The meeting I attended at Schloss Niederschönhausen was of senior officials from six states: the Soviet Union; the United Kingdom; France; the United States.and two Germanies, West and East. Our purpose was to draw up the final settlement that united Germany and ended the Four Power rights that were the legacy of the Potsdam Agreement.

Before long, two of the six states at that meeting had slipped into history. So whenever I visit Berlin, I am moved to ponder on the drama and trauma, the highs and lows of the past.

I count myself fortunate to be among the final cohort of America’s Cold War diplomats, to have been one of the last of a long line of my countrymen who kept a promise to the German people: a pledge of Freiheit und Einheit.

Now I have the honor of serving my country in a totally different era. I know Germans and Americans share values - - and experiences. Yet the question we must address now is whether we have shared interests as well.

In considering that question, we should draw from the lesson of the two Marshall Funds - - American and German - - that this event celebrates. Both were generous gifts. Yet their true distinctiveness was not their unselfish charity, but their largeness of spirit and imagination in defining enlightened self-interest.

The American and German benefactors appreciated that to build for the future, we would need more than a shared history and common values: Since Europeans and Americans would inevitably pursue their interests, we needed to encourage the examination of mutual strategic interests and to foster the joint pursuit of those interests.

During the 1990’s, Europe’s anguish in the Balkans distracted Germany and its partners in the European Union from assessing shifting perceptions of strategic interests. Germany, in particular, struggled with vital issues such as the limits of humanitarian peacekeeping and the use of military force to stop aggressive dictators, ethnic cleansing, and mass rape. Europeans wavered over whether they wanted the United States to be involved in the Balkans, and then whether America was too active or not active enough.

As the United States and the European democracies emerged out of the Balkan travail and the decade of the 1990’s, we could observe a vista that had been shrouded for a century: The broad plains of Central Europe were no longer the crucible of the world’s fear for its security, even its very existence.

This is an epic achievement. But this historic transformation raises questions about the future. Will there be a basis for a trans-Atlantic unity absent the intense cohesion of shared danger? If common values and institutions are to bind us, in what ways?

Chris Patten, the European Commissioner, has written that he sees America’s role as stirring indignation in Europe, and he hopes that indignation will forge a new Euro-patriotism. Goran Persson, the Swedish Prime Minister, stated the EU must be developed “as a balance to U.S. world domination.” Prime Minister Jose María Aznar of Spain acknowledged ruefully that being down on America wins points for being “simpatico” in the EU. My colleague and friend Commissioner Pascal Lamy has pointed out, accurately, that the surest way to win applause in the European Parliament is to criticize the United States.

I suggest respectfully that America bashing - - or building European unity on the negative premise of countering the United States - - will not promote the EU’s enlightened self-interest.

Last month, the Indian columnist Raja Mohan, writing from Berlin, observed that India and Europe seem to have traded places: Whereas Europeans now criticize Americans at the drop of a hat, like India used to do, India is now more comfortable with the United States because of a convergence of long-term interests. Mohan traced this reversal to his supposition that Europe is content with the world order - - its rules and institutions - - coming out of the peaceful conclusion of the Cold War, while the United States and India see conditions requiring changes to the old ways.

Germany’s and the EU’s enlightened self-interest may not in fact be served by sticking cautiously to status quo multilateralism. Perhaps European preoccupations - - with the Balkans, EU enlargement, and the new EU constitutional debate - - have stymied the development of a new European Weltanschauung. In the absence of a new European worldview, U.S. initiatives to deal with changed global conditions have triggered that old standby deployed by both Europeans and Americans: Caricatures of one another.

As a long-time friend and admirer of Germany - - and someone even once decried by the Economist as a Euro-romantic - - I urge you to consider an idea: Many recent Euro-Atlantic squabbles are not traceable to a change of U.S. administrations or personal styles; they reflect instead America’s reassessment of its national interests in a changed world and Europe’s conservatism in adjusting.

President Bush has begun to discuss some themes about America’s changing definition of security. Among them are the following ideas.

First, the geographic concept of America’s security has changed. It reaches deeper into our home territory at the same time that it extends beyond conventional territorial borders of states. The American people can see a direct connection between deployments in the mountains of Afghanistan and the defense of buildings in Manhattan.

Second, our security is being redefined as a function of time: We can no longer build our defense solely around deterrence and containment, because these approaches may not thwart the new enemies that have attacked us. Instead, we need to think preventively and possibly preemptively - - in diplomacy, economics, and even the use of force.

Third, security in the future will not just be a matter of maintaining order among the great powers, although peaceful relations among them is a prerequisite for deeper security. We need in fact to promote cooperation among the principal powers to address new dangers and seize new opportunities. Ultimately, that cooperation will be most effective if it is based on shared values.

And fourth, American security depends on more than the old language of power: It rests ultimately on the promotion of shared values. In considering the uses of power, we need to face questions of right and wrong, good and evil. This should involve a worthy debate among democratic partners who share these values. We reflect our respect for one another by facing these difficult questions, not by evading them in deference to the ethical relativism of various international structures.

These themes point to a direction for U.S. and global security. They are not, of course, automatic in execution. Allies and partners can and should have serious debates about how they should be applied. Nevertheless, the ideas provide a framework for understanding the logic of American policies under the new circumstances in which we live.

Rather than rely on the worn distinction between unilateralism and multilateralism, we urge Europeans to join with us in considering how the global context - - and our interests - - have changed over the past decade. And we urge you to join us in reassessing the missions and applications of Cold War institutions and agreements in a new era.

I believe that trade policy offers one area in which the EU is seeking to adapt its policies to match changed circumstances. Commissioner Lamy and I may have disagreements over individual items - - and even clashes of interests - - but I believe he has presented a trade strategy with which we can, have, and will work because we have many interests in common. The challenge for Europe is to promote competition, reduce rigidities, and address the cultural and social sources of structural protectionism so that Europe’s economy is aligned with the EC’s strategy for more open trade. The challenge for the United States, in turn, is to urge the domestic beneficiaries of our flexible and dynamic economy to provide political support for openness while preserving our economic adaptability.

In the spirit of dialogue, let me illustrate how the United States - - and I hope Germany and the EU - - might pursue an enlightened self-interest through new approaches in three areas: building a constructive relationship with a Russia that belongs in the Euro-Atlantic community; defeating the terrorists who threaten us; and seizing the opportunities of globalization.

Russia and the Euro-Atlantic Community

Germans know better than anyone that Russia is a land that is both part of and separate from Europe. St. Petersburg is a grand European city built on a Russian scale. Moscow is an older Russia - - of boyars and bureaucrats - - suspicious but strong, harsh but capable of great accomplishments in adversity, enduring but warily interested in new possibilities. And the vast Russia that sweeps eastward is where the shifting frontiers of Europe and Asia meet, mix, and clash.

When the old Russian empire collapsed, the Soviets fused Marxist ideology with totalitarian controls and imperial ambitions. The 70 years of the Soviet Empire further distanced Russia and its conquered lands from European civilization, and from Europe’s political and economic evolution.

When President Bush assumed office, he signaled that America’s aim is to draw Russia closer to the West. What many Europeans failed to grasp, however, is that President Bush’s purpose is not to restore some modernized Ostpolitik just to lessen tensions between the Euro-Atlantic world and Russia. That is an old framework, a residue of Cold War blocs. Instead, President Bush is considering Russia’s future place in a much wider world of opportunities and threats. This view is not colored by romantic Wilsonian idealism or Cold War power balancing, but by new assessments of interests.

It is in America’s - - and we believe Europe’s and Russia’s - - interest for the United States to terminate an ABM treaty that both enshrined an obsolete doctrine of Mutually Assured Destruction and limited our combined ability to build defenses against new missile threats. It is in our mutual interest to reduce drastically the size of strategic nuclear arsenals. It is in our mutual interest to develop a NATO-Russia Council so that there is a new security framework in which Americans, Europeans, and Russians can work to counter the common security threats of this century. By taking these steps, we also promote our mutual interests in developing greater security in the wary lands between Germany and Russia through enlarging NATO. And we can advance our mutual interests by employing Russia’s accession to the WTO to help Russia build the economic rule of law.

Russia is, of course, struggling through a massive transformation. Its democracy is rudimentary and constrained. Institutions drawing from the old security organs still limit press freedoms and liberties. Russian fears of fragmentation have led to brutalities against minorities.

Yet Russia is not our enemy. We share common interests. We need to counter terrorists who strike against our countries. We need to counter and prevent the spread of weapons of mass destruction to dangerous states and terrorists.

Russia is recognizing that whereas in the 19th Century large countries wanted weak neighbors that they could dominate, in the 21st Century both the United States and the EU have decided that healthier, growing, secure neighbors are better partners. And if the Russian people - - with their remarkable talents and resources - - are permitted to own and sell property, create entrepreneurial ventures, and expand the reach of a competitive, non-oligopolistic private sector, Russians will add to their prosperity and ours.

As President Bush began to advance these ideas, he weathered a storm of European hail, stinging axioms from cloudy Cold War thinking and a stubborn front resistant to change. Perhaps the early results of this new American assessment of enlightened self-interest will prompt Europeans also to consider whether the old ways are necessarily the best ways to pursue the new ends of policy. International agreements are only tools to advance common interests; treaties are not themselves interests unless they continue to serve the goals of policy.

Defeating the Terrorists Who Threaten Us

Two weeks ago President Bush spoke in Berlin about terrorists that are defined by their hatreds, killing in the name of false religious purity.

Unfortunately, our countries have used the word “war” laxly. America has proclaimed wars on poverty and drugs. And Commissioner Lamy correctly points out, hyperbole transforms conflicts over tariffs or trade rules into trade wars.

Do not be misled by desensitized diction: The United States is engaged in a real war against terrorist enemies, and Europe’s interests, today and tomorrow, are very much at stake in this struggle.

Perhaps it is natural that Europeans want to treat the shock of September 11 as one tragic moment in time. But that would be self-deceiving and dangerous. The U.S. response is not, as some suggest, an overreaction to some loss of innocence.

A few weeks ago the Washington Post reported that a man identified as fugitive Taliban leader Mohammed Omar was quoted as saying that “the battle [in Afghanistan] has begun and its fires are picking up. These fires will reach the White House.”

These are not idle threats. The Al Qaeda network is organized, centrally planned, financed, and actively plotting. The history of this evil web reveals its intolerance of modern civilization, a belief forged in Afghanistan in the 1980’s that it can overcome any foe, and an utter insensitivity to human life, even of its own members. The struggle against those who support or emulate these terrorists will be protracted.

Given Europe’s tragic history of militarism, imperialism, and ruinous wars, perhaps the counter reactions of pacifism and a certitude that reason and dialogue are superior to military action are understandable. Given Europe’s difficulties in integrating some immigrants within its societies, one may appreciate the fears about triggering hostility within European cities.

It is harder to fathom European leaders who jump to a microphone to criticize U.S. incarceration of Taliban and Al Qaeda butchers based on one photo but not facts. This is not a question of political dissent - - this is mass murder.

For the pacifists, the fearful, or the Schadenfreude critics of the United States, I can only suggest that America will pursue its interest in self-defense, which we proffer is in Europe’s interest, too. The aim of these terrorists is not just to kill and maim people or to smash buildings; it is to employ violence to paralyze with terror, to destroy a way of life, or as President Bush said here, to attack “civilization itself.”

These terrorists need sustenance to scheme. They need money. They need to organize. They need bases for training. They need hiding places. They need weapons. They need havens in states.

It is in our interest to deny them these resources and places. We need intelligence about their plans. We need to expose their perversion of the faith they claim to hold. And we need to break the potential link between terrorists and weapons of mass destruction.

Our enlightened mutual self-interest also calls for a longer-term consideration of how to thwart those who choose to destroy instead of to create. I do not believe that poverty causes terrorism.

To do so would be to insult the many poor people who struggle peacefully to overcome terrible hardships. Furthermore, the backgrounds of most of the Al Qaeda terrorists - - like most terrorists - - are privileged or middle class. Yet broken societies provide havens in which mass murderers can thrive covertly. Therefore, part of our campaign must be to offer hope, opportunity, and support for individuals and societies to respect the rule of law, to build, to improve the lives of their children.

Seizing the Opportunities of Globalization

Which brings me to the third area in which the United States, Germany, and others in the European Union might pursue an enlightened self-interest: in seizing the opportunities of globalization.

As Germans know well, the collapse of the Berlin Wall opened not only a new era of politics and security, but also of economics. The shift has been arduous.

Compounding this transformation, China, India, Latin America, and parts of Africa began to open their economies, reduce state controls, and privatize. They began to move away from the mid-20th Century vogue for state planning and ownership, import substitution, and dependency theories. Not surprisingly, the shift from a global marketplace of one billion to five billion people has been harrowing.

Moreover, during the 1990’s, advances in communications and information technologies - - combined with changes in financial markets - - have sparked revolutionary shifts in perceptions of geographic markets, business and sourcing models, capital flows, productivity potential, and the provision of customized goods and services.

Consider this one example of the pace of technological change: The spacecraft that carried the Apollo astronauts to the moon had less computing power than a modern pocket calculator; today, a single laptop can crunch numbers faster than all of NASA’s computers combined in the 1960’s.

The Euro-Atlantic marketplace is the pacesetter for deeper economic integration driven by this business, technological, and financial transformation. In 2000, the book value of U.S. direct investment in Europe reached $650 billion, and European investment in the United States was almost $900 billion.

A recent story in the Washington Post about a typical American family taking an all-American vacation brings these cold statistics to life:

Bill, an engineer at Niagara Mohawk Power Corp. in Upstate New York, and Betty, a clerk at Casual Corner, take their Jeep down to the Amoco station for a fill-up, pop a Dave Matthews album into the cassette player and head west. They drive all day, except for a quick lunch at Burger King, and stop for the night at a Holiday Inn outside of Pittsburgh. In their room, Bill smokes a couple of Lucky Strikes and watches “A Beautiful Mind” on pay-per-view, while Betty curls up with a bottle of Snapple and the new Philip Roth novel she just received from the Literary Guild. The next day, they get some cash at a Mellon Bank ATM, fill the tank at a Shell station and drive all the way to Chicago. There they meet their daughter Barb, a copywriter at the Leo Burnett advertising agency, who proudly shows her parents the ad she has written for Taster’s Choice coffee. Barb’s husband, Bob, a reporter for the Chicago Sun-Times, is delighted with the Brooks Brothers necktie his in-laws brought him.

It all sounds thoroughly American. However, just about every product and service that the family bought or used on this trip came from European-owned companies.

In explaining the European investment in the United States, one European executive pointed out that in addition to the financial returns, “The U.S. is so competitive that... the things we learn operating there will help us in all other markets around the world.” Given the expansion of the European single market, I suspect that businesses based in the United States also recognize that they need operations in the EU to compete globally.

It is not surprising then that the intensifying trans-Atlantic economic integration leads to frictions, as government policies and different democratic procedures clash with market preferences for transparency, lower costs, and quicker decisions.

American and European anti-trust authorities are struggling to reconcile not only the definition of geographic markets, but also economic theories of competition. European prohibitions on biotechnology not only block U.S. exports but also impede efforts to counter malnutrition, disease, and poverty in Africa, Latin America, and Asia. And temporary American safeguards on steel - - permitted by WTO rules and which affect only about one percent of U.S. imports from the EU - - understandably trigger complaints from Europeans who believe the United States should instead rely on the same huge social subsidies that the EU used in shifting from its own national steel champions to merged companies.

I believe that Pascal Lamy shares my view that while we manage these frictions and pursue our respective economic interests, the United States and the EU must also advance a common enlightened self-interest: We need to strengthen the world economy and expand the circle of prosperity in this modern age of globalization.

Historians have pointed to an earlier age of globalization a century ago - - a time marked by great technological innovations in communications, transportation, and energy; flows of trade and capital that matched today’s as a share of the economy; immense immigration; and novel social movements.

The earlier globalization also spawned anarchists, who emboldened assassins and terrorists who targeted presidents, premiers, kings, and an archduke in Sarajevo. The hopeful prospects of globalization a century ago were overwhelmed by the dangerous ideas and brutality of the 20th Century.

History may never repeat itself. But as Mark Twain said, it does sometimes rhyme.

Commissioner Lamy and I have been endeavoring to improve globalization’s prospects in the 21st Century.

First, we worked closely together last year to launch the new WTO negotiations in Doha, to overcome the failure in Seattle. Now the 144 economies that belong to the WTO have an opportunity to adapt the rules and practices of the world trading system to better fit the challenges of globalization. Going forward, we will explore how the WTO can interact constructively within a larger network of free trade agreements, custom unions, labor and environmental accords, and health and human rights policies.

Second, we need to complete the integration of the former communist economies within the WTO’s system of rules so as to promote more open trade and encourage their development of the rule of law. To this end, the United States and the EU worked closely to bring China, and a democratic Taiwan, into the WTO last year. Looking ahead, we need to cooperate on the implementation of China’s obligations and the accessions of Russia, Vietnam, and others to the WTO.

Third, the United States and the EU share an interest in enabling the developing world to prosper through trade openness. The Doha negotiating mandate offers an excellent framework for reducing barriers to trade in agriculture, manufactured goods, and services. To help developing nations to participate effectively in negotiations, implement their trade obligations, and harness open trade to better achieve development, both the EU and the United States are directing aid to assist trade. Last year, the United States devoted $555 million to build the developing world’s capacity for trade.

The United States and the EU are also opening our markets through special unilateral trade preferences. The trade bill that President Bush launched shortly after taking office, which we hope the Congress will complete in coming weeks, should increase access for sub-Saharan Africa and the Andean countries, as well as renew lower tariffs on some 3,500 products from 140 developing countries. The EU’s “Everything but Arms” trade initiative has the same purpose.

Developing countries will lower their costs for producers and consumers, force sheltered businesses to compete, lessen temptations for corruption, and improve their ability to benefit from globalization if they lower their barriers to trade and investment. To encourage liberalization through reciprocal openness, once the U.S. Congress grants the President Trade Promotion Authority, the United States will pick up the pace of negotiating regional and bilateral free trade agreements.

Fourth, both the United States and the EU need to build support at home for free trade. Little has changed since 1824, when the British historian Macaulay wrote that “free trade, one of the greatest blessings which a government can confer a people, is in almost every country unpopular.”

The challenge in the United States is complicated, perhaps ironically, by the generally open nature of our economy. The average trade-weighted tariff for the United States is now under 2 percent. Some of our last remaining quotas - - on textiles and apparel - - will be eliminated by 2004. Our customs procedures are designed for transparency and efficiency, not for surreptitiously or corruptly blocking goods at ports. We have not relied on ill-informed fears and biases to block others’ innovations in goods and services. We have not hidden national competition behind an all-too-convenient cultural exception.

Furthermore, investment in the United States has contributed to a strong dollar. All these policies have spurred U.S. productivity and dynamism, but our $1 trillion of annual imports and $437 billion trade deficit have become political targets. And the many barriers faced by U.S. exports around the world provide a convenient rallying point for Americans who argue that others should liberalize before the United States reduces its remaining barriers.

For example, when Europeans criticize the recent U.S. farm bill, I wonder how many are even aware that U.S. agricultural tariffs are less than half of the EU’s; that we would be delighted to zero out export subsidies, whereas the EU continues to spend 25 times our amount; and that WTO rules permit the EU to spend three times the U.S. amount on trade-distorting international farm subsidies?

The United States remains fully committed to the mandate for agricultural trade negotiations that we helped attain at Doha. While the negotiations are proceeding, we, like the EU and others, will continue to promote our national interest within the global WTO rules.

The U.S. Congress, which under our Constitution has the authority to regulate trade, has vehemently declared that the United States should not weaken the international rules governing unfair trade practices or temporary safeguards. Given the easy and generally open access of foreign exporters to the U.S. market, these rules are the last legal and political safety valves for industries trying to adjust to the anxieties and challenges of globalization.

Of course, many businesses in the United States believe, as I do, that our national interest is best served by freer trade. Yet if they and their employees do not persuade the Congress, the President’s hands will be tied. Because President Bush is an ardent believer in free trade, he made it a top priority to secure Congressional approval of the trade negotiating authority that lapsed eight years ago. And we are close to that major accomplishment.

Conclusion

Today I have offered some ideas about the enlightened self-interest that America and Europe might share at the start of the 21st Century.

To promote these interests, our elected governments need the support of publics on both sides of the Atlantic.

Over the past year, I have read two particularly thoughtful comments - - one by Joe Joffe in The National Interest and the other by Professor Ernest May in a paper for the Aspen Strategy Group - - on whether European and American attitudes will support new ties to match new challenges.

As Joffe and May remind, Europe’s view of itself as the “Un-America” has deep historical roots. Europeans have long reveled in considering America as “morally, socially and culturally retrograde.” In 1977, Wolfgang Wagner, the editor of Europa-Archive, wrote that throughout the 19th Century, European commentary on the United States had “three recurrent themes: America as a continent without culture, America as the country of the idolatry of money, and America as the Babylon of licentiousness.” Indeed, in his famous report for Frederick the Great, Abbé Corneille De Pauw deplored the very discovery of America, because he believed the climate degenerates all inhabitants to “a brutish insensibility.” On some summer days in Washington, I share this view.

Americans, in turn, proudly defined themselves as “not Europe.” After all, many Americans risked all to leave the Old World. Benjamin Franklin, a man who found success on both sides of the ocean, nevertheless contrasted Europe, a place of “rich and haughty landlords,” with America’s “happy mediocrity.” I still recall my grandmother referring to “putting on the von” to describe people with a false air of superiority.

Of course, over time Americans were not content with being plain and virtuous in comparison with Europeans, but also saw themselves as “more energetic, practical, ingenious, and productive.” They were, as May writes, the Connecticut Yankees at King Arthur’s backward, suspicious court - - or, for those of you who still watch recent American movies, “The Black Knight.”

Perhaps more distressing to Europeans, there came a point when Americans stopped bothering to compare themselves with Europe - - or, for the matter, any earthly society.

Yet an intriguing Euro-Atlantic fusion was taking place. The criticism of America expressed by European intellectuals was increasingly supported by, or even drawn from, the criticism of the United States by American intellectuals. As a reporter for the Wall Street Journal pointed out 20 years ago, the United States was exporting anti-Americanism, with the primary European consumers being “people in the consciousness industry - - the churches, schools, universities, and mass media.”

Indeed, Professor May suggests that Europe and America may be so entwined that they are creating a single society, divided less by political boundaries than by social, economic, and cultural stratification.

So when Joe Joffe points out that average Europeans are drawn to American learning, technology, and popular culture - - “Harvard, Hollywood, McDonald’s, and Microsoft” - - May adds that the non-average have a different view: Both European and American elites scorn the products of Hollywood and McDonald’s. American elites disdain American mass culture: They favor Cannes over Hollywood; they drive BMWs and Mercedes, not Cadillacs; they learn the names of French chefs and wines and dress in Italian styles.

May notes that many of the issues that seem to divide Europe and America - - the death penalty, the environment, and, I would add, immigration - - actually reflect divisions within our common society.

He suggests that European and American governments may represent this internal diversity differently because of the nature of their political institutions. In the United States, elected leaders and senior appointees come from a widely dispersed group; they are also more likely to be connected with business and professional leaders than with cultural and intellectual elites. The U.S. federal and Congressional system increases options for citizens to express local preferences enormously; at the same time it gives specialized constituencies disproportionate influence.

European governments, in contrast, are generally national, centralized, and largely run by people who make their careers within political parties or elite civil services. The governing elites are more likely to align with intellectual and cultural elites than with the general public or groups lobbying for specific interests.

The institutions of the European Union have probably further emphasized elite preferences. Indeed, just as the European Union is launching an interesting new constitutional project, its member states seem to be asking whether their governments are sufficiently alert to the views of those outside the favored elite.

Perhaps this is a time for Germany - - with its respect for the local governance of federalism as well as its commitment to European integration - - to suggest the way to meet these challenges of European democracy.

When I started working with German officials in the 1980’s, I noticed they could never bring themselves to refer to national interests. In the 1990’s, after unification, I noticed a creeping shift: Germans grew confident that as Atlanticists and Europeans, they needed to consider national interests within those frameworks.

I hope Germany will exercise its appropriate influence within a larger European Union and NATO. Because I believe most Germans recognize that our countries - - perhaps even our common society - - share binding experiences and values, but also something more: We can recognize an enlightened self-interest in promoting security, open markets, economic vitality, and a commonwealth of liberty.

That is why I felt, coming to Berlin 12 years ago, that Germany’s unification would not only fulfill an old promise, but would also create a new basis for a united Germany, within a Europe whole and free, to pursue a new promise of enlightened self-interest for a changed era.