Europe and the US: the rift is growing wider

The conflict over Bosnia is a symptom of something far deeper, writes Vincent Cable

The lifting by the US Congress of the Bosnian arms embargo opens up a major division between the Western allies. It prompts the question: is this a disagreement over a specific and localised, albeit harrowingly tragic, problem or is there a more fundamental disorder?

It may seem odd to pose the wider question. On the surface, the core of the Western world - the Atlantic alliance of the US and Western Europe - has never been stronger. It won the Cold War (and the Gulf war). The West dominates global political and economic institutions. Applicants are queuing to join Western clubs: Nato, the EU, the G7, the OECD. Democratic capitalism is largely unchallenged as a preferred system of political and economic organisation. There is no major, coherent security threat in sight.

The fact that the West is impotent to influence the Balkan war is not in itself surprising: Nato (let alone EU) structures were not designed with complex ethnic conflicts and local warlords in mind. What is surprising is that close allies in a disciplined and successful alliance should have allowed themselves to be split asunder.

While much abuse has been heaped on the hapless UN, the main failure has been the inability of the Western allies to establish agreed principles and objectives. The US and the Europeans have in effect taken different sides. The Europeans, by trying to stabilise the territorial status quo, have, however unintentionally, given legitimacy to the Serb conquests and now carry some moral and political responsibility for the terrible consequences of leaving the Muslim population both unprotected and outgunned.

By contrast the US, which has done little, is emerging as the Muslims' champion, the result of instinctive emotional support allied to a shrewd appreciation of Islamic sensitivities. Now that the US is lifting the arms embargo to level up the killing fields, the war may turn and polarise Western opinion even more.

The last time Britain, in alliance with France, became so detached from the US was at Suez. But, unlike at Suez, there is no longer a deeper relationship to fall back on. The US commitment to Europe, enshrined in Article 5 of the North Atlantic Treaty and in a military presence, has become an expensive chore. The security subsidy to Europe costs perhaps $90bn a year. The reasons for keeping over 100,000 troops in Europe (roughly the threshold below which the presence lacks real credibility) are decreasingly obvious to many Americans. The Soviet threat has disappeared and it requires unusual paranoia to see comparable threats to Western Europe in the new Russia. The subtext to any serious quarrel between the US and Western Europe is that, at a certain point, the residual US security guarantee no longer holds.

Meanwhile other disagreements are opening up. In the Middle East the US is pursuing a "dual containment" strategy against both Iraq and Iran. Whether this is wise is debatable - but what matters more is the inability of the West to agree and maintain a consistent position. The strategy is being undermined by France in Iraq and general European distaste for the Iran boycott. The fact that disagreement is expressed through an opportunistic pursuit of contracts - by Total in Iran, for example, allegedly supported by the French government - adds, in US eyes, economic injury to political insult.

The idea that Western capitalism could be undermined by trade and competition for markets is a very old one and seemed to be as dead as Lenin, who promoted it. And at first sight, the risk of trade warfare between the Western allies does appear remote. There has just been a ground-breaking set of liberalising agreements under the Uruguay Round which create disciplines for an increasingly globalised system.

Yet the new World Trade Organisation framework is in serious trouble even before it has been properly established. The problem is not, or not yet, about traditionally divisive issues such as agriculture. Rather it is over the whole principle of multilateralism: whether global disciplines should prevail over national, unilateral action.

Specifically, the US is insisting on the right to an aggressive, unilateral approach to forcing open Asian markets. The Europeans have found themselves in the unaccustomed position of being virtuous guardians of the multilateral system, even to the extent of supporting Japan. The argument runs deeper than trade tactics. Some of the luminaries of the US administration and in Congress explicitly describe their relations with Western Europe and Japan as akin to an economic war. Such attitudes can become contagious. There is already a barely suppressed conflict resulting from competition between Western governments to help their firms win big infrastructure projects which threatens to destroy carefully crafted agreements to stop subsidy warfare.

It could be said in response that there is nothing new to all of this. There have long been disagreements among the Western allies. France has always been a loose, nationalistic cannon. Trade frictions have been endemic in the post-war system but haven't stopped the process of integration. Yet serious policy makers on both sides of the Atlantic are now clearly alarmed.

There is a particular danger for Britain. For more than a generation, Britain's external identity has been defined as both European and transatlantic. If the Western alliance fragments, that will no longer be possible. A large and influential segment of opinion would opt for a deeper involvement with Europe; another, particularly on the political Right, would be more at home with the Anglo-Saxon world. The tensions such a divide could create have been demonstrated already in the destructive debate over Europe. They would be multiplied many times once it sank in that the old transatlantic ties had snapped.

There are two interpretations of the growing rift. One is that there is an institutional deficit, leading to suggestions - particularly from Germany - for a new North Atlantic Community to buttress the old relationships. But it is not obvious why this is necessary. Formal and informal institutions abound, starting with Nato, the World Trade Organisation and the OECD. Specific proposals are being made for a "dialogue" between groups of transatlantic policy makers and for trade discussions on technical standards: valuable but hardly earth-shattering stuff.

A second explanation concerns personalities. Some superior Europeans look despairingly at the way Clinton foreign policy is made: on the hoof, in response to public opinion polls, Congressional pressure, campaigning by Irish, Cuban and Polish Americans, and lobbying by car companies, Hollywood, and environmental action and human rights' groups. They dream of a strategic visionary (even a George Bush).

The problem with this argument is its patrician assumptions. International relations are no longer the preserve of foreign policy elites engaging in High Diplomacy. And not only in the US; Germany's current immobilism (and past unhelpful moves such as the premature recognition of Croatia) derives from strong domestic public opinion. Changes in personalities would make little difference.

The end result is that Western leaders are trapped between ever more demanding international obligations and increasingly demanding domestic constituencies. Voters want to "do something" about overseas conflicts without putting their own troops at risk. They support the broad abstractions of international economic co-operation while opting out of specific obligations. Unless a more austere, disciplined and self-sacrificing approach can be sold to Western public opinion, the strategic and economic underpinnings of the West will unravel much as they have in the former East. The process is already beginning.

The writer is head of the International Economics Programme at the Royal Institute of International Affairs.