ Whether the previous sense of solidarity can be restored in the future will depend on the policies that governments on both sides adopt in the crucial months to come.⁴² A vibrant transatlantic partnership remains a real possibility, but only if both sides make the necessary political commitment. It is elective, not inevitable; but we will all be the better off if we seize the opportunity.

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Notes

¹ Secretary Powell: 'I'm very disappointed that France has played, frankly, a somewhat unhelpful role in keeping the pressure on Saddam Hussein. Saddam Hussein could always see that there was at least one nation, there were others, as well, who were signaling veto of anything that might put maximum force on him. And unfortunately, it's a continuing pattern from 1998'. http://www.state.gov/secretary/rm/2003/18755.htm. See also the statement of British Foreign Secretary, Jack Straw, 'Sadly, one country then ensured that the Security Council could not act. President Chirac's unequivocal announcement last Monday that France would veto a second Resolution containing this or any ultimatum, "whatever the circumstances", inevitably created a sense of paralysis into our negotiations. I deeply regret that France has put Security Council consensus beyond reach.' http://www.number-10.gov.uk/output/page3289.asp.

² From the Suez crisis in the 1950s, the balance of payments disputes and France's withdrawal from NATO's unified military command in the 1960s; the conflict over burden sharing and Vietnam in the 1970s, to the INF debates, SDI and anxieties about decoupling in the 1980s and trade friction in the 1990s, the Alliance has been declared critically ill, and calls have gone forth for the establishment of a new transatlantic bargain. See, for example, James B. Steinberg, 'The Case for a New Partnership', in Nanette Gantz and John Roper (eds.) *Towards a New Partnership: US-European Relations in the Post-Cold Era*, The Institute for Security Studies, The Western European Union, Paris, 1993, pp. 105-121.

³ Nonetheless, the US-EU trade relationship remains the largest 'bilateral' trade relationship in the world. Total transatlantic investment is around $1.4 trillion. In 1999, over 45% of US foreign direct investment (FDI) went to the EU (representing over 56% of total FDI in Europe) while EU FDI in the US represented 60.5% of total FDI in the US. The United States accounts for 24.1% of the EU's total exports and 20.5% of the EU's total imports. See 'Bilateral Trade Relations', http://europa.eu.int/comm/external_relations/us/intro.

⁴ See 'Address to a Joint Session of Congress and the American People', 20 September 2001, http://www.whitehouse.gov/news/releases/2001/09/20010920-8.html

⁵ Kagan, 'Power and Weakness'. Charles Kupchan, *The End of the American Era* (New York: Alfred A. Knopf, 2002), pp. 153: 'It is too soon to tell whether Washington and Brussels will head down the same road as Rome and Constantinople – toward geopolitical rivalry – but the warning signs are certainly present.'). See also Samuel Huntington, 'The Lonely Superpower', *Foreign Affairs*, March-April 1999; Stephen Walt, 'The Ties that Fray', *National Interest*, Winter 1998-9. For an example of a more optimistic view, see Joseph S. Nye, Jr. 'The United States and Europe: Continental Drift?' *International Affairs*, January 2000, pp. 51-59; as well as the Report of the Council of Foreign Relations Independent Task Force, *The Future of Transatlantic Relations* (New York: Council on Foreign Relations, 1999).

⁶ This was not inevitable; debates about containment versus rollback might have posed a more serious challenge to transatlantic consensus, and elements of the European left advocated a more accomodationist

142 James B. Steinberg

posture. But for the most part, the
containment paradigm was largely
accepted.

⁷ Several examples are the INF and SDI debates, European interest in 'defensive defence' and Ostpolitik, as well as the US push to strengthen conventional forces in Europe.

⁸ Ronald D. Asmus et al. ‘Can NATO Survive?’, Washington Quarterly, Spring 1996, pp. 79, 92–93.

⁹ The Transatlantic Declaration established the principles for greater EU-US cooperation and consultation in the fields of economics (e.g. liberalisation, OECD, competition policy), education, science and culture, and transnational challenges. It also set up the first formal machinery for US-EU political dialogue, consisting of biannual summits and ministerial meetings, to supplement the previous informal dialogue with the European Political Cooperation (PoCo) process.

¹⁰ Chicago Council on Foreign Relations and the German Marshall Fund of the United States, *Worldviews 2002: Comparing American & European Public Opinion on Foreign Policy*, p. 5.

¹¹ Pew Research Center for People and the Press, *What the World Thinks in 2002. How Global Publics View: Their Lives, Their Countries, The World, America*, 4 December 2002, http://people-press.org/reports/display.php?ReportID=165 hereafter Pew December 2002.

¹² North Korea is an interesting intersection of the global and regional dimensions of security. Although the United States is more deeply engaged in managing the overall security situation on the peninsula, Europeans have taken a keen interest in addressing the North Korean nuclear problem, which Europeans see as an element of trying to maintain the global norms of non-proliferation under the Nuclear Non-Proliferation

Treaty. Some Europeans (especially France) have taken a tougher position on North Korea's non-compliance with the NPT than has the United States. And when the United States appeared to reject the idea of dialogue with the DPRK, the EU, in an unprecedented step, sent a mission of its own to Pyongyang in the spring of 2001.

¹³ Generalisations are always perilous. Germany, for example, has also had particularly close ties to Israel, although even in Germany in recent months, there has been growing discomfort with the US position.

¹⁴ The Chicago Council-GMF poll shows that Americans are much more concerned about military conflict between Israel and its Arab neighbours (67% in the United States consider it critical, compared with 42% in Europe). Seventy-two percent of Europeans favour a Palestinian state, while only 40% of Americans hold that view. American attitudes are far warmer toward Israel than those of Europeans.

¹⁵ Of the 7 new NATO members, five (Estonia, Latvia, Lithuania, the Slovak Republic and Slovenia are also part of the next wave of EU enlargement, and the other two (Romania and Bulgaria) remain likely candidates for EU membership. Of the 10 new EU members, three (the Czech Republic, Hungary and Poland) are already members of NATO and five more are joining as part of the new wave. Seen another way, after the next rounds of enlargement, 19 of 25 EU members will be in NATO, and 19 of 26 NATO members will be in the EU (with at least two more, Romania and Bulgaria, likely to join).

¹⁶ Pew Research Center, 18 March 2003.

¹⁷ The Chicago Council/German Marshall Fund poll found that 72% of Europeans supported the use of troops 'to bring peace to a region

An Elective Partnership: Salvaging Transatlantic Relations 143

where there is civil war', in contrast to
only 48% of Americans who held that
view. This is also borne out by the
high proportion of Europeans
(compared with American troops)
serving in post-conflict military
deployments in Bosnia, Kosovo,
Macedonia, and ISAF in Afghanistan.

¹⁸ The Prague Capabilities commitment consisted of 'firm and specific political commitments to improve [European] capabilities in the areas of chemical, biological, radiological, and nuclear defence; intelligence, surveillance, and target acquisition; air-to-ground surveillance; command, control and communications; combat effectiveness, including precision guided munitions and suppression of enemy air defences; strategic air and sea lift; air-to-air refueling; and deployable combat support and combat service support units'. Prague Summit Declaration, Para. 4(d), http://www.nato.int/docu/pr/2002/p02-127e.htm

¹⁹ For an analysis of what both the United States and Europe should do to increase their ability to contribute to peacekeeping and humanitarian missions, see Michael O'Hanlon, *Expanding Global Military Capacity for Humanitarian Intervention* (Washington DC: Brookings Press, 2003).

20 The NATO-EU agreement was reached on 16 December 2002.

21 See, e.g. *Defence News*, 5 June 2000. The text of the Clinton administration's 17 proposals can be found at http://www.fas.org/asmp/campaigns/control/dtsa17pts.htm

22 See Daniel Hamilton, 'The Future Ain't What It Used to Be: Europe, America and the New International Landscape', The Robert Bosch Foundation Lecture, 11 December 2001, p. 13

23 The New Transatlantic Agenda identified 'promoting peace and

stability, democracy and development
around the world' as one of four
major goals for transatlantic
cooperation. USAID-European
Commission consultations began in
1995, but for the most part there have
been few operational results.

24 The need for new mechanisms was highlighted by Alan Greenspan, Chairman of the Federal Reserve, at the Council on Foreign Relations Financial Crisis Conference in July 2000 (quoted in Kupchan, p. 101).

25 Telecommunications, radio transmitters, electric and electronic products, pharmaceuticals and recreational marine aircraft.

²⁶ A recent example is the informal US-EU financial market dialogue, which is considering such issues as the impact on transatlantic relations from directives under the EU Financial Services Action Plan and accounting standards. See Remarks of Treasury Deputy Secretary Kenneth Dam, 3 December 2002.
http://www.useu.be/Terrorism/EUResponse/Dec0302HaassDamUSEURelations.html

27 See Stuart Eizenstat and Hugo Paeman, 'Closing the Transatlantic Divide', *The Financial Times*, 25 July 2002. Some senior US officials have echoed that sentiment. See, for example the remarks of US Principal Deputy Assistant Secretary of State for European Affairs, Charles Ries, who urged 'the need to explore alternative methods of dispute resolution, conciliation, arbitration, negotiation and to reward acts of collaboration. Compromise - for both sides - is a sign of strength, not weakness. For trade problems, WTO cases, merely because they are easy to bring should not be the first recourse to trade barriers.' 14 November 2002, http://www.useu.be/TransAtlantic/Nov1402RiesUSEUPartnershipTIES.html

144 James B. Steinberg

28 For an overview of the history and the implementation of the safe harbour agreement, see the Commerce Department's web portal, http://www.export.gov/safesharbor/sh_overview.html.

29 Anne-Marie Slaughter has called this approach 'transnational governance'. See Anne-Marie Slaughter, 'The Real New World Order', *Foreign Affairs*, September–October 1997.

30 A fledging effort to establish a Transatlantic Environment Dialogue died in 2000 from lack of political support.

31 Another example of efforts to form a common scientific basis for policy formulation is the recent joint study by seven national academies of science on the risks and benefits of agricultural biotechnology. As well as the US National Academy and the British Royal Academy, other participants included academies from Brazil, India, China and Mexico, and the Third World Academy of Science. For the text of the report, *Transgenic Plants and World Agriculture*, see http://bob.nap.edu/html/transgenic/. These kinds of dialogues can provide a solid underpinning for government-to-government efforts, such as the US-EU Biotechnology Consultative Forum involving scientists, industry and NGOs, which was established in May 2000 and which issued a consensus report to the US-EU summit in December 2000. There has been no follow up on this report since the Bush administration took office.

32 See Council Framework Decision of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States.

33 See US Department of State, 'US/EU Meeting on Cooperation to Combat International Terrorism', 19 October 2001, http://usinfo.state.gov/topical/pol/terror/01101916.htm

34 In addition to the 'Europol 1' agreement to share strategic data and to facilitate cooperation on joint threat assessments, the US and EU are negotiating a second Europol agreement to allow the exchange of personal data in criminal cases and an agreement on Mutual Legal Assistance and Extradition. See Remarks of Ambassador Rockwell Schnabel, 3 December 2002, http://www.useu.be/About%20the%20Embassy/Ambassador/Speeches%20Schnabel/Dec0302SchnabelEPC.html

35 The preparatory work is conducted by the Senior Level Group. The Summits bring together key Cabinet Level Officials/Commissioners from agencies such as the State Department, US Trade Representative, Commerce and so on.

36 The G-7 (now G-8) was designed as an opportunity for informal, high-level dialogue among leaders, rather than as a working body, and there has been considerable resistance to institutionalising G-8 efforts (despite the arguable success of such quasi-institutionalised G-8 efforts as the Lyons Group on International Crime, and the on-going role of the G-8 'sherpas' who in some respects are the model for the SLG). Whatever the arguments for or against a more institutionalised approach to the G-8, the ad hoc nature of the current efforts, including the sherpa system, provide a poor model from which to fashion a stronger US-European relationship.

37 A recent speech by the current US Ambassador to the EU shows the difficulty this dialogue faces (with commendable determination by the US Mission to try to 'touch all the bases': 'On the political and security front, we have kept pace with the growing responsibilities of the

An Elective Partnership: Salvaging Transatlantic Relations 145

European Union as it develops a
common foreign policy. At the
invitation of the EU's Political Security
Committee, high-level US officials
have briefed European policy-makers
on issues and regions where we have
joint concerns, such as terrorism and
South Asia. Recently, our Assistant
Secretary for Non-proliferation, John
Wolf, met jointly with the Political
and Security Committee and the
North Atlantic Council at NATO to
address the worldwide threat of
nuclear proliferation. And we have
briefed Commissioner Chris Patten
on the nuclear program recently
revealed in North Korea. Similarly,
we are active in the efforts to bridge
military planning and capacities
between the EU and NATO',
http://www.useu.be/
About%20the%20Embassy/
Ambassador/Speeches%20Schnabel/
Dec0302SchnabelEPC.html

38 Nye calls these 'political chat rooms'. See Joseph S. Nye, Jr. 'The United States and Europe: Continental Drift?' *International Affairs*, January, 2000, pp. 51-59

³⁹ See Fred Bergsten, 'The Transatlantic Century', Washington Post, 25 April 2002.

⁴⁰ According the GMF/ Chicago Council Poll: 'The British and Poles give the United States their highest ratings (68 and 65 degrees, respectively) [on a thermometer scale measuring 'warmth of feelings toward other countries]. Strikingly, the United States also receives the second highest rating from the Italians (68 degrees) and Germans (63 degrees) as well as the third highest from the French (60 degrees, just after Germany, which receives 62 degrees) and the Dutch (59 degrees, just after Great Britain and Germany). This suggests that reports of rising anti-Americanism in Europe may be overblown.

Europeans appear to like the United
States at least as much as their major
European neighbours.'

⁴¹ According to a Pew Center survey taken on the eve of the war, favourable attitudes toward the US in Britain dropped from 75% in mid-2002 to 48%, in France from 63% to 31%, in Germany from 61% to 28% and in Italy from 70% to 34%. Pew Center, 18 March 2003.

⁴² The Pew Center 18 March 2003 survey concludes: 'The publics of Western Europe are more apt to blame President Bush for the negative impact of US policy than to blame America in general. Among those saying US foreign policy is having a bad effect on their country, about three-quarters of the French (76%) and two-thirds of Germans (68%) blame the president. Relatively small minorities in both countries (15% in France and 30% in Germany) blame America in general. Just over half of the British (56%), Italians (52%) and Spanish (53%) also place responsibility solely on Bush'.