The United Kingdom: Issues for the United
States
Derek E. Mix
Analyst in European Affairs
May 14, 2010
Congressional Research Service
7-5700
www.crs.gov
RL33105
CRS Report for Congress
P
repared for Members and Committees of Congress
The United Kingdom: Issues for the United States
Summary
Many U.S. officials and Members of Congress view the United Kingdom (UK) as the United
States’ closest and most reliable ally. This perception stems from a combination of factors,
including a sense of shared history, values, and culture; extensive and long-established bilateral
cooperation on a wide range of foreign policy and security issues; and the UK’s strong role in
Iraq and Afghanistan. The United States and the UK also cooperate closely on counterterrorism
efforts. The two countries share an extensive and mutually beneficial trade and economic
relationship, and each is the other’s largest foreign investor.
The term “special relationship” is often used to describe the deep level of U.S.-UK cooperation
on diplomatic and political issues, as well as on security and defense matters such as intelligence-
sharing and nuclear weapons. British officials enjoy a unique level of access to U.S. decision-
makers, and British input is often cited as an element in shaping U.S. foreign policy debates. Few
question that the two countries will remain close allies that choose to cooperate on many
important global issues such as counterterrorism, the NATO mission in Afghanistan, and efforts to
curb Iran’s nuclear activities. At the same time, some observers have called for a reassessment of
the “special relationship” concept. Some British analysts express concern that the UK tends to be
overly deferential to the United States, sometimes at the possible expense of its own national
interests. Others assert that British policymakers are in the process of adjusting to new
geopolitical realities in which changing U.S. priorities may mean that the UK will not always be
viewed as a centrally relevant actor on every issue.
The UK is one of the 27 member countries of the European Union (EU). While the UK’s relations
with the EU have historically involved a degree of ambivalence and a reluctance to pursue certain
elements of integration, British policy and the UK’s outlook on many global issues are often
shaped in the context of its EU membership. For example, analysts note that some UK policy
positions, such as its approach to climate change, are closer to those of its EU partners than to
those of the United States.
The Conservative Party won the most seats in the UK election of May 6, 2010, although they fell
short of winning an absolute majority. On May 11, 2010, the Conservatives agreed to form a
coalition government with the Liberal Democrats, who finished third in the election. Conservative
leader David Cameron became the UK’s new prime minister, and Liberal Democrat leader Nick
Clegg was named deputy prime minister. The Conservative-Liberal Democrat government is the
UK’s first coalition government since World War II. After losing a considerable number of seats
in the election and finishing in second place, the Labour Party moved into opposition. Labour had
led the UK government for 13 years, first under Tony Blair (1997-2007) and then under Gordon
Brown.
U.S.-UK relations and the implications of the 2010 British election may be of interest in the
second session of the 111th Congress. This report provides an overview of the election and
discusses some of the key issues facing the new government. The report also examines the UK’s
relationship with the European Union and assesses some of the main dimensions of the U.S.-UK
relationship. For broader analysis of transatlantic relations, see CRS Report RS22163, The United
States and Europe: Current Issues, by Derek E. Mix.
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Contents
Introduction ................................................................................................................................ 1
The 2010 UK Election ................................................................................................................ 2
State of the Economy ............................................................................................................ 3
Political Reform.................................................................................................................... 3
Implications for the United States.......................................................................................... 4
The UK and the European Union................................................................................................. 4
A Coalition Compromise on Europe ...................................................................................... 5
The UK Between the United States and the EU ..................................................................... 5
U.S.-UK Relations ...................................................................................................................... 6
Political Relations ................................................................................................................. 6
Defense Relations ................................................................................................................. 8
Economic Relations ............................................................................................................ 10
Selected Issues in U.S.-UK Relations ........................................................................................ 11
Counterterrorism................................................................................................................. 11
Afghanistan ........................................................................................................................ 13
Iran..................................................................................................................................... 14
Tables
Table 1. May 2010 UK General Election Results ......................................................................... 2
Contacts
Author Contact Information ...................................................................................................... 15
Acknowledgments .................................................................................................................... 15
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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 (UK) as the United
States’ closest and most reliable ally. This perception stems from a combination of factors,
including a sense of shared history, values, and culture; extensive and long-established bilateral
cooperation on a wide range of foreign policy and security issues; and the UK’s strong role in
Iraq and Afghanistan. The United States and the UK also cooperate closely on counterterrorism
efforts.
The modern U.S.-UK relationship was 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.” This term describes the high degree of mutual trust between the two counties in
cooperating on diplomatic and political issues. The United States and the UK are two of the five
permanent members of the United Nations Security Council, and are both founding members of
the North Atlantic Treaty Organization (NATO). U.S. and UK officials, from the Cabinet level to
the working level, consult frequently and extensively on many global issues. American and
British 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 9/11 attacks on the United States. Some observers assert that a
common language and cultural similarities, as well as the habits of cooperation that have
developed over the years, contribute to the ease with which U.S. and UK policymakers interact
with each other.1
The “special relationship” also encompasses unusually close intelligence-sharing arrangements
and unique cooperation in nuclear and defense matters. During the cold war, the UK served as a
vital base for U.S. forces and continues to host U.S. military personnel and equipment.2 U.S.
defense planners view the UK as one of the most capable European allies—if not the most
capable—in terms of combat forces and the ability to deploy them.
The mutually beneficial trade and economic relationship is another important aspect of the U.S.-
UK partnership. The UK is the sixth-largest economy in the world and the sixth-largest export
destination for U.S. goods. It is also the sixth-largest supplier of U.S. imports. Even more
significantly, the UK and the United States are one another’s largest foreign investors.
U.S. military and economic preponderance, however, has caused many to characterize the UK as
the “junior” partner in the U.S.-UK relationship, and to note that the relationship often appears to
be more “special” to the UK than it is to the United States. While few question that the UK’s role
as a close U.S. ally and partner on a host of important global issues will continue, some observers
have asserted a need for the UK to reassess its approach to the “special relationship,” and to
adjust its mindset in accordance with changing geopolitical realities.
1 See, for example, C.J. Bartlett, The Special Relationship: A Political History of Anglo-American Relations since 1945
(New York: Longman, Inc.), 1992.
2 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.
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The 2010 UK Election
The UK general election of May 6, 2010, resulted in a hung parliament, an outcome in which no
single party wins a majority of seats in the House of Commons. The Conservative Party, led by
David Cameron, won the most seats but fell 20 short of the 326 needed to form a majority
government on its own. The Labour Party suffered substantial losses and finished in second place.
Labour had won the three previous elections and led the UK government since 1997, first under
Tony Blair (1997-2007) and then under Gordon Brown.
After five days of negotiations, the Conservatives reached an agreement on forming a coalition
government with the Liberal Democrats, led by Nick Clegg, who finished third in the voting.
With this deal reached, Gordon Brown resigned as prime minister and David Cameron became
the new prime minister of the United Kingdom on May 11, 2010. Cameron appointed five Liberal
Democrats to serve in his cabinet, including Nick Clegg as deputy prime minister.
Table 1. May 2010 UK General Election Results
# of Seats
Party
(649 total declared)
Net # of Seats +/—
% of Vote
Conservatives 306 +97
36.1%
Labour 258
-91
29.0%
Liberal Democrats
57
-5
23.0%
Al Others
28
-1
11.9%
Source: “Election 2010,” BBC News, http://news.bbc.co.uk/2/shared/election2010/results/.
Given ideological differences between the two parties, some analysts assert that the
Conservatives and the Liberal Democrats are an unlikely pairing for the UK’s first coalition
government since World War II. Adding up the numbers, however, this combination was the only
one that could deliver a solid majority, a fact that may have provided a strong argument for
ideological compromise. The two parties reached an initial policy agreement with a swiftness and
ease that surprised some observers, and both appeared willing to give ground on some issues.
Some observers, nevertheless, wonder how well and how long the arrangement will work.
Before the past 13 years of Labour government, the Conservatives had led the UK government
for a stretch of 18 years, first under Margaret Thatcher (1979-1990), followed by John Major
(1990-1997). The Conservatives, who are often also called the Tories, are generally considered to
be a party of the center-right, although some elements of the party also tend to be more right-wing
than centrist. While critics charge that the Conservative Party remains dominated by the interests
of the country’s social and economic elites, David Cameron, who became the party leader in 2005
and now becomes prime minister at the age of 43, has sought to portray the party as more modern
and inclusive. For instance, Cameron has spoken forcefully in support of efforts to address
climate change.
The Liberal Democrats were formed by the 1988 merger of the Liberal Party and the Social
Democratic Party. The Liberal Democrats are considered a center-left party, and members often
describe themselves as progressive. Since their formation, the Liberal Democrats have been the
UK’s “third party,” struggling to assert their voice alongside Labour and the Conservatives. Nick
Clegg, who became the party leader in 2007 and now becomes deputy prime minister at the age
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of 43, campaigned on the themes of fairness and social equality, portraying the Liberal Democrats
as the alternative to either of the larger parties.
State of the Economy
The economy will be the most pressing issue facing the new government. Between 1993 and
2008, the British economy enjoyed an unprecedented period of sustained growth. The UK,
however, was severely impacted by the global financial crisis and entered a deep recession in
2008—the British economy contracted nearly 5% in 2009 and unemployment rose from 5.6% in
2008 to an expected 8.3% in 2010. The recession appears to be ending this year, with growth
forecast at 0.8% for 2010 and 1.1% for 2011.3
During the years of economic expansion, however, the UK developed a large structural deficit
and accumulated considerable public sector debt. The financial crisis and recession greatly
exacerbated this situation: the government budget deficit grew from 4.8% of gross domestic
product (GDP) in 2008 to 11.3% in 2009 and is forecast to be 12% in 2010. Public sector debt is
expected to grow from 52% of GDP in 2008 to 85% in 2011.4
Against this backdrop, many analysts argue that the new government must take quick and
decisive steps to improve the outlook for the country’s public finances. David Cameron is
expected to introduce an emergency budget during his first months in office that contains
dramatic cuts in public spending. Although some tax increases are also likely to be unavoidable,
the Conservatives’ instinct is that cutting spending while holding down taxes is the best way to
stimulate growth and hiring.
Political Reform
The result of the 2010 election could usher in landmark changes in the British political system.
The coalition partners quickly agreed to terms that offer one another a measure of insurance. The
partners installed “fixed term” Parliaments of five years, setting the next election for May 2015.
Previously, general elections could not be held more than five years apart, but the prime minister
could, by custom, dissolve Parliament and call for a new election at his discretion. The coalition
also agreed that the votes of 55% of the members of Parliament would now be required to bring
down the government in a vote of no confidence—previously, a no confidence vote could be won
by a simple majority.
More broadly, the coalition partners plan to hold a national referendum on introducing an
“Alternate Vote System” for future general elections.5 The vagaries of the UK’s “first-past-the-
post” electoral system (i.e., winner take all within each electoral district) operate to the great
benefit of the two largest parties—and to the detriment of the Liberal Democrats—in terms of
transferring the popular vote into parliamentary seats (see Table 1). The Liberal Democrats have
3 Economist Intelligence Unit, Country Report: United Kingdom, May 2010.
4 ibid.
5 According to the BBC’s Election 2010 Q&A on Electoral Reform and proportional representation, in an Alternate
Vote System, “Voters rank the candidates. If no candidate has 50% of first preferences then second preferences are
counted and so on until someone has a majority.”
http://news.bbc.co.uk/2/hi/uk_news/politics/election_2010/8644480.stm
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long advocated the introduction of some type of proportional representation electoral system,
such as those used in many countries in continental Europe (the Alternate Vote System is regarded
as one of the least proportional models of proportional representation voting systems). Although
agreeing to the referendum, the Conservatives oppose such reform and are expected to campaign
against it. The introduction of proportional representation voting, even if in its “lightest” form,
could potentially make it much more difficult in the future for one party to achieve a majority,
possibly making coalition politics a more permanent fixture in the UK.
Implications for the United States
The main dimensions of transatlantic cooperation and partnership are unlikely to be altered under
the Conservative-Liberal Democrat coalition. Media coverage of the election has made much of
assertions that the United States and the UK are drifting apart, that the special relationship is over,
and that the UK will seek a more independent course in foreign policy. Officials and analysts are
reassessing the nature of the U.S.-UK relationship (see “Political Relations”), but most agree that
suggestions of a dramatic break or shift in the relationship are exaggerated. David Cameron and
his new ministers are expected to seek a close relationship with President Obama, the U.S.
Administration, and the U.S. Congress. No sudden moves are expected in British policy on key
issues such as counterterrorism, the NATO mission in Afghanistan, and Iran’s nuclear program
(see “Selected Issues in U.S.-UK Relations”), as well as the Israeli-Palestinian conflict, relations
with Russia, the future of NATO, and international trade and economic policy.
The UK and the European Union
The relationship between the UK and the EU has long been marked by a certain degree of
ambivalence. The UK stood aside in the 1950s when the six founding countries (Belgium, France,
Italy, Luxembourg, Netherlands, and West Germany) launched the first steps of European
integration, fearing a loss of national sovereignty and influence. The UK finally joined the
precursor of the modern-day EU in 1973, largely in order to derive the economic benefits of
membership but also to have a political voice on the inside as integration took shape.
Nevertheless, historically many British leaders and citizens have remained skeptical of the EU
and ambivalent in their support for further European integration (including, notably, former Prime
Minister Margaret Thatcher).
The UK has zealously guarded elements of its national sovereignty to a greater degree than most
EU countries. On the whole, the UK’s “Anglo-Saxon” economic philosophy and approach to
social issues differs from those of its continental partners, and the UK has been especially
adamant about shielding its national prerogatives in these areas. Most famously, the UK retains
the pound sterling as its national currency and appears unlikely to adopt the euro anytime soon.
The UK does not participate in the Schengen Agreement that creates a virtually borderless visa-
and passport-free zone among most EU countries. The UK secured an exemption from the
Charter of Fundamental Rights that was attached to the Lisbon Treaty and details a sweeping
range of social protections, and negotiated the right, in effect, to choose which policies in “Justice
and Home Affairs” areas (such as police and judicial cooperation) it wishes to take part in under
the new treaty. Many British officials and observers have long opposed the “Federalist” vision of
EU integration, preferring instead an “intergovernmental” arrangement between sovereign states.
British leaders have also tended to express impatience with what they view as the EU’s tendency
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to look inward and focus on process and institutional arrangements, arguing instead for an
outward-looking and results-oriented EU focused on action.
On the other hand, there is no question that the EU and the 26 other member countries of the EU
are, alongside the United States and select others, among the UK’s main allies and partners in the
world. Although “euro-skepticism” is considerable among the British public, it is far from
universal. Geographically, the UK is much closer to continental Europe than to North America,
and over half of British trade is conducted with fellow EU members. Moreover, some observers
assert that many of the UK’s diplomatic and foreign policy impulses, in areas such as climate
change policy, for example, are closer to those of its EU partners than to those of the United
States. During the Blair years, the UK was a driving force behind EU efforts to strengthen its
foreign policy and defense cooperation. For many European policymakers, including in the UK,
the need for the EU to speak with “one voice” in a more cohesive EU Common Foreign and
Security Policy (CFSP) was one of the great lessons of the Iraq War. In 1998, Blair reversed the
UK’s long-standing opposition to the development of an EU defense arm, and British
involvement is viewed by many as an essential ingredient for the viability of the EU Common
Security and Defense Policy (CSDP).
A Coalition Compromise on Europe
Many members of the Conservative Party are critical of the European Union and opposed to the
current level of European integration, in which they believe the UK has surrendered too much
national sovereignty. The prevalence of such “euro-skeptics” among the Conservative ranks has
had many in Brussels wondering about how a Conservative-led government might manage the
UK’s relations with the EU. In summer 2009, David Cameron pulled the British Conservative
Members of the European Parliament (MEPs) out of the main center-right political group that
includes the parties of German Chancellor Angela Merkel and French President Nicolas Sarkozy
to caucus with much smaller “euro-skeptic” parties. The Conservatives opposed ratification of the
Lisbon Treaty, the EU reform treaty that came into effect in December 2009, and Cameron had
long suggested that the UK should hold a national referendum on the treaty rather than approving
it by parliamentary vote. There remains some sentiment among Conservatives that the UK should
try to reclaim aspects of national sovereignty that have been pooled into the EU.
The Liberal Democrats, on the other hand, are the most pro-EU of the UK’s three major parties,
as demonstrated by their calls for the UK to adopt the euro as its national currency. The initial
policy agreement announced by the Conservative-Liberal Democrat coalition indicated that the
two parties had agreed to a “truce” on Europe under which the UK would be a “positive
participant” in the EU. The coalition has ruled out any moves toward joining the euro during the
lifetime of the current Parliament, and has pledged to hold a referendum on any future EU
proposals that would transfer additional power or sovereignty to Brussels. In addition, the
Conservatives have agreed not to seek opt-outs from EU social legislation, although they will try
to limit the application of an EU law that caps the number of hours an employee can work in a
given week. While the coalition compromise indicates a constructive British approach to the EU
under Prime Minister Cameron, the potential for friction still remains.
The UK Between the United States and the EU
Some analysts have long described the UK as caught in a balancing act between the United States
and the European Union. The UK has, at times, sought to play the role of a “transatlantic bridge”
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between Washington, DC, and the EU. Prime Minister Blair sought to perform such a role after
taking office in 1997, believing that strong U.S.-UK and UK-EU relations would be mutually
reinforcing. Blair is often credited, for example, with having a key role in gaining U.S.
acquiescence to the December 2003 NATO-EU deal to enhance EU defense planning capabilities.
Ultimately, however, domestic political struggles and the bitter intra-European divisions
stemming from the 2003 Iraq War limited some of the possibilities for UK-EU relations under
Blair. Nonetheless, the UK remained a highly influential voice through its EU presidency during
the second half of 2005 and Blair’s last EU Summit, in June 2007, which launched the Lisbon
Treaty.
Other analysts assert that the dimensions of British foreign policy have never been as simplistic
as a black-and-white choice between the United States and Europe. According to many,
depictions of a zero-sum choice between one or the other are false and artificial—the United
States and the EU generally have similar interests and compatible outlooks, work together in an
expanding range of issues, and are far more often partners than adversaries. In addition, there is a
significant NATO dimension to the discussion: 21 members of the EU, including the UK, are also
members of NATO. In the end, UK officials and analysts assert what might appear obvious to
some: UK foreign policy decisions have always been and will continue to be determined
primarily by British national interests, and preserving the UK’s position as a strong U.S. ally and
leading EU partner provides the UK with the greatest ability to promote its diverse interests in
Europe and beyond.
U.S.-UK Relations
Strong relations with the United States have been a cornerstone of UK foreign policy, to varying
degrees and with some ups and downs, since the 1940s. Observers assert that the UK’s status as a
close and loyal ally of the United States has often served to enhance its global influence. The UK
is often perceived to be the leading allied voice in shaping U.S. foreign policy debates: 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,” a statement that well describes the mindset of many
British diplomats over the ensuing decades.6 Beyond the bonds of similar interests and values,
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. On the other side, British support has often helped add
international credibility and weight to U.S. policies and initiatives, and the close U.S.-UK
partnership has benefitted the pursuit of common interests in bodies such as the U.N., NATO, and
other multilateral institutions.
Political Relations
The U.S.-UK political relationship encompasses a deep and extensive network of individuals
from across the public and private sectors. Relationships between the individual national leaders,
however, are often analyzed by some observers as emblematic of countries’ broader political
relations. Former Prime Minister Tony Blair established a close personal relationship with both
President Bill Clinton and President George W. Bush. Following the terrorist attacks of
6 As quoted in Robin Harris, “The State of the Special Relationship,” Policy Review, June/July 2002.
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September 11, 2001, Blair established himself as a key Bush Administration ally in the U.S. “War
on Terrorism.” He also famously backed the Bush Administration with regard to the Iraq War, and
was an important advocate in support of the case for invasion. In a March 2002 Cabinet meeting,
Blair reportedly stated that the UK’s national interest lay 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, the UK stood a better chance of preventing the United States
from overreacting, could encourage the U.S. Administration to pursue its objectives in Iraq in a
multilateral way, and could try to broaden the U.S. agenda to include what the UK and other EU
partners viewed as the root causes of Islamist terrorism, such as the Israeli-Palestinian conflict.
The degree to which the UK influenced U.S. policy choices in the war on terrorism, Iraq, and
other issues has been a topic of much debate on both sides of the Atlantic. Some observers
contend that Blair played a crucial role in convincing the Bush Administration to initially work
through the United Nations with regard to Iraq. They argue that the priority Blair placed on
resolving the Israeli-Palestinian conflict helped keep that issue on the Bush Administration’s radar
screen, and that the UK was instrumental in pressing for a meaningful international peacekeeping
presence in Afghanistan, which resulted in the creation of the NATO-led International Security
Assistance Force (ISAF).
Critics, however, charge that Blair and the UK got little in return for their unwavering support of
controversial U.S. policies. Opponents point out Blair was unable to prevent the United States
from abandoning efforts to reach a comprehensive international consensus regarding Iraq, that
little progress has been made in recent years on the Israeli-Palestinian conflict, and that tepid U.S.
responses to Blair’s initiatives on African development and climate change further demonstrate
that Blair’s close relationship with Bush yielded few benefits for the UK. Some commentators
came to describe Blair as the American president’s “poodle,” and Blair paid a high political price
with the British public and within his own Labour Party for his close alliance with President
Bush. The question of how the UK benefitted from its support of the United States during the
Blair-Bush years raised some debate in the UK about the nexus between transatlantic solidarity
and British national interests, and whether future British prime ministers may think twice about
boldly supporting controversial U.S. policies or make more explicit demands of the United States
as the price for support. Some British observers are anxious to assert that British national interests
come first and foremost in deciding British policy, arguing that these interests are not always
identical to U.S. national interests, and that the UK should not be overly deferential to the United
States in foreign policy issues.
Upon taking over as prime minister in 2007, Gordon Brown sought to distance himself from some
of the domestically unpopular foreign policy choices of his predecessor. Given the British
public’s unease with the close Blair-Bush alliance, Brown appeared disinterested in developing a
close personal relationship with the U.S. President, demonstrating instead a business-like
approach that kept his counterpart at arm’s length. Some observers pointed out that because of the
political timetable, Brown had little incentive to develop a close relationship with Bush, and that
he was to a large extent awaiting the arrival of a new U.S. President in January 2009.
Nevertheless, far from reorienting UK foreign policy in a new direction, Brown also attempted to
maintain the portrayal of the “special relationship” and made no major substantive changes in
relations with the United States: he maintained the UK’s commitment to a strong counterterrorism
policy and to the mission in Afghanistan, even if proceeding with the planned withdrawal of
British forces in Iraq, which raised some questions and concerns among U.S. policymakers.
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Prime Minister Brown pursued closer relations with President Obama. Brown visited Washington,
DC, in March 2009 to meet with Obama ahead of the G-20 and NATO Summits that were held in
Europe in early April. He also addressed a joint session of Congress. In being the first European
leader to visit the Obama White House, some observers pointed to an intention to symbolically
reaffirm the vitality of the “special relationship.” Critics, however, sensed that some aspects of
Brown’s reception seemed lukewarm, raising speculation as to whether Obama shares quite the
same level of enthusiasm about the bilateral relationship.
Some observers assert that Obama is the first post-war U.S. President with no sentimental
attachments to Europe, and many argue that with U.S. foreign policy priorities increasingly
focused on the Middle East and Asia, Europe, including the UK, faces a growing struggle to
remain relevant in U.S. eyes. Media reports in September 2009 indicating that Brown had been
“rebuffed” over the course of the year in numerous attempts to secure another personal meeting
with Obama created a degree of heightened anxiety in the UK about the future of the “special
relationship” and how it is viewed by the Obama Administration. Some observers, however,
assert that certain sources—in particular the British media—tend to read too much into the
appearance of personal relations between the individual leaders, noting that the functional aspects
of the U.S.-UK relationship run much broader and deeper.
Nevertheless, many analysts agree that a reassessment of the “special relationship” concept is in
order. As part of an on-going debate about emergent geopolitical trends and the UK’s changing
global role, British officials and analysts may seek to adjust outlooks and expectations to better
match perceptions of national interests and capabilities. Most agree that the U.S.-UK political
relationship is likely to remain intimate, and that the “special relationship” in areas such as
defense and intelligence cooperation will almost certainly remain strong. On vital issues such as
Afghanistan and Pakistan, for example, most observers agree that the UK is a crucial U.S. ally. In
an increasingly “G-20 world,” however, the UK may not be centrally relevant to the United States
in all of the issues and relations considered a priority on the U.S. agenda.7
Defense Relations
U.S.-UK defense cooperation became especially close and well established during the cold war,
as both countries worked together bilaterally and within the context of NATO to counter the
threat of the Soviet Union. In the early 1990s, the UK was an important U.S. ally in the first Gulf
War, and the two countries later worked together in stabilization and peacekeeping operations in
the Balkans. The UK was the leading U.S. ally in the 2003 invasion of Iraq and subsequent
stabilization operations, and is the largest non-U.S. contributor to the International Security
Assistance Force (ISAF) mission in Afghanistan. Many observers consider the UK the most
valuable and effective U.S. ally in such military operations, noting that the United States and the
UK tend to have similar outlooks on issues such as the use of force, the development of military
capabilities, and the role and shape of NATO.
The UK has long hosted important U.S. forces at airbases on British soil, and also hosts vital U.S.
radar and intelligence-gathering installations. U.S. and British forces have established extensive
liaison and exchange arrangements with one another, with British officers routinely seconded to,
for example, the Pentagon, U.S. Central Command Headquarters in Tampa, FL, and U.S. Naval
7 See, for example, the November 11, 2009 testimony of Dr. Robin Niblett in House of Commons Foreign Affairs
Committee, Global Security: UK-US Relations, March 18, 2010, pp. Ev3.
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Headquarters in Norfolk, VA. British sources reportedly often have access and input into U.S.
defense planning and efforts such as Quadrennial Defense Reviews and the 2009 U.S. Strategic
Review on Afghanistan and Pakistan.8
The 1958 U.S.-UK Mutual Defense Agreement established unique cooperation with regard to
nuclear weapons, allowing for the exchange of scientific information and nuclear material.9 The
United States has supplied Britain with the missile delivery systems for its nuclear warheads since
1963. The UK’s nuclear deterrent currently consists of several Vanguard class submarines, each
armed with up to 16 Trident missiles (totaling as many as 48 nuclear warheads). In 2007, former
Prime Minister Blair announced plans to renew the UK’s current nuclear weapons system by
joining a U.S. program to extend the life of the Trident missiles into the 2040s and by building a
new generation of submarines in the UK. Although the Liberal Democrats campaigned for
phasing out the UK’s nuclear role, the Conservatives support maintaining Trident, and the
coalition plans to continue with the maintenance and updating of the UK’s weapons.
Given the difficulties with the UK’s public finances, concerns are growing about the UK’s ability
to maintain its core defense budget to meet the equipment needs of the military. The new
government is launching a defense spending review, and while the defense budget may not be
affected immediately, projected spending cuts in the years ahead are likely and will probably
include equipment procurement programs.10 This reality is likely to force the UK to make tough
decisions about its future force structure. On the one hand, the UK could attempt to maintain a
military with “full spectrum” capabilities mirroring those of the United States, allowing the
British military to fight alongside U.S. forces as well as undertake a broad range of independent
missions and operations. On the other hand, some suggest that the UK could decide to cut back,
focusing on centrally important capabilities and abandoning others, and increasingly seeking to
leverage joint capability planning and development efforts offered by European defense
integration initiatives.
The United Kingdom and the United States are also key partners in terms of defense industry
cooperation and defense sales. The two countries are engaged in more than 20 joint equipment
programs, including the Joint Strike Fighter (JSF).11 In FY2008, U.S. foreign military sales
(government-to-government) to the UK reportedly topped an estimated $1.1 billion and shipment
of U.S. direct commercial sales (contractor-to-government) to the UK reportedly exceeded an
estimated $3.1 billion.12 The United States is the largest overseas supplier of the UK Ministry of
Defense. The UK, in turn, is the largest overseas supplier to the U.S. Department of Defense, and
8 See House of Commons Foreign Affairs Committee, op. cit. pp. 23-24.
9 The document can be accessed on the website of the British American Security Information Council at
http://www.basicint.org/nuclear/MDA.htm.
10 The direct cost of military operations such as Iraq and Afghanistan is covered by a Treasury reserve fund that is
separate from the core defense budget. In the 2008/09 fiscal year, operations in Afghanistan cost the Treasury reserve
over £2.6 billion, and over £14 billion total has been spent on operations (mostly Iraq and Afghanistan) since 2001. See
NATO Parliamentary Assembly, information document from the 2009 Annual Session, The Global Financial Crisis
and its Impact on Defense Budgets, http://www.nato-pa.int/Default.asp?SHORTCUT=1928.
11 The Joint Strike Fighter program is a multinational procurement effort—involving the United States, the UK, six
other NATO allies, and Australia—to develop and produce the next generation fighter/strike aircraft, the F-35. For
more information, see CRS Report RL30563, F-35 Joint Strike Fighter (JSF) Program: Background and Issues for
Congress, by Jeremiah Gertler.
12 U.S. Department of State, FY2010 Congressional Budget Justification, Foreign Assistance, Title IV Supporting
Information, pp. 4, 270-276, http://www.state.gov/documents/organization/124296.pdf.
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the United States is the UK’s second-largest defense market overall (behind Saudi Arabia). The
United States, however, acquires a relatively small proportion of its defense equipment from
overseas: the balance of U.S.-UK defense exports is about 2 to 1 in favor of the United States.
Most major U.S. defense companies have a UK presence and, led by BAE Systems, numerous
British companies operate in the United States. British defense companies’ U.S. operations tend
to be part of a larger supply chain, with sales consisting mostly of components and niche
equipment, rather than entire platforms.13
U.S. regulations related to technology transfer and the export of defense articles have long been a
source of frustration for British officials. For years, the UK sought a waiver to the U.S.
International Traffic in Arms Regulations (ITAR) that would eliminate the requirement for
individual export licensing of each article. British officials have argued that ITAR and the related
licensing process unduly hinder defense trade and cooperation and prevent greater military
interoperability, citing the UK’s status as a valuable and trustworthy ally as grounds for waving
the regulation. British arguments, however, have come up against strong congressional opposition
due to U.S. concerns that technology could be reexported to third countries. Congress
nevertheless granted the UK “preferred” ITAR status in October 2004—intended to expedite the
export licensing process for British defense firms—but many in the UK still maintained that the
process remained too burdensome. In the context of the Joint Strike Fighter program, the British
became concerned they would not have sovereign access to key technologies involved in the
aircraft. In December 2006, the United States and the UK signed a memorandum of
understanding effectively guaranteeing that the UK would receive the sensitive JSF technology it
demanded.
In June 2007, in an effort to address long-standing British concerns about U.S. technology-
sharing restrictions and export controls, the countries signed a Defense Trade and Cooperation
Treaty that would eliminate individual licensing requirements for certain ITAR-controlled defense
articles and services. The treaty is reciprocal and is intended to cover defense equipment for
which the U.S. and UK governments are the end-users. The treaty also calls for the creation of
“approved communities” of companies and individuals in each country with security clearances
to deal with technological transfers.14 The UK has ratified the treaty, and it is currently pending
before the U.S. Senate Foreign Relations Committee. U.S. concerns persist over whether UK
safeguards and enforcement mechanisms will be sufficient to protect transferred material. If
ratified, the U.S. Department of State would amend ITAR to account for the treaty provisions.
Economic Relations
The U.S.-UK bilateral investment relationship is the largest in the world. In 2008, UK investment
in the United States totaled $454 billion, supporting over 1 million American jobs. U.S.
investment in the UK totaled $421 billion. Between 2000 and 2009, the UK was the second-
largest overseas market for U.S. foreign direct investment (FDI), behind the Netherlands, and
received nearly 20% of U.S. FDI flows to Europe.15 Tourism and trade are also important pillars
13 See House of Commons Foreign Affairs Committee, op. cit. pp. 25, Ev111-Ev112.
14 See Claire Taylor, UK-US Defence Trade Co-operation Treaty, House of Commons Library, International Affairs
and Defence Section, February 17, 2009, http://www.parliament.uk/commons/lib/research/briefings/snia-04381.pdf.
The full text of the treaty can be accessed at http://www.state.gov/t/pm/rls/othr/misc/92770.htm.
15 Center for Transatlantic Relations, Johns Hopkins University Paul H. Nitze School of Advanced International
Studies, The Transatlantic Economy 2010, p. 99-100.
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of the economic relationship. In 2008, nearly 3 million Americans visited the UK and 4 million
British residents visited the United States. Also in 2008, the United States ran a trade surplus with
the UK, with exports of goods and services worth $116 billion and imports worth $104 billion.16
The global financial crisis and recession has had a significantly negative impact on world trade
and investment flows. Both the United States and the UK are home to major world financial
centers, and the U.S.-UK economic relationship has been affected. British banks have suffered
massive losses from their exposure to asset-based securities linked to the U.S. sub-prime
mortgage market. Over the first three quarters of 2009, U.S. FDI flows to the UK fell 65%
compared to the first three quarters of 2008.17 Prime Minister Brown has led efforts to forge an
international response to the crisis through the G-20. As the EU and the United States seek to
formulate and implement new rules for financial sector regulations, analysts believe that thinking
in the UK on such issues tends to be more aligned to that of the United States than countries such
as France and Germany.
The European Commission negotiates a common EU trade policy on behalf of its member states,
and therefore UK trade policy is formulated within an EU context. Although most of the U.S.-EU
economic relationship is harmonious and mutually beneficial, some tensions persist. Current
U.S.-EU trade disputes focus on poultry, aircraft subsidies, hormone-treated beef, and genetically
modified (GM) food products. The UK has been a consistent supporter of U.S.-EU efforts to
lower transatlantic and global trade barriers, and to reach an agreement in the Doha Round of
multilateral trade negotiations.18
Selected Issues in U.S.-UK Relations
The United States and the UK share a long list of similar global interests, and act in close concert
on a wide range of international issues. While a full list would include such topics as the Israeli-
Palestinian conflict, non-proliferation of weapons of mass destruction, relations with Russia, and
many more, this section highlights three issues to illustrate the nature of U.S.-UK cooperation.
Counterterrorism
Most analysts and officials agree that U.S.-UK counterterrorism cooperation is close, well-
established, and mutually beneficial.19 The UK’s Security Service (MI5) and Secret Intelligence
Service (MI6) routinely cooperate closely with their U.S. counterparts in the sharing of
information, and U.S. and British law enforcement and intelligence agencies regularly serve as
investigative partners. Counterterrorism cooperation with the UK also takes place in the context
of the many U.S.-EU agreements that have been put in place in recent years. According to the UK
Foreign and Commonwealth Office, however, the U.S.-UK intelligence and law enforcement
16 U.S. Department of State, Background Note: United Kingdom, October 2009,
http://www.state.gov/r/pa/ei/bgn/3846.htm.
17 Center for Transatlantic Relations, op. cit., p. 97.
18 For more information, see CRS Report RL34381, European Union-U.S. Trade and Investment Relations: Key Issues,
coordinated by Raymond J. Ahearn; and CRS Report RS22645, U.S.-European Union Relations and the 2007 Summit,
by Raymond J. Ahearn, Kristin Archick, and Paul Belkin.
19 See, for example, House of Commons Foreign Affairs Committee, Global Security: UK-US Relations, March 18,
2010, pp. 39-42.
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relationship “far outstrips the level of interaction and co-operation with other nations.”20 In
addition to efforts seeking to disrupt terrorist attacks against U.S. and European targets, U.S. and
UK officials cooperate closely with regard to developments in countries such as Afghanistan,
Pakistan, Somalia, and Yemen.
The UK has extensive experience in dealing with issues of terrorism and homeland security,
having long faced terrorist attacks from groups such as the Irish Republican Army (IRA). More
recently, as highlighted by the deadly July 2005 attacks on the London transportation system and
the failed car bomb attempts in London and Glasgow in the summer of 2007, radical Islamist
terrorism has developed into a primary domestic threat. Many were alarmed that the majority of
the perpetrators in these attacks were “homegrown” British Muslims. The British government
launched its long-term Strategy for Countering International Terrorism (CONTEST) in 2003. The
CONTEST strategy consists of four strands: (1) disrupting terrorist attacks through prosecution
and other measures at home, combined with military and intelligence operations abroad; (2)
working with vulnerable communities to prevent radicalization and extremism; (3) reducing the
vulnerability of national infrastructure, crowded places, transportation systems, and borders; and
(4) mitigating the impact of terrorist attacks through well-trained and equipped regional and local
resilience networks and crisis management structures. As of 2008, the UK’s annual spending on
counterterrorism, resilience, and intelligence activities had doubled since 9/11, to some £2 billion
(about $3 billion).21
In recent years, the UK has strengthened its anti-terrorism laws and expanded the powers of its
intelligence and law enforcement agencies.22 The Terrorism Act 2006 created a series of new
terrorism-related criminal offenses, including the encouragement of terrorism and the
dissemination of terrorist propaganda, including via the Internet. It also gave the government the
right to ban groups that glorify terrorism, and extends the allowable period of detention without
charge from 14 to 28 days. The Counterterrorism Act 2008 further increased the powers of law
enforcement authorities in terrorism-related cases, changing rules related to searches,
interrogations, asset seizures, and the collection and use of evidence. The act also increased
sentences for some terrorism-related offenses. Civil liberties advocates have sharply criticized
these pieces of legislation. Sharing some such concerns, Parliament rejected a proposal in the
Counterterrorism Act 2008 to increase the legal period of detention without charge to 42 days.
Although the overall U.S.-UK intelligence and counterterrorism relationship is overwhelmingly
positive, some tensions exist. The relationship was damaged by public accusations of British
complicity in U.S.-led renditions and the alleged torture of terrorist suspects between 2002 and
2008. Related court cases sought the release of intelligence documents and raised concerns in the
intelligence community about the risk of confidential information coming into the public domain
through the British legal system. In the past, some British officials have objected to the U.S.
detention facility at Guantanamo Bay and complained that the United States concealed practices
20 House of Commons Foreign Affairs Committee, op. cit., pp. Ev 61.
21 See the March 2009 update of the CONTEST strategy, http://security.homeoffice.gov.uk/news-
publications/publication-search/contest/contest-strategy/contest-strategy-20092835.pdf?view=Binary.
22 UK counterterrorism legislation includes the Public Order Act 1986; the Terrorism Act 2000; the Anti-Terrorism,
Crime and Security Act 2001; the Prevention of Terrorism Act 2005; the Terrorism Act 2006; and the Counterterrorism
Act 2008.
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such as waterboarding. Some British officials also complain that the updated bilateral extradition
treaty that was signed in March 2003 favors the United States.23
Some U.S. critics have also charged that UK measures to clamp down on Islamist extremists are
long overdue. They argue that until recently, traditionally liberal asylum and immigration laws in
the UK, as well as the country’s strong free speech and privacy protections, attracted numerous
radical Muslim clerics claiming persecution at home. As a result, some say the UK became a
breeding ground for Islamist terrorists—some observers have sarcastically described an open
culture of radical Islamism in London as “Londonistan.” In recent years, the UK has expelled
some foreign imams and others who espouse extremism and terrorist violence, and denied entry
to others. Concerns about radicalization in the UK resurfaced in December 2009 when a Nigerian
who had lived and studied in London attempted to blow up an airliner en route from Amsterdam
to Detroit.
Afghanistan
The UK is the second-largest troop contributor to the NATO-led International Security Assistance
Force (ISAF) mission in Afghanistan.24 The UK contributes 9,500 soldiers to ISAF. Counting an
additional 500 special forces operating in the country, there is a total of approximately 10,000
British soldiers in Afghanistan. The UK is also the largest European donor of bilateral aid to
Afghanistan, contributing some £740 million (about $1.15 billion) since 2001 for development
and security assistance, and pledging a further £510 million (about $790 million) for the next four
years.25
Most British forces are based in the volatile southern province of Helmand, where they have
engaged in frequent combat with Taliban insurgents. The UK has suffered approximately 240
military fatalities in Afghanistan since operations began in 2001, which is more than the number
of casualties the UK had in Iraq. British casualties in Afghanistan spiked in July 2009 during a
preelection offensive against the Taliban, and over 100 British soldiers were killed in 2009 alone.
Like their U.S. and NATO counterparts, British officials have repeatedly called for greater troop
and equipment contributions from some of the European allies. “National caveats”—restrictions
that some governments place on their troops to prevent them from engaging in combat
operations—have been a sore spot within the Alliance.
The UK has contentious relations with Afghan President Hamid Karzai. Tensions grew when
Karzai criticized the 2006 British compromise with insurgents in the Musa Qala district of
Helmand. The UK negotiated a deal under which both the British military and the Taliban would
withdraw from the area and leave it under the control of tribal leaders. The Taliban subsequently
returned and overran the district in early 2007. In addition to frustrations with the pace of efforts
to build Afghan security self-sufficiency, the UK has been highly critical of alleged corruption in
Karzai’s government.
23 The U.S.-UK extradition treaty is treaty number 108-23.
24 For more information on international efforts in Afghanistan, see CRS Report RL30588, Afghanistan: Post-Taliban
Governance, Security, and U.S. Policy, by Kenneth Katzman.
25 UK Foreign and Commonwealth Office, The UK Effort in Afghanistan, http://www.fco.gov.uk/en/global-
issues/conflict-prevention/uk-effort-in-afghanistan/ and UK Department for International Development (DFID), ,
http://www.dfid.gov.uk/Where-we-work/Asia-South/Afghanistan/.
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By and large, the UK has concurred with the Obama Administration’s Afghanistan strategy, and
British sources have reportedly had significant input into elements of U.S. strategic review. Points
of agreement include focusing on Afghan army and police training and civilian efforts regarding
governance, rule of law, and economic development. Some British officials and observers have
long asserted that the key to defeating the insurgency lies in political solutions and incentives
aimed at militants who may not be motivated by radial Islamic ideology, and some have long
advocated negotiations with the more moderate elements of the Taliban. In August 2009, the
House of Commons Foreign Affairs Committee published a report asserting that the direction and
tendencies of U.S. policy under the Bush Administration—including an excessive focus on
military goals—bear substantial responsibility for many of the problems facing international
efforts in Afghanistan today.
The UK strongly supports a regional approach to Afghanistan that includes Pakistan. Prime
Minister Brown stated that three-quarters of the terrorist plots uncovered in the UK have their
roots in the Afghanistan-Pakistan border region. The UK is helping train and equip Pakistani
forces for counter-insurgency operations along the Afghan border and plans to provide £665
million (approximately $1 billion) in aid to Pakistan over the period 2009-2013.26
Iran
The United States and the UK share the same goals with respect to Iran, starting with curbing its
nuclear program and ending its sponsorship of groups such as Hezbollah and Hamas. Officials in
London have long advocated conditional engagement with Iran over isolation, and as one of the
“EU-3” (with France and Germany) the UK has played a leading role in diplomatic efforts to
curtail Iran’s uranium enrichment activities. British leaders are committed to a diplomatic
resolution, pressing Iran to make a choice between harsh sanctions and isolation versus economic
and technical cooperation. The UK has also been central in pushing for the three rounds of
limited sanctions related to Iran’s nuclear program that have been adopted by the United Nations
Security Council (UNSC) since 2006 (Resolutions 1737, 1747, and 1803).
Tensions between the UK and Iran increased following the controversial and disputed reelection
of Iranian President Mahmoud Ahmadinejad in June 2009. Iranian authorities blamed post-
election unrest on Western interference, and particularly singled out the UK. Although Prime
Minister Brown strongly criticized the behavior of the Iranian government, the UK Foreign
Office vehemently denied any British involvement in organizing opposition activities. In late
June, Iran expelled two British diplomats (prompting the UK to expel two Iranian diplomats) and
angered the British government with the arrest of nine local staff of the UK embassy in Tehran.
Eight of the nine were eventually released, but in October 2009 Hossein Rassam was sentenced to
four years in prison for “inciting unrest,” a move that drew sharp condemnation from British and
EU officials. Iran has also long accused the UK of supporting Jundallah, a militant Sunni group
that operates along the Iran-Pakistan border. Iranian officials harshly asserted that the British
government was behind an October 2009 Jundallah suicide bombing against Iranian
Revolutionary Guard troops. In December 2009, Iran released five British citizens who had been
detained for a week when their yacht strayed into Iranian waters. Previously, Iran had forcibly
detained British naval personnel in 2004 and 2007.
26 UK Department for International Development (DFID), Afghanistan Country Plan: 2009-13,
http://www.dfid.gov.uk/Documents/publications/Afghanistan-Country-Plan-2009.pdf.
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With Iran’s apparent rejection of renewed Western overtures in 2009, the new British government
is expected to continue its predecessor’s support for a new round of more stringent U.N. sanctions
on Iran. The likelihood of new sanctions increased in September 2009 when the UK, along with
France and the United States, presented the International Atomic Energy Agency (IAEA) with
evidence of a previously secret Iranian enrichment facility near the city of Qom. U.S. officials
have long urged European countries—including the UK—to do more to limit their trade and
business ties with Iran and to adopt and enforce tighter sanctions, even if outside the U.N.
framework. The EU and a number of member countries have taken some such autonomous
measures, but many Europeans prefer to work strictly within the U.N. process regarding
international sanctions. In recent years, some British banks, including the UK’s largest (HSBC),
have voluntarily cut back business dealings with Tehran and Iranian banks. The UK and the EU
have long opposed the U.S. Iran Sanctions Act (ISA) as an extraterritorial application of U.S. law,
although no firms have ever been sanctioned under ISA. Some European governments have in the
past expressed concern that legislation like H.R. 2194 (passed by the House in December 2009)
and its companion in the Senate, S. 2799 (passed in January 2010), could harm European energy
companies and undermine transatlantic unity.27
Author Contact Information
Derek E. Mix
Analyst in European Affairs
dmix@crs.loc.gov, 7-9116
Acknowledgments
This report was originally written by Kristin Archick, CRS Specialist in European Affairs.
27 For more information, see CRS Report RS20871, Iran Sanctions, by Kenneth Katzman.
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