Order Code RL33105
CRS Report for Congress
Received through the CRS Web
The United Kingdom:
Issues for the United States
September 23, 2005
Kristin Archick
Specialist in European Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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The United Kingdom: Issues for the United States
Summary
Many U.S. officials and Members of Congress view the United Kingdom as
Washington’s staunchest and most reliable ally. This perception stems from a
combination of factors: a shared sense of history and culture; the extensive bilateral
cooperation on a wide range of foreign policy, defense, and intelligence issues that
has developed over the course of many decades; and more recently, from the UK’s
strong support in countering terrorism and confronting Iraq. The United States and
Britain also share a mutually beneficial trade and economic relationship, and are each
other’s biggest foreign direct investors.
Nevertheless, some policymakers and analysts on both sides of the Atlantic
question how “special” the “special relationship” is between Washington and
London. UK Prime Minister Tony Blair has sought to build a good rapport with the
Bush Administration to both maximize British influence on the global stage, and to
strengthen the UK as the indispensable “bridge” between the United States and
Europe. As a result, some claim that London has more political capital in and
influence on Washington than any other foreign government. But many British
critics charge that Blair has gotten little in return for his unwavering support of
controversial U.S. policies, most notably in Iraq. Some have called for a reevaluation
of the U.S.-UK partnership, and predict that Blair — who won a third term in office
in May 2005 but with a much reduced parliamentary majority — may chart a more
independent course from the United States for the remainder of his tenure.
Meanwhile, despite Britain’s traditional ambivalence toward the European
Union (EU), the UK, in its desire to play a key role in a bigger and more integrated
EU, may inevitably be drawn closer to Europe in the longer term, especially if current
tensions in the broader U.S.-European relationship persist. Analysts note that some
UK foreign policy impulses are closer to those of its EU partners than to the United
States. For example, like other EU member states, Britain places great emphasis on
multilateral institutions as a means for managing international crises and legitimizing
the use of force, and views resolving the Israeli-Palestinian conflict as key to
reshaping the Middle East and decreasing the terrorist threat. Others argue that the
conduct of British foreign policy has never been nor will it ever be as simplistic as
a black-and-white choice between the United States and Europe. Preserving the
UK’s position as a strong U.S. ally and leading EU partner provides UK foreign
policy with maximum flexibility to promote its diverse interests in Europe and
beyond. Consequently, the UK will continue to seek close ties with both the United
States and the EU for the foreseeable future.
This report assesses the current state of U.S.-UK relations. It examines the
pressures confronting London as it attempts to balance its interests between the
United States and the EU, and the prospects for the future of the U.S.-UK
partnership. It also describes UK views on political, security, and economic issues
of particular importance to the United States, and their implications for U.S. policy.
This report will be updated as needed. For information on broader transatlantic
relations, see CRS Report RL32577, The United States and Europe: Possible Options
for U.S. Policy, by Kristin Archick.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
British Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The 2005 Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Blair’s Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Coming End of the Blair Era . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The UK Between the United States and the EU . . . . . . . . . . . . . . . . . . . . . . . . . . 7
UK Foreign Policy Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Blair’s Transatlantic Bridge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Relations Post-September 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Future Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A More Independent UK? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A Shifting Balance in the U.S.-UK-EU Relationship? . . . . . . . . . . . . 12
Current Issues in U.S.-UK Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Countering Terrorism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Israeli-Palestinian Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
NATO and the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
EU Arms Embargo on China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Defense Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Economic Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
UK G8 Priorities: African Development and Climate Change . . . . . . . . . . 22
Northern Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Conclusions and Implications for the United States . . . . . . . . . . . . . . . . . . . . . . 24

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The United Kingdom:
Issues for the United States
Introduction
Many U.S. officials and Members of Congress view the United Kingdom as
Washington’s staunchest and most reliable ally. This perception stems from a
combination of factors: a shared sense of history and culture; the extensive bilateral
cooperation on a wide range of foreign policy, defense, and intelligence issues that
has developed over the course of many decades; and more recently, from the UK’s
strong support since September 11, 2001 in countering terrorism and confronting
Iraq. Following the deadly terrorist bombings in London on July 7, 2005, the United
States reciprocated, expressing solidarity with the British people and government,
and offering any intelligence, law enforcement, or other assistance necessary. The
U.S. Senate and House of Representatives each passed unanimous resolutions
condemning the London attacks (see S.Res. 193 and H.Res. 356). U.S. authorities
have also been assisting their British counterparts with the investigation into the
failed July 21, 2005 attacks on London’s transport system.
The modern U.S.-UK relationship was largely forged during the Second World
War, and cemented during the Cold War by the need to deter the Soviet threat. It is
often described as the “special relationship” by policymakers and scholars, in
particular because of the unusually close U.S.-UK intelligence arrangement and the
unique U.S.-UK cooperation in nuclear and defense matters. The United States and
the UK have collaborated in collecting and sharing intelligence since World War II,
and London continues to share intelligence with Washington and other English-
speaking countries (Australia, Canada, and New Zealand) that it does not share with
its European allies or EU partners. UK-U.S. cooperation on nuclear technology also
dates back to the 1940s, and the United States has supplied Britain with the missile
delivery systems for its nuclear warheads since 1963. During the Cold War, the UK
served as a vital base for U.S. forces and cruise missiles and continues to host U.S.
military personnel, albeit at reduced levels. And U.S. defense planners view the UK
as one of only two European allies (the other being France) able to project significant
military force over long distances and in high-intensity conflict situations.1
Such long-standing cooperation has engendered a degree of mutual trust
between the United States and the UK that also extends to the diplomatic and
political fields. The United States and Britain are two of five permanent members
1 For more information on the history of U.S.-UK intelligence and defense relations, see
John Baylis, Anglo-American Defense Relations 1939-1984 (New York: St. Martin’s Press),
1984; Martin Rudner, “Britain Betwixt and Between,” Intelligence and National Security,
Winter 2004.

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of the U.N. Security Council, and are founding members of NATO. U.S. and UK
officials, from the cabinet level to the working level, consult frequently and
extensively on the full spectrum of global issues. Many U.S. and UK diplomats
report often turning to each other first and almost reflexively when seeking to build
support for their respective positions in multilateral institutions or during times of
crisis, as in the immediate aftermath of the September 11 attacks on the United
States. Some say that the common language and cultural similarities as well as the
habits of cooperation that have developed over the years contributes to the ease with
which U.S. and UK policymakers interact with each other.
The mutually beneficial U.S.-UK trade and economic relationship is another
important aspect of the U.S.-UK partnership. The UK has the fourth largest economy
in the world, and the fourth largest U.S. export market. Even more significantly, the
UK and the United States are each other’s biggest foreign investors.
U.S. military and economic supremacy, however, has caused many to
characterize the UK as the “junior” partner in the U.S.-UK relationship, and to note
that the relationship is more “special” to Britain than it is to the United States. In the
aftermath of World War II, as the British Empire crumbled and the UK’s relative
poverty and military weakness became evident, the United Kingdom made a strategic
decision to stick close to the United States as a way to preserve as much of its fading
power as possible, leverage its influence internationally, and better protect its
interests in Europe and the world. This has been a guiding principle of British
foreign policy, especially since the 1956 Suez Canal Crisis, during which the UK was
forced to abandon its joint military operation with France and Israel in the Middle
East in the face of U.S. disapproval and economic pressure that led to a run on the
pound. Nevertheless, there have been numerous ups and downs in the U.S.-UK
relationship over the years.2
As with the Clinton Administration, UK Prime Minister Tony Blair has sought
to build a good rapport with the Bush Administration in order to further the “special
relationship,” maximize British influence on the global stage, and strengthen the UK
as the indispensable “bridge” between the United States and Europe. As a result,
some claim that London has more political capital in and influence on Washington
than any other foreign government. British critics, however, charge that Blair has
gotten little in return for his unwavering support of controversial U.S. policies in the
fight against terrorism and in Iraq. Some have called for a reevaluation of the U.S.-
UK partnership. Others predict that Blair — who won a third term in office in May
2005 but with a much reduced parliamentary majority in part because of public
opposition to the British role in the U.S.-led war in Iraq — may chart a more
independent course from the United States for the remainder of his tenure.
Since assuming office in 1997, Prime Minister Blair and his Labour Party have
also pursued a larger role for the UK in the European Union (EU). The UK stood
2 C.J. Bartlett, The Special Relationship: A Political History of Anglo-American Relations
since 1945 (New York: Longman, Inc.), 1992; Gideon Rachman, “Is the Anglo-American
Relationship Still Special?,” Washington Quarterly, Spring 2001; Timothy Garton Ash, Free
World (London: Penguin Books), 2004.

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aside in the early 1950s when the six founding continental countries began the
European project. British leaders feared that UK participation in European
integration would infringe too much on UK sovereignty and detract from rather than
add to British influence in the world. They also worried that the U.S.-UK special
relationship would be endangered, despite Washington’s assertions to the contrary.
The UK finally joined the European Community (EC), the EU’s predecessor, in
1973, although many Britons have remained skeptical of the EU and ambivalent in
their support for further European integration. The UK has been a consistent
supporter of EU enlargement and Turkish membership in the EU, and Blair has been
a key driver of EU efforts to forge an EU defense arm and common foreign policy.
The UK, however, does not participate in the EU’s single currency, the euro, nor in
the EU’s open borders system. Some analysts suggest that the UK may inevitably be
drawn even closer to Europe in the longer term, especially if current tensions in the
broader U.S.-European relationship drive the two sides of the Atlantic apart.
This report assesses the current state of U.S.-UK relations. It examines how
“special” the special relationship is between Washington and London, the pressures
confronting London as it attempts to balance its interests between the United States
and the EU, and the prospects for the future of the U.S.-UK partnership. It also
describes UK views on political, security, and economic issues of particular
importance to the United States, and their implications for U.S. policy.
British Politics
The 2005 Election
Tony Blair has been British Prime Minister since his Labour Party won a
landslide victory in May 1997. This election ended 18 years of Conservative (Tory)
Party rule. Blair decisively secured a second term in June 2001. On May 5, 2005,
the Labour Party won an historic consecutive third term in office. However,
Labour’s parliamentary majority was reduced from 161 to 66 seats; although Labour
won roughly 35% of the national vote, this represented a decrease of over 5
percentage points from Labour’s share of the vote in 2001, and the lowest share for
any majority British government in modern history.
Public opposition to the UK role in the war in Iraq and domestic questions about
Blair’s trustworthiness contributed significantly to Labour’s diminished majority.
UK participation in the war in Iraq has been deeply unpopular among British voters,
and has overshadowed much of Blair’s agenda for the last two years. Blair has come
under repeated fire, including from some prominent members of his own party, for
allegedly exaggerating intelligence about Iraq’s nuclear and biological weapons
capabilities and misleading the UK into war. Labour’s opponents used ongoing
British casualties in Iraq and government documents leaked during the campaign —
that some suggested proved that Blair was committed to the use of force in Iraq as
early as the summer of 2002 — to keep the Iraq war and Blair’s character as
dominant issues in the election. In his own constituency, Blair was unsuccessfully

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CRS-4
challenged for his seat by the father of a British soldier killed in Iraq. Some critics
contend that Labour was returned to power despite, not because of, Tony Blair.
Both the Conservatives and the other main, albeit smaller, opposition party, the
Liberal Democrats, made net gains at Labour’s expense. However, they were unable
to convince many Labour voters that they represented real alternatives on domestic
issues, especially given continued UK economic growth. The Conservatives
emphasized law-and-order issues, such as restricting immigration, and ran a negative
campaign against Blair’s character. They were successful in recapturing some of
their traditional base, especially in London, and took some seats from the Liberal
Democrats, for a net gain of 33 seats. However, their share of the vote, about 32%,
increased less than 1 percentage point from 2001. Despite Blair’s difficulties over
Iraq, many UK analysts believe that Labour still occupies the center ground in British
politics and resonates with “middle England” on a range of issues. Meanwhile, the
Conservatives remain divided and unable to fully shake the perception of being a
party that is “out-of-touch” with the electorate. The Conservatives were also
hamstrung by negative public images of their own leader, Michael Howard, who has
since announced he will step down as party leader as soon as a successor is chosen.
The Liberal Democrats ran to the left of Labour and appear to have benefitted
from having been the only one of the three main parties to have opposed the war in
Iraq. They won roughly 22% of the national vote, an increase of roughly 4
percentage points from 2001, but netted only 11 additional seats. These results,
however, were the best showing for the Liberal Democrats in 76 years.3
Table 1. May 2005 UK General Election Results
Party
# of Seats
Net # of Seats
% of Vote
(646 total)
+/ —
Labour
356
- 47
35.3%
Conservatives
198
+33
32.3%
Liberal Democrats
62
+11
22.1%
All Others
30
+3
10.3%
Source: “Full National Scoreboard,” BBC News, June 24, 2005.
3 Christopher Adams, “Blair Defends Decision for War with Iraq,” Financial Times, May
2, 2005; Glenn Frankel, “Blair Wins Third Term,” Washington Post, May 6, 2005; “Anti-
war Backlash Gives Howard Some Heart,” Financial Times, May 6, 2005; “Lib Dems
Celebrate Best Showing in 76 Years,” Financial Times, May 6, 2005; “Who Deserted
Labor?,” BBC News, May 7, 2005.

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CRS-5
Blair’s Agenda
Throughout his tenure, Prime Minister Blair has pursued a policy mix of fiscal
conservatism, cautious social reform, and international engagement. Blair has been
fortunate to preside over a period of UK economic expansion that began in 1993;
between 1997 and 2001, real GDP grew by an annual average of 3.1%.
Unemployment is low at just under 5%, and growth continues in the 2-3% range,
although it has slowed since the 2001 global economic downturn. Key domestic
challenges for the Blair government include improving the delivery of public
services, ranging from health care to education; promoting government reforms,
especially in the pension and welfare systems; and tackling crime, immigration, and
asylum issues. Following the July 2005 London bombings, countering terrorism and
Islamist extremism will also be a priority on Blair’s domestic agenda.4
Internationally, the EU and G8 will figure prominently on Blair’s initial third
term “to do” list. The UK assumed the year-long rotating presidency of the G8 group
of nations in January 2005, and has sought to focus attention on aid to Africa and
climate change. The UK also took over the EU’s rotating six-month presidency on
July 1, 2005. Two major tasks will be forging agreement on the EU’s next seven-
year budget and managing the current crisis of confidence within the EU following
the French and Dutch rejections of the EU constitutional treaty. Commonly referred
to as the “constitution,” the new treaty was intended to enable an enlarged EU to
function more effectively and play a bigger role on the world stage. The French and
Dutch “no” votes have thrown its future into doubt and caused some EU members
to question the EU’s future shape and identity.5 The July 2005 terrorist attacks on
London will also reinforce the importance the UK places on enhancing EU
counterterrorism capabilities during its presidency.
The July 2005 London bombings have given Blair a political boost, at least in
the short term. The Conservatives and Liberal Democrats closed ranks behind Blair,
insisting that the terrorists would not triumph and that British policies in Iraq or
elsewhere in the Muslim world did not justify the attacks. Opinion polls indicate
increased public satisfaction with Blair’s performance as a leader in the wake of the
bombings. At the same time, polls show that over 60% of Britons believe that the
government’s Iraq policy had increased the risk of terrorist attacks in the UK.6
Although the bombings will probably make it easier for Blair to gain
parliamentary support for new law enforcement and border control measures against
terrorism, it is unclear whether the political goodwill generated will extend to other
aspects of Blair’s agenda. Many argue that discontent within the Labour party and
4 “What’s In the New PM’s In-tray?,” BBC News, May 6, 2005. Also see the Economist
Intelligence Unit reports: United Kingdom Country Report, June 2005 and United Kingdom
Country Profile, 2005.
5 See CRS Report RS21618, The European Union’s Constitution, by Kristin Archick.
6 James Blitz, “Security Challenges Start a New Political Chapter,” Financial Times, July
23, 2005; Peter Riddell, “You’re To Blame But We Want You To Stay, Voters Tell Blair,”
The Times (London), July 26, 2005.

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CRS-6
Blair’s reduced majority will make it more difficult for him to push his domestic
agenda through parliament. They point out that Blair’s parliamentary majority,
although still comfortable by historical standards, includes about 50 Labour members
who rebelled at least twice against the government in the last Parliament, and who
may now feel further emboldened to oppose Blair. Many rebels hail from Labour’s
staunch left wing and have long opposed Blair efforts to liberalize the British
economy and reform its social benefits system. They also reflect an anti-American
strain within the Labour Party. Some have been vocal critics of UK policies in Iraq
and concerned that UK actions to counter terrorism not infringe on human rights and
civil liberties. Many experts believe that they will remain a thorn in Blair’s side,
especially on controversial social and economic issues.7
Some commentators assert that Blair’s ambitions to move the UK closer to
Europe were also damaged by the 2005 election results. Others suggest that Blair’s
plans for bringing the UK into the EU’s single currency were put on ice long before
the election given continued public opposition to relinquishing the pound for the
euro. They also say that the EU’s own current identity crisis has further eroded the
Blair government’s appetite for expending its limited political capital on either the
euro or the EU constitution. In the wake of the French and Dutch “no” votes, the UK
suspended its plans to hold a referendum on the EU constitution in 2006. The Blair
government is now seeking to frame the terms of the debate on the EU’s future
structure and purpose, arguing that EU economic and social reforms are necessary to
meet the challenges of a globalized world and to build public confidence in the EU.8
The Coming End of the Blair Era
Blair has asserted that he will not seek re-election as Labour leader, but that he
intends to serve a “full” third term. However, analysts expect that Blair will step
down before the scheduled end of the next parliament in 2009 in favor, most likely,
of Gordon Brown, his Chancellor of the Exchequer (equivalent to the U.S. treasury
secretary). A week after the election, Blair asserted that he wanted to see a “stable
and orderly transition” to a new Labour leader before the next general election. This
statement has caused many to surmise that Blair may resign in 2007 or 2008 to allow
for such a transition period. Many Blair critics, including some Labour rebels, called
for him to go even sooner given what they viewed as disappointing election results.9
In light of Blair’s improved political fortunes in the wake of the July 2005
terrorist attacks on London, some ardent supporters reportedly are suggesting that
Blair should reconsider his decision to quit as prime minister. They note that
pressure from Labour rebels for Blair to stand down in the next year to 18 months has
dissipated, and that public opinion polls indicate that the number of voters who
7 “Drop in Seats Could Bring Turbulence for Labour,” Financial Times, May 6, 2005.
8 “Blair Tells EU To Change or Fail,” BBC News, June 23, 2005.
9 Graham Bowley, “Blair’s New Battle: Labour Leadership,” International Herald Tribune,
May 7, 2005; Frederick Studemann, “Pressure Grows on Blair To Resign as British Leader,”
Financial Times, May 10, 2005; Christopher Adams and James Blitz, “PM’s Remarks About
Transition Call Third-term Goal into Doubt,” Financial Times, May 12, 2005.

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believe that Blair should resign by the end of 2006 has decreased from almost 40%
in June 2005 to 24% in early August 2005. Most UK-watchers, however, believe that
Blair will stick to his original plan not to seek re-election as Labour leader. They
also note that the boost Blair has received in the polls since the July 2005 attacks may
be temporary. Some suggest that if Blair’s political fortunes fall again, this may
prompt renewed calls for Blair to stand down sooner rather than later.10
The exact timing of a possible early exit by Blair may also depend on how much
resistance he encounters in Parliament; if his legislative agenda stalls, some contend,
this could increase pressure on Blair to transfer power quickly, presumably to Brown.
This may also be true if Labour candidates fare poorly in UK local elections in May
2006. Blair and Brown have been both close partners and rivals for over a decade.
Brown has long aspired to succeed Blair, but was a staunch supporter of Blair in the
2005 election. Some suggest that Blair could still serve a full third term and ensure
an orderly transition to a new Labour leader; in this scenario, Labour would anoint
at its annual party conference in the autumn ahead of the next election a new leader
who, if successful in leading Labour to victory, would take over from Blair as prime
minister the day after the poll.11
The UK Between the United States and the EU
UK Foreign Policy Trends
As noted above, strong relations with the United States have been a cornerstone
of UK foreign policy, to varying degrees, since the 1940s. Most UK policymakers
have looked upon being a loyal ally to the United States as a way to magnify the
UK’s influence internationally and protect its global interests. In 1944, the UK
Foreign Office described its American policy as being to “steer this great unwieldy
barge, the United States, into the right harbor.”12 UK officials long viewed
themselves as America’s foreign policy guide and mentor, often attempting to quietly
exert restraint. Some experts suggest that the United States has been more inclined
to listen to the UK than to other European allies because of the UK’s more significant
military capabilities and willingness to use them against common threats.
The UK has also viewed maintaining good relations with the EU as an essential
part of British foreign policy, despite ongoing British ambivalence toward the EU.
The British government’s decision in the 1960s to apply for membership in the
10 Ben Hall, “Reports of Blair Quitting as MP Dismissed,” Financial Times, August 1, 2005;
“Blair Enjoys Soaring Popularity After London Attacks,” Agence France Presse, August 5,
2005.
11 John Deane, “The Winner, But Questions Remain Over Blair’s Future,” Press
Association, May 6, 2005; Sarah Lyall, “A Dour Scot on Blair’s Team, Eager for Him To
Go,” New York Times, May 7, 2005; Jackie Ashley, “It Isn’t Treason To Discuss the Future
of the Leadership,” The Guardian, May 12, 2005.
12 As quoted in Robin Harris, “The State of the Special Relationship,” Policy Review,
June/July 2002.

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CRS-8
European project was largely driven by concerns that the UK economy was suffering
from being outside the club, as well as fears that France’s political dominance of the
experiment was growing too strong. Ever since the UK acceded to the EC/EU in
1973, successive British governments have sought to balance British interests
between Washington and Brussels.
At the same time, some UK foreign policy impulses are closer to those of its EU
partners than to those of the United States. This has become more evident as the EU
has evolved into a political as well as economic actor and in the years since the 2001
terrorist attacks on the United States. Like its other EU partners, Britain places great
emphasis on multilateral institutions as a means for managing international crises and
legitimizing the use of force. Meanwhile, the United States views this approach as
only one option. Furthermore, the UK’s colonial history in the Middle East and its
relatively large Muslim community (between 1.5 to 2 million Muslims out of a
population of roughly 60 million) influences some of its policy choices in ways that
are distinct from those of the United States. For example, London views resolving
the Israeli-Palestinian conflict as a top priority — maintaining that it is the key to
reshaping the Middle East and decreasing the terrorist threat both at home and abroad
— while Washington stresses that peace and stability in the Middle East will not be
possible until the threats posed by terrorism and weapons of mass destruction are
confronted and removed.
Blair’s Transatlantic Bridge
Blair’s concept of the UK being the “transatlantic bridge” between the United
States and the EU is essentially an extension of long-standing British foreign policy
tendencies. The “bridge” notion was meant as a way to engineer a stronger role for
the UK in the EU while preserving Britain’s position as Washington’s most trusted
and influential ally. Blair and his advisors argued that close U.S.-UK relations gave
the UK more influence in the EU, while the United Kingdom would have more
influence in Washington if it played a central role in Europe. They suggested that
Britain might cease to matter to Washington if London was perceived as being a
fringe player in an EU that was pursuing enlargement and further integration. Former
UK Foreign Secretary Robin Cook asserted shortly after Labour’s election in 1997
that “Britain will be a more valuable, and a more valued, ally of America if we do
actually emerge as a leading partner within Europe. Because a Britain which does
not have influence in Europe will be of less interest to Washington.”13
Other experts suggest, however, that the Blair government was also eager to
promote the UK as a leader in Europe to give Britain more options in its foreign
policy and decrease British dependency on the United States. Many UK
policymakers were alarmed by U.S. hesitancy in the early 1990s to intervene in the
Balkan conflicts, prompting serious questioning of U.S. reliability and NATO’s role
in the post-Cold War era. At the same time, Blair and many of his advisors believed
that Europe had failed to pull its weight diplomatically or militarily in the Balkans.
13 As quoted in “Britain Tough on Human Rights,” Associated Press, May 12, 1997; also see
Rachman, Op. Cit.; and CRS Report 97-622, Britain’s May 1997 Election: Implications for
Foreign Policy of Labour’s Landslide Victory, June 11, 1997, by Karen Donfried.

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They recognized that the violence in the Balkans laid bare Europe’s inability to
manage or intervene in such crises on the European continent, let alone further afield.
As a result, they concluded that the European allies needed to be better prepared to
undertake peacekeeping or crisis management missions on their own in the event that
the United States chose not to participate.
In 1998, Blair reversed Britain’s long-standing opposition to the development
of an EU defense arm and threw greater support behind EU efforts to forge a
common foreign policy. The 1999 NATO air campaign in Kosovo further exposed
Europe’s military weakness and gave added momentum to these initiatives. The
British moves were widely interpreted as an attempt to demonstrate Britain’s
leadership in Europe at a time when the UK’s influence had lessened due to its
absence from the launch of the EU’s single currency. Blair maintained that any EU
defense role should not undermine NATO, and argued that improving European
military capabilities would enable the allies to better share the security burden.
However, U.S. critics were suspicious that Britain’s policy reversal on an EU defense
arm indicated that the UK was inclined to support French ambitions to develop the
EU as a counterweight to the United States.14
Relations Post-September 11
Following the September 11, 2001 terrorist attacks on the United States, some
analysts contend that Prime Minister Blair has hewed more closely to Washington
than to its other EU partners. Many argue that this was because Blair, unlike other
European leaders, immediately grasped how September 11 changed everything, both
for the United States, but also with regard to the international threat posed by
terrorists, especially if they were able to acquire weapons of mass destruction. UK
diplomats stress that Blair was deeply concerned about such threats, including the
one posed by Saddam Hussein in Iraq, long before September 11, 2001.
Regardless, after September 11, the Blair government made a strategic choice
to stand by the United States, and stuck with this choice as the Bush Administration
began to pursue regime change in Iraq. According to an account of a March 2002
Cabinet meeting by Robin Cook, who was then Leader of the House of Commons,
Blair stated that Britain’s national interest laid in “steering close” to the United States
because otherwise, the UK would lose its influence to shape U.S. policy. He argued
that by seeking to be the closest U.S. ally, Britain stood a better chance of preventing
Washington from overreacting, pursuing its objectives in Iraq in a multilateral way,
and broadening the U.S. agenda to include what the UK and other EU partners
viewed as the root causes of Islamist terrorism, such as the ongoing Israeli-
Palestinian conflict.15
The degree to which the UK has successfully influenced U.S. policy choices in
the war on terrorism, Iraq, and other issues has been a topic of much debate on both
14 For more background, see CRS Report RS20356, European Security and Defense Policy:
The British Dimension, October 7, 1999, by Karen Donfried.
15 Ash, Op. Cit., p. 49; and Glenn Frankel, “From Memos, Insights Into Ally’s Doubts on
Iraq War,” Washington Post, June 28, 2005.

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sides of the Atlantic. UK officials contend that Blair played a crucial role in
convincing the Bush Administration to work through the United Nations to disarm
Iraq, even though this initiative ultimately failed. They argue that the priority Blair
placed on resolving the Israeli-Palestinian conflict helped encourage U.S. efforts in
the immediate aftermath of the Iraq war in the late spring of 2003 to become more
engaged in the search for peace. British officials also point to the 2001 war in
Afghanistan, the 2002 Indian-Pakistani nuclear crisis, and the rehabilitation of Libya
as issues where the UK has worked closely with the United States and affected U.S.
policy choices. For example, the UK was instrumental in pressing for a meaningful
international peacekeeping presence in Afghanistan, which resulted in the creation
of the International Security Assistance Force (ISAF).16
In addition, British diplomats cite the close relationship and trust that has been
built between Prime Minister Blair and President Bush as a key reason why the UK
gained U.S. acquiescence to the December 2003 NATO-EU deal to enhance EU
defense planning capabilities. Many U.S. officials had worried that allowing the EU
to develop its own operational planning cell would duplicate and compete with
NATO structures, and be a first step in driving the alliance apart. However, Blair
reportedly called Bush at least twice to discuss the issue and reassure him that the
new EU planning cell would not weaken NATO, thereby securing U.S. support.
President Bush asserted publicly that he believed that Blair would “be true to his
word” that the EU plan would not undermine the alliance.17
Critics contend, however, that Blair has gotten little in return for his staunch
support of controversial U.S. policies. Over the last few years, many British
commentators have described Blair as the American president’s “poodle.” Blair
opponents point out that he did not succeed in keeping the United States on a
multilateral path with regard to the use of force in Iraq, and although Blair supported
giving the United Nations a significant role in reconstructing Iraq, the Bush
Administration initially opted for more limited U.N. involvement. Although
President Bush made some efforts toward being more engaged in the search for peace
in the Middle East in the immediate aftermath of the Iraq war, British critics claim
that Bush has not made resolving the Israeli-Palestinian conflict a priority. Most
recently, UK critics suggest that U.S. responses to Blair’s G8 initiatives on African
aid and climate change fall short, and further demonstrate that Blair’s close
relationship with Bush has yielded few benefits for Britain.18
Some British officials complain privately that many U.S. policymakers expect
the UK to function automatically as the U.S. “water carrier” in the EU, that is, to
fight for U.S. policy positions on political and security issues such as EU defense
structures or EU relations with China. Although UK views on such issues often align
with those of the United States, British diplomats assert that U.S. reliance on the UK
16 Discussions with UK officials and experts, Spring-Summer 2005.
17 Judy Dempsey, “EU’s Big Three in Deal Over Defense,” Financial Times, December 11,
2003; Discussions with U.S. and European officials.
18 Glenn Frankel, “Party Critics Urge Blair to Stand Up to Bush,” Washington Post, October
1, 2004; Richard Stevenson, “In Bush Talks, Blair To Push Africa Aid,” New York TImes,
June 7, 2005; “Enough Payback for Iraq?,” BBC News, June 8, 2005.

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CRS-11
to support U.S. interests in the EU or be the “peacemaker” often puts them in an
uncomfortable position, causing some EU members to view the UK as little more
than America’s Trojan horse. They argue that Washington must be more
sophisticated in managing its relationship with the EU, and should engage robustly
with other EU capitals, not just London, to argue for its point of view, especially
when potentially divisive issues are concerned.19
Future Prospects
A More Independent UK? Some experts believe that Blair will chart a more
independent course from the United States for the remainder of his tenure in office.
For example, the Blair government is unlikely to have much appetite for possible
military intervention in Iran or Syria, partly because UK forces are already
overstretched in Iraq, Afghanistan, and elsewhere. However, even UK political
support for any eventual U.S. or Israeli military strikes on Iranian nuclear facilities
may not be guaranteed given the ongoing opposition to the war in Iraq and the 2005
UK election results that reduced Blair’s parliamentary majority. Some also suggest
that UK officials are eager to portray Iraq as an exceptional case, rather than make
the use of military force to solve international crises the model. Blair may place
greater emphasis over the next few years on more “voter friendly” areas such as
world poverty and climate change; success in these fields could also help Blair polish
his legacy as a global leader.
Press reports indicate that core Labour voters remain distressed by the Bush-
Blair alliance and dissatisfied with Blair’s quiet diplomacy tactics. A former British
Ambassador to Washington, Christopher Meyer, described the Blair approach as one
of “total support in public, total candor in private.”20 Some observers suggest that
Blair’s advisors may encourage him to disagree publicly with President Bush in the
future on areas where British views differ from those of the United States.
Many Labour voters believe that Gordon Brown, upon assuming the prime
ministership, may be less likely than Blair to subjugate UK foreign policy to the
United States, in part because Brown is viewed as more in tune with the Labour Party
faithful. One analyst put it this way: “Other things being equal, Brown would want
to be a good ally of the Americans. But he would care more about what the Party
thinks.”21 This may produce some rhetorical changes in Brown’s approach to the
United States. Others contend that Brown is more euroskeptic than Blair, and a
strong supporter of the Anglo-Saxon political alliance and economic model; thus,
there may be few changes in the substance of UK policy toward the United States.
19 Discussions with UK officials and experts, Spring-Summer 2005.
20 As quoted in Rupert Cornwell, “The Man Who Believes Quiet Lobbying Can Change the
World,” The Independent, December 2, 2002. Also see, Frankel, “Party Critics...,” Op. Cit.;
and “Blair’s Wings Clipped Abroad,” BBC News, May 6, 2005.
21 As cited in Glenn Frankel and Dan Balz, “Facing Roadblocks, Blair Quietly Begins Third
Term,” Washington Post, May 7, 2005.

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CRS-12
Several analysts argue that the effect of the Iraq war on the 2005 British election
may also make future British governments more hesitant about being as bold of a
U.S. ally as Blair was to the Bush Administration. Blair and his successors may be
more inclined to ensure that UK policies are in line with those of other major EU
partners. BBC correspondent John Simpson commented that, “For the first time
since 1941, it may no longer be the automatic choice to stick close to Washington...
None of Mr. Blair’s successors for the next half-century will entirely forget what
happened to Tony Blair [in the 2005 election] when he chose to support an American
president in preference to most of the rest of Europe.”22 Some suggest that the
internal EU crisis over Iraq also convinced Blair of the need to forge a more common
EU foreign policy, in part to help bolster the UK’s clout in Washington. In March
2003, during Blair’s statement opening the debate on Iraq in the House of Commons,
he asserted that Europe, “with one voice,” should have firmly committed itself to
backing the United States in addressing the threats posed by Saddam Hussein, but
demanded in return that “the U.S. should choose the U.N. path and...recognize the
fundamental overriding importance of restarting the Middle East peace process.”23
At a minimum, some experts suggest that U.S. policymakers should not take
future British support for U.S. foreign policy choices for granted. They say the
United States will need to devote greater attention to managing the “special
relationship” and be willing to take British concerns on board. Several UK analysts
point out that Blair and successor governments may make more explicit demands of
the United States in the future as the price for its support of U.S. policies.
A Shifting Balance in the U.S.-UK-EU Relationship? UK officials
argue that the conduct of British foreign policy has never been as simplistic as a
black-and-white choice between the United States and Europe. They point out that
UK foreign policy decisions have always been and will continue to be determined
primarily by British national interests, and these would not be served by forcing a
false and artificial choice between the United States and Europe. UK views on
certain international challenges may align more closely with one side of the Atlantic
or the other; preserving the UK’s position as a strong U.S. ally and leading EU
partner provides UK foreign policy with maximum flexibility to promote its diverse
interests in Europe and beyond. Consequently, the UK will continue to seek close
ties with both the United States and EU for the foreseeable future, regardless of
which party or personalities holds power in either London or Washington. Many
experts also note that British instincts toward protecting UK national sovereignty
from EU encroachment remain strong, and UK officials are not about to cede their
freedom of action in foreign policy and defense matters to the EU anytime soon.
Nevertheless, some analysts suggest that the balance in the triangular U.S.-UK-
EU relationship could change in the years ahead, with the UK ultimately drawn
closer to Europe, especially if the sense persists in London that Blair has gotten little
out of his close relationship with Bush in terms of either the ability to shape U.S.
decisions or tangible policy rewards. They point out that geographically, the UK is
22 “Costly Victory for Chastened Blair,” BBC News, May 9, 2005. Also see William
Kristol, “An Electoral Trifecta,” Weekly Standard, May 16, 2005.
23 Prime Minister Tony Blair, Speech to the UK House of Commons, March 18, 2003.

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CRS-13
much closer to continental Europe than to the United States, and over 50% of UK
trade is with its other EU partners. As a member of the EU, the UK has already given
up some sovereignty to the Union in certain areas, and is therefore bound to the EU
in a much more fundamental way than it is to Washington. Many believe it is only
a matter of time before the UK joins the euro, which would reduce the degree of UK
exceptionalism within the EU. In addition, commentators suggest that younger
Britons feel more European, and future generations of British policymakers, farther
removed from World War II and the Cold War, may not share the same conviction
as previous generations about the importance of the “special relationship.”
Moreover, as in the late 1990s, some UK experts are questioning U.S. reliability
as an ally. They are skeptical about the U.S. commitment to maintaining the broad
transatlantic partnership, especially given the numerous U.S.-EU disagreements that
have surfaced in recent years on a range of foreign policy and trade issues. Iraq is the
most notable, but the list also includes Iran, the Israeli-Palestinian conflict, the
International Criminal Court, the treatment of prisoners at Guantánamo Bay and Abu
Ghraib, genetically-modified food, and climate change. Divergent U.S. and
European views on the role and value of multilateral institutions and international
treaties are at the core of many of these disputes. The Bush Administration in its
second term has sought to improve relations with Europe, in both NATO and the EU,
but differences remain, and many Europeans, including the British, are wary of U.S.
unilateralist tendencies. If these current tensions fester and ultimately drive the
United States and Europe further apart, it could become increasingly difficult for the
UK to straddle the two, especially if British policymakers determine that they have
more common ground with their EU partners than with Washington.24
Other UK-watchers maintain that the United States will retain an edge in the
triangular U.S.-UK-EU relationship, arguing that there is no place in British politics
for a UK foreign policy that does not put strong relations with the United States at
its center given the UK public’s euroskepticism and U.S.-UK cultural and historic
ties. Many also point out that the UK’s more liberal, free-style market economy is
more in line with the U.S. economic and social model than with the highly
protectionist, statist social systems that exist in much of continental Europe.
Furthermore, they suggest that the balance of power within the EU has shifted in
favor of the UK vision for the EU, which is outward-looking and Atlanticist. They
assert that following EU enlargement, France and Germany are no longer able to
drive the EU forward alone; this will make it easier for the UK to ensure that the EU
evolves in a U.S.-friendly way, minimize U.S.-EU tensions, and decrease pressure
on the UK to have to choose between Washington and Brussels. They claim that
even the dispute over Iraq has been overblown, and was mostly a disagreement
between the United States and EU members France and Germany.25
24 For more information on U.S.-EU relations, see CRS Report RS22163, The United States
and Europe: Current Issues, by Kristin Archick.
25 Discussions with U.S. and UK officials and experts, Spring-Summer 2005.

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Current Issues in U.S.-UK Relations
As noted above, U.S.-UK cooperation is extensive and mutually beneficial on
a wide range of foreign policy, defense, and economic issues. At times, however,
UK national interests come into conflict with Washington and/or its EU partners.
This section examines some of the most prominent issues in U.S.-UK relations.
Although not exhaustive, the issues chosen seek to demonstrate instances of close
U.S.-UK cooperation as well as differences, and serve to evaluate the extent to which
some UK policy choices are influenced by competing U.S. and EU preferences.
Countering Terrorism
UK officials assert that London is Washington’s leading ally in the fight against
terrorism. UK forces participated in the U.S.-led military operation in Afghanistan
from its start in October 2001. UK troops are deployed in the NATO-led
International Security Assistance Force (ISAF) in Afghanistan, and the UK has the
lead on counter-narcotic efforts there. The UK has also sought to strengthen its
counterterrorism legislation, stem terrorist financing, and enhance its border controls
in the years since September 11. U.S. and British law enforcement and intelligence
agencies have served as key partners; the two sides have reportedly been working
closely on the July 2005 London bombing investigations.
In August 2005, Blair announced plans to make it easier to deport or exclude
foreign individuals from the UK who advocate violence and incite hatred, as well as
a number of other new law enforcement and immigration reforms aimed at improving
security and tackling Islamist extremism. Critics in the United States and in other
countries say that such measures are long overdue. They charge that traditionally
liberal asylum and immigration laws in the UK, as well as the country’s strong free
speech and privacy protections, have attracted numerous radical Muslim clerics
claiming persecution at home. As a result, some say the UK has become a breeding
ground for Islamist terrorists, such as airplane “shoe bomber” Richard Reid and the
“20th” September 11 hijacker Zacarias Moussaoui, both of whom were apparently
indoctrinated at radical mosques in London. Until recently, UK authorities have
emphasized extended surveillance of extremists as a way to gather intelligence, but
some U.S. officials have expressed frustration with what they view as dangerous and
unnecessary delays in arresting terrorist suspects or instigators in the UK.26
The UK has been trying to balance its counterterrorism policies against well-
established civil liberty protections and democratic ideals. At times, this has also
created tensions with the United States. For example, British courts have rejected
some U.S. extradition requests for terrorist suspects on the grounds of insufficient or
inadmissable evidence. Like its EU partners, London has also expressed serious
concerns about the U.S. decision to hold terrorist suspects at Guantánamo Bay, Cuba
because it fears that such policies weaken Washington’s hand in the battle for
Muslim “hearts and minds.” However, U.S. and British officials discount worries
26 Steve Coll and Susan Glasser, “In London, Islamic Radicals Found a Haven,” Washington
Post, July 10, 2005; “Different Approach To Tackling Terrorism Exposed,” Financial
Times, July 12, 2005.

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CRS-15
that frictions over such issues could impede future law enforcement cooperation,
arguing that both sides remain vulnerable to terrorist attacks and cooperation serves
mutual interests. The UK also supports EU efforts to improve police, judicial, and
intelligence cooperation both among its 25 members and with the United States.27
Iraq
Like President Bush, Prime Minister Blair believed that Saddam Hussein and
his quest to acquire weapons of mass destruction posed an immediate threat to
international security. Although London would have preferred a second U.N.
resolution explicitly authorizing the use of force against Iraq, it ultimately agreed
with Washington to forego such a resolution given the opposition of veto-wielding
members France, Russia, and China. As noted earlier, Blair backed the U.S.-led war
in Iraq over significant public opposition and has paid a political cost, especially
within his own Labour party, which was severely divided over the use of force.
About 45,000 British forces served with U.S. troops during the major combat
phase of the war. In June 2004, Washington and London worked together to gain
unanimous U.N. Security Council approval of a new resolution endorsing the transfer
of Iraqi sovereignty and giving the United Nations a key role in supporting Iraq’s
ongoing political transition. Echoing the view of other EU partners, the UK had been
a consistent advocate for a significant U.N. role in rebuilding Iraq to help bolster the
credibility of the international troop presence and the reconstruction process. The
Bush Administration had initially favored a more narrow, advisory U.N. role in Iraq.
As of September 2005, roughly 8,500 British troops remain in Iraq and have
command of the southeastern sector. UK officials assert that current UK and U.S.
goals in Iraq are the same: to root out the Iraqi insurgency, to support Iraqi efforts
to establish democratic institutions, and to build up Iraqi security capabilities. The
UK has supported a role for NATO in training Iraqi security forces. Media reports
suggest that London is keen to transfer security responsibilities to Iraqi forces to
enable a drawdown of British troops, but UK officials say there is no exit strategy or
fixed timetable. A UK military assessment leaked to the press in July 2005 examines
cutting UK forces in Iraq to about 3,000 in 2006 in parallel with possible U.S.
reductions. Since the March 2003 invasion of Iraq, 95 British soldiers have died.28
Iran
The United States and the UK share similar goals with respect to Iran, including
encouraging reforms, ending Iranian sponsorship of terrorism, and curbing Tehran’s
nuclear ambitions. However, Washington has generally favored isolation and
containment, while London has preferred conditional engagement. The UK, with
France and Germany (the “EU3”), has been working to persuade Iran to permanently
27 For more on UK efforts against terrorism, see the UK entry, pp. 99-107, in CRS Report
RL31612, European Counterterrorist Efforts since September 11: Political Will and Diverse
Responses, coordinated by Paul Gallis.
28 Glenn Frankel and Josh White, “UK Memo Cites Plans for Troop Reduction,” Washington
Post, July 11, 2005; Discussions with UK officials, Summer 2005.

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CRS-16
end activities that could lead to nuclear weapons production in exchange for political
and trade rewards. In late 2004, Iran agreed to temporarily suspend its uranium
enrichment-related work, and Iran and the EU3 opened talks on a long-term
agreement on nuclear, economic, and security cooperation. UK officials stressed that
such engagement was the only practical option, argued that the EU3’s negotiations
were slowing Iranian nuclear progress to some degree, and urged U.S. involvement.
London welcomed the Bush Administration’s March 2005 decision to offer limited
economic incentives if Iran agreed to cooperate with the EU3 on nuclear matters. In
return, the Europeans pledged, if negotiations failed, to refer Iran to the U.N. Security
Council, where Iran could face trade sanctions.
The EU3’s negotiations with Iran have been stalled since August 2005,
following Iran’s resumption of uranium conversion, an early stage in the nuclear fuel
cycle. The EU3 appear increasingly frustrated with Iranian intransigence, and ready
to push for an International Atomic Energy Agency (IAEA) resolution that would
refer Iran to the U.N. Security Council. Such an IAEA resolution, however, would
require a majority vote, and U.S.-EU3 efforts are facing opposition from many IAEA
members, including Russia, China, and India. And even if the United States and the
EU3 are successful in referring Iran to the Security Council, experts view support for
economic sanctions as a remote prospect. Some Europeans, including many British,
worry that Washington may ultimately conclude that diplomacy has failed to address
the Iranian nuclear threat and that a military option should be considered.29
Israeli-Palestinian Conflict
The UK views a just and lasting settlement to the Israeli-Palestinian conflict as
vital to promoting lasting stability in the region and diminishing the threats posed to
both the United States and Europe by terrorism and Islamist militancy. Like its EU
partners, the UK supports a two-state solution, with Israel and a viable Palestinian
state existing peacefully within secure and recognized borders. The UK welcomed
Israel’s withdrawal from the Gaza Strip in August 2005, but remains concerned that
Israel views its disengagement from Gaza as an alternative to the two-state solution
put forward in the “road map” for peace authored by the diplomatic “Quartet” of the
United States, the EU, Russia, and the United Nations.
UK officials have repeatedly urged the United States to become more engaged
in the Middle East peace process. They argue that only sustained U.S. engagement
at the highest levels will force the parties to the conflict, especially Israel, back to the
negotiating table. The Blair government has sought to inject its own momentum into
the peace process at times. In March 2005, London hosted an international
conference that focused on promoting Palestinian efforts to democratize and reform.
Press reports indicate that London initially proposed a wider peace conference, but
Washington preferred a narrower approach. UK officials agree with the United
States that the Palestinian Authority must institute democratic reforms and end
Palestinian terrorism, but they hope that Washington will also pressure Israel to make
more concessions for peace. London supports U.S. efforts to promote democracy in
29 “Straw Attacks Iran Nuclear Stance,” BBC News, September 18, 2005; “Facing
Opposition, U.S. and EU Backpedal on Iran Action,” Washington Post, September 23, 2005.

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the broader Middle East, but stresses that such an initiative will have a better chance
of succeeding if there is progress on resolving the Israeli-Palestinian conflict.30
NATO and the EU
The UK strongly supports NATO and continued U.S. engagement in European
security. At the same time, the UK has been a driving force behind EU efforts to
create an EU defense arm, or common European Security and Defense Policy
(ESDP), to enable the Union to conduct military operations “where NATO as a
whole is not engaged” and to help boost European military capabilities. London
insists that ESDP be tied to NATO, despite pressure from Paris for a more
autonomous defense arm. British officials stress that ESDP provides a more
compelling rationale for European governments to spend scarce resources on
improved defense capabilities that, in turn, will also benefit the alliance.
Some U.S. experts worry, however, that as the UK seeks to burnish its European
credentials in the aftermath of the Iraq war, it may be more willing to cede ground to
the French view on ESDP; they fear this could lead to a duplication of NATO
structures and erode NATO in the longer term. They are critical of Britain’s
acceptance of French-German-led efforts in 2003 to establish an EU operational
planning cell independent of NATO, and point to this as an example of Britain’s
willingness to allow the French to push the autonomy envelope. UK officials counter
that the new EU cell considerably scales back earlier proposals for a European
military headquarters, and that language in the NATO-EU agreement paving the way
for the new EU cell reaffirms NATO as Europe’s preeminent security organization.31
UK policymakers, like the Bush Administration, have not been enthusiastic
about German Chancellor Schroeder’s statement in February 2005 that effectively
proposed a stronger EU role in transatlantic policymaking. His remarks were
interpreted by many as suggesting that the evolving EU, rather than NATO, should
be the primary forum for discussions of international security and political issues,
such as managing Iran or the rise of China. British hesitancy regarding Schroeder’s
proposal may reflect UK concerns that a U.S.-EU dialogue not erode NATO or the
U.S. role as Europe’s ultimate security guarantor. British officials also suggest that
while greater U.S.-EU political dialogue on issues such as the greater Middle East
may be beneficial, it is unlikely that the EU would be willing or able to lead any
significant military mission in the region on its own in the near future, and therefore,
it is vital that NATO be retained and perhaps bolstered as a forum for political
dialogue between the two sides of the Atlantic.32
30 Steven Erlanger, “Israel Still Open To Road Map,” International Herald Tribune,
December 16, 2004; Discussions with UK officials, Spring-Summer 2005.
31 For more information, see CRS Report RL32342, NATO and the European Union, by
Kristin Archick and Paul Gallis.
32 Discussion with UK officials, Summer 2005.

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EU Arms Embargo on China
The EU has been considering lifting its arms embargo on China, which was
imposed after the 1989 Tiananmen Square crackdown. The United States believes
that ending the embargo would send the wrong signal on China’s human rights record
and could help alter the balance of power in East Asia, especially in the Taiwan
Strait. France and Germany claim that the embargo hinders the development of an
EU “strategic partnership” with China and closer economic ties. Lifting the embargo
requires a unanimous decision of all 25 EU members.
The level of UK support for ending the EU arms embargo on China has varied
over the last year. In late 2004-early 2005, UK and other EU policymakers appeared
to be leaning toward agreeing to lift the embargo. UK willingness to do so appeared
based on the view that the embargo was largely ineffective, and that it would only be
lifted if a stronger EU export control regime were put in place at the same time.
Some observers also suggest that London was keen to avoid another fight with Paris
and Berlin so soon after their rift over Iraq.
Britain and other EU members have grown more hesitant recently amid strong
U.S. opposition, lingering human rights concerns, and China’s adoption in March
2005 of an “anti-secession law” warning of the possible use of force against Taiwan.
It now appears likely that the EU’s decision will be delayed until at least 2006. The
UK is not keen for the embargo to be lifted during its EU presidency given its close
political and defense ties to the United States. Nevertheless, many analysts assert
that the EU is still politically committed to lifting the embargo. UK officials stress
that the embargo is far from water-tight, and its eventual end would be accompanied
by an improved EU arms export control regime that they believe would be more
effective in curbing arms sales to China, and elsewhere. UK defense manufacturers
worry that if the EU lifts its arms ban on China, this could impede U.S.-UK defense
cooperation on weapons systems if the United States were to respond by restricting
technology transfers to or defense procurement from Europe.33
Defense Relations
As noted previously, close U.S.-UK defense ties date back many decades. The
United Kingdom currently hosts roughly 11,000 U.S. military personnel plus almost
1,000 civilians, as well as their dependents. Britain provides about $134 million in
host nation support, mostly in indirect contributions such as waived taxes and rents.34
The United States is in the early stages of considering alterations to the nature and
size of its military presence in Western Europe given the changed security threats.
Reducing U.S. troops and bases in Germany will be the main focus of this
realignment. It is unclear whether or to what extent facilities in the UK would be
affected, according to publicly available information, but most defense analysts
33 Also see CRS Report RL32870, European Union’s Arms Embargo on China: Implications
and Options for U.S. Policy, by Kristin Archick, Richard Grimmett, and Shirley Kan.
34 See from the U.S. Department of Defense: Allied Contributions to the Common Defense
2003, [http://www.defenselink.mil/pubs/allied_contrib2003/allied2003.pdf]; and Base
Structure Report FY2005 [http://www.defenselink.mil/pubs/20050527_2005BSR.pdf].

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believe it is unlikely that U.S. military personnel levels in the UK would change
significantly given that U.S. force levels in the UK have already been drawn down
since the end of the Cold War and most that remain are headquarters staff. U.S.
officials say they have been consulting with their UK counterparts, as with other
European allies, on U.S. plans and options.
The United Kingdom has participated, albeit cautiously, since the 1980s in the
U.S. Ballistic Missile Defense (BMD) program; about $300 million in U.S. funding
has been devoted to joint U.S.-UK missile defense activities since 1986, according
to the U.S. Department of Defense Missile Defense Agency. In February 2003, the
Blair government agreed to a U.S. request to upgrade the early warning radar
complex at Fylingdales, a Royal Air Force base in northern England, for a possible
role in the U.S. BMD system.35 UK officials believe that the potential aspirations of
North Korea or Iran to acquire nuclear weapons strengthen the case for BMD, but the
issue remains controversial for many British parliamentarians and public activists.
British critics doubt the technical viability of BMD, worry it could spark a new arms
race with Russia and China, and claim that helping Washington will make the UK
a more likely target of a ballistic missile attack. In announcing the decision on
Fylingdales, then-UK Defense Secretary Geoffrey Hoon stated, “The upgrade does
not of itself commit the UK government to any greater participation in the U.S.
missile defense program.” In June 2003, Washington and London signed an
agreement to facilitate bilateral BMD information exchanges and help pave the way
for further UK industrial participation in BMD. Press reports indicate that the United
States hopes to base U.S. “interceptor” missiles in Europe as part of BMD, and is
considering Britain as a possible site, among others.36
The United Kingdom and the United States are also key customers and suppliers
of defense equipment for each other. U.S. government-to-government sales
agreements of defense articles, services, and technology to the UK for FY2004 are
valued at $479 million.37 However, the UK also acquires U.S. defense articles and
services directly from U.S. defense firms; experts believe that these U.S. commercial
defense sales to the UK are substantially higher than government-to-government
sales. The British government estimates that total U.S. defense equipment sales to
the UK average $2 billion per year, while UK sales of defense items to the United
States average around $1 billion annually.38
35 Fylingdales is one of three long-range radar posts, along with similar installations in
Greenland and Alaska, that comprise the U.S. Ballistic Missile Early Warning System. Data
from Fylingdales feeds into the North American Air Defense Command headquarters in the
United States and its UK counterpart.
36 “UK to Help Son of Star Wars,” BBC News, February 5, 2003; “U.S., Britain Pen Formal
Agreement,” Defense Daily International, June 20, 2003; “U.S. Seeking Sites in Europe for
Son of Star Wars’ Missiles,” Independent on Sunday, November 21, 2004.
37 See the U.S. Defense Security Cooperation Agency’s Facts Book 2004, available at
[http://www.dsca.osd.mil/data_stats.htm].
38 Office of the British Defense Staff (Washington), “US/UK Defense Trade,” March 2002
[http://www.bdsw.org/internet/dto/DTO_Trade_Balance.htm].

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Furthermore, the United States and Britain are engaged in major joint defense
procurement projects, such as the Joint Strike Fighter (JSF) program, and British
defense companies supply components for several U.S. weapons systems, such as the
Patriot Advanced Capability (PAC-3) missile and the Predator unmanned aerial
vehicle. British defense firms also have a significant presence in the United States.
Most notable is British defense contractor BAE Systems. Since the late 1990s, BAE
has acquired several sensitive U.S. defense firms; most recently, in March 2005,
BAE announced its acquisition of U.S. defense company United Defense Industries.
As a result, the U.S. Defense Department has replaced the UK Ministry of Defense
as BAE’s largest customer, and BAE’s U.S. branch employs 45,000 in the United
States, including 35,000 Americans.39
However, some British defense officials and industry leaders complain that
while the UK defense market is relatively open, foreign access to the U.S. defense
marketplace remains restricted and heavily protected. They point out that the U.S.
military uses very little equipment bought from or developed outside of the United
States, and this largely accounts for the U.S.-UK defense trade imbalance. Many UK
policymakers are also frustrated that U.S. security restrictions hamper technology
transfers, which they say impedes UK efforts to cost-effectively enhance British
defense capabilities and improve interoperability with U.S. forces. For several years,
the UK has been pushing for an exemption from the requirements of Section 38(j) of
the U.S. Arms Export Control Act to make it easier for British companies to buy U.S.
defense items; this has generally been referred to as seeking a waiver from the U.S.
International Traffic in Arms Regulations (ITAR). However, London has been
unable to overcome U.S. concerns that UK export controls are not strong enough to
ensure that U.S. technologies sold to or shared with Britain would not be re-exported
to third countries, such as China. It is now unlikely that either the Bush
Administration or Congress would support the UK case for an ITAR waiver should
the British decide in favor of lifting the EU’s arms embargo on China.
Some military analysts believe that U.S. technology-sharing restrictions may
make the United States a less attractive defense supplier or industrial partner for the
UK in the longer term. British officials, for example, are increasingly concerned that
the UK will not have full access to JSF technology. They claim that the UK’s limited
access to JSF design data and weapons technology will make it difficult for Britain
to maintain or modify its own JSFs, and could affect British procurement plans for
the new fighter. Limited UK access to U.S. defense technologies may also cause the
UK to be more inclined to “buy European,” especially given already existing
pressures to do so in order to create European jobs, to ensure a European defense
base strong enough to support the military requirements of the EU’s evolving defense
arm, and to guarantee that European governments and defense industries are not left
completely dependent on foreign technology.40
39 UDI is a key supplier of combat vehicles (such as the Bradley armored infantry vehicle),
munitions, and weapons delivery systems to the U.S. Defense Department. “BAE Systems’
Acquisition of UDI Clears Final Hurdle,” Jane’s Defence Industry, June 24, 2005.
40 “Agency Is in the Making, But Where Is Support from the Nations?,” Jane’s Defence
Industry, July 16, 2004; “UK MPs Meet with U.S. Counterparts To Discuss Problems of
Military Technology Transfer,” Jane’s Defence Industry, August 16, 2005.

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CRS-21
Economic Relations
The bilateral U.S.-UK trade and economic relationship is extensive and
increasingly interdependent. The UK is the fourth largest economy in the world, with
a gross domestic product of roughly $1.8 trillion. The UK is the United States’
largest European export market and fourth largest export market worldwide after
Canada, Mexico, and Japan. In 2004, U.S. exports to the UK totaled about $36
billion, while U.S. imports from the UK were roughly $46 billion. The United States
has had a trade deficit with the UK since 1998. Major U.S. exports to the UK
include aircraft and parts, information technology and telecommunication equipment,
pharmaceuticals, and agricultural products.41
Even more significantly, the UK and the United States are each other’s biggest
foreign investors. U.S. investment in the UK reached roughly $303 billion in 2004,
while UK investment in the United States totaled $252 billion.42 This investment
sustains an estimated 1 million U.S. jobs. According to studies conducted by the
SAIS Center for Transatlantic Relations, the UK has accounted for almost 20% of
total global investment flows into the United States over the last five years, and the
UK ranks as the single most important foreign market in terms of global earnings for
U.S. companies — accounting for 11% of total affiliate income in the first half of this
decade. The contribution of U.S. affiliates to the British economy is also notable.
For example, in 2002, U.S. affiliates accounted for 6.7% of the UK’s aggregate
output.43 U.S. exporters and investors are attracted to the UK because of the common
language, similar legal framework and business practices, relatively low rates of
taxation and inflation, and access to the EU market.
UK trade policy is formulated within the EU context, and U.S.-UK trade
disputes are taken up within the EU framework.44 Although most of the U.S.-EU
economic relationship is harmonious, trade tensions persist. Current U.S.-EU trade
disputes in the WTO include government subsidies that the United States and EU
allegedly provide to their respective civil aircraft manufacturers, Boeing and Airbus;
the U.S. Byrd Amendment, which disburses anti-dumping duties to affected domestic
producers; the U.S. export tax subsidy; and the EU’s ban on approvals of genetically
41 U.S. Census Bureau, U.S. International Trade in Goods and Services: Annual Revision
2004, Exhibit 13, available at [http://www.census.gov/foreign-trade/Press-Release/2004
pr/final_revisions]; U.S. Commerce Department, UK Country Commercial Guide, 2005;
U.S. State Department, Background Note on the UK, August 2005.
42 Jennifer Koncz and Daniel Yorgason, “Direct Investment Positions for 2004: Country and
Industry Detail,” Survey of Current Business, U.S. Commerce Department, July 2005.
43 Joseph Quinlan, Drifting Apart or Growing Together? The Primacy of the Transatlantic
Economy (SAIS Center for Transatlantic Relations, Johns Hopkins University), 2003;
Daniel Hamilton and Joseph Quinlan (eds.), Deep Integration: How Transatlantic Markets
Are Leading Globalization (SAIS Center for Transatlantic Relations, Johns Hopkins
University), 2005.
44 A British official, Peter Mandelson, has been EU Trade Commissioner since November
2004. He is the U.S. Trade Representative’s key interlocutor on U.S.-EU trade disputes.
As a member of the European Commission, however, Mandelson serves the Union as a
whole and does not represent the British government.

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CRS-22
modified food products. Despite such frictions, the UK has been a consistent
supporter of U.S.-EU efforts to lower trade barriers and strengthen the multilateral
trading system. The Blair government hopes that the ongoing WTO Doha round of
multilateral trade negotiations can be successfully concluded by 2006 to deliver
greater global economic growth and better market access for developing countries.
As part of this process, the UK, in its EU presidency role, is pushing to liberalize the
EU’s system of sugar subsidies. The UK also supports efforts to reform the EU’s
Common Agricultural Policy, a perennial source of U.S.-EU trade disputes.45
UK G8 Priorities: African Development and Climate Change
The UK assumed the year-long rotating presidency of the G8 group of nations
in January 2005, and aid to Africa and climate change are London’s two top
priorities. Blair has been pushing for a substantial aid increase for Africa from G8
nations. Key Blair proposals included creating an “International Finance Facility”
(IFF), 100% forgiveness of African debt to the international financial institutions, and
removing trade barriers to African exports. U.S. officials assert that they share UK
concerns about the plight of Africa, and point out that U.S. non-food aid to Africa has
been increasing over the last four years, to roughly $3.5 billion in FY2005. However,
Washington reacted coolly to the IFF, which would have issued bonds to finance an
additional $25 billion in annual aid to Africa beginning in 2006, on grounds that it
lacked a mechanism to ensure that the money would be well spent.
At the G8 summit in Scotland on July 7-8, 2005, the IFF proposal was dropped,
but the UK, the United States, and other participants agreed to increase development
assistance to Africa by $25 billion per year by 2010. G8 leaders also approved an
agreement on debt forgiveness for 18 of the world’s poorest countries, including 14
in Africa. Both Blair and Bush have sought to portray the summit results as a
significant step toward ending poverty in Africa. Some development advocates agree
with this assessment, while others have been more skeptical, arguing that the
promised aid increases are not enough and pointing out that most of the additional
financial assistance will come from the EU rather than the United States.46
Climate change was also highlighted at the G8 summit. Like its EU partners,
the UK remains dismayed with the Bush Administration’s rejection of the U.N.
Kyoto Protocol on climate change that sets limits on heat-trapping gas emissions in
an attempt to reduce global warming. The Bush Administration maintains that such
mandatory caps would be too costly and that the Kyoto Protocol lacks sufficient
developing country participation; instead, it is promoting research and technological
advances to increase energy efficiency and decrease emissions. UK officials claim
that they succeeded in narrowing the gap between the United States and Europe on
climate change at the G8 summit. They point out that Washington agreed to
language in the G8 communique acknowledging, for the first time, the role of human
activity in global warming and the need for urgent action. Critics maintain that the
45 For more information, see CRS Issue Brief IB10087, U.S.-European Union Trade
Relations: Issues and Policy Challenges, by Raymond Ahearn.
46 Also see CRS Report RL32796, Africa, the G8, and the Blair Initiative, and CRS Issue
Brief IB95052, Africa: U.S. Foreign Assistance Issues, both by Raymond W. Copson.

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final G8 statement on climate change is significantly weaker than earlier British
versions, which had called for ambitious greenhouse gas reductions and committed
G8 countries to spend a certain amount on new environment-friendly projects.47
Northern Ireland
The United States strongly supports UK efforts to implement an enduring
political settlement to the conflict in Northern Ireland, which has claimed over 3,200
lives since 1969 and reflected a struggle between different national, cultural, and
religious identities. Northern Ireland’s Protestant majority (53%) defines itself as
British and largely supports continued incorporation in the UK (unionists). The
Catholic minority (44%) considers itself Irish, and many Catholics desire a united
Ireland (nationalists). For years, the British and Irish governments, with U.S.
support, sought to facilitate a political settlement. The resulting Good Friday
Agreement was reached in April 1998. It calls for devolved government — the
transfer of power from London to Belfast — and sets up government structures in
Northern Ireland in which unionists and nationalists share power. It recognizes that
a change in Northern Ireland’s status as part of the United Kingdom can only come
about with the consent of the majority of its people. Implementation of the
agreement, however, has been difficult and the devolved government has been
suspended since October 2002 amid a breakdown of trust and confidence on both
sides. Decommissioning (disarmament), especially by the Irish Republican Army
(IRA), and police reforms have been two key sticking points.
The Bush Administration and many Members of Congress continue to view the
Good Friday Agreement as the best framework for a lasting peace in Northern
Ireland. The Bush Administration has sought to support the efforts of London and
Dublin to broker a deal to reinstate Northern Ireland’s devolved government and
power-sharing institutions. U.S. and British officials assert that the IRA and other
paramilitaries must “go out of business” in order to move the peace process forward.
The Bush Administration and the Blair government welcomed the IRA’s July 2005
statement that it was ending its armed struggle and directing all IRA units to dump
their weapons, but have cautioned that the IRA’s words must be followed by deeds.48
47 Juliet Eilperin, “G9 Urges Action on Global Warming, with General Goals,” Washington
Post, July 8, 2005; Jim Vandehei and Paul Blustein, “African Aid Is Doubled by G8,”
Washington Post, July 9, 2005.
48 For more information, see CRS Report RS21333, Northern Ireland: The Peace Process,
by Kristin Archick.

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CRS-24
Conclusions and Implications
for the United States
Despite occasional tensions between the United States and the United Kingdom
on specific issues, the so-called “special relationship” offers the United States certain
tangible benefits and often serves to buttress U.S. international policies. UK support
has been important to the global fight against terrorism, U.S. military action in
Afghanistan, and the U.S.-led war to oust Saddam Hussein and efforts to stabilize
and rebuild Iraq. UK military capabilities and resources have helped share the U.S.
combat and peacekeeping burden in these conflicts, as well as in the Balkans. Britain
has been a consistent proponent of developing a greater EU political and security role
in a way that complements NATO and promotes a stronger EU as a better and more
effective partner for the United States. The two allies also share a mutually
beneficial and increasingly interdependent economic relationship, and UK policies
within the EU and with the United States have helped to maintain and promote a
more open and efficient world trading system.
Whether the UK position within the U.S.-EU relationship and traditional UK
foreign policy tendencies are changing are questions that have vexed policy analysts
for many years. But beyond the issue of whether changes are afoot lay perhaps two
more profound questions: Does it really matter for the United States if the UK draws
closer to Europe in the longer term? And in light of the EU’s ongoing evolution,
how might a UK either more inside or outside of the EU affect U.S. interests?
Part of the answer to these questions depends on whether the EU evolves into
a more tightly integrated body, especially in the foreign policy and defense fields.
Some U.S. analysts say that if the EU becomes a more coherent foreign policy actor,
this could make the UK a less reliable ally for the United States. If the UK
increasingly turns toward its EU partners in formulating foreign policy decisions, this
could make it harder for Washington to gain London’s support for its initiatives in
NATO or the United Nations. The UK may also be more resistant to being the U.S.
“water carrier” in Europe. Some fear that the UK may become less willing to deploy
its military force in support of U.S. objectives, or be tempted to support French
aspirations to develop the EU as a rival to the United States.
Others argue that a more integrated, cohesive EU in which the UK plays a
leading role could make the EU a better partner for the United States in tackling
global challenges. Conversely, if a “core Europe” were to develop in which a
vanguard of EU member states drove further integration — but which did not include
economically liberal and pro-Atlanticist Britain — Washington could lose one of its
key advocates within the EU and U.S.-EU tensions could increase. The difficulties
with ratifying the EU constitution have sparked renewed discussion of a “core
Europe,” presumably with France and Germany in the lead. The UK would probably
not join such a “core Europe” given its less-integrationist and free market impulses.
Many assess that further EU integration in the foreign policy and defense fields,
however, is impossible without continued British participation, given UK global
interests and military capabilities. Thus, EU initiatives in these areas are unlikely to
go forward in any significant way without British commitment and leadership. While

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the Blair government has been instrumental in recent EU efforts to develop a
common foreign policy and defense arm, a future, more euroskeptic Conservative-led
government might seek to slow these EU projects.
Others are skeptical about the EU’s ability to play a bigger role on the world
stage, especially following the French and Dutch rejections of the EU constitution.
Those of this view maintain that the EU is far from speaking with one voice on
contentious foreign policy issues. If the EU does not move toward further political
integration and remains a looser association of member states whose foreign policies
continue to be determined primarily at the national level, little may change in the
current state of the U.S.-UK-EU relationship, even if the UK moved closer to the EU
by joining the euro. This may be the most realistic scenario, in light of the UK’s own
ambivalence toward deeper EU political integration; many experts contend that no
British government would ever relinquish UK sovereignty in the foreign policy or
defense fields to the EU.
The future shape and identity of the EU, however, does not rest solely in British
hands. It will also depend upon the views and ambitions of other EU members,
particularly France and Germany, and the political parties in power. Not only is the
Blair era in Britain winding down, but new leaders will likely come to power in
Germany and France over the next few months or years and may be more
economically-liberal, reform-minded, and Atlanticist than their predecessors.
Consequently, Blair or future UK leaders may find themselves sharing more common
ground with their French and German counterparts, thereby enabling the UK to
promote its vision of a politically strong, economically vibrant EU working in
partnership with the United States. An EU shaped more fully to the UK liking, and
to that of the United States, may ease U.S.-EU tensions and the pressure on the UK
to serve as bridge or peacemaker between the two. However, improved relations
among London, Paris, and Berlin might also in the longer term lead the UK to turn
more frequently to its other EU partners first — rather than Washington — on
foreign policy concerns. As a result, Washington might not hold quite the same
influence over London as it has in the past.
At the same time, regardless of whether the EU evolves into a more coherent
actor on the world stage or whether the UK draws closer to Europe in the years
ahead, the U.S.-UK relationship will likely remain an important factor in the conduct
of British foreign policy. In general, the “special relationship” helps to boost
Britain’s international standing and often gives the UK greater clout in the EU and
other multilateral organizations. British officials will persist in efforts to shape
decision-making in Washington. However, the extent of U.S. influence on British
foreign policymaking in the future may depend in part on British perceptions of the
value that Washington places on the UK as an ally. Although British support for
U.S. policies should not be automatically assumed, many UK policymakers and
experts believe that it is not in British interests to choose between the United States
and Europe, and thus, the UK will continue to try to avoid such a choice for the
foreseeable future.

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