The United States and Europe: Possible Options for U.S. Policy

CRS Report for Congress
The United States and Europe:
Possible Options for U.S. Policy
Updated January 23, 2006
Kristin Archick
Specialist in European Affairs
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

The United States and Europe:
Possible Options for U.S. Policy
Summary
The United States and Europe share a long and intertwined history, replete with
many ups and downs. The modern transatlantic relationship was forged in the
aftermath of World War II to deter the Soviet threat and to promote security and
stability in Europe. NATO and the European Union (EU), the latest stage in a
process of European integration begun in the 1950s, are the two key pillars upon
which the U.S.-European partnership still rests. The U.S. Congress and successive
U.S. administrations have supported both organizations as means to nourish
democracy, foster reliable military allies, and create strong trading partners.
Despite the changed European security environment since the end of the Cold
War and current transatlantic frictions, many observers stress that the security and
prosperity of the United States and Europe remain inextricably linked. Both sides of
the Atlantic continue to face a common set of challenges — from countering
terrorism and weapons proliferation to ensuring the stability of the global financial
markets — and have few other comparable partners. The United States and the EU
also share the largest trade and investment relationship in the world; annual two-way
flows of goods, services, and foreign direct investment exceed $1.1 trillion, while the
total stock of two-way direct investment is over $1.6 trillion.
Nevertheless, the transatlantic partnership has been fundamentally challenged
in recent years as numerous trade and foreign policy conflicts have emerged. The
crisis over Iraq is most notable, but the list of disagreements is wide and varied. It
includes the Israeli-Palestinian conflict, the EU arms embargo on China, the role of
multilateral institutions and the use of force, the U.S. treatment of prisoners in Iraq
and at Guantánamo Bay, aircraft subsidies, and trade in genetically-modified food.
These disputes have been driven partly by leadership frictions and European
perceptions of U.S. unilateralism, and partly by structural issues — different policy
preferences for managing threats, the U.S.-European defense capabilities gap, and the
EU’s political evolution — set in motion by the end of the Cold War and September
11. These factors are also prompting some Americans and Europeans to question
whether the two sides of the Atlantic still share the same values and interests, and
whether enough commonality remains to make the partnership work.
This report assesses the present state of the U.S.-European relationship and the
reasons for current frictions. To stimulate debate and for the purposes of analysis,
it also offers a spectrum of possible options for U.S. policymakers in considering the
future shape of the political and strategic dimensions of the transatlantic partnership.
These selected options should be viewed as illustrative guideposts, however, rather
than definitive, exhaustive predictions or stark choices. This report will be updated
as needed. For additional information, see CRS Report RL32342, NATO and the
European Union, by Kristin Archick and Paul Gallis; CRS Report RS21372, The
European Union: Questions and Answers, by Kristin Archick; CRS Report RS21864,
The NATO Summit at Istanbul, 2004, by Paul Gallis; and CRS Issue Brief IB10087,
U.S.-European Union Trade Relations: Issues and Policy Challenges, by Raymond
Ahearn.

Contents
In troduction ......................................................1
The Current State of U.S.-European Relations...........................3
The Ties that Bind.............................................3
U.S.-European Frictions and a Relationship in Flux...................4
Leadership Issues..........................................4
Structural Drivers..........................................7
Diverging Interests and Values?.............................10
The Future of the Transatlantic Partnership: Possible Options for the
United States................................................13
Option #1: De-emphasize Europe................................13
Pros ...................................................14
Cons ...................................................14
Option #2: Maintain the Status Quo..............................15
Pros ...................................................15
Cons ...................................................15
Option #3: Coalitions of the Willing.............................16
Pros ...................................................16
Cons ...................................................16
Option #4: A Division of Labor.................................17
Pros ...................................................18
Cons ...................................................18
Option #5: A New Bargain.....................................19
Pros ...................................................19
Cons ...................................................20
Assessment of Possible Options.................................20
Issues for Congress...............................................21
List of Tables
Appendix A: Membership in NATO and the European Union.............23
Appendix B: Spectrum of Possible Options for U.S. Policy Toward Europe..24

The United States and Europe:
Possible Options for U.S. Policy
Introduction
The United States and Europe share a long and intertwined history.¹ U.S.-
European political, security, and economic relations that today comprise the broad
transatlantic relationship have their modern origins in post-World War II efforts to
deter the Soviet threat and bring security to Europe. NATO, which was created in
1949, and the European Union (EU), the latest stage in a process of European
integration begun officially in 1952, are the two main pillars upon which the
transatlantic relationship still rests. NATO was founded upon a shared commitment
to protect common values of democracy, individual liberty, and the rule of law; in
practice, it sought to do this by providing collective defense against Soviet expansion
through a mutual security guarantee for the United States and its European allies.
The European integration project was meant to promote peace, political stability, and
economic prosperity in Europe by entrenching democratic systems and free markets.
The U.S. Congress and successive U.S. Administrations have strongly supported
both NATO and the EU, believing that both organizations have helped foster
democracy, reliable military allies, and strong trading partners. The United States
also views the Organization for Security and Cooperation in Europe (OSCE) as an
important transatlantic forum for promoting democracy and human rights both in
Europe and in Europe’s wider neighborhood, including Russia, Ukraine, Belarus, and
the countries of the Caucasus and Central Asia. The United States and European
nations also share membership in other major international organizations such as the
World Trade Organization (WTO) and the United Nations.
Since the end of the Cold War, both NATO and the EU have evolved along with
Europe’s changed strategic landscape. While NATO’s collective defense guarantee
remains at the core of the alliance, members have also sought to redefine its mission
as new security challenges have emerged on Europe’s periphery and beyond. At the
same time, EU members have moved beyond economic integration and have taken
steps toward political integration with decisions to develop a common foreign policy
and a defense arm. Both organizations have also enlarged in recent years to
encompass many Central and East European states, bringing the number of NATO
and EU members to 26 and 25 respectively. The United States was a key proponent
of NATO expansion and a firm backer of EU enlargement, viewing these twin efforts

¹ For the purposes of this report, “Europe” is used to encompass European NATO and EU
members — both the traditional West European countries and the new Central and East
European member states — and the Western Balkan states (Albania, Bosnia-Herzegovina,
Croatia, Macedonia, and Serbia-Montenegro) that harbor NATO and EU aspirations.

as serving U.S. interests by consolidating a “Europe whole and free, at peace with
itself and with the world.”
Meanwhile, the U.S.-European economic relationship has continued to grow.
The United States and the EU share the largest trade and investment relationship in
the world. Annual two-way flows of goods, services, and foreign direct investment
exceed $1.1 trillion. The total stock of two-way direct investment is estimated to be
over $1.6 trillion, making this huge investment position perhaps the most significant
aspect of the relationship. Although some prominent U.S.-EU trade disputes exist,
the vast portion of this bilateral economic relationship is harmonious. Some analysts
estimate that trade tensions involve only 1-2% of transatlantic commerce.²
Despite the shared history and close economic ties, the transatlantic partnership
has been fundamentally challenged in recent years. The September 11 terrorist
attacks on the United States prompted an initial display of transatlantic solidarity, but
much of the goodwill has since dissipated as numerous trade and foreign policy
disputes have emerged. The crisis over Iraq is most notable, but the list of
disagreements is wide and varied. Although Europeans are not monolithic in their
views, most states — including those such as the United Kingdom, Spain, Italy, and
Poland that supported the U.S. intervention in Iraq — object to at least some
elements of U.S. policy on a range of issues, including the Israeli-Palestinian conflict,
the treatment of Al Qaeda prisoners at Guantánamo Bay and the U.S. practice of
rendition, missile defense, genetically-modified food, and the U.N. Kyoto Protocol
on climate change. The Bush Administration says it will make mending transatlantic
relations — in both NATO and the EU — a priority in its second term.
Nevertheless, a debate is reemerging in policymaking and academic circles on
the value and purpose of the U.S.-European relationship. While many would argue
that much still binds the two sides of the Atlantic, others worry that the relationship
is in trouble. Some U.S. critics question the extent to which the European allies
share U.S. threat perceptions of the challenges posed by Islamist terrorism or the
proliferation of weapons of mass destruction (WMD). Even if the allies agree on the
necessity of tackling such problems, U.S. and European tactics are often at odds;
European governments remains firmly wedded to managing international crises
through multilateral institutions, while the United States views this approach as only
one option. The Bush Administration and Members of Congress are also concerned
that deficient European military capabilities hinder the allies’ ability to share the
security burden with the United States. Others suggest that U.S. actions in the
prosecution of the war on terrorism and in Iraq have prompted some to question
whether the two sides of the Atlantic still share enough values and interests to make
the transatlantic partnership work. This report assesses the present state of the U.S.-
European relationship and reasons for current frictions, and provides, for the purpose
of analysis, a spectrum of options for U.S. policymakers in considering the future
shape of the political and strategic dimensions of the transatlantic partnership.

² See Dan Hamilton and Joseph Quinlan, Partners in Prosperity: The Changing Geography
of the Transatlantic Economy, Center for Transatlantic Relations, Johns Hopkins University,
2004. Also see, European Commission, “The European Union and the United States: Global
Partners, Global Responsibilities,” June 2004.

The Current State of U.S.-European Relations
The Ties that Bind
Historically, U.S.-European relations have experienced numerous ups and
downs. During the Cold War, even with the unifying pressure of a common military
threat, transatlantic tensions flared from time to time over controversial issues such
as Vietnam and the stationing of U.S. ballistic missiles in Europe. Ineffective and
tentative international responses to the Balkan conflicts in the early 1990s prompted
serious questioning of NATO’s role in the post-Cold War era, and of Europe’s ability
to manage crises on the European continent. Proponents of the alliance have always
stressed, however, the underlying solidity of the transatlantic relationship given its
basis in common values and shared interests. Thus, conventional wisdom dictates
that frictions merely represent disagreements among friends characteristic of U.S.-
European “business as usual.” Many Europeans acknowledge that criticism of U.S.
policies in Iraq and the Middle East has been fierce recently, but claim that they have
only felt free to express their views because U.S.-European relations are so close, and
honesty is a hallmark of true friendship.
Even without the Soviet threat to unite the two sides of the Atlantic, the United
States and its European allies face a common set of challenges — from countering
terrorism and WMD proliferation to ensuring the stability of the global financial
markets — and have few other comparable partners. Supporters of strong
transatlantic ties argue that neither the United States nor Europe can adequately
address such diverse concerns alone and that the track record shows that they can
accomplish much more in the world when they work together rather than at cross
purposes. U.S. and European forces are promoting peace and stability in the Balkans
and Afghanistan. U.S. and European law enforcement authorities have sought to
intensify police and judicial cooperation since September 11 to root out terrorist cells
in Europe and elsewhere. U.S.-European cooperation has also been critical in
making the world trading system more open and efficient.
In addition, proponents stress that the trust and habits of political and military
cooperation that have developed among the allies, and especially within NATO, over
the last 50-plus years are unique in international relations and continue to serve U.S.
interests. NATO’s organizational structure provides a forum in which differences
among allies can be discussed and narrowed. The alliance has also fostered a
beneficial “Atlantic loyalty,” especially in times of extreme adversity, as evidenced
by the invocation of NATO’s Article 5 defense guarantee after September 11.³

³ Some suggest, for example, that European countries contributed military support to the
U.S.-led 1991 Gulf War not because those forces were essential to the operation’s success,
but in order to demonstrate alliance solidarity against a common threat; similarly, they
contend that the U.S. decision in 1995 to deploy ground troops as part of the NATO
peacekeeping force in Bosnia was driven in part by the belief that the United States must
stand firmly with its NATO allies. See David C. Gompert, “America as Partner,” in David
C. Gompert and F. Stephen Larrabee (eds.), America and Europe: A Partnership for a New
Era, Cambridge University Press, 1997.

As noted above, the United States and the EU share a huge and mutually
beneficial economic relationship that is increasingly interdependent. Reports indicate
that the transatlantic economy employs 12 to 14 million workers, and that most U.S.
and European investments flow to each other rather than to lower-wage developing
nations. Europe remains the most important foreign source of global profits for U.S.
companies, accounting for over half of U.S. firms’ total annual foreign profits.
Similarly, the United States is the most important market in terms of earnings for
many European multinationals. Between 1990 and 2000, for example, U.S. affiliate
income of European companies increased from $4.4 billion to nearly $26 billion.
Although transatlantic mergers and acquisitions have slowed since the 2001
economic downturn, the boom of the late 1990s has left European firms more
engaged in the U.S. economy than ever before.⁴ This economic interdependency,
some argue, is a key reason a transatlantic divorce would be impossible.
U.S. and European policymakers are keen to stress that working relations
between U.S. and European officials remain close, and have not been impeded by the
highly charged political confrontations over issues such as Iraq. Some commentators
suggest that without the Soviet threat, European allies feel freer to voice more
robustly their own views; European officials suggest that this simply represents the
transatlantic alliance’s evolution into a more mature, frank, and open relationship.
U.S. officials also note that some bumps in the relationship are to be expected as the
United States and the European allies slowly chart new territory in grappling with
how to address significant challenges outside of Europe. In their view, for the first
time since World War II, a Europe is rising that is increasingly concerned with events
beyond Europe, in part because EU enlargement and the internal stabilization of the
continent are nearly complete. The current difficulties in the transatlantic partnership
are thus just “growing pains” in the relationship that need time to be worked out.⁵
U.S.-European Frictions and a Relationship in Flux
Despite the ties that bind, the events of September 11 and the crisis over Iraq
have helped spark significant changes in the U.S.-European political and strategic
relationship. Some observers argue that the recent U.S.-European frictions are
largely driven by personality differences among U.S. and European leaders. Many
analysts contend, however, that the underlying causes are deeper and structural, and
that September 11 merely kicked into high gear changes that had already been set in
motion by the end of the Cold War and the demise of the Soviet Union a decade
earlier. Such structural changes include different policy preferences, the U.S.-
European defense capabilities gap, and Europe’s ongoing but unfinished integration.
Others ponder whether U.S. and European interests and values have diverged to such
an extent as to call into question whether sufficient commonality still exists to make
the broad transatlantic partnership desirable and beneficial for both sides.
Leadership Issues. Numerous observers attribute current transatlantic
tensions to European perceptions of the Bush Administration as inclined toward

⁴ Joseph Quinlan, Drifiting Apart or Growing Together? The Primacy of the Transatlantic
Economy, Center for Transatlantic Relations, Johns Hopkins University, 2003.
⁵ Interviews of U.S., European, and EU officials, Summer 2004.

unilateralism and largely uninterested in Europe. It should be noted, however, that
such European charges of U.S. unilateralism are not completely new. Many
Europeans in the 1990s complained that Congress and the Clinton Administration
often acted unilaterally, citing, for example, the defeat of the Comprehensive Test
Ban Treaty and U.S. sanctions related to Cuba, Iran, and Libya.
Regardless, European governments from the start of the Bush Administration
seized on its rejection of international treaties such as the U.N. Kyoto Protocol and
its decision to proceed with missile defense as evidence of a new, broader U.S.
unilateralism. They were also extremely wary about the new administration’s
commitment to Europe, given that officials during the campaign had questioned the
need to keep U.S. troops in the Balkans and seemed to place greater emphasis on
other regions of the world, such as Asia. The September 2001 terrorist attacks swept
such frictions under the rug for a while as European governments, NATO, and the
EU condemned the attacks and expressed complete solidarity with the United States.
At the same time, the initial U.S. decision to forego using NATO forces, planning,
or logistical resources in the war in Afghanistan began stirring European concerns
about NATO’s relevance to the Bush Administration and U.S. security interests.⁶
In 2002-2003, U.S.-European tensions reemerged on a wide range of trade and
foreign policy issues. U.S. moves in the first half of 2002 such as rejecting the
International Criminal Court and seeking to exempt U.S. soldiers from its
jurisdiction, as well as imposing steel tariffs, reignited European concerns that the
Bush Administration was not interested in working with its long-time allies. Perhaps
most unsettling for many Europeans was the emergence in early 2002 of a
confrontational U.S. policy toward Iraq, which culminated in the U.S.-led decision
to go to war against Saddam Hussein in March 2003. Many Europeans perceived the
United States as acting with little regard for the views of the international community
and without much concern for the need to gain U.N. approval for the use of force.
As a result of Europe’s own bloody history, European allies place great emphasis on
multilateral institutions as a means for managing international crises and legitimizing
the use of force. This is as true for the UK and other European countries that
ultimately supported the U.S.-led intervention in Iraq as it is for France, Germany,
and others that opposed U.S. policy.
By 2004, critics of the Bush Administration began to contend that the U.S.
intervention in Iraq and its aftermath were seriously damaging U.S. credibility
abroad, including in Europe. The Abu Ghraib prison scandal stunned and dismayed
the European allies. Many Europeans viewed the actions of U.S. soldiers at Abu
Ghraib as following directly from U.S. policies in the war on terrorism, such as
detaining suspected Al Qaeda terrorists at Guantánamo Bay. Some charged that
these actions violated human rights and sacrificed the long-term battle for Muslim
“hearts and minds.” Opinion polls in Europe indicate declining trust in U.S.
leadership. One poll found that an average of 58% of Europeans in nine countries
believe that strong U.S. leadership in world affairs is undesirable.⁷ And critics assert

⁶ See James Kitfield, “Pox Americana?,” National Journal, April 6, 2002.
⁷ See Transatlantic Trends 2004 [http://www.transatlantictrends.org], a project of the
(continued...)

that this loss of trust and credibility has made many European allies even less
inclined to shoulder a bigger financial or security role in Iraq.
Some Europeans charge that the Bush Administration’s pursuit of its goals in
Iraq damaged not only the credibility of the United Nations, but also of NATO. They
assert that U.S. pressure in early 2003 to deploy NATO military assets to help Turkey
defend itself against a possible attack from Iraq forced an unseemly public
confrontation within the alliance. Many Europeans also worried that the Bush
Administration was keen to keep Europe weak and divided. They feared that U.S.
Secretary of Defense Rumsfeld’s statement shortly before the U.S. invasion of Iraq
that divided Europe into “old” (countries that opposed the invasion) and “new” (those
countries, especially in Central and Eastern Europe, that supported it) signaled an
unofficial shift in U.S. policy away from continued support for further European
integration. Most European allies, including those included in the “new” category,
such as Poland, were critical of Rumsfeld’s comments because they object to any
division of the continent and support building “a Europe whole and free.”
At the same time, many analysts also blame some European leaders,
particularly French President Jacques Chirac and then-German Chancellor Gerhard
Schroeder, for contributing to the breakdown in transatlantic relations. Chirac has
long espoused the concept of “multipolarity” in international affairs, but some Bush
Administration officials have interpreted this concept as a means to thwart U.S.
predominance. Many viewed Chirac’s opposition to the war in Iraq as an attempt to
constrain U.S. power and influence in spite of the threat posed by Saddam Hussein.⁸
Relations between President Bush and Chancellor Schroeder over Iraq soured in
September 2002 when Schroeder began condemning U.S. Iraq policy to bolster his
re-election campaign. Many observers maintain that both Chirac and Schroeder
expressed their opposition to the war in Iraq in an undiplomatic and irresponsible
way, without due consideration of the implications for the broader transatlantic
partnership. They note that the failure of France and Germany (and Belgium) to
clearly and quickly support their fellow NATO ally Turkey as the conflict with Iraq
loomed left a damaging impression of allies unwilling to stand together in a time of
need, and has caused some in Washington to lose confidence in NATO.⁹
Europeans have welcomed the Bush Administration’s efforts in its second term
to improve U.S.-European relations and responded positively to the European trips
in February 2005 by President Bush and Secretary of State Condoleezza Rice. Many
believe they have gone a long way toward improving the atmospherics of the
relationship, but transatlantic tensions have not disappeared,and resolving differences

⁷ (...continued)
German Marshall Fund of the United States and Compagnia di San Paolo. This survey was
conducted in June 2004. Of those countries surveyed, for example, 73% in France, 60% in
Germany, 56% in Italy, 47% in Poland, and 37% in the UK viewed U.S. leadership as
somewhat or very undesirable.
⁸ For more information, see CRS Report RL32464, France: Factors Shaping Foreign
Policy, and Issues in U.S.-French Relations, by Paul Gallis.
⁹ Philip H. Gordon, “The Crisis in the Alliance,” Iraq Memo #11, The Brookings Institution,
February 24, 2003.

will require a sustained political commitment from both sides. Some observers note
that President Bush’s visit to the EU’s institutions while in Brussels in February 2005
and his statement in support of EU integration have helped alleviate some European
anxieties stemming from Secretary Rumsfeld’s comments about “old” and “new”
Europe. Many point to the recent U.S.-EU cooperation to curb Iran’s nuclear
ambitions as a tangible positive development that demonstrates the value of the
transatlantic partnership. Nevertheless, others point out that many Europeans still
remain skeptical about the degree to which the Bush Administration views its
European allies and friends as full partners.
Structural Drivers. Many analysts argue that the reasons for current U.S.-
European frictions are largely structural, stemming from the end of the Cold War and
exacerbated by September 11 and its aftermath. In this view, recent tensions are to
some degree inevitable, and go beyond individual leaders and their personal styles.
One key structural change often cited relates to alterations in the U.S. security
outlook since September 11. Some observers note that diverging U.S.-European
threat perceptions are not new, and have been emerging since the end of the Cold
War. Throughout the 1990s, U.S. policymakers often complained that Europe was
preoccupied with its own internal transformation, and largely blind to the new global
threats. However, the September 11 attacks on New York, Washington, and over
Pennsylvania, as well as the still unsolved anthrax attacks of October 2001, had a
profound effect on America’s national psyche, and further widened the gap in U.S.-
European threat perceptions and policy preferences for managing those threats.
Many in Europe have been slow to understand that many U.S. actions in the
“war” on terrorism are driven by the conclusion that nothing should be left to chance,
especially with regard to the possibility of terrorists acquiring WMD. The Bush
Administration’s promotion of “pre-emptive action” in the face of security threats has
been a source of great concern for European allies and partners, especially if
undertaken without U.N. authorization. Some claim this is in part because European
publics do not feel the same sense of urgency regarding the terrorist threat — even
after the terrorist attacks in Madrid in March 2004 and in London in July 2005 — and
in part because most European governments continue to view combating terrorism
primarily as an issue for law enforcement and “soft power” diplomatic and economic
tools. In the post-September 11 world, however, the United States is likely to be
much more activist in confronting potential threats and more inclined to view
multilateral efforts to tackle such problems as only one option, regardless of who
controls the White House. Europeans, for example, took note of Democratic
presidential candidate Senator John Kerry’s statement at his party’s convention in
July 2004 that he “would never give any nation or international institution a veto over
our national security.”¹⁰

¹⁰ For the text of Senator John Kerry’s speech to the 2004 Democratic National Convention,
see [http://www.johnkerry.com/pressroom/speeches/spc_2004_0729.html]. For European
reactions, see Richard Bernstein, “Europeans Mostly Rally to Kerry, But With Few
Illusions,” New York Times, August 1, 2004.

U.S. analyst Robert Kagan attributes the difference in U.S. and European
approaches to managing threats and using force to a “power problem.” In his view,
Europe emphasizes multilateral institutions, diplomatic pressure, and foreign aid as
the best tools to manage crises because most European countries, with the possible
exceptions of the UK and France, lack the military capabilities necessary to project
and sustain power, especially outside of Europe. Kagan asserts that Europe’s military
weakness has produced a “European interest in inhabiting a world where strength
doesn’t matter, where international law and international institutions predominate.”¹¹
Most Europeans reject Kagan’s thesis, arguing that they are not pacifists, and
citing their roles in the 1999 NATO-led war in Kosovo and their presence in
Afghanistan. They acknowledge, however, the need to improve their military
capabilities in order to better ensure their own security and to enable European forces
to continue to operate with U.S. forces. But many experts assert that overall levels
of European defense spending remain insufficient, and skeptics say that European
promises to spend existing defense resources more wisely have failed to materialize
in any substantial way. Thus, the U.S.-European capabilities gap will remain a
source of contention in the transatlantic alliance, especially given that U.S. attention
for the foreseeable future will likely be focused on threats well beyond Europe.
Some assert that Washington will increasingly measure Europe’s “value added” in
the years ahead by how willing and able the European allies are to help the United
States manage the security burden not only within, but also outside of Europe.¹²
Another major structural factor affecting U.S.-European relations is the
European Union’s ongoing evolution. Since the end of the Cold War, the EU has
pursued further integration through both widening and deepening. On May 1, 2004,
the EU welcomed 10 new members, mostly from Central and Eastern Europe.¹³ At
the same time, EU members over the last decade have taken steps to enhance their
economic integration. Twelve EU members have adopted a single European
currency, the euro, and the 10 new members are committed to doing so in the future.
Perhaps most important to the future shape of the U.S.-European strategic
partnership are EU efforts to build a Common Foreign and Security Policy (CFSP),
backed up by an EU defense arm capable of managing a full spectrum of crisis
management tasks. These EU initiatives have come further and faster in recent years
than many EU skeptics expected, but both remain works in progress. The EU has
established new political and defense decision-making bodies, and has succeeded in
forging consensus on common policies related to the Balkans, the Middle East peace

¹¹ Robert Kagan, “Power and Weakness,” Policy Review, June-July 2002. Also see Robert
Kagan, Of Paradise and Power, Alfred A. Knopf Publishers, 2003.
¹² Successive U.S. Administrations and Members of Congress have been pushing the
European allies since at least the mid-1990s to look beyond Europe. For example, Congress
passed the Kyl amendment to the 1998 protocol amending the North Atlantic treaty to
include three new members. The Kyl amendment reflected the view that the allies should
support U.S.-led operations distant from Europe to help combat terrorism and WMD
proliferation. For more information, see CRS Report RL32342, NATO and the European
Union, by Kristin Archick and Paul Gallis.
¹³ See CRS Report RS21344, European Union Enlargement, by Kristin Archick.

process, Iran, and Colombia, to name a few. In December 2003, the EU released its
first-ever security strategy, which outlines common threats and policy responses.
Critics suggest, however, that the EU is still far from speaking with one voice on
contentious foreign policy issues, such as Iraq, because of competing national
interests, sovereignty concerns, and different foreign policy preferences. They also
note that efforts to improve EU military capabilities have lagged behind, and they
doubt that current European defense budgets are sufficient to fund all of the EU
defense arm’s requirements.
Nevertheless, EU efforts to develop CFSP are contributing to current U.S.-
European strains. Some see the emergence of an EU “strategic personality” — a
specifically European way of interpreting and acting upon perceived threats and
foreign policy opportunities that stresses diplomacy and multilateral solutions — as
diverging from the U.S. strategic position and outlook, which places greater emphasis
on the use of force and decisive action.¹⁴ As the EU’s “strategic personality”
continues to strengthen, EU member states are increasingly and reflexively assessing
major foreign policy decisions from a European perspective, i.e., with an eye toward
meeting European strategic goals and establishing a larger role for Europe on the
world stage. EU members consult with each other on foreign policy concerns to a
greater degree than ever before, and often before consulting with Washington. As
a result, Washington does not hold quite the same influence over the European allies
as it once did, and EU member states are quicker to challenge U.S. policies with
which they do not agree.
Some analysts also suggest that the EU’s progress to date on CFSP, plus the
several small civilian and military crisis management missions the EU has led in the
Balkans, Africa, and elsewhere, have given the organization and its member states
a new self-confidence. This is leading to a more vocal Europe, which is more
assertive about its right to an equal decision-making role in the alliance. Such
demands, however, often frustrate U.S. policymakers, who continue to view Europe’s
aspirations as outpacing Europe’s abilities. As one analyst remarks, “As an
unfinished union of states, Europe now stands as a power in the world, which gives
it a legitimate voice that America must hear more and more clearly than has been the
case to date; but lacking the capabilities required for military action when necessary,
it is not, or not yet, the world power that it claims to be, and the price of consultation
is not always worth the benefits it brings.”¹⁵
Regardless, the EU is likely here to stay as an actor in the foreign policy,
security, and defense field. Some contend that a larger, more united, and more
confident EU may seek to rival the United States and could weaken NATO and the
transatlantic link. The Bush Administration reacted coolly to former German
Chancellor Schroeder’s statements in February 2005 in which he effectively proposed
a stronger role for the EU in transatlantic policy-making. His remarks were
interpreted by many as suggesting that the evolving EU, rather than NATO, should

¹⁴ See Joanna Spear, “The Emergence of a European Strategic Personality,” Arms Control
Today, November 2003.
¹⁵ Simon Serfaty, “A New Deal in U.S.-EU-NATO Relations,” CSIS Initiative for a
Renewed Transatlantic Partnership, July 21, 2004.

be the primary forum for discussions on international security and political issues
such as Iran or China. U.S. officials were concerned that a wide-ranging or formal
strategic dialogue with the EU could ultimately erode NATO, where the United
States has not only a voice but also a vote.
Many experts maintain that most EU members do not support developing the
EU to counterbalance the United States and continue to view NATO as their ultimate
security guarantee. In addition, EU momentum in the foreign policy and defense
fields may be in for a period of stagnation following the rejection in the spring of
2005 by French and Dutch voters of the EU’s constitutional treaty. Some observers
expect EU attention in the near to medium term to be focused on internal reforms
rather than external challenges.
Others argue that a Europe able to “speak with one voice” on foreign and
security policy may be a more credible and reliable partner for the United States in
both maintaining European security and tackling global challenges. During President
Bush’s February 2005 trip to Brussels, he asserted that “the United States wants the
European project to succeed” and that a strong Europe is in U.S. interests.¹⁶ At the
same time, a more unified and self-assured EU may reduce U.S. leverage on
individual member states, thus complicating U.S. efforts to rally support for its
initiatives in NATO or at the United Nations.
To a large extent, however, the EU’s ability to become a stronger security
partner for the United States will depend on the degree to which the EU succeeds in
improving its defense capabilities and whether the operational and institutional links
established between the EU and NATO continue to function smoothly. The EU’s
assumption of NATO’s mission in Bosnia in December 2004 is viewed as an
important test of Europe’s ability to shoulder a greater degree of the security burden.
Moreover, the EU’s future evolution as a foreign policy actor will also depend on
domestic politics in individual member states and the political parties in power. For
example, UK Prime Minister Tony Blair has been instrumental in forging CFSP and
the EU’s defense arm, but a future, euro-skeptic Conservative-led UK government
may attempt to put some brakes on further EU political integration.
Diverging Interests and Values? Common interests and shared values
have always been the cornerstone of the transatlantic partnership. In light of the
numerous disagreements of recent years, some analysts and policymakers on both
sides of the Atlantic increasingly question whether the United States and a more
integrated and assertive Europe continue to share the same interests and values. The
answer, however, depends in part on how interests and values are defined.
On the broadest level, most analysts agree that the United States and its
European allies remain committed to the shared values of democracy, individual
liberty, and free market economies. On a policy level, however, whether the United
States and the allies share common interests and values varies depending on the

¹⁶ See the transcript of the press conference following the meeting of EU heads of state and
government and President Bush, February 22, 2005, available on the EU’s website
[http://europa.eu.int/comm/ press_room/presspacks /us20050222/transcript.pdf].

specific issue in question. On many important issues, such as countering terrrorism
and WMD proliferation, promoting Middle East stability, or fostering more open
global markets, U.S. and European interests are largely the same, even if tactics or
policy preferences diverge. The EU’s new security strategy was welcomed by many
U.S. officials because it seemed to signal a transatlantic consensus on security
threats, even if views on the best means to combat them differed. The EU strategy
cited terrorism, weapons proliferation, regional conflicts, failed states, and organized
crime as key global threats.
Nevertheless, U.S. interests and values do seem to differ on a range of other
issues, including approaches to international legal regimes, environmental standards,
social welfare, and genetically-modified food. The priority that most European
countries place on social spending, for example, is often cited as a primary reason
why European defense budgets remain flat.¹⁷ Many Europeans are increasingly wary
of what they view as a widening transatlantic divide over concepts of justice and U.S.
tendencies toward retribution rather than rehabilitation. Some struggle to understand
the practice of capital punishment in the United States, which they associate with
undemocratic and authoritarian societies.
A current and key distinction between the two sides of the Atlantic relates to the
role of multilateral institutions and the use of force. Some analysts assert that the
different U.S. and European perspectives on these issues only represent different
policy preferences, thereby suggesting that the positions of the two sides of the
Atlantic can be managed by skillful diplomats. Others suggest, however, that the
divide is deeper and goes to each side’s core beliefs and values. They claim that
Europe increasingly views multilateralism not only as a policy preference but as an
interest and value to pursue in and of itself because it represents the best way to
ensure European peace, security, and prosperity. In contrast, a number of experts
assert that the United States harbors a stronger belief in the value of the use of force
as a tool for protecting U.S. interests.
As a result, some question whether the diverging views of the United States and
Europe on the value of international institutions and the appropriate role of the use
of force can be reconciled, and whether the allies can go forward together in tackling
global challenges in a cooperative and determined way. Henry Kissinger observes,
“The most important event in Europe is the progressive erosion of the nation-
state...European diplomats seek to apply their new domestic experience in the
international arena. They insist that resorting to military force is legitimate only if
sanctioned by the U.N. Security Council.... By contrast, America remains a
traditional nation-state, insistent on sovereign freedom of action.” He goes on to
assert that the EU’s resistance to the use of force without U.N. authorization deprives
the Atlantic alliance of its “special status” and that “The challenge of Atlantic policy
is whether the nations of the alliance can regain a sense of common destiny.”¹⁸
Human rights, civil liberty, and rule of law issues related to Guantánamo Bay
and Abu Ghraib have also led some Europeans to charge that the United States has

¹⁷ Bruce Stokes, “More Than an Ocean Separates Us,” National Journal, April 6, 2002.
¹⁸ Henry A. Kissinger, “A Global Order in Flux,” Washington Post, July 9, 2004.

lost its moral authority. European officials and parliamentarians have also expressed
concerns about a November 2005 Washington Post report of alleged “secret” CIA
prisons for terrorists in some eastern European countries and the possible use of
European airports as transit points for U.S. flights transporting abducted terrorist
suspects. While some observers argue that such issues do not rise to the level of
threatening the broader transatlantic security and economic relationship, others are
less sanguine. They believe that these issues are feeding the public perception that
the United States and Europe no longer share the same values; in the longer term,
they worry that this perception will cause leaders on both sides of the Atlantic to
question whether the benefits of the alliance outweigh the constraints it imposes.
Many also fear that as such differences proliferate, younger American and European
policymakers, farther removed from World War II and the Cold War, will not share
the same conviction as previous generations about the need for a close and
intertwined political and strategic transatlantic relationship.
Others contend that although Europe may be looking increasingly outward, it
does not share U.S. global concerns to the same extent. The EU is primarily focused
on its own “neighborhood”: the Middle East and North Africa, as well as Russia and
the Caucasus. Developments in Asia, however, remain of lesser concern, in large
part because Europe, unlike the United States, does not have the same military
commitments there. And the rise of China, the stability of the Korean Peninsula, and
India-Pakistan relations may increasingly preoccupy Washington.¹⁹
Some analysts also maintain that Europe remains largely preoccupied with its
own internal transformation, and even though European officials claim to recognize
the increasing threat posed to European societies by Islamist terrorism or WMD, they
still do not perceive the threat to be quite as severe. They believe such notions
contributed, for example, to the French and German assessments that Saddam
Hussein was a threat that could be managed without resort to the use of force, and
extends to some EU members’ strategic myopia with respect to Turkey, and their
qualms about Turkey’s EU aspirations. At the same time, a number of pundits
question the U.S. commitment to Europe, especially in light of Bush Administration
plans to pull up to a third of U.S. troops out of European bases over the next seven
to 10 years. U.S. officials point out, however, that these cuts would be part of a
global military repositioning scheme aimed at increasing U.S. military flexibility and
rapid response capabilities.

¹⁹ Michael Lind, “The Atlantic Is Becoming Even Wider,” Financial Times, Aug. 23, 2004.

The Future of the Transatlantic Partnership:
Possible Options for the United States
The constellation of reasons outlined above for current U.S.-European frictions
and a relationship in flux are also driving the emerging debate on the future of the
transatlantic partnership. The question arises, however, what forces might transform
this theoretical debate into a true policy debate, and prompt serious and sustained
U.S. consideration about reorganizing or reinvigorating the transatlantic relationship.
Some suggest that it may simply be a natural evolution, following from the structural
changes since the end of the Cold War and the events of September 11. Others posit
that much will depend on the perspective and vision of leaders on both sides of the
Atlantic, and the degree to which they are supported by their respective legislatures
and publics in embarking on a new course. The extent to which each side perceives
the need for a new course will also likely depend on future events, in particular, if
another catastrophic terrorist event occurs. For example, some suggest that a terrorist
attack in Europe similar in scale to the 2001 attacks on the United States might
prompt a change in European thinking about the use of force and help bridge certain
transatlantic gaps. Other pundits, including many critics of the Bush Administration,
say a driving force may be the decline in U.S. influence in the world and the growing
realization that the United States cannot manage all aspects of all conflicts alone.
For the purpose of analysis, the following five possible options offer different
scenarios for the future transatlantic partnership; they focus primarily on the political
and strategic dimensions of U.S.-European relations. Despite some trade and
economic frictions, it would be nearly impossible and in neither side’s interest to
actively pursue less robust trade and investment relations. Thus, the options below
touch upon the economic aspects of the partnership only to the extent that they have
implications for transatlantic trade and investment. Additionally, the options are
meant to be illustrative guideposts in considering the future direction of U.S.-
European relations, rather than definitive, exhaustive predictions or stark choices.
They should be viewed along a spectrum; the future transatlantic relationship, in
reality, will likely evolve over time and fall somewhere between any two given
options, or combine different elements from more than one scenario.
Although these selected options are presented as choices for the United States,
the future shape of the U.S.-European relationship is not solely a U.S. decision.
Much will also depend on outside circumstances, European assessments about
Europe’s new strategic reality and the value of its partnership with the United States,
as well as on the EU’s evolution and its future ambitions.
Option #1: De-emphasize Europe
This option essentially represents an end to the political and strategic
transatlantic alliance as it exists today, although the vast trade and investment
relationship would remain intact. Those who support such a political and strategic
distancing do not necessarily advocate a return to American isolationism or a strictly
unilateralist U.S. path. Rather, they claim that U.S. interests would be best served
by concentrating U.S. efforts on developing new strategic partnerships with emerging
powers such as Russia, China, and India that may be more capable and better suited

to help the United States confront the new global challenges of terrorism, weapons
proliferation, and the problems of the greater Middle East. Unlike during the Cold
War, Europe is not the central front of such struggles, but currently still constrains
the U.S. freedom of action at times. Proponents of this option assert that it would not
preclude the United States from working closely with European partners, like the
British, whom they view as sharing U.S. goals and who are able to make serious
military contributions. NATO may even remain as an organization but would
effectively be downgraded into a forum for discussion rather than decision-making.²⁰
Pros. One possible benefit for the United States of this option is that it would
free Washington from transatlantic decision-making constraints. This applies both
to the broad political level and on the NATO military level. Some analysts suggest,
for example, that pressure from the European allies to gain U.N. authorization for the
use of force in Iraq needlessly delayed U.S. intervention there in 2003. In addition,
many U.S. officials are increasingly frustrated with NATO’s cumbersome, often
time-consuming decision-making procedures that require consensus, and are viewed²¹
by some as an impediment to quick action. De-emphasizing the European allies as
the automatic first partner of choice would also allow the United States more latitude
in crafting responses to global trouble spots, and potential partners such as Russia or
China may have fewer qualms about the use of military force. Others suggest that
a U.S. de-emphasis of Europe may force the European allies to take more
responsibility for ensuring their own security and provide the needed impetus for real²²
European defense capability improvements.
Cons. Skeptics argue that the European allies remain the most feasible partners
for the United States in tackling global and regional challenges. The benefits derived
from the alliance’s institutional architecture and the well-honed habits of political
and military cooperation should not be underestimated and cannot necessarily be
duplicated elsewhere, especially with countries that do not share the same U.S.
commitment to freedom, democracy, human rights, and the rule of law.²³ U.S.
alignment with states that are not highly regarded for their respect of human rights
may also further erode U.S. credibility in areas of the world, such as the Middle East,
where it must be reclaimed in order to fulfill U.S. strategic goals. In addition, it is
unclear to what extent countries like Russia or China would be reliable or even
receptive partners. And if such countries were receptive, they would most likely
expect some concessions in return, which could conflict with other U.S. interests.
India, for example, might demand a less robust U.S.-Pakistani relationship, even
though the United States views Pakistan as an important ally in combating Al Qaeda.

²⁰ Elements of the description of Option #1 are drawn from: Thomas Donnelly, “Learning
To Live Without Europe,” American Enterprise Institute, May 2004; and Thomas P.M.
Barnett, “Forget Europe. How About These Allies?,” Washington Post, April 11, 2004.
²¹ Craig Smith, “Debate Over Iraq Raises Fears of a Shrinking Role for NATO,” New York
Times, January 25, 2003.
²² See Christopher Layne, “Death Knell for NATO? The Bush Administration Confronts
the European Security and Defense Policy,” Policy Analysis No. 394, The Cato Institute,
April 4, 2001.
²³ Gompert, Op. Cit.

Furthermore, critics assert that if the United States were to take steps to distance
itself politically and strategically from Europe, this could negatively affect the U.S.-
European economic relationship in the longer term. Over time, a more distant
political relationship could infect the economic partnership with growing distrust,
thereby complicating efforts to resolve U.S.-EU trade disputes, or to sustain U.S.-EU
cooperation in multilateral trade negotiations. Similarly, some fear this option would
also lead to an erosion of close U.S.-European cooperation against terrorism,
especially in terms of intelligence-sharing. This option would also likely encourage
the EU to develop as a political counterweight to the United States.²⁴
Option #2: Maintain the Status Quo
In this option, the United States would continue to “muddle through” with the
European allies and maintain an uneasy, tension-filled partnership. Both sides of the
Atlantic would continue to proclaim rhetorically that the U.S.-European partnership
is irreplaceable, and decision-making by consensus would remain the norm in
NATO. However, disagreements and differences would likely persist.
Pros. By maintaining the essential structures of the Atlantic alliance, this
option hedges against future strategic uncertainties, particularly a resurgent Russia,
and leaves open the possibility of the alliance eventually evolving into a more useful
tool to combat global challenges, thereby relieving the U.S. security burden.
Supporters of preserving the status quo point out that despite the current difficulties,
the transatlantic partnership continues to function, and produces tangible benefits.
For example, NATO has taken over the International Security Assistance Force
(ISAF) in Afghanistan, and has been working to extend ISAF beyond Kabul and
Kunduz to promote stability and reconstruction in other parts of the country. U.S.-
European law enforcement efforts against terrorism have remained robust, despite the
tensions over Iraq. And NATO-EU cooperation is enabling the EU to take on a
bigger role in ensuring peace and security in the Balkans. Maintaining the status quo
would also provide U.S. policymakers time to pursue any changes step-by-step, as
well as time to assess the EU’s development and the degree to which EU member
states are able to bridge the gap between their aspirations and capabilities.²⁵
Cons. Some analysts assert, however, that blindly preserving the status quo
will inevitably waste policymakers’ time and energy as they seek to manage the
constant bickering among the allies. On the U.S. side, this may detract from U.S.
efforts to tackle other, more immediate challenges that threaten U.S. interests. New
disputes could arise at any time that could further destabilize and erode the
relationship. And the effort needed to maintain the status quo may still constrain
U.S. policies as leaders try to accommodate the need within the alliance for²⁶

consensus, or attempt to avoid U.S.-EU policy confrontations.
²⁴ Interviews with U.S. and European officials, Spring-Summer 2004; Oxford Analytica
Brief, “Iraq Trade Fallout,” March 26, 2003.
²⁵ Interviews with U.S. and European officials, Summer 2004; Serfaty, Op. Cit.
²⁶ Layne, Op. Cit.

Option #3: Coalitions of the Willing
The “coalitions of the willing” concept for the transatlantic alliance has been
debated since at least the mid-1990s. The Balkans problem prompted a debate about
the use of NATO for so-called “out of area” or “non-Article 5” operations that were
not of a collective defense nature. Several observers at the time suggested that
decision-making unanimity should not be required for such missions because of the
absence of an overwhelming threat in which the demonstration of alliance solidarity
was crucial. Since then, some argue that even though the alliance has remained
wedded to consensus decision-making, this does not obligate every member state to
contribute militarily to a given NATO operation, and therefore, “coalitions of the
willing” exist in practice.
The Bush Administration has contended that NATO military actions should
mostly be conducted by “coalitions of the willing,” which would enable the United
States to pursue action with those allies that agree upon the threat and have the means
to counter it. Formalizing this option within the alliance may entail changing alliance
decision-making procedures and moving away from the consensus decision-making
principle.²⁷ More broadly for the transatlantic relationship, a “coalitions of the
willing” approach would essentially mean that the United States and its European
partners would cooperate where possible and agree to disagree on contentious issues.
Pros. Proponents believe this concept would help minimize transatlantic
quarrels and free the United States from European constraints on issues upon which
agreement proves elusive. Bitterness would be defused by acknowledging that
differences on certain international problems were irreconciable. Cooperation would
proceed on those challenges in which the United States and the Europeans could
agree on the threats posed and the best ways to address them. On the NATO
decision-making level, this option would allow the United States to avail itself of
European assistance from those allies willing and able to provide it, thereby helping
relieve some U.S. security burdens, although not all. Supporters view it as a more
realistic and effective option, especially given the U.S.-European military capabilities
gap and the lack of significant numbers of rapidly deployable European forces. They
claim it might also give individual European partners more freedom of action to join
with the United States, and as a result, it may weaken the development of an “EU²⁸
caucus” — pre-negotiated, common EU positions — within NATO.
Cons. Skeptics assert that this option on the broader transatlantic partnership
level would not produce a coordinated strategy with which to manage the full
spectrum of global challenges, and could result in allies working at cross-purposes
or feed U.S.-EU rivalry. Furthermore, they claim that this option may be interpreted

²⁷ For a more detailed analysis of this point, see CRS Report RS21510, NATO’s Decision-
Making Procedure, by Paul Gallis.
²⁸ Also see the Prepared Statement of John Hulsman before the House Committee on
International Relations, Europe Subcommittee Hearing, “Renewing the Transatlantic^th^st
Partnership: A View from the United States,” 108 Congress, 1 Session, June 11, 2003; and
the Prepared Statement of William Kristol before the Senate Foreign Relations Committee,^th^st
“NATO Enlargement (#4),” 108 Congress, 1 Session, April 8, 2003.

by European allies as a U.S. attempt to keep Europe weak and divided because the
United States would invariably try to sway certain EU member states to its point of
view. Some observers assert that this is exactly what happened with the Iraq issue,
which split EU member states between those that supported Washington’s approach
and those that opposed it, and was one reason why the transatlantic dispute over Iraq
was so divisive. In this view, pursuing “coalitions of the willing” could increase
rather than decrease transatlantic tensions.²⁹
On the NATO level, U.S. critics and many Europeans believe that this option
would essentially signal the end of the alliance’s consensus decision-making
approach. This, in turn, would undermine alliance solidarity by weakening the long-
held principle that all members have an equal stake in alliance security, and that the
sum of the alliance is greater than its parts. In this view, alliance consensus connotes
a certain international “legitimization” of a policy, especially if it involves the use of
military force. Over the longer term, they worry it could weaken the transatlantic link
and decouple North American and European security. In addition, the “coalitions of
the willing” approach may not give the European allies sufficient incentives to
significantly improve their defense capabilities because they would be reluctant to
be viewed as a “toolbox” that the United States uses as it pleases.
Option #4: A Division of Labor
Like the “coalitions of the willing” concept, this option has been the subject of
considerable debate on both sides of the Atlantic for some time. This option focuses
mostly on the military/security dimensions of the transatlantic relationship. Several
variations exist, although most put the NATO-EU relationship at the core of any
transatlantic division of labor. Some analysts have proposed a division based largely
on geography: the European allies and/or the EU would essentially bear the primary
burden for maintaining security within Europe and on its periphery, including in the
Balkans, and perhaps for managing small crises in the Maghreb or in Africa;
meanwhile, the United States would assume responsibility for handling international
crises elsewhere in the world, especially in the Persian Gulf and in Asia. In such a
geographic division, Europe would most likely desire, and the United States would
most likely insist on, joint responsibility within the NATO context for managing
crises involving Russia and the Caucasus.
The difficulties in drawing such stark geographic dividing lines, however, have
led many to favor instead a functional division. The European allies and/or the EU
would concentrate on “lower end” humanitarian assistance, crisis management, and
civilian reconstruction tasks, while the United States and perhaps more capable allies
such as the UK and France would undertake “higher end” combat activities and peace
enforcement operations. Additional permutations of the division of labor approach
that combine different geographic and functional elements may also be found in the
security literature. For example, one analyst has proposed a construction in which
the Europeans prepare to undertake stability operations on their own primarily in or

²⁹ Ronald Asmus, “Rebuilding the Atlantic Alliance,” Foreign Affairs, September/October

2003; Henry Chu, “Europe Is Taking a Prewar Hit,” Los Angeles Times, February 19, 2003.

near Europe, but would also develop the capacity to participate in higher-intensity
conflicts anywhere in the world with the United States.³⁰
Pros. Supporters argue that a functional division of labor already exists in
practice. To a large extent, U.S. forces have been assuming the bulk of higher-end,
war-fighting tasks. EU military missions to date have focused on lower-end stability
and humanitarian operations. Moreover, the EU is much better equipped, given its
full range of political and economic tools, to undertake peacekeeping and
reconstruction tasks than is the U.S. military. By acknowledging that the United
States and Europe have different strengths, this option would make better use of these
comparative advantages in a more coordinated strategy. Proponents claim that this
is the most feasible option because it would increase European burden-sharing while
lowering unreal U.S. expectations for significant European military capability
improvements, especially given the dim prospects for any substantial near-term
increases in European defense budgets and the already wide U.S.-European capability
gap. Reducing U.S. expectations of EU capabilities, particularly for high-intensity
conflicts, might also remove a continuous source of U.S.-European friction.
Moreover, this option would preserve the transatlantic partnership. NATO would
likely remain intact, serving as a continued symbol of alliance solidarity and also as
an “insurance policy” for Europe; NATO could also be used to manage the division
of labor between the European allies and/or the EU and the United States.
Cons. Rather than increasing burden-sharing between the two sides of the
Atlantic, critics argue that a functional division of labor would institutionalize
inequality because American forces would be left with the much more dangerous and
difficult military tasks. They worry it would ultimately undermine alliance solidarity
as U.S. soldiers were repeatedly put in harm’s way, while European forces handled
the relatively easier and less conflict-intense tasks associated with peace stabilization
and reconstruction. Furthermore, this option would likely do little to encourage the
allies to enhance their defense capabilities. If a geographic division of labor were
pursued, in which Europe had primary responsibility for maintaining its own security,
opponents say this would only serve to reinforce European inwardness and encourage
an abdication of European responsibility for global security. Finally, critics assert
that a U.S.-European military division of labor, be it geographical or functional, does
not provide a coordinated strategy to manage global problems. In their view, it
would do little to bridge the political and policy gaps between the two sides of the
Atlantic on a range of issues, such as the Middle East peace process or Iran, nor
would it adequately address U.S.-European differences over the use of force.

³⁰ See Ralph Thiele, “Projecting European Power: A European View,” in Esther Brimmer
(ed.), The EU’s Search for a Strategic Role, Center for Transatlantic Relations, Johns
Hopkins University, 2002. Elements of the description of Option #4 are also drawn from:
Bruno Tertrais, “ESDP and Global Security Challenges: Will There Be a Division of Labor
Between Europe and the United States?,” in Brimmer, Op. Cit.; and Peter Rudolf, “U.S.
Leadership and the Reform of Western Security Institutions: NATO Enlargement and
ESDP,” in Bernhard May and Michaela Hoenicke Moore (eds.), The Uncertain Superpower,
German Council on Foreign Relations, 2003.

Option #5: A New Bargain
As with the previous two options, devising a new strategic bargain for the
transatlantic relationship has been proposed by committed Atlanticists for many
years. Initially, such proposals were made as ways to keep the alliance, and
especially NATO, “in business” in light of the demise of the Soviet threat. With the
reemergence of serious U.S.-European frictions, many variations of this option have
been offered recently to help put the relationship on a better footing. Most of these
proposals place the NATO-EU relationship at the core of a renegotiated partnership,
and advocate a more equal sharing of responsibilities both within and outside of
Europe. Other common elements often include a U.S. commitment to a strong and
coherent Europe and a European commitment to building the EU as a partner rather
than a rival to the United States; a U.S. pledge to give the European allies a larger
decision-making role, in exchange for a European pledge to do more to help ensure
peace and security beyond Europe’s borders; and an increased European
understanding that multilateral solutions often require the credible threat of force, in
exchange for U.S. recognition of the benefits that multilateralism may bring in terms
of helping to “legitimize” U.S. policies internationally.
Politically, for a new bargain to work, advocates believe that new U.S.-
European deals, or at least some sort of accommodation, would have to be struck on
a host of contentious issues, including, for example: Iraq; the Israeli-Palestinian
conflict; efforts to curb radical Islam and transform the broader Middle East; Iran;
and the status of a number of international treaties such as the U.N. Kyoto Protocol
and the International Criminal Court. Militarily, in order to promote a fuller sharing
of tasks and responsibilities, many believe that a new bargain must also include
enhanced European defense capabilities, especially for higher-end tasks, and greater
U.S. recognition that crisis management and post-conflict reconstruction skills are
equally important. One analyst sums up his view of a new transatlantic security deal
as one “in which Americans learn to peacekeep and Europeans re-equip to fight.”³¹
An extremely ambitious “new bargain” could also seek to set up new institutional
arrangements for the transatlantic commercial relationship. Some U.S. and European
officials might support creating a Transatlantic Free Trade Agreement to both contain
trade disputes and bolster U.S.-European political cooperation.
Pros. Supporters assert that this option would help ensure a stronger and
deeper transatlantic partnership that would better serve U.S. global political and
security interests, and protect ongoing close U.S.-European economic relations.
Establishing the parameters of such a new bargain would likely entail a
comprehensive U.S.-European strategic dialogue, which would help guarantee
greater complementarity, if not commonality, of policies and decrease transatlantic
frictions. Proponents believe this option would promote more equitable burden-

³¹ This quote is taken from Julian Lindley-French, “The Ties That Bind,” NATO Review,
Autumn 2003. Elements of the description of Option #5 are drawn from various sources,
including Philip H. Gordon, “Letter to Europe,” Prospect, July 2004; Serfaty, Op. Cit.;
Asmus, Op. Cit.; Prepared Statement of Daniel Hamilton before the House Committee on
International Relations, Europe Subcommittee Hearing, “Renewing the Transatlantic^th^st
Partnership: A View from the United States,” 108 Congress, 1 Session, June 11, 2003.

sharing, encourage the European allies to build more robust military capabilities, and
discourage the development of U.S.-EU rivalry. They claim that the European allies
would not be required to match U.S. military capabilities exactly — which is viewed
as an increasingly impossible task — but the allies need to be able to do more, both
on their own and with U.S. forces.
Cons. Critics are skeptical about the realistic prospects for reaching a U.S.-
European political agreement on such a new bargain, and about the degree to which
it could be implemented in practice. This option would likely require the United
States to relinquish some decision-making authority within the alliance; furthermore,
it would also probably require certain U.S. compromises on issues of particular
importance to Europe, such as climate change or international law, and a U.S. re-
commitment to the pursuit of multilateral solutions and international institutions.
Some analysts doubt, however, that the United States would be rewarded for such
concessions that could constrain U.S. policies and slow decision-making given that,
in their view, Europe will remain unable to squeeze more money for defense out of
already-strapped European budgets. They also note that the EU may be skeptical that
the United States would keep up its side of the bargain, and could view it as a U.S.
scheme to keep EU ambitions on a tight leash. Others note that the chances of
reaching an accommodation with “Europe” on issues such as Iraq would be
complicated because differences still exist within the EU and among European allies.
Assessment of Possible Options
As noted earlier, the options discussed are illustrative guideposts meant to
facilitate consideration of the future shape of the transatlantic relationship. Each
potential option contains both pitfalls and promises for the United States. However,
the bulk of the analysis suggests that maintaining the U.S.-European political and
strategic relationship in some form would continue to offer the United States certain
tangible benefits and serve to buttress at least some U.S. foreign and economic
policies. All of the options, with the possible exception of maintaining the status
quo, would require serious and sustained U.S.-European dialogue and consultation;
this would also be true for “de-emphasizing Europe” in order to insulate the trade and
investment relationship from being negatively affected by any political distancing.
The reality of the future shape of the transatlantic relationship may be most
likely to surface somewhere between any of the two given options and combine
different elements. For example, the multitude of security challenges facing both the
United States and Europe argue that neither side can do all, and that there is bound
to be some sort of division of labor, especially given current differences in U.S. and
European military strengths. At the same time, politics and ambitions on both sides
of the Atlantic impede a stark division of labor because neither the United States nor
Europe would want to relinquish segments of its security interests to the other.³²
Thus, these factors could prompt a new bargain to be reached at the political level —
entailing perhaps a statement of U.S.-European solidarity in confronting global and
regional challenges, and an elaboration of joint policies to address issues such as Iran
or the Middle East peace process — while a division of labor is practiced and

³² See Tertrais, Op. Cit.

managed on a case-by-case basis as the need for a specific mission arises. It is also
possible that any given option may evolve over time, or that different options may
be possible or suitable depending on the specific issue facing the alliance.
Issues for Congress
U.S.-European security and economic relations represent areas of long-standing
congressional interest. Many Members of Congress share the overarching goal of
successive Administrations of a “Europe whole and free.” Traditional congressional
concerns have focused mostly on the degree to which the European allies are willing
and able to share the security burden with the United States. Members of Congress
have strongly supported the two most recent rounds of NATO enlargement in 1998
and 2003 as a means to promote European stability and bolster democracy in Central
and Eastern Europe; they also welcomed the EU’s enlargement on May 1, 2004.
Congress has been actively engaged in the evolving NATO-EU relationship, and has
supported EU ambitions to build a defense arm as a way to improve European
defense capabilities, provided that the EU project remains tied to NATO. Members
of Congress have also encouraged EU efforts to enhance its counterterrorism
capabilities and to improve cooperation in the police and judicial fields with the
United States since September 11. Issues in the U.S.-EU trade and investment
relationship — such as aircraft subsidies, genetically-modified food products, the
EU’s Common Agricultural Policy (CAP), e-commerce and data privacy, and
harmonizing regulatory and competition policies — also frequently occupy the
attention of U.S. lawmakers.
In the aftermath of the transatlantic crisis over Iraq, some Members have also
taken an interest in the broader shape of the future transatlantic relationship.
Hearings on this issue were held in 2003, 2004, and most recently in February 2005.³³
On November 5, 2003, the House passed H.Res.390 (introduced by Representative
Doug Bereuter, October 2, 2003) recognizing the continued importance of the
transatlantic relationship and reaffirming the need for a continued and meaningful
dialogue between the United States and Europe; on May 11, 2004, the House passed
H.Res.577 (introduced by Representative Doug Bereuter, March 25, 2004)
celebrating the 50^th anniversary of U.S.-EU relations and encouraging enhanced U.S.-
EU strategic discussions and international cooperation.
In considering any significant reorganization of the transatlantic relationship,
ensuring continued and close U.S.-European economic relations and counterterrorism

³³ See House International Relations Committee, Subcommittee on Europe and Emerging
Threats, “An Overview of Transatlantic Relations Prior to President Bush’s Visit To^th
Europe,” 109 Congress, 1st Session, February 16, 2005; House International Relations
Committee, Europe Subcommittee, “Transatlantic Relations: A Post-Summit Assessment,”^th^nd
108 Congress, 2 Session, July 15, 2004; also see two companion hearings: House
International Relations Committee, Europe Subcommittee, “Renewing the Transatlantic^th^st
Partnership: A View from the United States,” 108 Congress, 1 Session, June 11, 2003; and
House International Relations Committee, Europe Subcommittee, “Renewing the^th^st
Transatlantic Partnership: A View from Europe,” 108 Congress, 1 Session, June 17, 2003.

cooperation would likely be two areas of concern for Congress. Members would also
likely want assurances that any efforts to enhance the transatlantic partnership,
especially those that may entail U.S. political compromises, would result in more
robust European military capabilities and a strengthened European commitment to
work with the United States to tackle global challenges. Many Members, in any
“new bargain” approach, may desire a European recognition that a transatlantic
“consensus” provides sufficient “legitimization” and a U.N. mandate should not be
a prerequisite for action; Congress would probably resist any efforts to make U.S.
soldiers subject to the International Criminal Court’s proceedings.
Members of Congress could play a role in shaping the transatlantic debate over
the future of U.S.-European relations through discussions with European counterparts
in the existing NATO Parliamentary Assembly, the OSCE Parliamentary Assembly,
and the U.S. Congress-European Parliament Transatlantic Legislator’s Dialogue
(TLD). On February 9, 2005, Representative Jo Ann Davis introduced H.Res. 77
recognizing the 10^th anniversary of the New Transatlantic Agenda, acknowledging
the continued importance or the transatlantic partnership, and promoting new
initiatives to strengthen the partnership, including by enhancing the dialogue between
the U.S. Congress and the European Parliament through the TLD. In May 2005,
Members of Congress established a Congressional Caucus on the EU to promote a
better understanding of the EU and increase dialogue and other exchanges with a
wide range of EU officials. On June 20, 2005, Senator Robert Bennett introduced
S.Res. 178 on the occasion of the U.S.-EU summit highlighting the importance of
U.S.-EU cooperation and calling for expanded political and security dialogue
between the Congress, the European Parliament, and the EU more broadly; S.Res.

178 passed the Senate on the same day by unanimous consent.

In addition, several congressional caucuses focus on bilateral U.S.-European
relations and different aspects of the broader transatlantic relationship; examples
include the Congressional French Caucus, the Congressional Caucus on Central and
Eastern Europe, and the Congressional Caucus on Turkey and Turkish Americans.
Members of the U.S. Senate and House of Representatives are also active on the
Commission on Security and Cooperation in Europe that monitors and encourages
compliance with OSCE political and human rights commitments. Such forums may
provide useful opportunities for enhancing transatlantic dialogue on where the U.S.-
European relationship stands, in what ways U.S.-European interests coincide or
diverge, and what direction should be pursued in the future in order to continue to
promote security and prosperity on both sides of the Atlantic.

Appendix A:
Membership in NATO and the European Union
CountryNATOEU
Austriax
Belgiumxx
Bulgariax
Canadax
Cyprusx
Czech Republicxx
Denmarkxx
Estoniaxx
Finlandx
Francexx
Germanyxx
Greecexx
Hungaryxx
Icelandx
Irelandx
Italyxx
Latviaxx
Lithuaniaxx
Luxembourgxx
Maltax
Netherlandsxx
Norwayx
Polandxx
Portugalxx
Romaniax
Slovakiaxx
Sloveniaxx
Spainxx
Swedenx
Turkeyx
United Kingdomxx
United Statesx

CRS-24
Appendix B: Spectrum of Possible Options for U.S. Policy Toward Europe
De-emphasize EuropeStatus quo Coalitions of the WillingDivision of LaborNew Bargain
End to the strategicºContinue to “muddleºCooperate where possible,ºMake use of comparativeºRenegotiated political and
ethrough”agree to disagree where notadvantages in thestrategic relationship
ºMaintain uneasyºWithin NATO, may entailmilitary/security sphereºAlliance essentially “goes
Build strategicrelationsa change in alliance decision-ºNATO-EU relations at coreglobal”
making, away fromºGeographic/functionalºFull sharing of tasks and
le new globalconsensusvariationsdecision-making
es responsibilities
ºNATO-EU at core
Pros: Pros: Pros: Pros:
rees US from alliance+ Hedges against future+ Minimizes quarrels and+ Makes greater use of current+ Promotes complementary
making constraintsuncertaintiesfrees U.S. action on issues onEuropean capabilities, especiallypolicies because would entail
ⁱ^{ki/CRS-RL32577}e rising powers may+ Protects areas ofwhich do not agreein peacekeeping andcomprehensive dialogue
^g/we fewer qualms aboutongoing cooperation+ Helps manage some crises,reconstruction tasks+ Encourages more equitable
^s^.or force+ Provides time tobut not all+ Increases burden-sharingburden-sharing and enhanced
^le^ak promote better EUconsider future options+ Could weaken the+ Lowers unrealisticEU defense capabilities
and to assess the EU’sdevelopment of an “EUexpectations+ Discourages U.S.-EU rivalry
^://wikidevelopmentcaucus” within NATO
^h^ttp: Cons : Cons : Cons : Cons :
/ human- Constant bickering- No broad or fully- Burden-sharing inequalities- U.S. must relinquish some
hts issueswastes policymakers’coordinated strategy toremaindecision-making authority;
nclear whether risingtime and energymanage global challenges;- Does not encourage Europeanscould also slow decisions
ers reliable or receptive;- New disputes couldmay lead to allies working atto significantly improve their- Unclear to what degree
e, wouldfurther erode relationscross purposesmilitary capabilitiesEuropeans can realistically
ely expect concessions- Could still constrain- Undermines alliance- Undermines alliance solidarityimprove their capabilities given
atively affectU.S. policiessolidarity and threatens toand threatens to weaken relationsflat defense budgets
ic relationsweaken relations in thein the longer term- Unclear whether European
es EU to developlonger term- Does little to bridge broaderpolitical will exists to reach
al to U.S.- May not encouragepolitical/policy gapsaccommodation on contentious
Europeans to improve theirissues, such as Iraq

defense capabilities