ABSTRACT
Europe and the USA may seem to be drifting apart in economic terms, but they remain collectively powerful enough to determine much of the international trade agenda. Their frequent inability to avoid bilateral conflict or 'export' bilateral cooperation reflects how far economics has run ahead of politics, in both the transatlantic and the international economies. Globalisation is outpacing the capacity of states (including the USA and those of the EU) and international institutions to govern it. Transatlantic trade politics remains atomistic and issue based, with the WTO system clearly identifying winners and losers, thus promoting trade policies and institutions that tend to serve relatively narrow interests. Transatlantic economic relations remain mostly immune to wider diplomatic tensions over, say, the Iraqi war of 2003, but the USA and EU struggle to show collective leadership in international economic diplomacy.
