HL Deb 15 December 2003 vol 655 cc1018-48

7.41 p.m.

Lord Jopling

rose to move, That this House takes note of the Report of the European Union Committee on A Fractured Partnership? Relations Between the European Union and the United States of America (30th Report, Session 2002–03, HL Paper 134).

The noble Lord said: My Lords, I would like to add a personal note before I begin. Having been a member of Sub-Committee C since it was first instituted and its Chairman for the past three years, and having now been rotated off that committee, I would like to tell all noble Lords who sat with me on that Committee over the years how grateful I am for all their support and all the interest that we shared. My noble friend Lord Bowness, who is here, is taking over that committee. I wish him all the best of good fortune for the future.

Turning to the report, the committee was grateful to Sir Michael Quinlan for all the wisdom and experience that he showered on the committee. It served to give this report a great deal more authority than it would have had without his help. Finally, I thank Audrey Nelson, our Clerk, who came to the House only a year ago. I have never seen a clerk take to the water like a duck as she has. She has been outstanding.

With regard to the report, I am sure that I speak for the whole committee when I say that we are extremely grateful for the kind comments it has received. I am thinking of the Government's response, which has been published, and particularly of the kind words quoted by my noble and learned friend Lord Howe of Aberavon in last week's debate.

I can do no better than begin by repeating the words that start our report: The European Union's relations with the United States are at their lowest ebb for at least a generation". I was interested to see last week in the publication European Voice that those sentiments were exactly echoed by the former United States ambassador to the European Union, Stuart Eizenstat. It is a tragedy that, so soon after the events of 9/11, given the rising threat of terrorism in the world and the possible use of weapons of mass destruction, EU/US relations are in such a poor state today when they should never have been stronger. We asked ourselves at the beginning why relations had become so fractured, and I believe that there are six main reasons, although there are others.

First, we must recognise that there has always been friction between the United States and the European Economic Community, as it was, and the European Union, as it is now. We remember the French opt-out of the central command structure of NATO, although that was not an EU matter, and the various trade disputes that have arisen over the years—I remember ones about bananas, beef hormones, with which I was personally involved, and steel. Within the past few days, steel has, like so many of the others, been resolved or circumvented, with a certain amount of tension while the difficulty continued. There has been residual irritation in some cases, but such issues never created a situation anything like the present rift that exists between the EU and the US.

The second reason is the irritation in the EU at the United States' policy over the years towards Israel. There is a feeling that, if the United States had not pursued such a blatantly biased policy in favour of Israel, the Israel/Palestine problem might have been more easily settled. That problem has been the virus at the centre of the tension in the Middle East and one of the reasons for the rise in terrorism and Muslim fundamentalism.

The third reason is the attitude of the present administration in Washington, which has caused dismay in Europe. In recent years, the United States seems to have moved away from the multilateral approach to world problems that served us pretty well in the past in favour of going it alone on a unilateral basis. I think I speak for most of the committee when I say that I was shocked when we went to Washington last February and heard the expression used which appears in our report, if you agree with us, fine—if you don't then get out of our way". That is the new attitude in Washington and some of us were very shocked by it.

The fourth reason for the tension leads from the last one. There is despair in Europe at the attitude of those who currently run the Pentagon.

The fifth reason for the rift is again a recent one— the dismay that the events in Iraq this year seem to have been ill thought-out and prepared, as many of us warned before the conflict began. We warned that the post-war phase would be infinitely more difficult than the war itself. One can only hope that the capture of Saddam yesterday will help to reduce the obstructions to returning Iraq to normality.

The sixth and final reason for the rift is the belief held by many that action in Iraq should have been delayed, and not preceded by dodgy spin until there was a surge of support for action by the worldwide community. If that had happened, the climate in the Middle East and the wider Islamic world of burgeoning loathing for the West and the United States in particular could well have been very much reduced.

That is part of the background to our report. We believed very strongly—unanimously, I think—that both the European Union and the United States would be the losers if things remained as they were. Things are only made worse by some of the tit-for-tat that seems to be going on. As an example, there is the absurdity, in the mind of many, of the new French-German-Belgian-Luxembourgeois proposal for an independent command structure for the ESDP. Again, there is the mean decision of the United States to bar countries that opposed the war in Iraq from bidding for the re-building contracts that will be available in the future.

Lord Gilbert

My Lords, can the noble Lord explain to us why the American taxpayer should be expected to fund contracts to the benefit of French and German companies, when those countries made no contribution to ridding Iraq of Saddam Hussein's regime? Would he be prepared to recommend to his former constituents that they should fund a system whereby foreign countries who did not participate in those actions should be the beneficiaries of taxpayers' dollars?

Lord Jopling

My Lords, it will not be only American money that will be spent in re-building facilities in Iraq. I quote to the noble Lord an extract from the Financial Times that appeared only last week: Most of all, the contracts edict shows yet again the Pentagon's preference for sticking to its own alarmingly overoptimistic postwar scenarios". I was interested to see a quotation from BBC News from last week. Professor Steven Schooner of George Washington University said: This kind of decision just begs for retaliation and a tit-for-tat response". That is my point. The time has come, as I said, for both sides to stop that sort of thing.

The committee felt that, whereas the United States was used to the European Union as a trading alliance, it had not begun properly to accept it in its infant role as a world player in foreign affairs and defence. The committee felt that that was not necessarily only the fault of the United States. The European Union has a good deal of work to do to improve its public relations and its presence in Washington. We met the diplomatic representatives of the European Union when we were in Washington. That led us to the view that there were major improvements to be made. The appointment of a European Union Foreign Minister holding the immense powers likely to be attached to that post could be a positive help in establishing the European Union as a major player in foreign affairs and defence.

What else should the US and the EU do to restore the generally good relations and partnerships of former years? The EU should do more to shoulder the burden in Iraq. Already, the sum of 200 million euros, which was agreed in Madrid in October, is going in that direction. I am sure that there is more to be done. Both sides should put more weight behind the efforts of the quartet to settle the Israel/Palestine situation. The committee has always favoured the building up of ESDP, but more should be done to make it clear that the role of ESDP is in support of and complementary to NATO.

There are already some hopeful signs that the rift is becoming less apparent. There are the recent German-French-UK-US agreement on how to confront Iran's nuclear aspirations and recent documents such as the Thessalonika document and Mr Solana's security strategy. Yesterday, at the conclusion of the Council, the following words, which are to be heartily commended, were used in the declaration on transatlantic relations: The transatlantic relationship is irreplaceable. The EU remains fully committed to a constructive, balanced and forward-looking partnership with our transatlantic partners". Those are the ways in which we should move. Both sides must look to the future, not to the past.

The predictable guerrilla war that has gone on in Iraq for several months seems to have had a sobering effect on the United States. Recently, one can detect more understanding on the other side of the Atlantic of, for instance, the build-up of ESDP. There is more understanding in the United States of the need for a multilateral effort to re-build Iraq.

There has been too much trading of insults. There is too much to lose, if those insults are not forgotten and the rifts healed. I was particularly taken by a phrase used in the weekend declaration of the European Council: Acting together, the EU and its transatlantic partners can be a formidable force for good in the world". I spent a great deal of my life trying to further good relations between the United States and Britain, in particular, but also between the United States and the European Union. I ran the British-American Parliamentary Group for 14 years, and I regarded it as a labour of love. I could not endorse the words of the declaration more. The two sides must come together. We must never turn away from the force for good that that alliance can create.

Moved, That this House takes note of the Report of the European Union Committee on A Fractured Partnership? Relations Between the European Union and the United States of America (30th Report, Session 2002–03, HL Paper 134).—(Lord Jopling.)

7.58 p.m.

Lord Harrison

My Lords, like some other noble Lords tonight, I rise to give my swansong on Sub-Committee C of the European Union Committee, concerned with the common foreign and security policy. In doing so, I thank the committee's ring of Lords, who have made the past four years of discovery and debate so interesting and congenial. Above all, there is the Lord of the ring, the noble Lord, Lord Jopling, who has presided over us with Gandalfian wisdom and good humour.

Last week, I went to the Imperial War Museum. I found the room in the museum which displays exhibits from the conflicts in which British troops were deployed since 1945. Standing in the entrance was an enlargement of the celebrated Herald newspaper cartoon depicting an American soldier offering the reader a wreath, on which is displayed the legend, "Victory and Peace in Europe". The soldier's accompanying heartfelt words read: Here you are—don't lose it again". Today's debate on our report, A Fractured Partnership? Relations Between the European Union and the United States of America, gives us the opportunity to assess whether we have done enough to heed the lively warning contained in that memorable cartoon.

In the interim years, NATO has been established, the European Union created and the USA has become the world's supreme economic and military power. But the fall of the Berlin Wall more than a decade ago has brought new challenges that have shifted yet again the dynamics of all three countries and institutions.

Several issues arise from our report, which are crucial in influencing the future of our common development. They give the USA and the EU the chance to strengthen our common bond through change within NATO. But not all those issues are treated with the sense and sensibility that they warrant in the world outside. Perhaps I may take the vexed question of the so-called European army and its latest incarnation; that is, the proposal in the current IGC that the EU should develop a separate planning function, complementary to NATO, to undertake security operations to which the USA is neutral or perhaps even hostile.

Throughout our evidence taking, it was impressed on us that in order to fulfil our obligations to NATO, Europe had markedly to increase its defence spending, expressed as a percentage of national budgets. The committee agreed. However, at the same time, we were frequently apostrophied on the need to preserve the inviolability of NATO procedures. We were conjured that anything that fell outside NATO's usual procedures was deemed to be anathema and a threat to the Atlantic alliance. But is that credible politics? If Europe increases its defence spending—as it should and must—in comparison to the USA, which will always remain the major donor to our common defence, is it feasible that the EU will continue to accept the USA's veto on Europe's freedom to make its own decisions in the security field? I have in mind not only those instances where the USA, unsurprisingly, believes that it has little or no locus, but also those occasions where the USA is neutral or even hostile to NATO intervention.

However few those occasions are likely to be in future, is it politically acceptable that British or European politicians might stand before their electorate to say that they were not only forbidden by the USA from acting independently, but also failed to develop and prepare any separate planning function. That would be the politics of Ethelred the Unready, noted neither for his military preparedness nor his political wisdom.

Moreover, the saliency of the IGC proposals has been blown out of all proportion by excitable press and political backwoodsmen. Any separate EU planning function will entail some 30 to 40 staff, and not the 1,000 plus personnel who currently plan for NATO. It would be hardly a major break from NATO, but more a sensible addition to current competences. The lesson is that in the Morganatic marriage that joins the USA and the EU, the former brings by far the greater dowry of weapons and warriors. When the other spouse here—the EU—begins to pay its way, a more equal relationship will inevitably ensue, a development that should be celebrated, not decried, on both sides of the Atlantic.

That brings me to my second and allied point. Those who oppose this natural rebalancing of power and forces within the alliance all too often invoke the spectre of duplication and confusion. "Too many cooks will spoil the broth of command and control", they cry. But the self-same apologists cry foul if any commentator suggests that the current armed forces and military structures of the member states of the EU—more properly referred to as the European members of NATO—are themselves riddled with duplication. The memorable example given by the noble Lord, Lord Robertson of Port Ellen, about the difficulty of drawing together an effective and efficient rapid reaction force from Europe's current standing army of some 2 million servicemen and women is a case in point.

Whenever it is suggested that even the mildest steps might be taken to minimise the duplication of armed resources associated with the lack of specialisation of tasks, with the imperfect systems of common procurement, or with the haphazard stabs at shared training among Europeans, hands are thrown up in horror at this threat to each member nation's inalienable right to waste money on behalf of its taxpayers. And all that is to satisfy the illusion that member states preserve their 19th century sovereignty intact.

I have not begun to enter into the lists of the need to refocus our defence efforts on to the needs of tomorrow and not the outworn targets of yesterday, which, as last week's defence White Paper astutely observes, may require the substituting of the soldier by the satellite to meet the challenges of tomorrow's threat to national and international stability and security. Of course, there is a hidden agenda practised by those who deplore duplication in NATO but accept it in the EU. Their true vice is their ingrained antipathy to a uniting Europe; they fear what they perceive as the disintegration of the nation state.

That view is ably exemplified by the noble Lord, Lord Rees-Mogg, who recently asked in his column in The Times whether it was now time for Britain to choose between its allegiance to the United States and its membership of the European Union. He answers his own query by saying that Britain should forsake the latter for the former. Such a view is a patent folly, not least because it would undermine NATO. Britain should, of course, anchor itself in the European Union—its geographical home—and strengthen its ties with the United States, the Commonwealth and all other willing partners, which is a policy boldly developed by Prime Minister Blair and the present Government.

But the confrontational views of the noble Lord, Lord Rees-Mogg, find curious echo not only in the anti-Americanism which thrives in certain political circles in Europe, but also in the thinking of the neo-conservatives in Washington who wish to use the IGC's modest proposals for an EU planning function as a pretext for the United States to withdraw from its NATO responsibilities. Those of us who seek measured change in the relationship between the USA and the EU compatible with changing priorities should resist these siren voices and their sinuous simplicities. The partnership would indeed be fractured if we were to follow the American isolationists whose beliefs were reported in Irwin Stelzer's recent column in The Times, as those deeming NATO to be "irrelevant".

A Fractured Relationship is the provocative title of tonight's report and is one born of the recent conflict in Iraq and its effect on European unity. Yesterday's dramatic revelation of Saddam Hussein's welcome capture will bear further consideration elsewhere. Meanwhile, in the new year, a real opportunity is offered us here in Europe and across the Atlantic to repair the fractured relationship.

In conclusion, I want to draw one parallel with the path upon which NATO has now embarked as it shuffles off the coil of being a defence organisation wholly concerned with the mutual defence of its members and its reincarnation as an entity providing defence and security at home by pre-emptive action out of area. Invoking wider global security concerns, Prime Minister Blair has rightly highlighted the redundancy of the belief that, in the future, the defence and security of the global village can remain the separate responsibility of the parish councils of nation states.

Technology and communication have caught us out. In the future, we will all hang separately if we do not hang together in the new and developing coalitions of the willing, of which NATO and the EU are supreme and complementary examples. This Barkis principle, promoting, like Dickens's Barkis, the marriage of the willing, must inform our future thinking and action. The willing and able must support, as we do on both sides of the Atlantic, active democracies, dynamic markets, respect for human rights and the rule of law as the lodestones of a fairer, freer and far-sighted world. If our report helps to clarify that change and those challenges, then our retiring Sub-committee C will, I hope and believe, have done some small good.


Lord Hannay of Chiswick

My Lords, no one could reasonably argue that this debate is not topical, or that it does not address the single most significant aspect of any effort by Europe to develop a common foreign and security policy and its evolving relationship with the United States. It does both of those things. In doing them, the report before the House strikes, in my view, the right note: deep concern that all is not well with that crucial relationship, combined with a commitment to working to improve it. The House surely owes a debt of gratitude to the noble Lord, Lord Jopling, for his long service in this cause. I remember well when he ran the British-American Parliamentary Group and how much he contributed to it before he came to this place. I thank also his colleagues for having sounded an alarm bell after their visit to Washington.

My only regret is that, as is so often the case, we have taken more than six months to find time to debate such an important matter. In this House and during this new Session, we really must cut down that gap if we are not to lose our relevance.

The relationship between the European Union and the United States is fundamentally asymmetrical and atypical, and that is what makes it so difficult to analyse and to shape. It is asymmetrical in a number of different ways. First, it is so because of the unevenness of the weight of the two parties in different fields of external policy. To take the two extremes of the spectrum, in trade policy, as we saw recently over the lifting of US trade barriers on steel and as we can see whenever the main players in global trade policy sit at the negotiating table in multilateral negotiations, the US and the EU are equals. Agreement between them is a necessary if not a sufficient condition for any progress. At the other end of the spectrum—military power—there is no equivalence at all, and the gap is widening.

Between those two extremes, the situation is less clear-cut, with Europe's "soft" power assets in aid and nation-building often matching or exceeding that of the US. But the relationship is also asymmetrical because it is not one between two nation states, but between, on the one hand, one nation state and, on the other, a collectivity of states which approve a number of their functions, but each one of which has its own longstanding relationship with the US. In a way, every European country has a special relationship with the United States and so does the European Union as a whole.

Just to make it a little more complicated, all these aspects of the overall relationship are constantly moving and changing. So it is no good simply trying to draw up a blueprint and hoping that it will apply for all time and for all circumstances. There has to be flexibility and adaptability at both ends.

If we look first at the European end of the equation, it becomes clear that there is a massive difference in the influence we can hope to have over US policy making if we speak with one voice or if we are divided. Recent examples where we have influenced that policy making are on steel tariffs, on Europe's defence identity and on the handling of Iran. An example of the opposite situation has been where we have, both collectively and separately, had little influence on Iraq. And there are plenty of others.

But that does not mean to say that we should strive for unity at any price. The policy options we support have to make sense in terms of protecting and furthering our own European interests. In more cases than not it will be a case of pursuing a dialogue with Washington designed to maximise, in partnership, our ability to secure shared objectives and to promote shared values. That has already been the case in the Balkans and in Afghanistan, and it needs to be the case in post-war Iraq and in the Middle East peace process.

But unity certainly does not make sense if it is designed, systematically and deliberately, to promote policies in opposition to or at variance with those of the United States. That is the defect of the image of multi-polarity. That approach in any case will not correspond with Europe's interests, which so often coincide and are not in contradiction with those of the United States. It will not rally anything like a consensus in Europe, so it fails the basic test for an effective European policy.

The other end of the equation in the United States is less certain than at any time since the end of the Second World War. Successive US administrations from Truman to Clinton favoured and supported European unity even when there were short term costs—for example, in the field of trade policy. That policy outlived the end of the Cold War as it became clear that the new world disorder of the 1990s required effective co-operation across a wide range of issues between the two sides of the Atlantic.

Now, however, it is challenged by influential voices both outside and within the present Administration. Splitting Europe with slogans such as new and old Europe and measures such as the sheep and goats approach to the grant of contracts in Iraqi construction are pursued with a reckless disregard for the long-term consequences. If I was to answer the question of the noble Lord, Lord Gilbert, to the noble Lord, Lord Jopling, I would say, "Why should the American taxpayer pay for a wider range of countries to subscribe to these projects? First, because he will get value; and, secondly"—

Lord Gilbert

My Lords, who would get better value?

Lord Hannay of Chiswck

The American taxpayer, my Lords, because we have untied our aid. Why have we untied our aid? Because we get better value from it that way. And, secondly, because playing these kinds of games does not pay in the long term. Splitting Europe will not work.

The fabric of multilateral co-operation is challenged and the Europeans have made clear that it is essential for their involvement. That view is often treated with disdain in the United States.

This might not matter so much if the world was a more stable and secure place or if the United States really was a benign hegemon able on its own to ensure that nothing went seriously wrong, a little like the Roman Empire at the height of its power. But neither of these propositions stands up to careful scrutiny. The new threats which have taken the place of the Cold War—from terrorism, from the proliferation of weapons of mass destruction and from the failure of states—are as real as the old ones, and more complex and more difficult to counter. Combined with still festering old disputes such as those in Palestine and Kashmir, aggravated by poverty, pandemic diseases and environmental degradation, this is a witch's brew which particularly menaces the open societies that emerged so successfully from the Cold War.

It is not the United States acting alone that is either capable or willing to shield us as it did in the Cold War. Iraq and Afghanistan are already revealing how stretched US resources can be by two crises. Moreover, these new threats cannot be countered by military action alone. They need the widest possible global coalition, underpinned by a framework of international law, to give the effort the authority and the legitimacy it requires if it is to be successful.

That will simply not be achieved if Europeans and Americans do not work together in close partnership. If we cannot achieve that partnership, the Americans will find themselves with a burden that they are unwilling in the end to support, as they did in Vietnam, and we Europeans will be faced with an increasingly unilateralist and isolationist United States which will reveal how ill-equipped we are to look after our interests on our own.

Are we now beyond the point where we can hope to heal the fractures of this last year or so? In my view, certainly not. Damage has been done, but it is not irremediable. The institutions on which we depend— NATO and the UN—are capable of use if we can rediscover the habit of using them constructively and not as forums for discordant political debate.

However, a Europe seeking to develop its own common and foreign security policy—as I believe it will necessarily do as its individual nations' capacity for independent action steadily reduces—needs to be more imaginative than that. We need, I believe, to reach out to the United States and ask them to build new organic links between us which will enable the whole process of crisis and threat management, from analysis and assessment through the discussion of policy options to action itself, to be handled discreetly and calmly, with differences aired unpolemically when a fully common approach cannot be achieved.

The idea of specific EU/US machinery to handle foreign policy co-operation has been around at least since the 1970s. It is surely now time to move it from the realm of academic debate to actual practice.

8.21 p.m.

Lord Bowness

My Lords, the report of the committee has been comprehensively presented by my noble friend Lord Jopling. However, having had the privilege of being asked to succeed him as chairman of the sub-committee, I would like to take this opportunity of paying tribute to my noble friend, not only for his chairmanship and conduct of this inquiry and the presentation of this report but also for his tenure during his three years as chairman of the sub-committee. It is daunting to follow him, since he brought great skills, knowledge and expertise to the chairmanship, to say nothing of kindness to less well informed members—at least, one less well informed member—of the sub-committee. I am sure that all noble Lords who have served with him will want to thank him for his work, as well as thanking other noble Lords who left the committee at the end of the parliamentary Session.

There is very little to add to the report in the light of the analysis of my noble friend. However, the situation is, I submit, evolving, and the committee's recommendations in this report may be affected by the result of the weekend's European Council meeting and what ultimately happens to some of the proposals in the draft constitution. It would, I suggest, be unwise to indulge in too much jubilation that agreement was not reached this weekend, although the timetable was probably unreasonable. However, the total failure of the whole project will mean that a number of important recommendations which are designed to improve EU/ US relations need a new vehicle if they are to have a chance of succeeding.

The committee's recommendations place much emphasis on what the EU and the nations of the Union should do. It places rather less emphasis on what the United States should do. However, a partnership is a two-way street, and there are obligations on the United States if they truly want the European Union as a partner and not a satellite.

My noble friend Lord Jopling indicated that some people we met in Washington showed great reluctance to recognise the need for that partnership. Indeed, there was almost total disregard by some of any contrary opinions which might be expressed. As other noble Lords have said, I believe that crude attempts to divide Europe into old and new Europe are extremely unhelpful. It is quite extraordinary that some in the United Kingdom have taken up that theme.

I also suggest that forcing states soon to be members of the European Union to make a choice—a false choice, I believe—between the European Union and the United States is not helpful. The United States is likely to be better served by Europe working together, especially on foreign policy and defence.

I think, looking at the divide between old and new Europe, that nothing is quite that simple. Remarks were made about particular nations in the context of Iraq; yet some which opposed action in Iraq were deeply involved in the mission in Afghanistan.

The health of the partnership between the European Union and the United States is vital for both sides. As has been said, both sides will need to work at it, and disagreement on particular issues should not be an excuse for patronising or ostracising those who disagree. Paragraph 34 of the committee's report made it clear that the European Union's foreign policy framework should avoid failure in any particular field—failure to achieve total agreement being portrayed as a common foreign and security policy failure or as a reason for not trying to agree.

The health of the partnership will come from both sides having the ability—though not necessarily the equal ability—to contribute substantially, especially in the field of defence. The recommendation in paragraph 32, supported by the committee and endorsed by the Government, asks for the European Union to drive that forward. Of course, the details will be important; NATO will remain of paramount importance, and should remain so for the European Union and for the United States, which should not disregard it when that is convenient for them. Members of the European Union working together to improve capability, together with the necessary frameworks to work effectively, should be welcomed by the United States and not constantly portrayed as an attempt to subvert NATO.

The report and its presentation by my noble friend Lord Jopling shows the position as we found it and, to some extent, as it still is today. It may not make for comfortable reading or listening, but unless we can offer to friends in the United States and partners in Europe a frank assessment of our concerns, the relationship will not prosper.

8.26 p.m.

Lord Powell of Bayswater

My Lords, there is probably no issue more important for Europe than transatlantic relations, and our sub-committee was absolutely right to survey those relations and propose how the damage done in recent times could be repaired. Our timing could scarcely have been better, although that is more than can be said for the time that it has taken to have this debate.

Our report is certainly a tribute to the acute, shrewd and perceptive chairmanship of the noble Lord, Lord Jopling, the vast experience of our special adviser Sir Michael Quinton and the model industriousness of our excellent Clerk and researcher. The report is all the better for being brief, objective and very much to the point. In speaking to it, I must declare an interest as chairman of Atlantic Partnership, which is a bipartisan organisation established to maintain support for the transatlantic relationship. We are active in the United Kingdom, the United States and four major European countries, and I believe that our message is being heard.

As the noble Lord, Lord Jopling, said, our report notes that transatlantic relations are at one of their lowest ebbs ever. That was certainly true in July when we published the report; since then, the tide has begun to flow back in. On the United States' side, steel tariffs have been removed and legislation is now before Congress to remove tax incentives for American exporters, which the World Trade Organisation ruled illegal. That should avoid further escalation of trade disputes between Europe and the United States.

Perhaps most important was President Bush's remarkable speech at the Banqueting Hall during his state visit to the United Kingdom, where he restated vigorously America's preference for working with allies and through international institutions, provided always that they are effective. Our first choice and constant practice is to work with other responsible governments", were his words. Given that America's immense strength allows it the option of acting on its own, it is remarkable how often it has preferred to act collectively rather than unilaterally.

Europe, too, has moved some way in the right direction. NATO's involvement in Afghanistan is one positive step, which I hope will eventually be mapped by NATO involvement in Iraq. We have seen Europe's Foreign Ministers square up to Iran for that country's deceit over its nuclear weapons programme. The adoption of the European Union security strategy by the European Council at the weekend—at least, I hope that it was adopted—marks a welcome firming up of Europe's sense of purpose in foreign affairs. While an explicit reference to pre-emption was a bit too much for some European governments to swallow, "preventive engagement" seems to me much the same thing. We are assured by the Government that the phrase commits Europe to early and resolute action to prevent threats materialising.

So there is reason to hope that we are past the worst in the relationship. We should not romanticise about an idyllic past—there have been plenty of other low points in that relationship. But for the future we need to focus on some of the structural changes which are bound to affect transatlantic relations. The fact is that the Euro-Atlantic relationship has regularly worked well only in the core areas—above all, the defence of Europe itself against the Soviet threat. But there has almost never been much agreement on issues outside Europe, whether Suez or Vietnam or central America, yet those very out-of-area problems are the very ones that will feature most prominently in the future and where the divisions between Europe and the United States are greatest. So we need to find a way to extend traditional transatlantic collaboration to these areas and to the challenges arising from them, particularly terrorism and weapons of mass destruction.

The European Union's new security strategy is a step in the right direction. The test will be whether we can convert it from being a purely declaratory document into concrete measures—including equipping European members of NATO with the military capabilities to make it effective in dealing with these qualitatively new risks. Without that, the new security strategy will be toothless. The Government's recent defence White Paper helpfully addresses the consequences for the structure of our own forces. There is regrettably not much evidence so far that the rest of Europe has any intention of following our example.

We need to move cautiously on European defence arrangements and institutions. If the Europeans appear to be seeking alternatives to NATO—and that has been and remains the perception of many in the United States—then a process of unravelling will be set in train. Our report stresses that NATO should not be treated as a last resort or disagreeable necessity but as the principal and most systematic forum for EU/US consultation on security and defence issues. A European military planning unit separate from NATO and housed separately may seem very small and inoffensive in the beginning. But nothing in the EU ever shrinks—except national sovereignty. Every EU institution expands over time and assumes greater powers in what is called "competence creep". The first step is therefore the fateful one. It sounds as though the Government have avoided that danger for now, but they—and we—must be vigilant to ensure that it does not come back to haunt us in future.

Another fundamental risk to the transatlantic relationship is that the process of European integration so drains and absorbs our energy and attention—as it did during last weekend's European Council—that we are left exhausted and unresponsive to external threats. Whether the new institutions proposed in the European constitution—such as the more permanent presidency and the foreign minister—will eventually enable Europe to be more proactive remains to be seen. But so far we too often seem to get the worst of both worlds. The common foreign policy is strong enough to oppose and dilute the assertion of American power, but too weak to allow Europe itself to act independently and assertively on the world stage.

That is one reason why it is so important to preserve an independent British voice in foreign policy, which must mean no majority voting on foreign policy in the EU. The Government appear to have secured acceptance of that important point of principle at the weekend, in which case they deserve congratulations. I emphatically do not agree with noble Lords who argued in last week's debate on the draft European constitution that Britain's influence with the United States is now so slender that it is only by taking refuge in a common foreign policy that we can hope to be an influential partner to the US. That is a species of defeatism, and I know from my own contacts at very senior levels in the American Administration that is not how it looks in Washington, where Britain is frequently still a catalyst in American decision-making on many important issues. I was glad to see President Bush reaffirm the special relationship during his state visit, without a trace of the diffidence and embarrassment which inexplicably overcome some of our own Foreign Office experts at any mention of it.

For me the greatest danger is not of some cataclysmic crisis threatening the Atlantic partnership, but a steady erosion of trust and confidence, so that we wake up in 10 years' time to find that the two sides of the Atlantic have drifted irreparably apart and the concept of "the West", which has achieved so much for us, has been forfeited. There are forces pushing that way both in America and in Europe. Plenty of people in America believe that the European Union is a broken reed interested only in institution building and clinging to ineffective multilateralism, or, even worse, intent on building up Europe as a rival to the US, and ultimately intent on getting rid of the United States from Europe. They would be happy to see the US wash its hands of Europe and go its own way. In Europe, just as many see America as a bull in a china shop, interested in allies only as a "toolbox"—to use a favourite phrase of Secretary Rumsfeld—and unwilling to go through the processes of consultation and persuasion which have habitually been the strength of transatlantic relations.

The only way to avoid those perceptions gaining ground and becoming reality is to rebuild the relationship of confidence and mutual support which characterised the Cold War years and make that relationship work in the new international environment. Of course, we shall not always agree but we must not let occasional differences undermine the long-term relationship. That can be done only by engaging at every level through NATO, through the emerging common foreign policy and through the bilateral relationship— with the last of these, the bilateral Anglo/US partnership, remaining the ultimate guarantee that we can be guided by our own national interests and not have to rely in the last resort on soggy consensus or, even worse, anti-Americanism.

8.36 p.m.

Lord Williams of Elvel

My Lords, one of the difficulties of debating a report such as this is that time has gone by since we even started in the committee under the chairmanship of the noble Lord, Lord Jopling. I believe that we started in January. Since then a lot of water has flowed under a lot of bridges. In particular, last weekend seemed to mark some considerable flow under the bridge. Given that any report has a short-term shelf life, we have to ask ourselves, where does that report stand now?

Is there now, after last weekend, a coherent European Union that can produce a coherent statement on relations with the United States? Is there likely to be any coherent European Union foreign policy—given that there will be no Foreign Minister or anything like that—before general elections take place in the United Kingdom, presidential elections take place in the United States, and elections take place in Germany, Spain, Poland and so on? If I may say so, we are living on a slightly different planet from the planet we started on when we investigated this matter in our committee.

My noble friend Lord Harrison quite rightly pointed out that we are—this is true also regarding our report on the Russia matter—looking at the end (and the consequences of the end) of the Cold War. Personally, I do not think that we have quite settled down to the idea that in 1948 NATO had its proper function of defending the West against the Soviets, and that the Soviets had the Warsaw Pact defending them against us. When the whole thing broke down, we had a great problem in deciding what the role of NATO was and, consequently, whether there should be an EU role in defence and what the function of the WEU was. If I may say so to the noble Lord, Lord Jopling, we have been investigating this problem in the committee for quite a long time in both our reports on Russia and the United States. That is a very important point that I should like to put on the table.

My noble friend Lord Harrison said that we have to deal with what we have to deal with. There is going to be no constitution of the EU, there is going to be no EU Foreign Minister, so a large part of our report, I am afraid, is now irrelevant. Nevertheless, some positive things come out of our report. The first is that the EU such as it is and will be, even if there is no constitution and no foreign minister, can act on trade. The noble Lord, Lord Powell of Bayswater, has just introduced the idea that the EU did a pretty good deal on steel. There is humanitarian relief. There are all sorts of areas in places such as Macedonia where the EU can act.

It is difficult to see, however, how the EU can have any serious collective policy in regard to the United States. I shall quote a bit of the report that is quite important. Page 12 states: In practice, if an issue proves particularly divisive, as the crisis in Iraq was, the common position is likely to have little substance, leaving Member States free to pursue their national interest. An effective EU common foreign and security policy exists only in areas where Member States see a clear advantage in reaching agreement". I have absolutely no doubt that member states such as the United Kingdom, France, Germany, Italy and others see a clear advantage in maintaining bilateral relationships with the United States. For the life of me, I cannot understand how they will accept going through an organisation—that is what the European Union is—in dealing with the United States. On trade there is a positive, but on the generality of matters there is probably a negative.

We spent a lot of time on Iraq, but events have moved forward, probably in a beneficial way. I certainly endorse what our committee said about the importance of the EU being involved in what one would normally call the peace process in the Middle East, through the quartet. I am sure that the noble and gallant Lord, Lord Guthrie, will speak about ESDP in a minute. There have been some advances on that subject, and I believe that the United States has come to the conclusion that there is merit in EU-US relations, in terms of a function for an EU defence force of some form or other where America does not want to be involved.

Other than that, all that I can contribute to the debate, which is not very much, is to say that I deeply regret that there is in the media a wave of anti-Americanism in Europe, and that there may be a wave of anti-Europeanism in America. We spent a long time on the matter and had to rephrase our report.

I shall summarise, in so far as I can, after what has been a slightly confusing weekend in terms of the European Union and Iraq. It is a time to rebuild the EU-US relationship, as the noble Lord, Lord Powell, said. I do not know how the EU will be constructed. We do not know because we are in suspense. But until and unless we go through a process of rebuilding some coherent organisation in the European Union, I am certain that we cannot as a European Union adopt a sensible and constructive relationship with the United States. Bilateral relations will remain as they are, but until there is a European Union with some sort of construction then bilateral relations will be paramount.

8.46 p.m.

Lord Guthrie of Craigiebank

My Lords, of course the relationship between the United States and the European Union is important and needs whenever possible to be one of close partnership and co-operation, rather than one of confrontation, counterbalance and, from Europe, Gaullist opposition. The implications of the disagreements over Iraq will be with us to a greater or lesser extent for a long time.

I want to touch on a different matter. Syria is one example of where the EU and the United States need to be in step and appear now to be out of step. The EU wishes to give Syria associate status with access to each other's markets. In the past the EU has insisted that those countries granted associate status should conform on basic human and civil rights and standards. Syria has no political freedom, nor has it political opposition. The country is ruled by a small group, the Alawites. The Syrians are now the most repressive Arab regime there is. They also have an appalling record of hatred against Israel. Like many noble Lords, I am not uncritical of all Israel's actions, but Syrian schoolchildren have an unrelenting diet of hatred based on propaganda and deliberate historical distortion. Their syllabus is one of extreme anti-Semitism.

I have seen in the past few days films made in Syria recently which yesterday in the Observer newspaper William Shawcross described as "hideous". Actors portrayed Rabbis engaged in human mutilation and pouring molten lead into the mouth of a Jew who was alleged to have had an affair with a non-Jew. They also portrayed a child being kidnapped and having his throat cut so that his fresh blood could contribute to a Jewish religious ceremony. Those films were made with the help of the Syrian Government and broadcast at prime TV time. There were 29 episodes lasting through the month of Ramadan. Millions of Arabs saw them. We should remember the "Protocols of Zion".

So far, the EU and the UN appear to have said nothing about such racial hatred and behaviour. Why not? Syria has also allowed terrorist training to take place in its country; and many terrorists cross from Syria to Iraq, many intent on killing not only United States' troops but our own British soldiers. Of course I understand the concept of good cop/bad cop, but the divergence of attitudes between the EU and the United States is notable, serious and damaging. In the United States a special Act has just been passed giving powers to the President to approve sanctions. That is a very different message from that of the EU.

President Bashar al-Assad is receiving very mixed messages and must hope that the Europeans' approach will prevail. Assad appears to be nervous. His eventual and belated co-operation with the United States over Al'Qaeda suspects has, I suggest, had far more to do with the fact that the United States had more than 100,000 soldiers close to his border than it did with European carrots and diplomacy. What has Europe actually achieved with soft power in Damascus, apart from sending mixed messages to Assad?

The noble Lord, Lord Williams, was expecting me to say something about European defence. I was not intending to do so but I do not wish to disappoint him. I believe in European defence but I am very suspicious about what Europe's people are thinking at the moment. European defence must be a sensible concept if it means that we have stronger capability. But do we have stronger capability? No one in Europe is spending more on defence.

I am worried about our performance. We could be a real partner if we were prepared to spend more on defence. However, having a small planning headquarters of 30 to 40 people when there are hundreds of staff officers up the road in Belgium does not seem to me to be a very sensible approach at present. A small headquarters such as that will not be able to plan anything serious. It will have to be bigger. All such headquarters always become bigger and are very expensive indeed. Spending money on a headquarters such as that when the defence budget is so short of money and resources seems to me to be wasteful.

We should understand just how feeble the European effort is. Today, the noble Baroness, Lady Williams, interjected that the Minister had forgotten to mention peace-making. I do not believe that the Minister had forgotten to mention peace-making; she recognised that the Europeans were incapable of making peace. They can keep the peace if people want that, but we should not set our sights too high. We may be heading for a political and not a military solution, and that is always disastrous so far as concerns the military.

If we wish the world to be safer, we must do better with the United States. Like the noble Lord, Lord Powell, my feeling is that, following the Iraq crisis, US-EU relations are improving again. But there is still a long way to go before the European Union and the United States will be able to make the difference that they have the potential to make when working together.

8.53 p.m.

Lord Wallace of Saltaire

My Lords, we are all very grateful for this excellent report. I do not believe that it is outdated. I welcome the phrase in the declaration this weekend that the "transatlantic relationship is irreplaceable". We all agree with that. Part of our problem is that, unfortunately, at present too many people in Washington do not agree with that and some within Europe have forgotten it.

This morning, I received a new book written by Elizabeth Pond, the very good American observer of the transatlantic relationship, which referred to the "near-death" experience of that relationship over the past year. Ten days ago in Washington, I heard a senior State Department official refer to the hole which, he said, the United States had itself dug over the past year in its relations with its allies and which, he assured us, the US would stop digging further.

How do we get out of where we are? We face a difficult mood in Washington. It is the most divided Administration I can ever remember, with active rivalries between different factions within the Administration, and all the excited exaggerations of the Washington think-tank world.

We have also faced many divisions and weaknesses in Europe, not only in the past year. I recall President Bush's first visit to Europe in the spring of 2001 when he came to the EU summit in Göteborg in Sweden where he had to listen to 15 heads of government insisting on lecturing him on America's failures on climate change in not ratifying the Kyoto protocol. Not unnaturally, having heard those unco-ordinated messages, he returned rather bored. There was also European solidarity on Afghanistan but a great deal of scepticism on the push to move from Afghanistan on to Iraq, shared by many in this country.

How do we repair the damage? I was grateful to see that the report does not suggest that the answer is, as some who write for The Times and elsewhere suggest, to follow Washington uncritically as each new Administration changes direction. After all, we should recall that from time to time when in office Mrs Thatcher disagreed sharply with Washington; for example, over America's invasion of Grenada. We need partnership and not "followership".

Occasionally we on these Benches have criticised our current Prime Minister for being too uncritical in his support for Washington and for not spelling out to the American public and to Congress the points on which Britain's policy legitimately differs from the current policy of the US Administration. Partnership can come only from a more coherent European grouping; and as British participants in the transatlantic debate we have to insist that there is partnership and not deliberate rivalry. The Gaullist rhetoric that comes from Paris is deeply damaging in its own way. It arouses a counter-paranoia in Washington about a deep suspicion of French and European motives, which is also very unhelpful.

We need to recognise the long-term trends that have weakened the transatlantic relationship. When I first went to the United States in the early 1960s as a graduate student, by meeting contacts in Washington I discovered what my parents-in-law had been doing in the war. There were old wartime links with people who were still making policy and who had been at Bletchley together or in various other areas where the British and the Americans had co-operated. There was a generation who knew Europe very well. After all, foreign policy was run from the east coast.

Now the balance of American politics has shifted to the south and south-west. Once when I was working for David Watt, an excellent journalist and a strong Atlanticist, he recalled the shock that he experienced when he first lectured in western Texas and discovered that his audiences there did not know what the Atlantic Alliance was and had not heard of the acronym NATO. That was in the early 1980s. The United States is now run substantially from Texas, Florida and the south, and we have to do much more to explain where Europe is and what are our interests.

The disappearance of a common threat that held us together has of course made Europe seem less central to US foreign policy. We may say that NATO is the most important alliance for us, but European command is no longer the most important command for the Pentagon. The European region is far less central to American foreign and defence policy. The introversion of the American foreign policy debate, with its intense free market ideas and tangle of think-tanks and lobbies, preoccupied with real and imaginary threats and with other regions of the world, tends to shut out European voices unless they are clear and loud. So there is much less attention to Europe, less knowledge of European developments and of course, given patterns of migration, fewer human links to Europe. It is unlikely that a change of presidency party would change that position very much. The neo-conservatives, who have influence over the current administration, would go and rant and would be outside rather than inside. The underlying trends would still be there. So we need a more coherent European voice.

In the Government's response to the report, I was very happy to see strong support for a more coherent European voice in Washington, including a strengthening of the EU representation, as well as closer co-ordination of our embassies there. I recall that there have been occasions in the past when European Commission representation in Washington was chaired by a former Prime Minister: for example, Van Agt at one stage. That is clearly the direction to which we should be returning, and I glad the Government recognise that.

I agree very strongly with the noble Lord, Lord Hannay, that too many European governments separately pursue their own special relationships in Washington, without recognising that our voice would be stronger if we were better at co-ordination. I also welcome the reports on links to Congress from parliamentarians and others. I have been a member of the Transatlantic Policy Network for 12 years. One of our major activities is to persuade senior Congressmen from both Houses to visit Europe twice a year and to talk about European concerns: to see the world through European eyes.

I also think that we need to raise the European voice in the introverted think-tank debate. As the Minister knows, I have argued that matter before with the Foreign Office. It would be worth while the British Government investing in supporting British scholars spending more time taking part in a debate which matters so much for us, but which listens so little to the views of those outside the beltway.

However, we must also have a positive message to deliver. The report rightly says that it is rather shocking how little policymakers in Washington— even so-called experts on Europe—know about European developments; how easily misinformation gets around. There is little known about European assistance to the third world, or about the scale of its troops, which often support American as well as European objectives outside the European Union, such as in south-eastern Europe, Afghanistan, Kuwait, the Gulf, the Indian Ocean and of course Iraq. In the past three years, the 50,000 European troops deployed outside the EU at any point do not compare that badly to the 130,000 US troops in Iraq. We do not make the best of what we are doing, even though what we are doing is still too little.

I welcome the European security strategy. I was in Washington the day before the previous EU/US summit and was struck that the draft European security strategy was being handed around publicly there with far more enthusiasm than the British Government ever circulated it with here. Clearly, it was intended partly to tell the Americans what we were beginning to do. I rather hope that now that the final versions have been agreed Her Majesty's Government may indeed encourage the rest of us in Britain to take on board what they have now signed up to.

Some on the American Right seem to want to detach the United Kingdom from Europe and to confirm its status as America's most loyal follower. Irwin Stelzer, who has already been quoted in the debate, and who is of course an adviser to Rupert Murdoch, wrote an article I happened to see last year entitled, Is Europe a Threat? His definition of Europe as a threat was as a threat to American dominance of the world. But partnership for many on the neo-conservative Right in the United States is itself a threat to an imperial American approach to the world. That is part of the case we have to argue, therefore, with more reasonable people in Washington, in Congress and around the United States.

It is not a sustainable position for Britain simply to remain America's most loyal follower, given that Britain's interests are not always identical to those of the United States. I doubt whether it is sustainable in terms of British public opinion. After all, we saw how much public opinion doubted the automatic support that we gave to the American invasion of Iraq.

So we in Britain need in our national interest to rebuild a transatlantic partnership. Part of that must recognise that despite this week's set-back, practical co-operation among major EU states can and should move forward with a high representative—if not yet an EU Foreign Minister—a European security and defence policy, which is becoming stronger, and continuing EU-US summits—which will come to play a rather more important role than NATO-EU discussions as the relationship changes. I am glad to hear that President Bush will be coming to Europe this year to attend the Dublin EU-US summit. I hope that the Government are already actively preparing for a coherent European approach to that meeting.

British foreign policy has for the past 50 years rested on the determination to hold the United States and Europe together. We can do that successfully only through a stronger European pillar of sufficient strength to command respect and attention from the self-absorbed opinion leaders and policy-makers in Washington. That is what the report states; that is why we welcome it so warmly.

9.6 p.m.

Lord Astor of Hever

My Lords, I thank my noble friend Lord Jopling for opening this debate, which covers a huge subject. I declare an interest as a trustee of the Atlantic Bridge, a charity set up to promote public education on both sides of the Atlantic in areas such as healthcare, science and economics.

I also pay tribute to my noble friend for the outstanding work that he did in chairing the committee. Reading the report, it is clear that my noble friend has chaired the committee with great authority; the noble Lord, Lord Harrison, added that he did so with wisdom and good humour; and the noble Lord, Lord Powell, used the word astute, I think. Having run the British-American Parliamentary Group for so long, there is little that my noble friend does not know about UK and EU relations with the United States. I congratulate my noble friend Lord Bowness on agreeing to succeed my noble friend and wish him well in future.

The House has been treated to some excellent speeches. As someone who used to be guardian of the Downing Street-White House hotline, it was especially interesting to hear from the noble Lord, Lord Powell. I am aware of the excellent work of the Atlantic Partnership—incidentally, founded by my right honourable friend the Leader of the Opposition. The noble Lord, Lord Williams of Elvel, made some stimulating points about the position of NATO and the EU since the end of the Cold War. I agreed with much of what he said.

The noble and gallant Lord, Lord Guthrie, spoke with great authority on the terrible situation in Syria. As he is a former Chief of the Defence Staff, I hope that his points on European defence—especially the need for stronger capability and substantially larger defence budgets—will be taken on board.

I share the aspiration of the noble Lord, Lord Wallace of Saltaire, that the Government should do more to build up exchanges between British and American students, but I fear that I do not agree with him that Americans want to detach us from the EU.

I am sorry that my noble friend Lady Park, a member of the committee, was unable to speak tonight. The same is true of the noble and gallant Lord, Lord Inge, who plays such a positive role in fostering the special relationship between this country and the United States as president of the Pilgrim:?.

The overall EU-US relationship cannot be assessed without also examining bilateral relations between each EU country and the United States, as the noble Lord, Lord Williams of Elvel, said. UK-US links, French, Spanish, German and Italian links are all different and shaped by different histories. The world is a network, not just a pair of weights with one big bloc on either side of the Atlantic. That is even so in trade and investment, despite trade being in theory solely an EU competence. In practice, as US discrimination against France and Germany on reconstruction contracts in Iraq shows, the interests of the separate member states vis-a-vis the US do diverge sharply.

Although the report's conclusions, as the noble Lord, Lord Williams of Elvel, said, have been overtaken by events, particularly those of the past 48 hours, its publication is timely—more so following the show of public anti-Americanism during the recent state visit. We cannot ignore the opinion polls, which show a much wider unease in British public opinion about President Bush, his administration and his policies. That is worrying; no country is so powerful that it does not need friends. We wish the Secretary of State, Colin Powell, a very speedy recovery after his operation.

As the report states, the EU's relations with the US are at their lowest ebb for a generation. Two years on from the horrors of September 11th, the mutual support, reassertion of a common outlook and shared values across the Atlantic have been pushed into the background. The old concerns are back, particularly highlighted by the divisions over Iraq. French headlines that once asserted, "We are all Americans now" have given way to anti-US sentiment. The German Chancellor won re-election on a platform of naked anti-Americanism. The Atlantic Ocean seems wider than ever.

There remains discord on defence, with growing irritation in Washington over what is seen as the posturing of European countries over their European Defence Initiative. The US sees falling European defence budgets, accompanied by new and unnecessary command structures that involve needless duplications of the command structure that already exists within NATO.

On the Middle East, the difference in emphasis has become a yawning gulf. Trade disputes fester.

In truth, transatlantic differences of one kind or another have existed for a long time; some argue that they are now more visible due to the end of the Cold War. However, there is a long history between the two largest economies of the world. Forty per cent of world trade is between the EU and the US, so there is much at stake economically. We should never forget the past sacrifices that the US made for Europe.

The US and the EU—and its forerunners—have maintained diplomatic relations since 1953. There are various significant transatlantic co-operation treaties, which have important international agendas in which we all share—what the report describes as, deep, common and practical interests". Europe and America retain a fundamental common outlook. Despite disagreements over certain issues, the wider relationship generally continues to work well. The report makes clear that the relationship is not doomed but that work is required, on both sides, to ensure that the future relationship is viable and productive. Future interaction should, accentuate the positive, look to the future, and not focus on blaming or punishing for the past". The US relationship with the EU works best where the EU has clearly defined competencies; for example, terrorism, money-laundering, measures to combat poverty and spreading democracy and human rights. If they continue to work together more progress can be made in tackling the world's problems. The Atlantic partnership is of great value, not only to the partners, but to the world as a whole. If that partnership disintegrates into rivalry or hostility, the world will become a more dangerous place.

The strains that we are experiencing are not aided by the negative thinking on both sides of the Atlantic. There is a danger of heralding every new event in either part of the world as a possible new strain on the relationship rather than in a positive light. There sometimes seems to be a curious lack of diplomacy at the heart of diplomacy. There is too much at stake to allow that to go on.

Much has been written about how the enlargement of the EU might accentuate the divide between Europe and the US. However, little is said about the positive effects. Just a decade ago, half of Europe was run from Moscow, but the values that America and Europe hold dear— liberty, freedom and democracy—were anathema to them. We need a determination to manage the differences that have arisen, and will continue to arise, in such a way as to minimise their impact on the relationship as a whole. We need to identify potential problems before they become a serious source of difficulty.

Compromise is needed on both sides of the Atlantic to ensure that the partnership, which has been of great value to Europe and America—and the world as a whole—for 60 years or more, continues to enhance it for the next 60.

9.17 p.m.

Baroness Symons of Vernham Dean

My Lords, I, too, thank the noble Lord, Lord Jopling, for initiating the debate this evening. I thank him and my noble friend Lord Harrison, who is also retiring from the committee, for all their excellent work, and congratulate them on the report. As the noble Lord, Lord Powell of Bayswater, said, it is short and to the point, and goes to the heart of the issues surrounding the complex relationship between the European Union and the United States. It identifies the key to establishing and maintaining a healthy transatlantic relationship—to seek an effective partnership. I also congratulate the noble Lord, Lord Jopling, and his committee on the timing of this debate, coming immediately after the weekend's events in Brussels in the European Council and the IGC and, of course, in the wake of the remarkable and very welcome events in Iraq.

As several of your Lordships have mentioned, events can move very quickly in international relationships—they certainly did this weekend. The capture of Saddam Hussein is both extraordinary and welcome. As the Prime Minister pointed out at the weekend, the shadow of Saddam is finally lifted from the Iraqi people. Where once his rule meant terror, division and brutality, his capture can now bring about a real opportunity for unity, reconciliation and peace between the people of Iraq. As the noble Lord, Lord Jopling, said, it is an opportunity for a return to normality.

Following a meeting of the European Council and the IGC in Brussels over the weekend, we could all be forgiven for believing—or even for hoping—that the EU has suffered a massive calamity. We would believe that if we took some of media headlines at face value. However, the truth is rather different. Although in formal terms nothing is agreed until everything is agreed in the draft treaty, there were some 82 points where consensus was very close. They included the fact that very important issues for United Kingdom such as defence, foreign policy, tax, EU finance, social security and criminal law will remain the province of the nation state—subject to decision making by unanimity.

Moreover, the European Council welcomed the agreement that we were able to reach with France and Germany on the future of European defence. It will strengthen the European Union's collective planning capacity while in no way duplicating or conflicting with Nato, which of course remains responsible for Europe's territorial defence. International events have moved on since this excellent report was drafted.

I also remind your Lordships, including the noble Lord, Lord Bowness, that all 25 heads of government agreed a transatlantic declaration on the importance of the transatlantic relationship in dealing with the global issues that face us all—an important declaration. This relationship underpins another crucial agreement at the weekend—the European Security Strategy. I assure the noble Lord, Lord Powell of Bayswater, that it was agreed. It was welcomed by the United States and sets out the EU's approach to dealing with the security threats that confront us in the 21st century. Only last week, with the publication of the new FCO strategy, the Foreign Secretary reaffirmed the critical importance of the relationship between Europe and the US for the United Kingdom. It is important for the world's security and prosperity.

I strongly agreed with a great deal of what the noble Lord, Lord Astor of Hever, said. The relationship between the EU and the US is rooted in economic interdependence and in shared values and our many common interests. We confront great challenges in the 21st century: global terrorism; the spread of weapons of mass destruction; poverty and disease; and hostile dictators who oppress their own people and threaten peace. Together, the allies among the world's democracies have a special responsibility to take action and mobilise international institutions to meet those challenges and build a more secure, just and prosperous world. Despite the noble Lord's well argued list of differences, I think that the transatlantic partnership sits at the centre of this enormous effort. Britain's place in the world today is based on the twin pillars of our alliance with the United States of America and our membership of the European Union.

I was pleased that much of the committee's report expressed that view clearly. Specifically, the report says that, first, the terrible events of 9/11 thrust international security to the top of the US agenda, overshadowing the great bulk of transatlantic business that is done quietly and well. Secondly, the report correctly asserts that EU member states agree on the key security objectives but there are differences about how to achieve them. Iraq, of course, highlighted many of those divergences. Thirdly—this is something that should stick firmly in all our minds—both sides, the United States and the EU, will lose out if the relationship is a poor one. Fourthly, I can do no better than to quote directly from the report: Both sides should … avoid either accepting or reinforcing the 'Europe as counterweight' perception. Europe should be seen … to be a more effective partner". The noble Lord, Lord Hannay of Chiswick, was right to differentiate between aspects of the transatlantic relationship. For example, he contrasted the difference in the balance of power in, on the one hand, trade and, on the other, military power. We have seen the divisions over Iraq and, perhaps, the lesser divisions over the Middle East peace process. In recent weeks, we have seen a renewed interest on both sides of the Atlantic in creating a better climate for the international relationship. That point was effectively made by the noble Lord, Lord Powell of Bayswater.

It was on the theme of effectiveness that the Prime Minister and President Bush focused during Mr Bush's recent state visit. As Tony Blair and George Bush said together: Effective multilateralism, and neither unilateralism nor international paralysis, will guide our approach". That approach was echoed in the contributions made by the noble Lords, Lord Hannay of Chiswick and Lord Powell of Bayswater.

It is also the underlying approach taken by the committee chaired by the noble Lord, Lord Jopling. It set out the key areas in which the EU should act and how it should behave in pursuit of an effective transatlantic partnership. The report rightly identifies the reconstruction of Iraq and the search for peace in the Middle East as two key areas in which the EU should continue to strive to make a difference. It also asks that the EU examine its own military capability and improve its means of communicating and explaining itself to the US. Those points were ably emphasised by the noble Lord, Lord Bowness. Finally, the report focuses on NATO as the best forum for transatlantic dialogue in defence and security.

The issue of the ESDP, NATO and the IGC was taken up by my noble friends Lord Harrison and Lord Williams of Elvel and by the noble Lords, Lord Bowness, Lord Powell of Bayswater and Lord Wallace of Saltaire. Of course, NATO remains the cornerstone of our defence. But it makes sense in circumstances where NATO is not engaged for Europe to have the capability and power to act in the interests of Europe and the wider world. It is in that spirit that we have approached the recent discussion on ESDP in the IGC and the separate debate on how to enhance the planning capacity of the EU. On both we have made enormous progress, but, on planning, agreement on a paper setting out the way forward was reached by the European Council over the weekend.

We believe that this agreement addresses the needs identified for the closer links that the EU should be forging with NATO and for better co-ordination between civilian and military aspects of ESDP. On one point, which I know is of vital interest to your Lordships, it does not provide for a standing EU operational headquarters. I agreed with much of what the noble and gallant Lord, Lord Guthrie, said about improving EU capability.

As regards the ESDP, the package was on the table at the IGC. We believed that it provided the basis for consensus. It contained important elements, including the creation of a defence capability development agency, a solidarity clause to help manage the consequences of terrorist attacks and other disasters, and the updating of the Petersberg tasks. We supported the package because we believed that it would contribute to the development and strengthening of the open, flexible, militarily robust ESDP that the United Kingdom for long has championed. We also thought that much of it tuned in with what we said in the White Paper earlier this year.

Therefore, the partnership between NATO and the EU has significant potential that so far has not been recognised. It is a fact which, I believe, many in NATO already acknowledge. At the NATO foreign ministerial meetings in Brussels on 4th December, many allies supported a move for more effective co-operation between NATO and the EU. Various ideas were floated, including a United Kingdom proposal for a joint declaration at the Istanbul Summit in June next year as a response to the terrorist threat. We will keep those matters at the forefront of our continuing relationship and development.

I draw to your Lordships' attention the fact that the European Security Strategy this weekend described the transatlantic relationship as irreplaceable. I was much taken with the points made by the noble Lord, Lord Wallace of Saltaire. I assure him that, of course, the new strategy is warmly supported by Her Majesty's Government.

Perhaps I may turn now to Iraq. I believe that my noble friend Lord Williams described the current position as "in suspense". As I said, the capture of Saddam Hussein is welcome news—nowhere more so perhaps than in Iraq. Possibly understandably, some commentators have focused on the difficulties in the current position, but the position is more positive than that. The European Council leaders have restated their commitment to the political and economic reconstruction of Iraq. The attacks that we have seen on Iraqis and the multinational force, and the international presence generally in Iraq, are attempts to undermine Iraq's future. The EU presidency has welcomed the 15th November announcement by the Governing Council. It has welcomed, too. the accelerated handover of authority to an Iraqi transitional government by the middle of next year. The EU is committed to supporting that process.

Perhaps it is true to say that the European pledge at the Madrid donors conference last October was a little on the disappointing side. But it should be remembered that in the EU a number of member nations have troops on the ground in Iraq, as well as police trainers, and shortly will be preparing a medium-term strategy for Iraq. That strategy will reflect Iraq's needs and complement the efforts of the UN and the coalition.

I would argue that the EU is becoming increasingly engaged in helping Iraq to achieve the goal of a stable, free and prosperous future. The noble Lord, Lord Jopling, raised the issue of the United States' decision to award contracts only to those who supported the action in Iraq, a point also touched on by the noble Lord, Lord Astor of Hever. That point was challenged by the noble Lord, Lord Gilbert. I am sorry that he is not in his place because he was quite vocal on the subject. The noble Lord made the point about why should the US not spend US taxpayers' money on those who supported them.

My point would be slightly different. We must acknowledge that the United Kingdom is among a very small minority of countries that does not attach trade conditions to development assistance that we give. For instance, it is not only the United States that attaches such conditions, but France and other countries also tie their aid to their trade. We do not believe that that is the right approach, but it is important to put that decision in the context of the practice of most countries around the world.

A number of noble Lords, including the noble Lord, Lord Jopling, raised the issues around the Middle East peace process. The European Union and the United States have together been the motor of international engagement in that process. Together we have been at the forefront of the Quartet, leading the work of producing a plan for progress towards a lasting and peaceful settlement. This plan, the road map, builds on our vision, shared in many parts of the world, including the Arab world, of a viable Palestinian state and an Israeli state secure and with internationally recognised borders. Of course there are differences in the nuances of approach on each side of the Atlantic, but the important point is that both the European Union and the United States share the determination to carry that vision forward.

In the conclusions agreed over the weekend by the European Council and in the statements made by President Bush when he was in London in November, the message is the same: the road map is the only credible path to peace and that both the Palestinians and the Israelis must fulfil their commitments under it. We must recognise that the parties cannot take those steps alone. The international community has a great stake in the process and it must play its part. So maintaining a high level of engagement on the part of the members of the Quartet and, perhaps I may say, in particular on the part of the European Union and the United States, will be essential.

The noble Lord, Lord Jopling, reflected that at present the Middle East is something of a virus infecting much of the international agenda. To a certain extent he is right. There are enormous differences on this issue, in particular in public opinion on either side of the Atlantic. But it is important to remember that the United States has recently made commitments not made before by a US government. The US has also challenged the Israeli Government on points where they have not been challenged before, in particular on the building of the security fence, but also—and probably of more importance because of its historical perspective—on the issue of targeted assassinations.

The European Security Strategy also deals with two of the great global threats of today: terrorism and weapons of mass destruction. Given the events of recent weeks, we have a real reason to take an interest in this matter. The threat of terrorism is global. Every time I go overseas, whether to EU or NATO meetings or to individual countries, terrorism is very much at the top of the agenda. The EU and the US remain strong partners in the international coalition against terrorism. That co-operation encompasses policy and operational issues.

On the issue of weapons of mass destruction, we also have an important dialogue between the EU and the US. Only last week the EU's WMD strategy was endorsed at the European Council, and the Union recognises that co-operation with the United States and other key partners is absolutely vital to ensure a successful outcome to the global fight against proliferation.

Perhaps I may turn to the point made by the noble and gallant Lord, Lord Guthrie, about Syria. Last week I spent two days in that country and I agree that we have an enormous amount of work to do. The real dilemma is whether the right strategy is one of disengagement, as the United States would prefer— the noble and gallant Lord cited the instance of the SAA—or is it one of trying to build up the relationship in the way being pursued by the European Union through the association agreement. The noble and gallant Lord was also right to draw our attention to the virulent anti-Semitism in Syria, as well as to the issues around terrorism. I dealt with that subject at some length in my meeting with the Syrian President. I believe that the right strategy at the moment is to offer the opportunity of serious engagement with Syria in order to put right some of what has been going wrong in its international relationships.

The noble Lord, Lord Jopling, my noble friend Lord Williams of Elvel and other noble Lords raised the issue of trade disputes with the United States. Yes, we have had a difficult and damaging trade dispute on steel. I am sure that we shall see more of that. Of course the foreign sales corporations will be coming up the agenda this year and I am sure that there will be those who wish to see retaliation and a strong stance taken in the European Union. But let us put this in the right context. The transatlantic trade relationship is fundamentally very good and enormously important. It is worth thousands of billions of pounds a year in trade and that means jobs and prosperity on both sides of the Atlantic. And, of course, we have the ability to resolve our disputes through the WTO when they occur.

In a wider context, both the United States of America and the European Union can engage in the Doha development round. It is vital that these two huge trading blocs of the world understand the importance of a new trade agreement in terms of the prosperity of those parts of the world that desperately need one. For the European Union and the United States that means a better approach to the key issue of agriculture in trade. We know that that is the position and we have to have the courage on both sides of the Atlantic to address that important issue.

The range of issues on which both sides have to work will continue to grow. Without an effective partnership between the EU and the United States an awful lot of the issues will remain unresolved. We cannot pretend that we do not have differences—of course we do—but the only sensible path is to work together to tackle the problems that confront us.

The committee's report referred to a "fractured relationship". It concluded that the relationship had been damaged and was in need of repair. The committee also readily recognised that the condition is not terminal and, as I have suggested, much has changed since the committee published its report. To use the words of the European security agreement which was agreed this last weekend, the transatlantic relationship is indeed an irreplaceable relationship. As was said at the European Council: Working together bilaterally and within the framework of multilateral institutions, the transatlantic partners will combine the vision and capabilities needed to address the challenges of our time. Now more than ever, the transatlantic link is essential if we want to create a better world".

9.37 p.m.

Lord Jopling

My Lords, I shall be very brief. I thank those noble Lords who were members of the committee for allowing us to produce a unanimous report—a point which has not been mentioned—and I thank noble Lords who have spoken in the debate for the warm reception they have given it. As I said earlier, we have not heard any serious criticisms of the report.

I wish to make only one substantial point to the Minister. I hope that she will ponder on the remarks of the noble Lord, Lord Powell, about the dangers inherent in the 40-strong planning cell which it is proposed should be established for ESDP. He quite rightly made the point that, unless one is very careful, that 40-strong planning cell could turn into a Trojan horse in the future and could turn out to be a threat to NATO. The Government have made the deal but I hope that they have made absolutely certain that that agreement does not lead to this now very small planning cell becoming something very much larger in the end.

The only other criticism raised during the debate concerned the length of time between the publication of the report and the debate. I am grateful that the Government Chief Whip is in his place. I know that he is aware of the great dissatisfaction there is at the log-jam of these reports, into which a great deal of effort, care and time is put by noble Lords. They deserve a more prompt and thorough examination by the House.

The message is clear: the present rift between the EU and the US is very dangerous. There is an urgent need for both sides to renew their efforts to move back as soon as possible to the kind of meaningful partnership we have enjoyed in the past.

On Question, Motion agreed to.

House adjourned at twenty minutes before ten o'clock.