Goodwill lost to tension over trade and military

Seven months after the events of 11 September saw the European Union stand shoulder to shoulder with America, President George Bush arrives in Europe against a more familiar backdrop: a troubled transatlantic relationship.

Across a range of policies, from trade to the Middle East, from the environment to a possible attack on Iraq, relations between the two blocs have seldom been more tense.

Although Mr Bush may hardly inspire huge confidence in Europe, the current travails go deeper than a distrust of one president. Indeed, he impressed many EU leaders when he made his first visit to the Continent last year. So low were European expectations – Mr Bush had recently announced his opposition to the Kyoto Protocol to combat climate change – that his relaxed but combative style impressed big hitters such as the German Chancellor, Gerhard Schröder.

In response to 11 September, European leaders competed for Mr Bush's favours. Tony Blair has been pushing hard to make Britain's "special relationship" with America count. He has faced competition from the Spanish premier, Jose Maria Aznar, and the Italian leader, Silvio Berlusconi. Even Jacques Chirac, the French President, has been careful not to drift too far from the US.

This goodwill produced some results, most notably increased co-operation on extradition and other judicial matters. But, as one official put it yesterday: "There is a divergence between us on long-held policies, ones which the EU has developed over the years and which cannot suddenly be changed to suit Washington's whim."

The Middle East presents a good example. A clear difference of emphasis persists, with America reluctant to put pressure on the Israelis. In Washington, the recent success of European far-right parties has been seen as evidence of anti-Semitism. For the EU, which has spent millions of euros building up the infrastructure of the Palestinian Authority, it can hardly do anything but complain when Ariel Sharon's army bulldozes that work.

Similarly President Bush's "axis of evil" speech, in which he linked North Korea and Iran with international terrorism, was an implicit criticism of EU policy. The EU has been trying to build bridges with both of these nations and, in the case of Iran, gone a long way towards establishing a rapport.

Although the EU's trade disputes with America are greatly overshadowed by the volume of normal business, they pose a big threat. The American decision to impose tariffs on steel imports, and its recent Farm Bill – criticised for being protectionist – have paved the way for EU retaliation.

But perhaps the biggest rift is over America's role in a world where it has military superiority. Such is the disparity between defence spending in Europe and the US, the Pentagon finds the simpler and more effective option is to go it alone in military forays.

To some in America this typifies European weakness, to some Europeans it illustrates an alarming tendency towards unilateralism.

Whether such differences can be papered over if and when Washington takes on Iraq remains to be seen.