Chapter 4

A Special Relationship

Bridging the Europe–America Divide

A British View

Alan P Dobson

The Second World War was the apogee of the Special Relationship. British and American civil servants and military commanders and politicians used generally to work out policy… there were joint solutions to joint problems.

Lord Callaghan: British Prime Minister 1976–79¹

In the Second World War, in planning for the new economic and security world order and in the early years of the Cold War, while Britain’s relationship with the US was asymmetrical, there were clear and concrete grounds for claiming an indispensable interdependence. The scale of Britain’s role emerged in talks among US ambassadors in Europe in 1950. US Ambassador in the UK Lew Douglas noted the importance of the UK’s worldwide bases, the Commonwealth, the sterling as an international currency, but, ‘beyond all these considerations the UK is the only power, in addition to ourselves, west of the Iron Curtain capable of wielding substantial military strength. This assembly of facts, though some may disagree with a few of them, makes a special relationship between the US and the UK as inescapable as the facts themselves.’²

By the 21st century, Britain’s power and influence, and hence its ability to trade in mutually supportive policies with the US, were much diminished. There was no power base in the Commonwealth, there was no sterling bloc, there were no troops east of Suez, and the UK’s military power, while greater than ever in absolute terms, had shrunk comparatively to virtual insignificance when set against that of the US.

How far, qualitatively speaking then, has the relationship moved from its apogee? By 2003, a very long way, according to US Defence Secretary Donald Rumsfeld, who declared that the US could well do without British troops for the war of liberation in Iraq. That was soon corrected after frantic transatlantic telephone calls between British Prime Minister Tony Blair and President George W Bush (Mann 354). Blair was determined that the decision to send British troops to Iraq should not be devalued by members of the Bush Administration. That would hurt him at home and reduce his leverage in Washington.

Lately, more favourable rhetoric has been in evidence. During Bush’s state visit to Britain in November 2003, he claimed that Britain was an important ally and that US goals regarding terrorism could better be achieved through Anglo-American cooperation. One aspect of their relationship, which Bush was careful to drop mention of to indicate its intimacy, was the Blair-Bush weekly telephone conversation.³ A year later a highly influential, conservative think-tank in Washington declared: ‘British Prime Minister Tony Blair will be the first foreign head of state to visit George W Bush following his re-election victory. The November 11 and 12 Washington summit between the world’s two most powerful leaders will take place against the backdrop of a major US–led offensive against insurgents in Fallujah and just months ahead of national elections across Iraq.’⁴

Apart from Edward Heath, recent British prime ministers have always made a point of an early pilgrimage to the White House to touch base with its new or returning occupant, but this must be the first time in decades that anyone has intimated that a British prime minister is the world’s second most powerful man. A more measured but equally revealing comment came from Lincoln P Bloomfield, Assistant Secretary of State for Political-Military Affairs. ‘The US–UK political-military partnership has produced today the closest and most capable bilateral military alliance in the world.’⁵

Despite the skeptics and the critics, the special relationship abides (Beloff 1966, Dickie 1994). Even after the Suez débâcle in 1956 it was soon renewed and subsequent British policy has been to remain close to the US seat of power so that it can influence it and promote British interests (Riddel 2004).

While Britain’s defence capabilities might be much diminished and its economic power even more so, to think that the special relationship relies solely on these central aspects of states’ vital national interests is a mistake. Political values and the legal and cultural inheritance of the two countries, which led them into friendship to oppose the great totalitarian threats of the twentieth century have remained more or less the same and along with acts of cooperation, and have created a way of seeing many international problems in the same way.

In some cases, links have become stronger in recent years. Britain is the most popular destination for Americans who fly abroad. Tourism, educational exchanges, and a common language that gives ready access to each other’s media have further strengthened mutual knowledge and awareness. What one might call the informal aspect of the special relationship—a myriad of ties and links at all levels that span the political, commercial, military, intelligence, and family realm—provide ties additional to those at the formal levels of defence, economic, and alliance structures.

But how does Britain’s membership of the European Union fit in with this? Blair has offered the image of Britain as a pivotal power, acting as mediator between the US and the EU. This is not new. Writing in the 1970s, David Owen argued that a strong relationship with one did not logically exclude a strong relationship with the other (Owen 1979). In the 1990s Blair skillfully played just such a role nurturing both the special relationship with President Bill Clinton and stronger ties with the EU—signing up to the European Social Charter and working closely with France on the European Security and Defence Policy (ESDP).

But there now appear to be two important developments that might challenge Britain’s pivotal role: the rise of the neo-conservative ideology in the Bush Administration and a gravitational pull from the EU away from the US. Britain must be careful not to fall between two stools and be left with both its American and European relationships in ruins.

Whither the Special Relationship: Bush and Blair?⁶

By the late 1990s, while structures and formal and informal linkages still fed the special relationship, there was also a long-term movement toward Europe. Britain is now positioned, if not exactly at Europe’s heart, at least in such a way that it no longer dangles off its edge. This longer-term structural switch from a transatlantic to a European positioning has continued to develop momentum and threatens to be at the expense of close Anglo–American ties. In particular, when EU officials represent British interests in relations with the US, they cut the long standing, informal and bilateral ties that officials and institutions have built up over successive generations. Consequently, rations of mutual sustenance are being cut back. When Britain’s military power is of little significance to the US, when economic relations are largely mediated through the EU, when the asymmetry of overall power between the two continues to increase, and when Britain’s engagement with the EU continues to intensify, then from this perspective the special relationship begins to look undernourished.

The decline in the importance of the formal structures of the defence and economic relationship has also inevitably had an impact in loosening the informal ties. This loosening is potentially the most significant, as it strikes at the heart from which much else is now sustained. So, how does one explain the continuing special relationship that has emerged between Bush and Blair, who are ideologically dissimilar and who do not have particularly compatible personalities. And, with strong anti-Americanism in Europe, what does this imply for Britain in the EU?

The symbolism and language of the special relationship were in evidence after Bush entered the White House despite the warmest of personal relations that had existed between his Democratic predecessor Clinton and Blair. Immediately on the announcement of Bush’s success in the election, Blair told him: ‘I know that together we will strengthen still further the special friendship between Britain and the United States.’⁷ And Bush reciprocated on Blair’s first visit to Washington when he said, ‘I can assure you that when either of us get in a bind, there will be a friend on the other end of the phone.’⁸

But while the language was reminiscent of all those years of the special relationship stretching back to its apogee in the Second World War, the reality seemed to be different. Britain was pushing vigorously for a more central place in the counsels of Europe and for more say in its political leadership. Meanwhile, Bush appeared to be such a shortsighted unilateralist that his gaze would hardly carry across the Atlantic, never mind envisioning a special relationship there.

Issues troubled relations. There were substantial and serious differences over the International Criminal Court, the Kyoto Protocol, the Ottawa Convention, antipersonnel landmines, and the US National Defence Missile Program. Economic difficulties over trade between the US and the EU rumbled on, and there was no disguising the ideological differences between the Clinton–Blair ‘Third Way’ and Bush’s commitment to the deregulated market, trickle-down theory; and what liberals saw as Neanderthal positions on capital punishment and abortion. To cap it all, the contrast between Blair’s sophisticated, polished, articulate public performances and Bush’s inarticulate mumblings encapsulated the contrasts between their personalities and their styles.

Nevertheless, appearance and reality are not always the same. Though Blair moved closer to Europe on some issues, Britain still excluded itself from the euro-zone, collaborated closely with the US on monetary, defence, and intelligence policies, and while it pursued the development of the ESDP, it was with the aim of making it compatible and complementary to NATO. One could say that the British saw the ESDP as a way to increase Europe’s military capability and get closer to the Americans, make themselves more significant militarily, and help close the interoperability gap with the US. This is not to say that this is not also in Europe’s interests. The British believe it is, but it is not a strategy to produce a military capability to weigh against that of the US the way some French and German politicians would like.

Finally, while Bush had appeared awkward and unilateralist, so had his predecessor at times, particularly on several economic issues that troubled transatlantic and Angloxy–American economic relations in the 1990s (Frey 2004). Then came September 11, 2001, and another clear chapter in the special relationship unfolded.

Following September 11, Blair positioned himself ‘shoulder to shoulder’ with the Americans and strove to show how useful Britain could be. It was Blair, not Bush, who engaged in Kissingeresque shuttle diplomacy to try to shore up support for a coalition that would wage war on terrorism, support the invasion of Afghanistan, and be supportively inactive if the US and Britain decided to lead an invasion of Iraq as part of the war.

This had advantages. Blair met and talked with leaders who would have caused Bush political difficulty at home if he had been seen to consort with what some regarded as the enemy. Secondly, Blair was able to demonstrate Britain’s capabilities as a global actor. He claimed that Britain, while not a super or even great power, was a pivotal power. Not only could Britain act as a flying diplomat for US interests, it could also mediate between the US and European allies who were doubtful about American policies.

Thirdly, Blair maintained persistent support for Bush. Just as in 1998, when the French pulled out of enforcing the no-fly zone in Iraq, Blair again wanted to demonstrate the reliability of the British and of their military capabilities. He was in the forefront of support for the invasion of Afghanistan and for whatever military action might be required against Iraq. While Blair tried to get a clearer mandate from the UN, and Bush somewhat reluctantly went along with this for a time, in the end both stuck together and launched what was effectively an Anglo–American invasion of Iraq in 2003 (with support from a small contingent of Polish troops).

To France and Germany, Britain looked to be over-subservient, if not sycophantic, to the Americans, but Blair shared many of Bush’s fears, saw an opportunity to strengthen the special relationship and at the same time moderate some of the more extreme unilateralist and aggressive suggestions coming from the Pentagon and National Security Adviser Condoleezza Rice. To many, from the perspective of the 1970s, the Anglo-American special relationship appeared to have arisen again Phoenix-like, though this author is not convinced that it was ever in ashes. Churchill’s formal special relationship, or as Callaghan put it, the apogee of the special relationship, has never been recovered since the Second World War. Churchill’s attempts at making it a formal relationship in 1952 failed, but the mixture of reduced formal content and strong informal relations have proved to be a fertile compound in which the special relationship has continued to flourish (Dobson 1997).

Britain, the US, and Values

It was clear from the start of the Bush Administration in 2001 that there were a large number of highly ideological people in high places, but Bush himself came across as more moderate and pragmatic than many he had appointed. During the election campaign he had presented a profile of caring conservatism and early in his administration he seemed little different from a conventional, albeit right of centre, pragmatist (Halper and Clarke 2004).

But the ideologically charged neo conservatives and their fellow-travellers—Paul Wolfowitz, Donald Rumsfeld, Dick Cheney, John Bolton, Richard Perle, Stephen J Hadley, and Rice—had a clear agenda that they had either constructed over the past decade, or, as fellow-travellers, came to embrace after 9/11. The genesis of the neo conservative agenda stretches back into the 1960s and the disillusionment of highly moralistic left-leaning radicals who then tipped sharply to the right. But their focus in the 1990s was the ‘emergence of China as a strong, determined, and potentially hostile power; the troubling direction of political developments in Russia; the continuing threat posed by aggressive dictatorships in Iraq, Serbia, and North Korea’; and ‘the increasingly alarming decline in American military capabilities’ (Halper and Clarke 2004, quoting from Kagan and Kristol 2000).

While all this sounds like traditional realism, it is permeated with values that transform it into something else. In fact, it is ‘a new political animal born of an unlikely marriage of humanitarian idealism and brute force’. It differs from Wilsonianism’s desire to make the world over in the image of American liberalism in that ‘neo conservatives prefer to act alone and heavily armed rather than work through the often labourious multilateral process’ (Mann 2004).

Further, the moral dimension of neo-conservatism departs from realism as it emphasises the promotion of values as well as security. In the fog of war, only now are the implications becoming clear. The promotion of these values is informed by both the strategic doctrine fathered by Albert Wohlstetter, who was one of the first to realise the importance of smart weapons, and the unipolar condition of the one remaining military super power.

In the aftermath of 9/11 this neo conservative agenda provided a clear policy for Bush’s response. It would not be primarily against terrorists, but against undemocratic rogue states that could challenge the US and its security by developing weapons of mass destruction and using terrorist proxies to deliver them against America and its allies. Confronting this challenge, the neo conservatives convincingly argued that the traditional deterrence option was impotent and that smart weapons must be used for preemptive and clinical intervention against rogue states.

A major sub-theme of their strategy to deal with instability in the Middle East (and, conveniently, the oil access problem) was to spread democracy and the free market, first in Afghanistan, then in Iraq, and then onward through the region. The outcomes of these value positions were embodied in diplomatic exchanges and policy and strategy papers over the months that followed 9/11. Even while President Bush appeared initially to move multilaterally, it was appearance rather than reality. The US military made it very clear to the French from the outset that they were not going ‘to wage war by committee’—Kosovo had provided the salutary lessons.⁹

In his State of the Union Address in January 2002, Bush spoke of an ‘Axis of Evil’. In June at West Point he spoke of the need for pre-emptive action against clear and present dangers, which soon seemed to develop into a policy of preventive action against less clear and less present dangers. And in September 2002, in The National Security Strategy of the United States of America, three key concepts were embedded: the need for pre-emptive action; that the USA must remain the unchallenged superpower; and that US democratic values should be trumpeted and spread abroad.¹⁰

In many ways, though National Security Adviser Rice determined much of the content, the ideas were a logical follow-on from the findings of the 1998 Commission to Assess the Ballistic Missile Threat to the United States, chaired by Donald Rumsfeld and into which Wolfowitz also fed ideas (Newman 2004).

At the same time that the neo conservatives managed to implement their agenda, their publicists were busy categorising the Europeans as Venusians and themselves as Martians. While such a simplistic characterisation is really too fatuous to be taken seriously, it has spread disinformation abroad that blurs reality and makes transatlantic and Anglo–American cooperation more difficult (Kagan 2003) at a time when problems of anti-Americanism and anti-Europeanism are already abroad (Hodgson 2004, Crockatt 2003, Shawcross 2004). Most crucial of all, there are serious issues at stake and clashes of values between America and Europe, which need to be considered and resolved or tolerated, but that job is made much more difficult in the fog of heated ideological rhetoric (Puchala 2005).

For all the changes wrought by New Labour, it is clear that it has not metamorphosed into neo-conservatism. Blair is a devout Christian and has made values an important aspect of his foreign policy in a way that previous prime ministers have not. He also believes that interventionism can be a justifiable policy. But practicing Christianity does not permeate the British Cabinet as it does the White House and while Blair has been highly supportive of the Bush policy on Iraq, he does not justify interventionism in quite the same way and is more circumspect about it as an instrument of policy.

On key issues of general approach there are significant Anglo-American differences. So far Blair has managed to handle them, squeeze enough concessions from the US, and thus sustain a coincidence of interests to make it politically acceptable to continue in a supportive role, but limits are in sight and for a number of colleagues in the British Government they have been very clearly and more closely in sight for some time than they have for Blair.

In the summer of 2004 a new cabinet committee was established to monitor Anglo-American relations in the wake of the war in Iraq and the findings of the Hutton Report that questioned the use of intelligence by the British government. To some this seemed an attempt to ‘rein in’ Blair.¹¹ As Donald Puchala (Puchala 2005) has effectively pointed out, one of the problems in allied relations with the US during the first Bush Administration was that while it is clear what the administration has been against, it is unclear what it is for, and this worries members of the British cabinet who dislike the US neoconservative ideology.

With the announcement of Colin Powell’s retirement (with whom the British worked closely) and Rice’s succession as Secretary of State, with Rumsfeld and Cheney continuing, and with Hadley succeeding Rice, it is possible that the second Bush Administration will stand for what the neo conservatives want: unassailable US military power; unilateralism; the spread of US-style democracy, especially in the Middle East, but not apparently in Central Asia; the free market when it is in US interests; and the revival of a moral civil society. With a new mandate from the people, and with increased majorities in the House and the Senate, the political power to check the more extreme ideological positions discernible in the administration have been severely weakened, and those ideological positions threaten the current political working relationship with Britain.

Blair, for all his trimming to fit the American pattern and his convictions about the need for interventionism in Iraq, cannot disguise his preference for multilateralism and the legitimacy and authority that goes with it, and his persuasion that military power is only one among many means to achieve results. Also, while being openly assertive about the need for more economic justice (at the expense of the supposed efficiency of the free market) and more tolerant and nuanced in his conception of democracy and how it might be exported, he is decidedly more cautious about further interventions, and, while a devout Christian, his beliefs are derived from a more tolerant and loving New Testament tradition than is evident in the White House.

There have, of course, been significant clashes of political values in the special relationship before (for example, during the Ford Administration 1974–77), but these have always been tempered by pragmatism and personal relations that have allowed the ‘specialness’ to continue on a variety of levels.

Before the results of the November 2004 presidential election were known, Downing Street insiders were suggesting that a Bush victory would be a blow for Blair. If it is, it will be because the strength of ideological commitment on the American side will alienate too many on the British side and disrupt not only the high political formal ties but also stretch to breaking point the informal ties that have been so binding in the past. For the health of the special relationship, and for Blair’s policy of pivotal power, it is imperative that the American ideological tone is tempered by pragmatism.

Britain, the US, and Security

NATO has been a longstanding strength of the West since its creation in 1949 (Dobson 1997), but, since the end of the Cold War it has been transformed and the importance of the Anglo-American axis within it has diminished.

In March 1999, Poland, Hungary, and the Czech Republic joined the alliance. In the spring of 2004, Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia followed suit. At the summit in Prague in 2002, members agreed to transform the alliance with new members, new relationships with partners such as Russia, and, most significantly, with new capabilities, namely the NATO Response Force that could be deployed ‘out-of-area’. In August 2003, NATO for the first time assumed such out-of-area responsibilities when it took over from the US in Afghanistan.

These changes transformed the alliance and meant ‘taking more responsibility for upholding stability on a global scale and specifically combating what Washington considers the major threats of the future, namely international terrorism and the spread of WMD to ‘rogue states’ or ‘terrorists’ (Mahnke et al. 2004). At the Istanbul summit, as the official communiqué put it, ‘We have given further shape and direction to this transformation in order to adapt NATO’s structures, procedures, and capabilities to 21st century challenges.’¹²

Running in parallel with these developments in the NATO has been the emergence of the ESDP with its ambition for the creation of a more independent European security capability, but one that would operate in tandem with NATO. Neo conservatives in the Bush Administration see an independent European capability as a threat to US leadership and a development that could undermine NATO and American dominance of that organisation, recently enhanced with the accession of strongly pro-American members. Some members of the Bush Administration feel that it is important to ensure that Britain does not align too closely with France in developing the ESDP and that the traditional British policy of broadening, rather than deepening, the EU should be encouraged.

One way of tempting the British into maintaining their transatlantic and European identity would be to create an Anglo–American defence procurement free-trade area. This, the neocons believe, would make it more difficult for Britain to go down the road of political deepening and further convergence with its European counterparts, and, without that, the idea of an effective ESDP is a chimera (Halper and Clarke 2004, Guay 2005). These attitudes pose problems for Britain both in its general relationship to the EU and specifically with regard to its role in the NATO and the necessary commitments it would need to make if the ESDP were to ever become a strong and independent reality (Diedrichs 2005).

A close Anglo–American relationship that goes down a route dictated by the Bush neo conservatives is fraught with danger. But, according to many current indicators, this is a possible scenario. For example, the July 2004 British Defence Command Paper made it very clear that interoperability with the US and tasks defined in a manner very similar to the US 2002 strategy document are at the heart of things. Among some of the key points are that the new policy should ‘enhance our ability to lead or be the framework nation for European (and other coalition) operations where the US is not engaged’. The ‘assumption (is) that the most complex large-scale operations will only be conducted as part of a US-led coalition’, and as a key priority ‘a range of C4ISR (Command, Control, Communications, Computers, Intelligence and Surveillance and Reconnaissance) assets, forming our own network and integrated with the US network,’ would facilitate interoperability with the US.¹³ And this is only what might be called the structure for the formal special defence relationship that also involves continuing formal intelligence and nuclear cooperation, most notably with the US supply of delivery vehicles for the UK nuclear deterrent.

In addition is the longstanding informal special defence relationship. During the Falklands War of 1982 the US Navy increased dramatically its logistical and intelligence support for the Royal Navy without any formal agreement having to be made. As the US navy secretary later commented, this was illustrative of a relationship like no other between foreign navies (Dimbleby and Reynolds 1988). More recently the relationship between the USAF and the RAF has been described as ‘an excellent model of successful coalition relations’ and with further observations that personnel ‘exchange tours have long been a staple of the relationship’ and that the RAF ‘has continued to fly (since the end of the Cold War) with US airmen and provide the US access to bases in the United Kingdom, Cyprus, and Diego Garcia during Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom’ (Finn and Berg 2004). This informal special relationship can often bind tighter than formal arrangements.

With Britain remaining firmly wedded to the US in the security field, it could get drawn more and more into anti-rogue state operations and regional democratisation efforts that run counter to its own conceptions of the best policies to promote, to its European engagement, and to its own national interests. Such a scenario would clearly make manifest the current gap between the value preferences of the Bush and the Blair governments and could lead to a serious unravelling of the special relationship, leaving Britain to poke around in the ruins of its European policies in the hope of repairing the damaged fabric.

In the past, British leaders, Blair in particular, have clung to the hope of influencing matters from the US decision table by being close and present at the creation. But the ideological severity of much of the drivers behind current US policy may well prevent that strategy from providing payoffs to the British. A situation in which the US believes that it can go it alone (Rumsfeld’s claim that the British were not needed in Iraq in 2003) leaves the British as a fellow traveller, heard but not heeded; no need to heed if there is no need.

Of course, perceptions of need can change and Bush has recently indicated that he would prefer to allow the Europeans to take the lead with Iran on ending its nuclear program (especially if Britain is in the vanguard), and Condoleezza Rice in her Senate hearing for confirmation as Secretary of State emphasised the need to repair relations with Europe. And Europe is the top of Bush’s schedule for overseas visits. How one reads these runes is far from easy, but they could indicate a swing back to multilateralism and a more pragmatic line.

It is in the sphere of security relations that Britain will have to tread most carefully if it is not to compromise its good relations with both the US and the EU. Trying to act as the pivotal power when the transatlantic axis is under such stress will take all of Blair’s much-vaunted political skill. But it is possible. It should not be overlooked that ‘on Iraq’ Britain acted with Spain and Italy as well as with the new members of the EU and against the wishes of France and Germany, and that France and Germany are not tantamount to the EU.

The EU also recognises that, in the face of danger from terrorism and rogue states, inaction is not a viable option and that the US may be needed for Europe’s own security, and that Britain is indispensable for making the ESDP a reality. In short, Britain has strong cards to play in pursuing its pivotal role in the security field and may be able to deliver an ESDP that is compatible with NATO (thus allaying American neo conservative fears and rendering redundant their strategy of trying to prevent Anglo–French cooperation in ESDP), and which will help to reunite the interests and actions of the EU and the US. Working for this outcome is clearly a priority for Britain, and the US must play a more pragmatic card if it is to help facilitate success.

Britain, the US, and Economics

In 1999 the US GDP was just over $9 trillion and the EU’s was running at about $8.5 trillion. With the recent accessions to the EU, the comparison is even more symmetrical. Combined, these two economies produce well over half the world’s economic output. About a quarter of all EU exports go to the US and the EU receives about one-fifth of its total imports from America. Two-thirds of all foreign direct investment in the US comes from the EU and, significantly, over half of the EU’s FDI comes from the US. The conclusion one author draws from this is that ‘the very magnitude of the word’s most important economic relationship, amounting to US $2 billion per day, deters trade wars’ (Mahnke 2004).

Eric Frey shares that view in his study of EU–US trade relations in the 1990s. His overall conclusion was that ‘evidence … suggests that the self-correcting mechanisms of the larger transatlantic partnership are strong enough to keep even powerful forces of conflict generation in check’ (Frey 2004). From one perspective one can take heart from this and expect the US–EU relationship to continue amicably, at least in the economic sphere, because there is such interdependence that any other course would be intensely damaging to both sides. One might go on to argue that this also applies to the US-UK relationship because the figures quoted above disguise Britain’s pre-eminence in EU–US economic relations.

By 1989 Britain had a stake of nearly $75 billion in US industry (more than twice that of Japan) and the US had approximately $45 billion of holdings in the UK, which was second only to Canada as a destination for US investment. By 1998, of $75 billion in capital outflows from the US to the EU, $40 billion went to Britain. In 1999 Britain surpassed China to become the largest single destination for American FDI. The total reached approximately $140 billion in March 2001.

Conversely, over the past decade, Britain’s net direct investment in the US has been twice that of the rest of the EU. The US remains Britain’s single largest export destination, accounting for some £28 billion worth of goods in 2000, and Britain provides the base in the single European market for over 5,500 American companies. Further, two-way trade in goods and services in 2000 alone amounted to approximately £80 billion, together with some £15 billion in investments. Interdependence is not a panacea and how things will develop is difficult to predict. The formal economic relationship will continue in the medium term to be increasingly mediated through the EU; only a serious breach between the UK and the EU could change that.

Such mediation will tend to weaken Anglo–American ties in two ways. First, while Britain’s ‘Third Way’ is generally closer to the US free-market economic model than the economy of other EU members, it is still closer to the general EU position (sometimes pushed there by public opinion, for example, on genetically modified foods) on a number of important policy issues with direct and indirect economic implications. Such issues include direct as opposed to indirect state subsidies for industry (Airbus versus Boeing), genetically modified and hormone-treated foodstuff, energy policy and environmental issues, and social policy. As these issues are mediated through the EU, Britain will tend to find itself compromising with its European colleagues and moving further away from the US.

Secondly, as dialogue increasingly goes on between the EU and the US, usurping the bilateral US–UK relationship, the informal special relationship that has existed for so long among many echelons of the two countries’ respective bureaucracies will be starved of sustenance. The general effect of these possible developments will be a distancing of the US from the UK and closer British alignment with the EU.

A second, more likely scenario might be the continuation of the economic special relationship helped by EU mediation of Anglo–American economic differences and nurtured by non-governmental connections and the sheer volume of economic and commercial transactions between the two countries, which in turn feed back into high policy to protect and promote these flourishing aspects of mutual economic self-interest.

A further possible way of sustaining this would be the development of a close-knit Anglo-American defence industry. This is on the neo conservative agenda in the US and something that Blair and Bush highlighted in their joint statement on multilateralism, November 20, 2003. ‘We will work to remove barriers to increased defence industrial cooperation, interoperability, and information exchange. We consider it a high priority to implement a licensing exemption that will facilitate defence trade between our two countries.’¹⁴ This has to be set beside the statement by Blair and President Chirac of France shortly afterwards that ‘… a European defence policy with its own military capability is perfectly compatible with NATO’.¹⁵ As Guay has pointed out, if the Europeans are unable to breathe real life into the ESDP, this will have consequences for the component parts of the European defence manufacturing industry, which would then, in all likelihood, turn to US companies for collaboration and easier access to the Pentagon’s procurement needs (Guay 2005).

On the other hand, if life does take hold in the ESDP, and in the way that Blair desires, then of all the European defence manufacturers British could be ahead of the game. Again, the pivotal role of the UK could be enhanced with the British operating fully in both the European and the American markets.

Conclusion

Opportunities and dangers currently challenge Anglo–American relations. One of the features of the relationship that has been emphasised here as centrally important since the decline of Britain’s power and the ever-growing asymmetry with the US has been the informal special relationship—the myriad of ties that bind, illustrated here statistically in economic terms and anecdotally in the defence sphere. Similar illustrations could be made in a host of other areas. Karl W Deutsch noted these kinds of ties as important many years ago in his study of the transatlantic community. Community was a word chosen carefully to encapsulate a sense of ‘we-ness’ as opposed to ‘otherness’ and is closely associated with much of the meaning ascribed here to the idea of an informal special relationship now threatened by alienation driven by US ideological rigidity.

When Deutsch wrote, he was talking of an Atlantic community, not just an Anglo–American one. What is clear today is that the Atlantic community is under threat with Germany, France, and the US in danger of losing their sense of ‘we-ness’. Put in simple terms, Europe speaks of multilateralism and the US of unilateralism; Europe favours preventative engagement and the US preemptive or even preventative military intervention. These differences are symptomatic of different values and ways of trying to accomplish objectives. It is not simply a matter of the US doing it because it has the power and the Europeans not doing it because they do not have the power. Political and moral positions are in play on both sides.

In the middle of all this stands Britain, trying to play the role of the indispensable pivotal power. If the US continues to pursue the neo conservative agenda and sustains its hard ideological line, then it may prove impossible for Britain to remain pivotal, but the balance of existing evidence suggests that this will not happen.

Six important issues will influence how things develop in Bush’s second term. First, the consequences of the Asian tsunami disaster and the extent to which it pushes the US back into a more multilateral tradition. Secondly, the difficulties that have afflicted the US and coalition efforts in Iraq over recent months have clearly demonstrated the limits of the kind of military power so dear to neo conservative hearts. Fighting terrorism requires not only firepower but also intelligence information, internationally concerted efforts at policing and control of financial resources, international respect for the moral position of those opposing terrorism, harmonisation of extradition procedures, and clear standards of due process and the rights of suspects (Nye 2002). For all these things the US needs allies and friendly relations with as many nations as possible. Full realisation of that would introduce more pragmatism and multilateralism into US policies and facilitate, among other things, Britain’s job of helping to develop the ESDP in a way that is compatible with NATO and American security and defence priorities.

Thirdly, the US dollar is now dangerously vulnerable. Ever since the 1970s the US has been able to run a massive deficit in its balance of payments, as countries were happy to hold dollars. That may change in the foreseeable future as the dollar continues to depreciate and the euro begins to look like a possible alternative international currency. If the US dollar were to become less acceptable to hold, then the US might find itself in very serious economic straits in which multilateral measures to help might look very attractive.

Fourthly, Blair and Bush have acted in concert on the key problem of Iraq, but for somewhat different reasons. Both are international interventionists, but if the neo conservative agenda is not modified by more pragmatic considerations the two leaders could get out of step, with serious consequences for Anglo-American harmony.

Fifthly, then, much will depend on moderation on the part of the neo conservatives. While there have been some more accommodating noises from Rice and Rumsfeld, the signs are still ambiguous and the direction too difficult to call definitively. Finally, much will depend upon whether Blair continues in office for a full term. Bush may be confronted with a less gifted politician and a less palatable one in 10 Downing Street before he leaves the White House and that could bring further changes in the Anglo-American relationship.

So, much hangs on whether the US continues to follow rigidly the neo conservative ideological agenda. If it moderates and moves back to a more pragmatic and multilateral style of policy, it will provide room for Blair to manoeuvre and consummate his goal of making Britain a truly pivotal power between the EU and the US.

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