Does Britain really understand its true position in the new world order? Jeremy Greenstock, Britain's former ambassador to the UN, gives a controversial analysis.

Is Britain being adventurous enough in its foreign policy analysis? Rapid shifts in the international distribution of power are creating a new political geography, and neither North America nor western Europe can claim to have read the global map right over the past few years. It is therefore a good moment to venture out of comfort zones and pose some awkward questions. Without doing this, we are unlikely to decide on the right action in an increasingly unpredictable environment.

First, where does the real value lie in the transatlantic relationship, especially for the UK? Talk of a special closeness with the United States is reassuring, but tends to paper over the crucial point that American and British policymakers now view the world and its currents through different lenses - the American focus is on exercising power, ours on adapting to the weather. This makes us more realistic than they are in assessing the context for international action and the consequences of policy choices - perhaps because they expect more from the assertion of power than global circumstances will support. Iraq is a clear example of this: events on the ground have created that reality, not American decisions, because the coalition's deployments never had any impact on the vast majority of Iraqis.

However, we too have miscalculated. The UK, with or without its European partners, is a long way from having all the answers. When it comes to dealing with the US itself, we exaggerate our own effect. To the extent that we offer something materially useful to the Americans, such as small-scale but high-quality intelligence and military capabilities (especially in our special forces and counter-terrorism skills), or finely tuned diplomatic support in the multilateral arenas, we earn points. But we are left to one side in straight power play, unless we have gathered our own catalytic set of allies. Within the EU, we can be "top-table" players on trade, development and environmental issues. But we carry far less weight on matters concerning the Middle East, or China, or nuclear proliferation, or energy. On all of these, and more, we need the strength of the US and we need to earn American respect if we are to be treated as equal partners.

Before one looks at particular examples, it is worth noting that the UK has invested enough in the relationship with the United States to benefit in two distinct ways. The first is in the field of security. If the Americans see the UK as an ally of first support, then we can count on them as an ally of last resort. With such an uncertain period ahead of us, it would be folly to distance ourselves from the world's only serious military operator. Tony Blair was right to consider this a central criterion for the choices he had to make over Iraq, though he found that it could not compensate for the depth of the tactical errors Washington made once Saddam Hussein was ousted. The lesson to draw is not that we should avoid a close alliance with the US on a major undertaking, but that we have to calculate more accurately in each specific case whether the US has both the capability and the international right to achieve its aims - in other words, whether the UK is serving its own interests in teaming up. Iran could well be the next issue to bring these considerations to a head, because American faith in the use of force will not be shared by the British majority.

Suffering by association

The second benefit comes in a spin-off from the single superpower, when the UK is seen internationally as an acceptable substitute or partner. The City of London would not have its current status and pull if American banks and equity groups were not as comfortable in London as in New York. Our role as a permanent member of the UN Security Council would not be sustainable if we did not work hard to soften, interpret and sometimes argue about US actions at the UN to make them more digestible for other UN member states. While the UK image sometimes suffers from association with the US, we also gain when American actions are both effective and legitimate, as in the Balkans. The difficulties arise when we cannot be sure that they are - as in Iraq, of course, and perhaps also over Iran, North Korea and even Afghanistan.

The fact is that the British people, if not always their poli tical leaders, have become more attuned to the European instinct for maximising soft-power approaches than to the American preference for hard action. This is not just the predilection of an over-mature nation for avoiding bullets and bombs because we are tired of them. It also contains an understanding that, in today's world, there are costs in making new enemies which we may not be able to afford, and that other peoples with a greater freedom of choice need to be persuaded, not pushed around. Even the worthy objective of promoting democracy in the world has to be pursued with interested rather than suspicious populations.

Yet we and our EU partners have so far generated too low a capacity for hard-power responses when they are really needed. The US showed us up over Bosnia. The Iranians would call our bluff if we faced up to them on our own. Afghanistan may go sour on us anyway, but the inclination of some major European allies to avoid the hard fighting there could become a nail in Nato's coffin. It will, in any case, need an enlightened reassessment by the French of their longer-term security interests to save Nato from a slow death from European underinvestment. Europe needs a global strategic vision, with an understanding of what it takes to create an impact. It would make a world of difference if Paris, Berlin and London were really able to understand each other in this area.

One compelling conclusion to be drawn from this is that the US and the EU have to work better together. The new EU treaty, if ratified, will help to supplant the problem of constantly changing European presidencies, which suggest to the Americans that we lack muscle and consistency on the big issues. A further effort is now needed, with the initiative taken on the EU side, to get effective transatlantic machinery in place for the incoming US administration in 2009. The UK should argue for a much more efficient and permanent structure at senior official level to underpin the twice-yearly EU-US summits. Europeans have to be prepared to share with the US some of the burden of keeping global law and order when it matters, rather than sniping from the sidelines. Many Europeans would be surprised how much more accommodating Washington would become on the substance if it saw this kind of commitment from Europe, especially if there was an administration that also recognised the importance for its own agenda of wider international support on global issues.

A shared understanding of the actual threats to our interests on both sides of the Atlantic has to be part of this. We face adversaries that are markedly different from those of the Cold War period. US and Nato forces remain configured for huge set-piece battles, now much less likely to occur precisely because our modern enemies have chosen to confront us where they can avoid our superiority. The US military reluctantly moved into nation-building, years later than they should have done, when the surprisingly bitter consequences of their projection of power were staring them in the face in Iraq and Afghanistan. That lesson, including for the UK, needs to be extended further into the future. In addition to the rise of new economies and the expected increases in terrorist and nuclear proliferation activity, there will be further rough developments for which we are not yet ready: more intense nationalism across the globe, competition over energy sources, stron g er migration flows, increasingly independent and self-reliant private sectors, diminishing government authority, more damag ing natural disasters. For all of these, we need plans, policies, allies.

Terrorism will remain in the headlines because it is lethal and mysterious and because it has probably not yet reached its peak. While the US is a significant ally in confronting it, we need to take account of an important difference in the threat facing the UK: we have a problem within our borders, not just beyond them. Ultimately, all terrorism must be countered at source. For the US, the prime requirement beyond effective frontier security is to persuade moderate Islam to assert its entirely acceptable values over violent extremism, an objective that most Islamic world governments will see as being of equal relevance to their own interests. In the case of the UK, and certain European allies, we also have to calculate and react to the effect of our history, our relationships and our policy choices on the domestic arena. A "War on Terror" will not do. A proper defence becomes a matter of values, of respect for other systems, of diplomacy in establishing a global culture of the rule of law. As a nation with a surprisingly solid record of social change without civil strife since the industrial revolution began, we can, with wisdom and time, probably find some good answers. But they have to be assessed under our own criteria, with the necessary hard-headedness when it matters.

Time is ticking away

Of the dangers we can anticipate with some certainty, the proliferation of nuclear weapons threatens the severest consequences for our current way of life, even more than terrorism (though they may interconnect). Time is ticking away as the non-proliferation regime gradually erodes. The trend towards disaster will accelerate if Iran and North Korea are not contained and if the Review Conference of the Parties to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) in 2010 hits the same rocks as the 2005 conference. The five nuclear powers under the treaty (China, France, the Russian Federation, the UK and the US) have to be prepared to make compromises in a credible global effort to stem nuclear proliferation. There is little sign of that at the moment.

The UK will be one of the first societies to be hit if things go wrong. A connected issue, because Article 6 of the NPT places requirements on the nuclear states to move towards eradi cation of nuclear weapons, is the future of the UK national deterrent. Have we fully thought through both the resource and the proliferation implications of renewing Trident? Our armed forces are too stretched, even now, to meet the government's overseas objectives; and the incentives for a greater number of state and non-state actors to acquire nuclear weapons are strengthening. Trident meets other concerns, important ones, but takes us down the wrong path in these two areas. The public debate we should expect on such a crucial issue has not happened. Where do the UK's scarce resources really need to be placed up to 2025? Are we incapable of generating a sophisticated national debate about it? The review of UK national security interests being conducted over the next year by the Institute for Public Policy Research is one opportunity to stimulate a deeper analysis of the priorities.

What is needed from the UK, in other words, is a more accurate analysis of our true position in a changing world. Iraq has exposed two illusions: first, that the company of the US gives us the scope to be an independent player; and second, that the conventional instruments of national and international action remain strong enough for us to deal with the challenges ahead. Taking government capability and public mood together, the British could be quite savvy about how to weather the turbulence of the coming period. But we cannot act alone. International legitimacy is a concrete asset. The UN is a significant forum, even if it has limitations. EU-US cohesion provides strength. Diplomacy - that is, talking, consulting, arguing, respecting - must be allowed maximum room.

So we must be prepared to consult much more widely and talk to virtually anyone. Exclude those who will not change their minds (al-Qaeda, for instance) but include anyone relevant, however great the differences, if their interests, too, require choices and compromises. Hamas in Gaza comes into this category, as a movement based on principles we cannot accept but which is capable of moving - and we cannot afford to let Palestine fester for much longer. North Korea and Iran will eventually have to choose. We must not let China and Russia lose the habit of talking. Broaden the international mechanisms such as the G8 to bring in the peoples - China and India especially - with the largest impact on the results. If we need them on energy and environmental issues, we are as likely to need them on trade and economic ones as well. At the same time, sharpen the instruments we are most likely to use if things go wrong, by allocating resources to the right places.

With the lessons of the past six years increasingly clear, the UK cannot afford to motor forward in cruise mode. The next decade is going to be as testing as any in living memory.

Sir Jeremy Greenstock served as the UK's special envoy to Iraq (2003-2004). He is now director of the Ditchley Foundation.

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