The current Italian EU presidency wants to complete the negotiations at the current two-month inter-governmental conference (IGC) ending in December to pave the way for the new treaty to be signed by the member states before the next EU Parliament elections scheduled for June next year (2004).

Hence all eyes are now set on the outcome of the on-going two-month IGC meetings which will be responsible to give the draft constitution a final shape to be accepted by all member states. That is why the French President Jacques Chirac had cautioned his fellow EU leaders not to open a 'Pandora's Box' by seeking substantial changes to the draft constitution, that may ultimately lead to the failure of the IGC meetings. Thus the EU now stands at the crossroads to achieve its dream of playing a global role to face its powerful rival, America.

EU's new reform measures

Let us now recapitulate some of the important reform measures adopted at the EU meeting held in Greece recently. First, a historic blue-print constitution has been prepared by the EU leaders, which is now being mooted at the IGC meetings for approval at its next meeting scheduled for December in Rome. The draft constitution was presented to the Rome meeting of the EU in October by no less a personality than the former French President, Giscard D'Estaing, who claimed to have finalised the draft after 16 months of debating on it by a 105-member convention held in Brussels. The main features of the draft EU constitution are: (a) a long-term president of the EU, instead of its current six-month rotating system; (b) A new full-fledged foreign minister; and (c) Reduction in the right of veto. Giscard D'Estaing believes that the draft, when adopted, would serve the 46-year old EU for next five decades. When the new constitution comes into force, the EU is expected to become more stronger than what it is today. In short, in loose terms, the EU will be more known as a 'United States of Europe' (USE), as a global power.

Besides political issues, it will be the economics and trade that would become poignant is streamlining EU-US relations. The recent so-called 'banana-war' between America and EU is a case in point. The EU decision to buy banana from the Caribbeans instead of its traditional supplier America raised a great furore from Washington which, as a punishment, raised unilaterally its tariff wall to 100 p.c. on goods imported from EU. When the matter was referred to WTO by EU, the world trade body came down on America with heavy hands asking it to pay compensation to the EU for the loss sustained by the latter because of high tariffs. America has now announced to settle the issue.

New common farm policy

Another land-mark event that took place at a recent meeting of EU agriculture ministers in Luxembourg will cast far-reaching impact on the shape of US-EU relations. The EU farm ministers struck a historic agreement to reform the EU's much-disputed Common Agricultural Policy (CAP) that would strengthen EU's hand in world trade talks at WTO vis-à-vis America. It has already been hinted by the Greek agriculture minister, after the meeting, that the new farm agreement would serve as a boon to farmers at home and abroad and will also strengthen EU's hand at the WTO talks on international trade reforms. The new step would certainly raise many eye-brows across the Atlantic.

The European farm commissioner, Frenz Fischler, had already pointed the "finger squarely" at Washington to follow EU's lead and slash farm-aid. The commissioner, rather sarcastically and in an oblique reference to US practice of throwing 'advice' often on the EU, said: "There are a lot of schoolmasters telling us in the last few months that we have to do some home-work. Now it is upto others to do their homework." The EU commissioner also directly criticised "American friends" and alleged that America had "resurrected a lot of trade-distorting policies of the past and actually increased agricultural support enormously."

In view of such open lashes, and that also with a tinge of sarcasm, America must be pulling up its socks for a trial of strength at the future WTO trade talks.

Highest US farm subsidies

Although US often cries wolf accusing other countries of "unfairly" blocking its farm exports, it is the US government that is known to be the provider of highest subsidies to its farmers in order to boost huge exports abroad, particularly in developing countries. Here is one example to prove the point. America, which is a major cotton producer and exporter, granted last year (2002) to its cotton farmers some 3.9 billion US dollars as subsidies which is said to be three times of the total amount of the annual US economic aid to all the African countries!

What's being cooked in backyards?

The vicious circle of hide-and-seek between Europe and America in out-witting each other in political and economic fields has been at work for about five decades or so. America once enjoyed monopoly on the post-war West European countries which were re-built by America through Marshal Aid, later putting its huge army in different parts through newly-formed NATO (North Atlantic Treaty Organisation) under US-leadership. The grateful European countries showed their unstinted support to NATO, and as a matter of fact, to America, for helping the economically-shattered West European nations to stand on their own again. But every beginning has its end, however cruel a joke it may be to all concerned. So it happened with America when things started changing for the better. This ultimately led to the emergence of a new politico-economic scenario which led to the creation of a new Europe, which now perhaps proves to be a Frankestein's ghost for America. The appearance of Europe's common currency, 'euro', has already assumed a role of a rival to the mighty US dollar.

So what started with the creation of the European Economic Community (EEC) in 1957, following a meeting of leading West European countries, was the first step towards the establishment of the EU. And this followed the formation of NATO by America in 1949 to serve as a bulwark against the expansion of the Soviet regime towards the west. But a new picture, may be considered as hostile by some, is now emerging, following the collapse of the Soviet Union.

Another political storm?

Another 'political storm' seems to be gathering which might cause extensive damage to EU-US relations. Several EU countries, including France and Germany, had decided recently to establish a separate multinational forces headquarters not later than 2004 for European operations where NATO is not involved, side by side with the development of European Rapid Reaction Force (RRF) open to all European countries. And, surprisingly, Britain, a leading member of EU, was not invited to this meeting, perhaps considering its too close proximity with America. This new move on the part of some EU countries, particularly keeping Britain outside, had evoked angry reaction in Washington and London, which had warned against any "duplication" of NATO. It is to be seen how EU reacts to this Anglo-US warning.

Another subtle game is also going on. While EU is busy in wooing the eastern European countries for admission to EU, America, perhaps as a counter-measure, had announced the formation of NATO's Quick Strike Force (QSF) where eastern European countries are being invited to join.

Many consider this new development is bound to create new cracks in the EU-US relations, despite the recent compromise on Iraq issue in the Security Council. It is really difficult to predict where this game of out-witting each other will end up. The new scenario, looming large on the horizon is ominous. Now the question is: will it ultimately lead to the creation of another volatile situation for a new phase of another, or rather, second 'cold war' period between the two blocs, one led by new Europe and another by the seasoned world power, America? Only time will show what is lotted for the peace-loving peoples of the world.

A M M Shahabuddin is a retired UN official.