President Bush's recent journeys to Europe were bitter-sweet
reminders, if any were needed, of the continued centrality of
transatlantic relations for U.S. interests. Even as the new
administration grapples with the shift of world economic and
political weight to Asia and turns its attention to issues such as
trade in the Americas or the problems of Africa, cooperation with
Europe remains the cornerstone of U.S. international engagement.
Nowhere is the United States enmeshed in a thicker web of
institutional and cultural ties than it is in continental Europe and
the British isles. Whether one speaks of economic stakes, scientific
and technological cooperation, or the bonds of common history and
philosophies of government, it is clear that nothing can diminish
Atlantic relations to a second order concern. In a practical vein,
too, it is difficult to see how the United States can accomplish any
of its international goals--even in Asia--in the absence of
cooperative relations with Europe.

At the same time, however, reactions to Bush by European leaders, the
press and the general public confirm the degree to which Europe,
freed of its Cold War dependence on Washington, feels that it can and
must assert itself in relations with the United States.
"Superpower"--a term rarely used in this context even two years
ago--has become commonplace in discussions of the European Union's
economic and political (if not military) ambitions vis-a-vis
Washington. While political leaders on both sides of the Atlantic
affirm the continued importance of NATO, the Europeans clearly attach
greater long-term significance to the EU, and they suspect Washington
of trying to use the alliance and its enlargement to bolster American
influence on the continent and undercut the relative importance of
the Union.

A central challenge for the United States in coming years will be to
preserve the existing network of transatlantic economic, political,
security and institutional ties even as it adjusts to an enlarged and
more assertive EU. Among other tasks, this will require managing a
complex U.S.-EU economic relationship in which the sheer weight of
cooperative links across the Atlantic intersects with differing
visions of capitalism and approaches to globalization.

Less well recognized, it will also require U.S. policymakers to deal
with the often jarring contrast between the EU's assertive external
posture and its persistent internal divisions. Such divisions are
apparent in the intensifying debate among European politicians about
the "finality" of the integration process, in the Irish electorate's
rejection of the Treaty of Nice, and indeed in the violent anti-EU
demonstrations that increasingly mar the very summits at which
European leaders seek to affirm the continent's unity and resolve
toward the rest of the world. Indeed, it is not too much to say that
the future of U.S.-EU relations depends more on the vicissitudes of
Europe's internal dilemmas than on anything else.

Europe's Internal Dilemmas

In the fifty years since Jean Monnet began the process leading to
today's EU, Europe generally has avoided divisive debate over the
finality of the integration project. The operating principle has been
to sidestep discussion of ultimate goals and to place trust in
process--in building "an ever closer union among the peoples of
Europe." For the most part, however, European leaders shared certain
key assumptions. Although the 1957 Treaty of Rome specified that all
European countries were eligible for membership, the division of
Europe set geographic limits to expansion. The same division meant
that NATO would remain the pre-eminent security organization in
Western Europe. There was also general agreement about the path that
Europe would take toward union. Although Monnet overestimated the
readiness of national governments to cede powers to Brussels, there
was broad support for his "Community method" in which powers would be
transferred gradually to Brussels. With the passing of the Gaullist
challenge under Mitterrand, only the recalcitrant British and the obstinate
Danes seemed to oppose as a matter of principle the creation
of a federal Europe.

Today, all of these assumptions are invalid. Geographic limits to
expansion have all but disappeared. Thirteen countries are formal
candidates for membership, a number that is certain to grow if
Croatia, Serbia and other Balkan states complete their transitions to
democracy. Other countries that have been mentioned as potential
candidates include Ukraine, Moldova, Belarus, Russia, Georgia,
Azerbaijan, and even Israel.

Second, the role of NATO has been transformed. While Europeans
continue to emphasize NATO's enduring role in collective defense, the
Cold War context that made NATO a vital part of European integration
is gone. The alliance can be expanded and modernized as it has been
in recent years, but it never again can be the institutional
embodiment of a benign American presence watching over the building
of a civilian Europe.

Finally, there is no longer basic agreement about the road to "closer
union." For the last fifteen years, Europe has been engaged in an
almost constant process of institutional debate and reform--one that
is set to continue as the member states ratify the Treaty of Nice (a
process complicated by the vote in Ireland) and prepare for an
intergovernmental conference in 2004 that is supposed to establish a
delineation of Union, national and regional powers. Federalists such
as Commission President Romano Prodi continue to call for
strengthening the EU's central institutions and eliminating the
national veto. But the member states, not least France, have largely
rejected this approach. They are looking to arrangements that deliver
the benefits of integration, including greater global influence,
while preserving the nation-state and its autonomy.

The reassertion of member-state autonomy in an enlarging Union is
likely to mean the persistence of two deep-seated structural factors
that characterize the present EU: an extremely uneven political and
legal order that complicates decision-making; and a systemic weakness
in turning agreed Union decisions into concrete policies that are
effective in the member-states.

The distinguishing feature of integration as envisioned by Monnet was
simplicity. The hallmark of today's EU is complexity. Different
decision-making processes are used for trade, monetary affairs,
defense, immigration and other policy areas. Differentiation among
member states, initially introduced to circumvent British
obstructionism, has become a permanent feature of the constitutional
order. Twelve member states have adopted the euro, three have not.
Twelve EU countries participate in the Schengen immigration
arrangements (along with two non-members), three EU members do not.
Eleven EU countries are members of NATO, four are not. Constant
tinkering with the EU institutional order, such as occurred with the
Maastricht, Amsterdam, and Nice treaties, has expanded the scope of
EU policy responsibilities without resolving such fundamental
questions as the sources of EU law or nature of the relationship
between the Union and the citizen.

Moreover, even in those policy areas in which the EU is able to take
clear-cut decisions, it has had increasing difficulty in ensuring
that those decisions are implemented, consistently and evenly, with
respect to the citizens (consumers, businessmen, taxpayers) that
European integration purports to serve. EU legislation generally is
passed in the form of directives addressed to the member states,
which then are required to transpose these directives into national
law. If a member fails to transpose a directive, does so improperly,
or neglects to enforce EU-mandated national law, the Commission is
supposed to begin an enforcement process that can culminate in a case
being brought to the Court of Justice and the imposition of fines. In
many cases this multi-stage process does not work, as can be seen in
reports about lags in the completion of the single market, illegal
state aid to industry, and continued segmentation of national
markets. The Commission lacks the resources to monitor enforcement of
EU law and is in any case often intimidated from doing so by powerful
member-state interests.

In some cases, difficulties with implementing EU law arise because
member states lack the administrative capacity and bureaucratic
traditions needed to enforce the thousands of pages of regulations in
the Union's acquis communautaire. (Indeed, traditionally Euroskeptic
countries such as Britain and Denmark resist expanding EU involvement
in new policy areas not only out of abstract concern for national
sovereignty, but also because they know that EU regulations are
enforced unevenly across the Union and fear that regulations may in
practice apply more stringently to their own firms than to those of
competitors.) In other cases, implementation problems are the result
of outright defiance of EU authority by national governments and
parliaments, usually in deference to domestic political pressures.
This has been the case, for example, with nationally-legislated bans
on genetically-modified organisms that fragment the EU's single
market and with national attempts to block takeovers of domestic
firms by investors from other EU countries.

The EU's problems both with decision-making and implementation are
almost certain to get worse with enlargement. The Treaty of Nice sets
out new procedures for taking decisions in a Union of 27 or more
member states, but there is little reason for confidence that these
complex reforms will succeed. With regard to implementation, new
member states will be granted long transition periods that will
exacerbate the complexity of the legal order. They will have weak
administrative mechanisms, while the sheer size of the enlargement
will strain already inadequate Commission resources dedicated to
enforcement.

None of this is to suggest that the EU is about to collapse or that
it has stopped moving forward. Its ability to progress on an agenda
that includes monetary union, enlargement, building the rapid
response force, and economic reform that finally is producing
respectable growth is rather impressive. This is to suggest that the
finality debate will not produce finality. The EU will continue to
evolve into an increasingly complex hybrid of dispersed and
centralized powers--"a superpower but not a superstate", as Tony
Blair phrased it in his October 2000 Warsaw speech--that will present
an array of challenges for U.S. policy.

The External Dimension

In viewing the EU's constitutional travails, some U.S. commentators
have expressed satisfaction with current trends and specifically with
the apparent ascendancy of "widening" over "deepening." Zbigniew
Brzezinski, for example, suggests that enlargement on the scale being
contemplated will result in a Europe that is "geographically and
culturally whole, but almost certainly politically diluted." The
accession of many new members is likely to block any serious move
toward genuine or deep political integration, frustrating attempts to
acquire an autonomous military capability and leaving the United
States through NATO the arbiter of developments on the continent.

This is much too sanguine a view. An EU that is engaged in perpetual
constitutional reform and an open-ended process of enlargement will
constitute a threat to an effectively managed international system
able to cope with the strains of globalization. Anything that the
United States might gain from a politically divided, NATO-compliant
Europe will be more than lost in political ill will generated by
endless squabbles over trade and other economic issues. A more likely
outcome of current trends is the emergence of an enormous trade and
regulatory bloc, increasingly able to influence the world economy,
but lacking the requisite political cohesion either to provide a
level economic playing field inside the Union or to deal with
security threats in Europe's near abroad (or in what could become
unstable regions internal to the Union). This is not a recipe for a
Europe "whole and free." It is a formula for intra-alliance trade
wars, and for continued security dependence in an increasingly
fractious economic and political environment.

Many of the escalating trade disputes between the United States and
the EU already reflect the externalization of the uneven
decision-making and enforcement situation within the Union. The
banana import and beef hormone cases demonstrate the difficulty the
EU has in bringing its trade and regulatory legislation into
compliance with WTO rulings. The United States and the EU finally
managed to resolve the banana dispute in early 2001, but only after a
nine-year period in which a coalition of member states blocked
Commission efforts to establish a WTO-compliant import regime. In the
case of beef, the EU has not even tried to meet WTO objections;
instead it has offered compensation in the form of allowing the
United States to impose tariffs on unrelated products.

It is an open question as to whether a liberal international trading
order and a solid transatlantic political relationship can survive
the growing stresses of the EU's internal incoherence. It is worth
recalling that the celebrated vandalizing of a local McDonald's by
French farmer José Bové was prompted by the imposition by the United
States--in response to the beef hormone exclusion--of WTO-sanctioned
tariffs on Roquefort cheese made from the milk of the sheep raised on
Bové's farm. Bové's trial provoked a wave of anti-U.S. and
anti-globalization protest in France. Meanwhile, the U.S. Congress,
irritated by EU failure to comply with adverse WTO rulings, sought to
increase the price of noncompliance by legislating so-called carousel
retaliation, which in turn threatened to give rise to further action
in the WTO, this time by the EU. Lost in the trading of trade-war
blows was the fact that the entire cycle of retaliation and
counter-retaliation would never have begun in the first place had the
EU been able to comply with its own commitments.

Several aspects of the EU's international behavior that grow out of
its complex internal situation should concern U.S. policymakers. Five
are especially noteworthy.

First, as in the example just cited, is the EU's difficulty in
applying internally its international trade obligations. This casts
the United States in the position of trade bully vis-à-vis European
publics, without resulting in any market openings that benefit
producers.

Second is the EU's increasingly political approach to regulation.
Nowhere is the EU's implementation deficit more apparent than in the
field of regulation, where the Union and its member states have
managed to achieve the worst of all possible worlds: disputes with
trading partners who suspect the EU of using regulatory barriers as a
disguised form of protectionism, widespread public scorn over the
Commission's perceived bureaucratic preoccupation with setting
standards on trivial matters, and a failure to protect the public
from genuine dangers such as "mad cow" disease and threats to the
blood supply. EU agencies for the environment, medicinal products and
other areas have been established, but the member states have not
been prepared to cede them genuine rule-making and enforcement powers
of the type that federal agencies exercise in the United States. The
result is a regulatory process that is easily politicized and that
lacks credibility both with its purported beneficiaries at home and
with trading partners abroad.

Europe's trading partners are especially wary of the "precautionary
principle", under which the EU claims the right to ban the import of
products when there is uncertainty or the possibility of a health or
environmental hazard. WTO rules allow countries to block the import
of hazardous products, but only on the basis of sound scientific
evidence. The United States and other countries are concerned that
the EU's use of precautionary standards will make their exports
vulnerable to decisions taken on ostensible grounds of health and
safety, but in fact made in response to political pressures,
artificially fanned by economic interests that stand to gain from
precautionary bans.

An additional exemplary domain concerns anti-trust regulation.
Anti-trust is an area in which the Commission enjoys strong powers
relative to the member states, but here as well the EU has failed to
establish the arm's length relationship between politics and
regulation needed to inspire international confidence. While U.S. and
EU regulators have tended to see eye-to-eye on most large mergers,
anti-trust has been an accident waiting to happen in transatlantic
relations. It was only a matter of time before the Commission made a
decision involving U.S. firms that would be perceived in Washington
as commercially motivated, provoking a serious transatlantic
controversy. Indeed, that decision seems to have come with the
Commission's blockage of the GE-Honeywell merger previously approved
by U.S. and Canadian authorities.

A third area of concern is the growing involvement of the European
Parliament in trade issues and in regulatory issues with effects on
trade. The Parliament was the driving force behind the ban on
aircraft engine hush kits to meet noise standards imposed by the EU
outside the International Civil Aviation Organization, the forum in
which international standards on aircraft noise are negotiated. This
action, had it been taken by the U.S. Congress, would have caused
howls of protest about American unilateralism. The European
Parliament has also taken hard-line positions on data protection
issues that affect U.S. firms as well as on broadcast and motion
picture quotas. It has seized upon the presence of U.S. listening
posts in Europe as evidence of commercial espionage intended to
damage the interests of European firms. And it sought to amend (and
ultimately blocked) the Commission's proposed takeover directive to
make unsolicited takeovers more difficult for U.S. firms.

Up to a point, these actions reflect the understandable response of
elected politicians to concerns raised by globalization. But they are
also an outgrowth of the EU's convoluted internal situation. Engaged
in a permanent campaign to enhance its powers relative to the
Commission and the member state governments, the Parliament tends to
subordinate policy considerations to this institutional objective. To
the extent that anti-Americanism in the name of environmentalism,
food safety and other concerns has become fashionable in Europe, the
Parliament reflects this trend.

A fourth area in which the EU's internal complexities spill over into
the international arena concerns the aggressive approach the
Commission has taken in the WTO toward other countries. The
Commission has exhibited a marked intolerance for shortcomings in
other countries that, while surely not desirable, can be shown to
have little real effect on EU trade--an intolerance that sits oddly
with the Commission's inability to tackle barriers inside the Union.
While "beef and bananas" has become a kind of shorthand for
transatlantic trade tensions, these cases--market access complaints
that the United States has filed against the EU--are probably less
important for the future of the international trading order than the
growing list of suits that Brussels has brought against the United
States.

In 1997, for example, the EU initiated a case against the U.S.
Anti-Dumping Act of 1916, claiming that a provision that allowed for
private lawsuits for treble damages and criminal penalties against
importers of products sold at below market value contravened
international trade agreements. The United States argued that the law
was susceptible to interpretation that would permit compliance with
WTO obligations. It pointed out that there had never been a
successful criminal prosecution under the act, and that no
complainant in a civil suit had ever recovered damages. The WTO panel
rejected these arguments and the EU, which claimed that threats of
adverse decisions under the act cast a cloud over the business plans
of European steel exporters, prevailed in the case.

The EU also requested WTO dispute settlement consultations regarding
a Massachusetts law curtailing procurement from companies doing
business in Burma--an action that proved superfluous, for the U.S.
Supreme Court struck down the law. The Court also struck down a
Harbor Maintenance Fee that the EU claimed, in a WTO action, violated
U.S. undertakings under the 1994 GATT agreement. In yet another case
a WTO panel upheld the U.S. contention that Sections 301-310 of the
Trade Act of 1974 were consistent with WTO rules. As in the 1916
case, the EU had argued that the mere existence of these provisions,
rather than any specific U.S. action affecting EU interests, was a
violation.

In what so far is the most significant dispute with the United
States, in 1998 the EU launched a case against the U.S. Foreign Sales
Corporation (FSC) regime, which it charged constituted a violation of
the WTO subsidy agreement by providing tax breaks for export-derived
income. The United States argued that the EU's action contravened a
1981 understanding that permitted FSCs as a way of counterbalancing
favorable tax treatment granted to exporters by EU member states. The
EU prevailed in the panel and the appeals process, prompting the
Clinton Administration and the Congress to amend the offending
legislation. The EU subsequently launched a new challenge to the
amended law and has asked for authorization to impose sanctions on
more than $4 billion worth of U.S. exports if the WTO upholds the EU
complaint.

What is striking about these complaints is that, unlike beef and
bananas, they are not for the most part about particular products
sold by identifiable firms. In most of them, the EU has alleged
little actual harm to European producers. Rather, they reflect an
effort by the Commission, backed with varying degrees of enthusiasm
by the member states, to use the WTO dispute resolution mechanism to
place the United States on the defensive and to gain leverage in more
substantive cases that the EU has lost. They reflect the complex and
politicized internal situation in the Union, as the member states,
industrial lobbying groups, and individual firms pressure the
Commission to lash out against external trading partners and to win
back in the dispute resolution process protections that the EU has
given up in trade negotiations. Legally and technically some of the
EU cases have merit--a fact that has been acknowledged in U.S.
efforts to comply with adverse rulings and in Executive Branch
efforts to blunt the implementation of U.S. laws that may be
problematic from a WTO perspective. Politically, however, the wisdom
of this wide-ranging assault on large swaths of U.S. law is
questionable--especially in view of the EU's large trade surpluses
with the United States, its own failure to comply with WTO rulings,
and the spotty record it brings to market enforcement within the
Union.

A fifth and final aspect of EU behavior that should be of particular
concern to U.S. officials is the emerging European posture on
globalization. Following the Seattle debacle, the Commission and key
member states have called upon the Union to assume a larger role in
"managing globalization." As they seek to sustain European
integration in the face of increased popular skepticism, European
leaders are presenting the EU as the optimum level to which citizens
should look in responding to the challenges of globalization.
Explicitly or implicitly, part of the message is that resisting or
shaping globalization is a task to be undertaken in opposition to the
United States. While few European leaders fall prey to crude
anti-Americanism, their statements reflect a growing temptation to
channel anti-globalization sentiment against the United States. The
tone is generally one of regret that, in a globalized world, America
alone is too big and too undisciplined to play by the rules that
everyone else recognizes must be observed. Meanwhile, Europe itself
is well on its way toward becoming a persistent violator of those
very rules, albeit in the name of such high-sounding principles as
precaution (food safety), multifunctionality (agriculture) and
diversity (culture).

There are, to be sure, countervailing forces that are working to
buffer these problems. Governments on both sides of the Atlantic are
committed in principle to open trade. The United States Trade
Representative and the Commission have pledged to work to resolve
disputes, and the two principals involved, Robert Zoellick and Pascal
Lamy, are said to enjoy a cordial personal and working relationship.
Non-governmental mechanisms, such as the Transatlantic Business
Dialogue and exchanges of legislators, can help to work through
problems. To the extent that standards can be harmonized bilaterally
or in bodies such as the oecd, regulatory clashes can be avoided. And
globalization presents opportunities for U.S.-EU cooperation as well
as temptations to political grandstanding. On balance, however,
guarded pessimism seems in order when it comes to assessing prospects
for U.S.-EU trade relations. Except under the most hopeful of
scenarios, the EU will be too big, too complex, and too conflicted by
soaring ambitions and crippling uncertainties to be other than a
difficult partner for the international community.

In characterizing the EU as a superpower but not a superstate, Tony
Blair was appealing to audiences in Britain by assuring them that
they could have the best of both worlds--retain their sovereignty and
enjoy the advantages of being part of a large and dynamic Union--even
as he sought to convince continental politicians of Britain's
commitment to Europe and its suitability for a leadership role. For
all its studied ambiguities and limited, pragmatic purposes, however,
Blair's phrase captured an important truth about the Union. In trade,
anti-trust, and foreign aid it already acts like a superpower, a role
that it is working to extend to monetary affairs, technology and
other areas. Internally, however, it lacks the strong central
executive and the uniformity with respect to policy and law that
characterize a nation-state.

For the United States and other countries, deciding how to respond to
the emergence of a political, economic and security entity that
exerts enormous external power but that is not organized like a
traditional nation-state will be a major challenge. In Washington,
the question of how to relate to the Union inevitably will be debated
in the context of U.S. support for European integration stretching
back to the Truman Administration. Although such support undoubtedly
has existed, it is important to stress that the United States was
never an uncritical backer of European integration. It came out of
World War II committed to a "universalist" approach to building a new
international order, one that rejected the special economic zones
associated with Imperial Preference and fascist autarky. Universalism
was embodied in the commitment to the most favored nation principle
in the General Agreement on Tariffs and Trade (GATT) and to universal
currency convertibility in the Bretton Woods system. It was only when
universalism failed to work in reviving Europe's economy, raising the
specter of communist takeovers, that the United States abandoned the
universalist approach and began to work with Europe on
region-specific responses to the crisis of that day.

The key point is that the United States was always attentive to the
content of European regional integration and how it related to U.S.
interests in the global system. When told about Robert Schuman's plan
for a coal and steel community, Dean Acheson was alarmed at what he
feared was a cover for "a gigantic European cartel." Only after these
concerns were mitigated did the United States mobilize support for
the community and the GATT waiver that it required. Washington later
backed the creation of the Common Market, but it never endorsed the
extension of trade privileges to overseas colonies and territories.
What the United States did not want were amorphous economic and
political arrangements that would set up difficult-to-combat economic
barriers against outsiders, without creating the core political
strengths that Washington desired out of European integration.

The European order that is emerging today--one that the United States
has been actively promoting--is in some respects the antithesis of
the one that Acheson and his successors worked to foster. With
open-ended enlargement, an increasingly differentiated and uneven
internal decision-making system, and a network of preferential trade
and political relationships that extends in all directions, the EU is
a far cry from the geographically and functionally well-defined
entity of the 1950s and 1960s. It is, as David Calleo and others have
noted, a hybrid confederal model that will take many years to work
out its internal constitutional dilemmas, and that is itself at risk
of becoming overextended to the point of total ineffectiveness.

Beyond how enlargement affects the internal functioning of the Union,
sheer size will at some point start to impinge on the global system
to the detriment of U.S. interests. In the 1950s the United States
sought to ensure that any regional group in Europe fit into a broader
global system governed by the GATT. Today one can hardly speak of the
EU as "fitting into" the WTO. It is, along with the United States,
the co-creator of that system and one of its major arbiters. With
further expansion of EU trade authority--through enlargement and
conclusion of special trade arrangements with other countries--there
is a sense in which the EU all but becomes the international trading
system, leaving the United States the odd country out.

European Union officials already boast that in the next decade or so "a free trade area with the EU at its center will be created comprising one billion people." [4] They are quick to add that American businesses will make the most of any new opportunities offered. While this may be true, the United States will reap such benefits only at the sufferance of Brussels, rather than from a position of strength. U.S.-based producers (as opposed to investors) may be especially disadvantaged. The Business Roundtable reports that already some 33 percent of total world exports in 1999 were covered by European free trade and customs union agreements--a number that is certain to grow as the Union completes its network of preferential agreements in the Mediterranean basin, the former Soviet Union and further afield.

These trends raise questions about the kind of EU that is in the interests of the United States and about the U.S. stake in Europe's debate on finality. To the extent that Washington has any influence, U.S. policymakers may be tempted to press for a looser, more intergovernmental Europe with an array of overlapping institutions, rather than a tightly integrated, EU-dominated Europe. Such a Europe might have particular advantages for the United States in the security field. It would facilitate the continuation of special U.S. relationships with countries such as Britain, help to sustain more of NATO'S traditional role, and facilitate faster crisis decision-making.

When it comes to day-to-day policy issues, however, especially the trade and regulatory matters that so bedevil U.S. European relations, it is not clear that a weaker and more decentralized EU serves U.S. interests. On issues such as telecommunications deregulation, agricultural reform, and subsidies to industry; Brussels has been a liberalizing force arrayed against entrenched political and corporate interests at the national level. While the Commission and the Court of Justice are vulnerable to political pressures, in principle they offer equality of treatment under EU law to U.S. firms. In contrast, in areas where the EU operates on the basis of negotiated deals among the member states (including, increasingly, arms procurement), there is less transparency, little recourse to the courts, and less to stop national governments from externalizing the costs of reaching intra-EU compromises by striking deals at the expense of non-member countries. To the extent that trade and other economic issues come to be d ecided on this basis, the United States will have little recourse but to seek redress for damages at the international level, in the already overburdened WTO dispute resolution process.

The European Commission, which often is regarded as the nascent federal government of a united Europe, is in its present form not suited to playing the role of an "honest centralizer." It lacks democratic legitimacy and has itself been politicized as it strives to maintain its position in a Union of more assertive member states. The same is true of the Court of Justice, which many argue has allowed concern over institutional survival to trump the law when it comes to standing up to pressures from national capitals. Centralization without reform is not in the interests of the United States any more than it is in that of Europe itself. Over the longer term, however, the United States and other countries that must live with the consequences of EU decisions share an interest in the emergence of a more uniform, predictable and law-based internal EU order with stronger and more transparent regulatory structures.

In such an order, the Commission (or whatever Union-level executive may emerge) would not need to prove its worth by aggressive Euro-nationalist stances against the United States on trade and globalization issues. The European Parliament, while still subject to the political forces that move domestic legislatures, could concentrate on good governance rather than on bolstering its position in the fractious EU system. And Europe might not need the multiple and excessive representations that it currently enjoys in the G-7, the UN Security Council, and other bodies. Only such a Europe will be able to play the partnership role that proponents of a strong U.S.-EU relationship welcome but that the EU, in its current incarnation, is largely incapable of fulfilling.

Implications for Policy

IN ADDRESSING the question what kind of Europe serves U.S. interests, Washington first needs to recognize the limits of its influence. With regard to widening, it should continue to support EU membership for the candidate countries negotiating accession. But whether it should support virtually open-ended EU enlargement is another matter. Getting out in front of the Europeans by championing membership for Russia, as President Clinton did in his June 2000 speech at Aachen, is clearly a mistake. It is simply not in the U.S. interest to promote the creation of a single trading block with 700 million people stretching from Guadeloupe to the Aleutian Islands.

The United States also needs to avoid having its relations with important countries on the periphery of Europe--Turkey, Russia and Ukraine--become little more than a function of its policies toward the EU. While lending support to Turkey's EU bid, the United States should maintain a strong political, economic and strategic bilateral relationship with Ankara. Turkey's outage in the 1990s at being excluded from the EU candidate list was the result not just of exclusion as such, but of Cyprus' inclusion on this list--which the EU blundered into through a combination of wishful thinking and political maneuvering among the member states. One lesson to draw is that damage from poorly thought-out pledges to enlarge is not necessarily repaired by equally murky plans for still more enlargement.

As for Russia, the United States must avoid a situation in which its relationship with Moscow runs through Brussels. In the second half of the 1990s U.S.-Russian relations were thoroughly "Europeanized" as Washington emphasized NATO-Russia and Russian-EU ties in hope of defusing resistance to NATO expansion and policy in the Balkans--a trend that reached its high point with Clinton's call for Russian admission to the EU. The United States and Russia (along with Canada) are the only large economies in the Euro-Atlantic area that are not striving to join the EU. While the United States has an interest in promoting good relations between Russia and the EU, it also has a stake in encouraging Russia to look critically at those aspects of EU enlargement that negatively affect Russia's interests. In some cases--deflection of Russian steel and nuclear exports to the U.S. market, combating persistent EU efforts to ban the use of traditional expressions (burgundy, champagne, port, sherry and so forth) by all but Europ ean producers, and resisting EU pressure to apply foreign content norms to Russian broadcasting--U.S. and Russian interests directly coincide.

Anything that Washington can do to promote reform in and bolster Ukraine against a possibly resurgent Russia is important. While it should work with Europe on policy toward Ukraine, it cannot assume that the EU will "save" Ukraine for the West, either by deliberate acts of policy or by the mere stabilizing force of its existence. While U.S. experts are attracted to the idea of Poland as a bridge between Ukraine and the West, the United States needs to do more than replicate in slightly different form programs funded by the EU to stabilize its future eastern border. Washington should concentrate exchange, aid and trade efforts on Kiev and central and eastern Ukraine--regions and cities where conditions may be more difficult than along the Polish border but where Ukraine's ultimate fate will be decided.

U.S. influence over the internal organization of the EU is limited. Some commentators have suggested that U.S. leaders speak out more directly about how U.S. interests are affected by the EU's internal reform debate. How the United States reacts to enlargement and to European efforts to create an autonomous defense capability also will signal attitudes toward the development of the Union. A United States that pushes for rapid and open-ended EU enlargement, or that resists the formation of a strong European defense identity, will not be in a position to argue for a cohesive Union, able to enforce its own laws and to present coherent positions in international forums.

Also important will be how the United States approaches trade. In confronting the complexity of EU decision making, any U.S. administration is likely to proceed pragmatically--to use whatever forum or process is likely to produce results in accordance with U.S. interests. While this approach is basically correct, some thinking should be devoted to how U.S. interactions with Europe might shape the longer-term evolution of the EU as an international actor. Washington has an interest in seeing the Commission (or, better yet, autonomous regulatory agencies) develop as a first line of defense against member state failures to comply with WTO obligations when those failures breach EU rules. To the extent that the Commission plays this role, U.S.-EU disputes will be transformed into intra-EU matters, with less stress placed on the WTO dispute settlement process.

To encourage progress in this direction, the United States might exercise restraint in actions that could be seen as undercutting the Commission (e.g., bilateral dialogues with member states on what are best defined as U.S.-EU rather than U.S.-member state disputes). At the same time, Washington should seek a clearer understanding with the Commission on determining when recourse to the WTO is desirable and when it might be better to allow one side or the other to work through its internal decision-making procedures. In dealing with the member states, the United States needs to signal its views on procedural issues. Unless they rein in the more aggressive and counterproductive aspects of Commission behavior in the WTO, the result will be a growing number of U.S. WTO actions against individual member states. Conveying such a position to national capitals is the logical counterpart to reminding the Commission of the importance of enforcement vis-a-vis the member states. The objective is the same: to prevent the development of an international double standard that will disadvantage the United States and, in the end, cripple the WTO.

In the near term, the most pressing requirement in U.S.-EU relations is to resolve or at least contain the political damage from the growing number of trade disputes. In this regard, the solution of the banana dispute early in the Bush Administration was an important step. In cases where the United States has lost in WTO panels and in the appeals process, the administration should work with Congress to bring U.S. legislation into compliance with WTO obligations. This will place it in a stronger position to insist on EU compliance when that is in U.S. interests. At the same time, Washington needs to address reform of the WTO dispute resolution mechanism, an issue that already has been placed on the agenda in Geneva. If the GATT system in which countries could block the adoption of adverse rulings is simply replaced by a new system in which they can block the implementation of WTO rulings, little will have been gained.

Apart from its interactions with the EU, how the United States positions itself with regard to other countries and regions will have important indirect effects on Europe. A starting point must be a recognition that U.S. policy in the 1990s was too Eurocentric. The first Clinton Administration took office declaring that Western Europe was "no longer the dominant area of the world" and focusing on mechanisms such as NAFTA and APEC that seemed to downplay the importance of Europe. Over the years, however, Clinton gravitated toward a policy that was heavily Eurocentric, as illustrated not only by the focus on NATO enlargement and engagement in the Balkans, but also in the diminution of the U.S.-Japanese relationship and the focus on regulatory convergence with the EU.

Excessive focus on Europe is conducive neither to good relations with the rest of the world nor with Europe itself. While Europeans do not want to be told, as they were in the early 1990s, that they are part of a declining region, soon to be left behind by the dynamic capitalism of Asia and North America, they also do not desire a hyperactive U.S. policy on NATO reform, expansion and out-of-area planning, or excessive concern over the alignment of European and U.S. positions on third areas and global issues. While such activism sometimes is defended as necessary to prevent the dilution of U.S. influence in Europe, it is based on a faulty assessment of the sources of that influence. Institutions and agreements are important, but in the final analysis the United States has influence in Europe because it is a global power, able to confer and deny benefits that Europe cannot secure for itself save at unacceptable costs. A less Eurocentric U.S. policy will bolster rather than undermine U.S. influence.

How the United States positions itself in the globalization debate will also influence U.S.-EU relations. The triumphalist rhetoric that has characterized U.S. pronouncements in recent years has been damaging. Rather than boasting about vague concepts of "soft power" that draw the connection between globalization and Americanization, U.S. officials should avoid rhetoric that equates the inexorable and anonymous forces of globalization with U.S. interests. Despite major differences over climate change and other matters, there is enormous untapped scope for U.S.-EU cooperation on regional and global issues--everything from promoting peace in the Middle East to combating HIV/AIDS in Africa. The United States should work to build such cooperation to the extent that it yields concrete results. But simply drawing up laundry lists of areas in which U.S. and European interests coincide, in hopes that cooperation in these areas will substitute for a core transatlantic agenda centered on trade and security, is illusory.

Above all, the United States should adopt an approach toward Europe that is tougher in pursuit of concrete U.S. interests but less ideological and dismissive of genuine European concerns. The United States needs to take a firmer line on European double standards on trade and the environment. It should question European over-representation in international economic forums and pose hard questions about the external costs of European policies. Instead of reacting with horror when European leaders invoke the specter of multipolarity, it should develop its own strategies for forming issue-by-issue coalitions with other countries against the EU when doing so can advance U.S. interests.

At the same time, the United States should be less ideological when it comes to arguing issues of trade and globalization. It needs to be more open to the possibility that the Europeans may be right about some issues, and that the French are absolutely right in emphasizing that globalization need not mean Europe's homogenization to U.S. norms. U.S. policymakers need to do better at defending interests because they are interests rather than because they are expressions of universal laws that other countries are obliged to accept. Unless the United States becomes more adept at listening and granting validity to European concerns, it will find itself isolated in international forums and undercut by U.S. interest groups that share European rather than official U.S. views on key issues.

For the same reasons, the United States needs to be careful about dismissing out of hand such European shibboleths as multifunctionality in agriculture, diversity in culture or precaution in food safety. The problem is not that these principles are inherently wrong--in fact, they have an appeal around the world and even in the United States. Rather, it is that Europe has an internal decision-making structure that all but guarantees that such principles will be applied selectively, manipulated for commercial ends, and implemented in such a way as to ensure that their benefits accrue to Europe while their costs are imposed on the rest of the world. Only by being open to other countries' ideas and able to embrace its own version of multipolarity will the United States be in a position to engage with and, if necessary counter an EU that enters the 21st century determined to be, if not a superstate, very much a superpower that is prepared to challenge American influence and to assert its economic and political po wer around the globe.

John Van Oudenaren is chief of the European Division, the Library of Congress, and professorial lecturer at the Paul H. Nitze School of Advanced International Studies, Johns Hopkins University. He is the author of Uniting Europe (Rowman and Littlefield, 2000).