TURNING THE TIDE

Reconstructing the transatlantic partnership is one of the most important strategic challenges facing President George W. Bush in his second term. Having squandered global sympathies after the attacks of September 11, 2001, stretched U.S. military forces to the breaking point in Afghanistan and Iraq, and run up such massive deficits that only enormous infusions of foreign capital can avert a meltdown of the dollar, Washington is learning the hard way that even the world's sole superpower needs allies. With too few troops and funds to shape the world as it wants, the United States will need to rely on moral suasion rather than brute force if it wants to recapture hearts and minds abroad and sustain its unparalleled power throughout the twenty-first century.

The place to start is in the 40-odd democracies spread across Europe. Over the last four years, the Atlantic alliance has suffered serious damage. On both sides, trust has been eroded by bickering over the war in Iraq and Washington's growing penchant for unilateral action, notably the Bush doctrine of preventive war. At the same time, however, the enlargement of both NATO and the EU has finally sealed the last fissures of the Cold War and created opportunities for Washington to renovate the transatlantic relationship--arguably the most successful alliance in history.

As President Bush embarks on a second term, he will need to prove to his critics that he can rediscover the values of Republican internationalists. He will have to reshape the transatlantic relationship by replacing the unifying struggle of the Cold War with a new common resolve to fight terrorism and the spread of weapons of mass destruction (WMD), as well as embrace fresh initiatives to bring peace to the Middle East and defuse a potential world energy crisis. Tensions between the United States and European states only exacerbate global instability. But together, these nations form the bedrock of a powerful coalition of democracies that can command worldwide support on a range of important issues. To achieve this new strategic understanding, the United States and the EU must buttress three critical aspects of their alliance: their economic partnership, their security strategy, and their foreign policy.

A MARRIAGE OF INTEREST

Any reassessment of the transatlantic alliance must start with an important but often overlooked premise: the United States and the EU are still the twin turbines of the global economy. Together, they account for more than half of trade and investment flows in the world. Their business with each other exceeds $2.5 trillion a year and provides jobs for some 12 million workers.

Over the past eight years, Americans invested twice as much in the Netherlands as in Mexico and ten times as much as in China. During that time, Europeans invested more in Texas than Americans did in Japan. And today, American business invests 60 percent more in eastern Europe than in China: $16.6 billion against $10.3 billion, according to the latest data from the U.S. Commerce Department. Conversely, Europe provides 75 percent of all investment in the United States, and it is far and away the biggest foreign source of American jobs: the German industrial giant Siemens alone employs some 70,000 Americans.

These transatlantic investments have proved very profitable. In 2003, while the media reported that Americans were pouring Bordeaux wine down the drain to protest Paris' position on the war in Iraq, corporate America saw its investment inflows and profits from France surge to the highest levels in nearly a decade: $2.4 billion and $1.7 billion, respectively. Profits earned by U.S. affiliates in Europe soared to a record $77 billion, and U.S. investments in Europe jumped by 30 percent to $87 billion. Large U.S. technology firms, such as Microsoft and Intel, predict that half of their global revenues will come from Europe in 2005.

Thus, U.S. business leaders say that the EU's 450 million a¤uent consumers still form the largest pool of purchasing power in the world. They also say that economic self-interest should be enough to persuade both Democrats and Republicans in the United States to want to protect the Atlantic partnership--all the more so because the combined economic power of the United States and Europe would give them enormous leverage to deal with major global challenges.

Despite the billions of dollars already invested on both sides, the full potential of the U.S.-European economic relationship is not yet realized. Four big challenges remain. The first is managing the Western world's worsening jobs crisis (which is partly caused by outsourcing to cheap-wage places such as China and India) without resorting to the kind of draconian protectionist measures that provoked the Great Depression. Second, as the world's major oil, coal, and gas consumers, the United States and Europe urgently need to consider joint energy and environmental strategies to reduce their dependence on fossil fuels and curtail greenhouse gas emissions. Third, they must promptly conclude the Doha Round of global trade negotiations by agreeing to cut much of their $300 billion in farm export subsidies, which harm producers in developing countries and exacerbate the disparity between rich and poor nations. Finally, they must consider global financial reforms to avert a dollar crisis and take account of the growing importance of the euro.

To be sure, Europe and the United States will occasionally be divided over trade issues; strains might even be intensified by the enlarged EU's growing willingness to confront Washington over aircraft subsidies, antitrust rules, bioengineered foods, and cloning. But business so pervades the transatlantic relationship that powerful interests in Europe and the United States will push for the peaceful resolution of these matters. In the battle between Airbus and Boeing, for example, the fact that both companies employ thousands of workers on both sides of the Atlantic creates a formidable lobby that seeks compromise to maintain jobs and healthy competition. Thus, despite a few unavoidable differences, the forces of globalization and competitive markets are driving Americans and Europeans closer together, not apart.

MOVING TARGETS

A more difficult task will involve bridging the gap on security and foreign policy that was so abruptly widened by disagreements over the war in Iraq. Even the best of intentions on both sides may not be enough to alleviate current differences. Indeed, fundamental divergences over unilateralism and the preventive use of force have raised a disturbing question: can Europe and the United States develop a common strategic agenda to deal with twenty-first-century threats, or will they discard the notion of collective defense as a Cold War relic and go their separate ways?

Tensions in this area are nothing new. Ever since NATO was created to thwart Soviet expansionism more than half a century ago, Americans and Europeans have weathered crises challenging the alliance's survival. The Suez debacle, rancor over the Vietnam War, Charles de Gaulle's expulsion of NATO and U.S. soldiers from France, and mass protests in the 1980s against the deployment of nuclear-tipped Pershing and cruise missiles in Europe all fueled dire speculation that the Western allies were on the brink of divorce. Yet the current estrangement seems more perilous. Indeed, the fall of the Soviet Union and the attacks of September 11 fundamentally changed the perception that Europe and the United States have of their respective security interests.

During the Cold War, Europeans would wake up each day fearing that their homeland might turn into a nuclear battlefield for the United States and the Soviet Union. But that nightmare began to dissipate with the fall of the Berlin Wall on November 9, 1989 (or 11/9, a date that resonates almost as much with Europeans as 9/11 does with Americans). Now, for the first time in many generations, hostilities between France and Germany are unthinkable. In fact, the two devastating world wars left many Europeans deeply wary of using military force in almost any situation. Meanwhile, the collapse of the Soviet Union, the waning of internecine strife in the Balkans, and the successful expansion of NATO and the EU into central and eastern Europe have removed all visible threats to the continent's peaceful order.

Since September 11, it is Americans who feel uncomfortably exposed. As a result, they have stronger martial impulses, with few inhibitions about wielding their country's awesome military clout, especially in the war against terrorism. Europeans still do not fully comprehend the Americans' trauma, partly because they, on the other side of the Atlantic, are enjoying an unprecedented degree of tranquility. For fear of disrupting this stability, many Europeans now seem reluctant to get dragged into distant, misbegotten conflicts in Iraq or Iran by their entangling military commitments with the United States. Coupled with disdain for Bush's leadership, that fear has prompted Europe to question the wisdom of entrusting troops and military resources to a security agenda driven by Washington. No American president, no matter how well disposed toward European allies, could now hope to restore the European fealty to U.S. leadership that prevailed in the half-century after World War II.

Yet the breach in transatlantic relations is not beyond repair. A recent survey of public attitudes conducted in June 2004 by the German Marshall Fund of the United States found that, for the first time since such polling began in 2001, 58 percent of nearly 10,000 Europeans interviewed in nine countries believed it was undesirable to have strong American leadership in the world. At the same time, the Transatlantic Trends survey found that 79 percent of nearly 4,000 Americans interviewed wanted to see the EU exercise more global leadership. Taken together, these results reflect a rise both in Europe's dismay at Washington's management of global affairs and in American popular support for a more assertive EU partner. They suggest that the new U.S. administration has a great opportunity to build a more equitable transatlantic partnership that would be favored both by American voters, who no longer want to police the world alone, and by Europeans, who want to see U.S. power constrained.

Current institutional changes in Europe could complicate Washington's task. Debates within the EU about whether to ratify the European constitution and whether to continue enlarging could delay a new dialogue about urgent global issues with the United States. The old discussion about "What is Europe?"--which pitted federalists advocating a kind of United States of Europe against nationalists favoring a loosely knit confederation that upheld the primacy of national sovereignty--has been overtaken by an impassioned argument over "Where is Europe?" Romania and Bulgaria are scheduled to join the EU in 2007. With Turkey next in line for accession negotiations, Europeans feel pressed to ascertain whether they would lose their traditional moorings by incorporating Turkey's 75 million Muslims and stretching the EU to the borders of the Middle East.

Consider, moreover, that NATO has moved far beyond its original theater of operations, as when it assumed command of the international peacekeeping effort in Afghanistan. Its evolving mandate could create friction, especially between NATO and the EU, even though 19 European states belong to both groups. Their members are struggling, for example, to reconcile contrasting perceptions of Russia. Ex-Soviet republics and eastern European states are wary of becoming too cozy with former oppressors in the Kremlin. The governments of France and Germany, meanwhile, are eager to win President Vladimir Putin's favor and gain access to Russian oil and gas supplies.

Nonetheless, Europe's structural changes offer Washington a unique chance to reshape the security agenda of the transatlantic alliance for this century. For much of the past half-century, the principal focus of U.S. foreign policy was to thwart an invasion of Western Europe by the Soviet Union and its allies and eventually to make continental Europe whole and free. Now that these goals have been accomplished, the United States needs to recognize that its present and future security interests will be best served by making Europe a full-fledged partner in managing global affairs.

Despite the damage that the insurgency in Iraq and the abuses committed at Abu Ghraib and Guantanamo have inflicted on Washington's image, Europeans grudgingly recognize that the United States cannot be allowed to fail in rebuilding Afghanistan and Iraq or in bringing democracy to the broader Middle East. The Bush administration can still count on significant support from the United Kingdom, as well as Poland, the Baltic states, and new democracies in central and eastern Europe that are still deeply grateful for the U.S. role in liberating them from communist dictatorships. But even in those countries, public goodwill is dwindling rapidly. Washington can preserve their support only by revisiting the way it manages the transatlantic relationship, taking greater account of Europe's geographic sensitivities, security needs, and distinct policy interests. In some cases, the United States may need to cede the initiative on some regional security matters in order to encourage Europe to live up to greater global ambitions and responsibilities.

Even critics of the EU recognize that European states have achieved extraordinary success in stabilizing a continent perennially ravaged by war--first by reconciling France and Germany, then by embracing former communist countries within a single market and the NATO security zone. But now that Europe is largely free of threats that could have required massive U.S. intervention, American skeptics--particularly neoconservatives who argue that Europe no longer shares the U.S. world-view--believe that the Atlantic alliance does not deserve to be a major foreign policy priority for Washington. Greater indifference is also justified, they claim, because Europe has proved reluctant to exert political or military power commensurate with its economic weight to help the United States confront the new threat of jihadist terrorism. Disdainful of the EU's ponderous procedures, these critics have called Javier Solana, the EU's high representative for foreign and security policy, the "high representative for the least common denominator."

Yet the critics are not entirely fair, and they do not recognize that some of their concerns have been taken seriously. Solana, who could become Europe's first foreign minister under the constitution, has acknowledged that Europe needs to take a tougher, more proactive stand against the menace of Islamic extremists, rather than carp against U.S. policy from the sidelines. He has claimed that the EU is striving to align its foreign policy and security priorities with those of the United States. In December 2003, European leaders endorsed a new security strategy that places a higher premium on projecting power abroad as a forward defense against the threat posed by failed states, terrorism, and WMD. They also approved broader intelligence sharing, better coordination of antiterrorism efforts, and the creation of a pan-European arrest warrant that would expedite the extradition of terrorist suspects. As Europe builds greater capability to deal with global threats, the United States will find that its own resources can be used more effectively in tandem with a stronger European partner.

GOOD COP, BAD COP

Europe and the United States can also find broader common ground on foreign policy. Despite lingering emotional divisions within Europe over the U.S. intervention in Iraq, there is still considerable support across the EU for greater coordination with Washington. Solana has continued to work closely with Secretary of State Colin Powell to keep peacemaking efforts alive in the Balkans and in the Middle East. Although Kosovo's status is still unresolved and the "road map" to an Israeli-Palestinian peace lies in tatters, some modest progress has been made in transatlantic cooperation regarding both issues. Powell's successor, Condoleezza Rice, can and should build on new developments, such as Europe's takeover of peacekeeping missions in the Balkans and a new Palestinian leadership following the death of Yasir Arafat.

U.S. and European assets are complementary. Europe's penchant for offering diplomatic incentives should be combined with America's tendency to threaten military force. Concerted diplomacy would help fulfill Europe's ambitions of playing a more assertive role in world affairs while encouraging it to work more closely in partnership with the United States. At the same time, presenting a unified front would restore to U.S. action the international legitimacy that the Bush administration's strong-arm unilateralism has tarnished.

Washington should allow its allies in Europe to take the lead in exploring new policy initiatives in regions where they enjoy greater influence or historical connections. Consider Iran, for example. The Bush administration was skeptical about Iran's proclamation that its nuclear activities were only peaceful, but it encouraged Europe to make a last-ditch effort to persuade Tehran to suspend its uranium-enrichment activities and reassure the world that it is not trying to build nuclear weapons. European diplomats say Iran's refusal to accept Europe's best offer, including enhanced trade possibilities and assured nuclear fuel supplies, would almost certainly trigger EU support for the UN sanctions that the United States is advocating. Indeed, the combination of European diplomacy and U.S. threats for wider sanctions has raised hopes that Iran will finally abide by its latest agreement to suspend all uranium-enrichment activities.

A more activist role for Europe could also have beneficial effects on efforts to broker peace between Israel and the Palestinians. The United States has long been seen as the only outside power capable of extracting key concessions from Israel--including the dismantling of settlements in Gaza and the West Bank--while Europe has been relegated to giving humanitarian aid and financial support to the Palestinians. Yet a more activist EU role that offered trade and aid incentives to Israel could help bring the two sides back to the negotiating table. After all, despite close security ties to the United States, Israel still regards the EU as its most important economic partner.

Diplomatic burden-sharing would relieve the United States of carrying the lion's share of responsibilities for regional peacekeeping. It would also help disprove the reputation for "free riding" that Europeans have earned, critics say, by sometimes shirking difficult military missions knowing that the United States would pick up the slack. In the Balkans, where the EU will soon take control of all international peacekeeping, this kind of recalibration is already underway.

And there could be more shifting of duties. Indeed, the European allies have adapted their military forces to the post-Cold War environment better than American critics usually admit. The United States has about 1.4 million men and women in its armed forces, with about 400,000 troops available for foreign deployment. The 25 EU states have 1.9 million in their armed forces, and although today only about 50,000 can be sent abroad, that figure is expected to reach 200,000 over the next decade. The $175 billion combined annual defense budget of EU members may seem paltry against the United States' nearly $500 billion budget for the current fiscal year, but it exceeds the military budgets of China, Japan, and Russia combined.

Moreover, several key projects have been launched to rectify Europe's military shortcomings and equip it with a long-range air transport fleet, an autonomous satellite reconnaissance system, new precision-guided weapons, and hundreds of light transport helicopters. There are now 19,000 troops from 15 European NATO countries in Iraq and 7,000 European soldiers in the NATO peacekeeping contingent in Afghanistan. In the Balkans, American troops are outnumbered by the 30,000 European forces who have assumed command of peacekeeping contingents in nearly all of the region's hot spots, including Albania, Bosnia, Kosovo, and Macedonia. Anticipating that future missions will require street patrols rather than blazing firepower, a new 5,000-strong EU police force has been established for peacekeeping duties abroad. Three such missions were conducted under the EU flag in 2003, in the Democratic Republic of the Congo, Bosnia, and Macedonia.

A SECOND WIND

"If you want to get a cheap cheer from certain quarters in America," Chris Patten, then the EU's commissioner for external affairs, told the European Parliament in September, "all you have to do is to bash the United Nations, or the French, or the very idea that allies are entitled to have their own opinions." Meanwhile, he said, Europeans think that sniping at Washington's warmongering absolves them of having to define their own foreign policy. "The world deserves better than testosterone on one side and superciliousness on the other," he warned.

Although strong differences of opinion will persist, if only for reasons of political posturing, they should not obstruct the allies' commitment to working together. Europe will continue to condemn capital punishment and the intrusion of religious nationalism into U.S. politics, and Americans will still criticize Europe's lavish welfare programs and its paternalistic market regulations. But given their formidable economic, political, and military resources, the United States and the EU need to seize the current crisis as an opportunity to reinvigorate their alliance. For the Atlantic partnership to gain a new lease on life, however, the allies must rediscover mutual respect and tolerance and, in the best of democratic traditions, strive to reconcile their differences rather than castigate each other's motives.

That new administrations are now coming to both Washington and Brussels with strong global agendas offers an unexpected chance to restore the primacy of the U.S.-European partnership. As he assesses his priorities and overhauls his national security team, President Bush begins his new term with America's world image more tarnished than at any point in recent history. Even though much of Europe is skeptical about Bush's commitment to the alliance, he can still count on staunch support from British Prime Minister Tony Blair and the pro-Atlantic views of a new EU executive commission headed by Portugal's former prime minister, Jose Manuel Barroso. Together, they can help American and European leaders keep in mind that the transatlantic alliance remains a crucial foundation for world order, which can and should be fortified with a combination of American military power and the diplomatic legitimacy of Europe's many democracies. One of the main slogans of the first Bush administration claimed that the mission would determine the coalition. Now that he is running for a place in history--rather than a presidency--Bush would do well to revise this motto. His second term will be far more successful if he can recognize the importance of securing support among traditional U.S. allies before embarking on missions abroad.

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  • William Drozdiak is the new President of the American Council on Germany in New York City. Previously, he was Executive Director of the German Marshall Fund's Transatlantic Center in Brussels.
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