Transatlantic relations in 2007 continue on a generally positive note, with the EU and the US currently working together on a whole range of issues over which they used to be divided. Within Europe, they are pursuing the same policies on consolidating stability in the Balkans, Ukraine, and Georgia, as well as encouraging Belarus to become more democratic. In the Middle East, the US has supported EU diplomacy on Iran and offered to start its own dialogue with Tehran. The European Union has joined the Bush administration in imposing tough conditions on Hamas (while the US has supported an EU aid mechanism to for Palestinians). Joint work continues on stabilising and re-building Afghanistan. Other divisive issues - such as the plan to scrap the EU’s arms embargo on China - have disappeared from the agenda (at least for now).

The relations, badly bruised by the Iraq war experience, are improving but still tender. They will be tested by several new and potentially divisive issues such as the US plan to build missile defence bases in Europe. On the whole, the ability of Europe and the US to deliver on shared objectives is increasingly constrained by the influence of a rising China and a resurgent Russia. On Kosovo, Russian refusal to entertain the possibility of even limited independence will test the will of both US and Europe.

And in Central Asia, the Shanghai Co-operation Organisation (SCO) - a grouping that brings the two superpowers together with four central Asian republics - is emerging as a rival to NATO, with a call on the US to withdraw its troops from the region. The CER wrote about the SCO in a May 2007 policy brief by Oksana Antonenko, ‘The EU should not ignore the Shanghai Co-operation Organisation’. Across Africa and Latin America, US and EU efforts to spread good governance, solve conflicts and prevent genocide are being undermined by Chinese diplomatic and economic support for problematic regimes.

The US presidential election in November 2008 could be a potentially pivotal moment. There is a reservoir of goodwill on both sides of the Atlantic, and the change of administration in Washington will create an opportunity to tap into it. However, the risks raised by the looming US presidential election are as large as the opportunities. Europe will expect the next US president to bring back a chastened and multilateral United States, that is willing to solve problems on terms comfortable to European sensibilities. The next US president may expect a more helpful European Union that takes responsibility and is prepared to run risks to solve common problems. But there is a risk that neither aspiration will be met. The CER discusses this possibility, as well as ways of avoiding a crisis of high expectations, in a November 2007 essay by Kori Schake, ‘The US elections and Europe: The coming crisis of high expectations’.