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

Publication Date: January 2006

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government; International relations

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Abstract:

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.