After some disappointment in Obama's first term, there is a moment of optimism for transatlantic relations. Washington and Brussels should capitalise on this moment, and work to ensure closer co-operation in pursuit of their strategic objectives in President Obama's second term.
With a team of like-minded officials, President Barack Obama is positioning for an activist foreign policy in his second term. There will be domestic priorities, to be sure, but the re-elected President will enjoy more freedom to define his foreign policy agenda over the next four years. The US is on a path towards recovery; it is quickly reducing its energy dependence, and there are no pressures for re-election. President Barack Obama has just four years to cement his foreign policy legacy.
In 2009, President Obama articulated a foreign policy that would emphasise partnerships and diplomacy, and in his second inaugural address today he has reinforced those themes by saying: 'America will remain the anchor of strong alliances in every corner of the globe; and we will renew those institutions that extend our capacity to manage crisis abroad, for no one has a greater stake in a peaceful world than its most powerful nation.'
Indeed, the centrality of partnerships and alliances may grow in the second term with John Kerry and Chuck Hagel at the Departments of State and Defense: both must manage reduced government spending and an orderly withdrawal from Afghanistan. A sense of weariness has set in, together with a reluctance to engage anywhere without a robust strategy and strong, capable partners.
The first Obama Administration had hoped the EU could be a strong global partner, engaging politically, economically and militarily alongside the United States. There was some disappointment in the relationship on both sides during the first term. Domestic politics consumed attention and there were differences over the financial crisis and perceptions of Obama's Pivot to Asia. Fears of a Eurozone break-up have subsided but anxiety is growing in Washington about the future of the EU. Inauguration Day could, perhaps provide a new opportunity to re-cast the transatlantic relationship, once again, in a more positive political light.
Opportunities for Progress on Trade
Despite economic woes on both sides of the Atlantic, the prospects of greater economic co-operation between the USA and Europe look promising. Talk of a Transatlantic Free Trade Agreement (TAFTA) at the end of 2012, injected a degree of energy and optimism into what was otherwise a tired debate about transatlantic relations. Progress on a TAFTA will be difficult, and it will take time and political capital, but a recent Financial Times editorial argued that the 'stars are aligned' for progress, and the opportunities may be too good to pass up. Closer integration of the two economies would let Washington and Brussels 'set the terms for the rest of the global economy', 'revitalising their relationship at a time of slow - or non-existent - growth'. The European institutions would be stronger and more credible at home and abroad, and more attractive to the UK at a critical moment in British politics.
Trade co-operation could make Europe 'fashionable' again in Washington, especially if the US can define a strategy that balances its Pacific and its Atlantic interests. Obama has yet to clarify his views on trade in concrete policy, and while many feared the Tea Party Republicans would backpedal on the trade agenda after 2010, this hasn't been the case. Progress is possible, and it is a strategic imperative. For Obama, it would mark a major bipartisan achievement, highlighting the importance of Europe for US and global economic recovery. Secretary Clinton argued the 'most important question in the years ahead is whether we invest as much energy into our economic relationship as we have put into our security relationship'.
NATO, Afghanistan and the Middle East
In Obama's second term, the US will focus on Afghanistan, Iran and the Greater Middle East, and re-calibrate relations with China while implementing the rebalancing strategy in Asia. The US and Europe have shared strategic interests and can work together in these areas. An 'outward-looking EU with Britain in it', as described by US Assistant Secretary of State Phil Gordon, would be an important partner and a strategic imperative for the US.
In Afghanistan, the Second Obama Administration will focus on avoiding worst-case scenarios as transition is completed by 2014. Even if there will be no victory, and possibly no success either (however it is defined), the experience has been good for NATO. The allies have combat experience, good relationships with partners, cohesion and significant capabilities. Allies must safeguard their knowledge base, and invest enough in NATO to protect its planning and command structures, its new partnerships and its key capabilities. At the same time, Afghanistan needs attention: there is no political settlement, the government lacks legitimacy and a period of major economic downturn looms ahead.
Challenges from Iran and from the Middle East have worsened over the past four years, and both are priorities for the US and Europe. Back in 2009, Hillary Clinton declared that no one in Washington thought that the EU had an appetite for a total embargo of Iranian oil. Yet the two sides managed to structure conditions in such as way as to enable the EU to establish a boycott, and global sanctions now cost the Iranian Government $3 billion per month. Transatlantic co-operation has improved, and the US and EU will push forward with negotiations, consider Israeli calculations, and the US will prepare other options. The challenge will appear at the end of this process.
Turmoil in the Middle East has also worsened considerably since Obama's first term. The challenges - Iran, Syria, and the Arab-Israeli conflict - will be priorities for Europe and for Washington in Obama's second term. They can do more to find a path that could make a positive impact in Syria and support institutional development while preparing for Assad's eventual fall. Both Washington and Brussels should turn their attention again to the stalled Middle East Peace Process; anxiety in the region is growing alongside anti-Israeli politics, and the Palestinians are losing hope. No over-arching strategy or framework can address complexity across the region. Both need a nuanced and flexible approach that maximises their economic and political influence.
Re-balancing With Europe Towards Asia?
Obama's 'pivot' to Asia, for all the criticism it received, will continue to be central in Obama's second term foreign policy. Much time has been spent clarifying what it meant (and what it didn't mean) in different parts of the world. The US wants Europe to be engaging more in Asia, helping improve security and economic relationships, seeing the region not just as a market, but a focus of common strategic engagement. As departing US Defense Secretary said in his valedictory speech in London last week, 'The bottom line is that Europe should not fear our rebalance to Asia, Europe should join it.'
When US officials first mentioned the 'pivot' in speeches and launched the Defence Strategic Guidance in early 2012, Europe was slow to respond, and the debate focused on the idea of a pivot away from Europe. This is changing, though, and a debate in Europe about its role in Asia is picking up pace. Recent polling suggest that 57% of European elites are not satisfied with the EU in Asia, and 96% believe it should be doing more. Engagement has been bilateral and commercial in nature, with very little at the EU level. This reflects both a lack of strategic thinking in Europe about Asia, but also of Chinese preferences to date, which have focused on bilateral economic relationships with EU member states, and with Berlin in particular. The US would like to see the EU rise above this, with more strategic attention from Brussels, and perhaps a new security strategy.
The Second Obama Administration will focus initially on US-China relations. Obama will reach out to the new Chinese leadership, which is facing difficult economic circumstances and instability, in order to set the tone going forward. The Second Administration will also ramp up its investment in Asian economic integration, pushing the Trans-Pacific Partnership negotiations forward, and engaging more in institutions to drive home the message that the US is in Asia to stay. It is in the areas of institution-building and economic integration where the EU has important lessons to share. The US also expects Europe - at the EU level - to contribute more in Asia, especially in areas such as institutions, human rights, environmental concerns and in aid.
A Moment of Optimism?
Despite power shifts and loose talk of decline, the US and the EU still have major structural advantages and shared global interests. They also have an increasing awareness, though, that they can only maintain their influence by restoring growth, fixing economic problems and addressing concerns of their people. The US must find a strategy to resolve its long-term fiscal problems, and the EU must address its political, economic and institutional challenges while delivering more legitimacy in the eyes of its own people.
At the same time, the US and the European Union will rely increasingly on one another and on other partners to extend their reach in all aspects of foreign policy. Some speculated that Obama's appointments - Chuck Hagel and John Kerry - would strengthen America's ties to Europe. Transatlantic ties could indeed be strengthened in the next Administration, but not because officials have 'Atlanticism in their blood'. Few people in Washington have Atlanticism in their blood any more, but they may be increasingly aware that Atlanticism is in America's strategic interests. Washington and Brussels should capitalise on this moment of optimism; there is much they can do together.
 P Pawlak and E Ekmektsioglou, Transatlantic Strategies in Asia, EUISS (June 2012). Quoted in 'Field Manual to Europe, Ten Memos for the new US Administration', Bertelsmann Foundation Report, (January 2013), p 70.
Visiting Fellow, Atlantic Council / Research Fellow, Royal United Services Institute for Defence and Security Studies