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.

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