We need "an active and capable EU [to] make an impact on a global scale [and thus] contribute to an effective multilateral system leading to a fairer, safer and more united world"¹. Such was the conclusion of the strategy paper agreed by the EU Council in December 2003; and it corresponds to what surveys and other evidence show to be a prevalent aspiration among citizens of member states. Thus the question is not what the citizens and their governments want in this respect, but rather what the Union could do to bring it about; and the purpose of this article is to show how the federal idea, as manifested in the European experience since 1950, can make the only genuinely effective contribution to the process.
The first lesson from that experience is that the basic driving force for introducing substantial federal elements into the relationships among European states has been a deeply felt need to deal with the danger, in an unreformed interstate system, of the possible recurrence of intra-European war. That motive, along with the need to deal with common economic problems, has carried the Union far towards federal arrangements for the economy as well as to the establishment of permanent peace among the member states. But this application of the federal idea to its internal polity has not been accompanied by an equivalent process in its relationship with the rest of what is becoming an increasingly dangerous world. While the Union's strategy paper points in the right direction, it fails to convey a sense of how urgently action is required to confront the dangers facing Europeans today, including in particular from atomic, biological and chemical weapons in the hands of an increasing number of states and, potentially, of non-state terrorists; from various forms of pressure arising out of global poverty; and from catastrophic climate change. Nor does it indicate that the proper response is to introduce substantial federal elements into the Union's arrangements for external policy, as a major step towards a European federation.
But whereas the federal process has gone far in important aspects of the Union's internal affairs that are appropriate for it according to the criterion of subsidiarity, in the field of foreign policy, jealously guarded by most of the member states, the process remains at an early stage. The Union's structure, however, and many of its internal policies provide a basis on which a federal foreign and security policy can be built; and there is one field of external policy that already, for the last four decades, offers an astonishingly successful example.

Trade, money, aid, environment, defence
The Community's common external tariff had been put in place by the mid-1960s and the US responded to a suggestion from Jean Monnet by proposing the Kennedy round of Gatt negotiations, in which the participating states agreed to cut tariffs by an average of one third. As the Brookings Institution's expert on the subject put it: "The dominant position of the United States in Gatt evaporated with the implementation of the Rome Treaty ... the Common Market is now the most important member of Gatt, and can determine in large measure the success or failure of any attempt to liberalise trade. When Europeans instruct Americans in the realities of the new international economic situation they are demonstrating the change in relative power that has taken place"². The consequence of this shift from hegemonic to bipolar leadership was not the trade wars and the mutual hostility that many opponents of a more powerful Union claim would follow from such a relationship with the US, but on the contrary a process of continued trade liberalisation with the EC/EU and the US as the principal actors, leading to the creation of the World Trade Organisation as the prime example of an effective rule of law in world affairs; and this stemmed from the Rome Treaty's provision not only of a federal instrument (the common tariff), but also a federal executive as negotiator (the Commission), with a federal procedure for accountability (qualified majority voting in the Council which, even if not often used, provides a deterrent to disruptive use of the veto)³.
In almost all other fields, the American relationship with Europeans, as with others, remains hegemonic, with an inevitable drift towards policies with imperial characteristics, which make the world neither safer, nor fairer, nor more united. But Europeans have not yet, four decades later, shown much sign of having learnt from this remarkable example of how they could, in most fields of policy, replace the American hegemony by a genuine partnership that is equally beneficial to both.
Thus although the euro has since 1999 become a counterweight to the dollar in international money markets, it remains far from that in the field of international monetary policy. Neither the eurozone nor the Union has the necessary federal elements in its institutions. The eurozone ministers and the Ecofin Council take their decisions without a procedure for majority voting; the European Central Bank is represented but there is no significant role for the Commission; and the eurozone does not dispose of a common vote in the IMF. But the eurozone could, with an effective common external monetary policy, preferably supported by Britain and other EU states, do much to promote a just and effective world monetary system, less vulnerable to the export of US domestic financial problems.
The EU provides over half the world's development assistance, four times that of the US. Most goes towards the attack on poverty. But a robust economy and good governance are more important for general welfare; and the Union has shown itself capable of providing, for example in the West Balkans, valuable assistance in a range of areas relating to public institutions, civil society and the economy. The EU aims to raise its contribution to 0.7 per cent of GDP; and the interests of both the recipients and the Union would be well served if a growing proportion is used to help enhance the contribution that the recipients can make to security and good governance as well as to their participation in an effective multilateral system.
The significant federal elements in the Union's internal environmental policy have provided a foundation for its leading role in global action on climate change. Despite the handicap of mixed Union and member state competences in that field, it was the Union that secured agreement in the Kyoto Protocol for a modest but significant start to the reduction of carbon emissions, which is a first step towards avoiding catastrophe in the second half of this century. It was moreover the Union which, against active American opposition, ensured the Protocol's ratification by enough states; and the external trade policy was a decisive instrument in this context too, as the essential Russian ratification was ensured by making it a condition of EU agreement to Russia's coveted entry into the WTO. The European Council has now adopted as its target the cutting of carbon emissions in half by the middle of this century; and if this is not to be a quixotic gesture, the Union will have to persuade enough other states to do the same.
Nearly half a century after the failure of the EDC Treaty, the Union returned to the field of defence, where it has recently taken significant steps: for example the creation of its military staff nucleus in the Council Secretariat; peace-keeping operations in Macedonia and the Congo; the creation of the Rapid Reaction Force and of a number of more quickly available smaller battle groups; and the establishment of the European Defence Agency. The Union can continue to build its capacity and to strengthen its institutions to the point where it can undertake almost any peace-keeping operation. But the US, to be joined perhaps by China, will continue to possess unrivalled military power.
The EU has, however, the potential to be the world's principal power in most fields of external policy save the military, where the US and probably China will continue to predominate; and the Union has so far failed to realise its potential, which is to become the predominant power in 'soft security', i.e. in all fields of external policy save the military, thus enabling it to make its full contribution to the building of an effective multilateral system. It is the process of progressively introducing more federal elements in the powers and institutions for the common foreign and security policy, encompassing its external policies as a whole, as has been done internally, which would enable the Union to achieve its aim in the world.

Completing the federal process in Europe and beginning it in the world
Surely enough of the Union's citizens and governments can be moved to support appropriate reform of the Union's instruments and institutions for external action, through understanding what it could do to enable Europeans to play their full part as prime movers of an effective multilateralism to avert the perils which confront the world; and through realising that this would not only ensure that the Union emerges from its present dangerous hiatus to engage citizens and governments in a great project, but can at the same time lead to the completion of its own federal process. Given previous experience since the Maastricht Treaty, it may well be that not all the twenty five member states would support such a development. But a core group, building on Joschka Fischer's suggestion, could agree to move ahead in the field of external relations, remaining open to the others to join them later. This would doubtless present many technical difficulties; but given the political importance of the project, they would not be insuperable. Nor should it be assumed that the British would automatically be incapable of taking part. The dissipation of pre-war British enthusiasm for the federal idea, which resulted from Britain's particular experience of the war, was the primary cause of the lack of support for Monnet's pragmatic method of federal steps applied to the Union's internal affairs. But the British are as much concerned as other Europeans about the dangers facing the world; and British citizens, if not yet the government, may be increasingly ready to prefer a genuine Euro-American partnership, with the Union strengthened through the application of federal principles, to American hegemony for dealing with them.
It is of course not only in the context of the European Union that the federal idea is relevant. The structure of an 'effective multilateral system' must, if it is to have real substance, contain a growing proportion of federal elements. That is the full implication of the strengthening of the United Nations which is an important aspect of the Union's external policy.
But while existing forms of cooperation can be further improved with states that are far from being liberal democracies, an increasingly federal relationship, with more promise for the future, can be developed among those that are ready and willing, as the European experience has demonstrated. An example of the concept is the proposal for a global climate community with appropriate institutions, for which the EU would take the initiative, and which, together with others from the North and the South of the world, most importantly India among the latter, could combine commitments for deep cuts in carbon emissions with mutual support for sustainable development⁴. As in Europe, the intention would be to deepen the relationship and enlarge the membership, and, in this case, to extend the process of federal development to the United Nations as a whole.
As Tommaso Padoa-Schioppa has observed, in his book on the subject, such a process will take a long time⁵. It is over half a century since the European Community was founded and the EU is still not a federation. The world will almost certainly take longer. But the relations between member states changed for the better from the time when the European process began. War among them became unthinkable and they were able to accomplish major projects together. Federalists must do everything possible to ensure that Europeans apply their federal experience for the benefit both of themselves and of the rest of the world.

1 A secure Europe in a better world, Brussels, Council of the European Union, December 2003, concluding paragraph.
2 Laurence B. Krause, European Economic Integration and the United States, Washington DC, The Brookings Institution, 1968, pp. 224-5.
3 For the role of the Community institutions in the Kennedy round, see David Coombes, Politics and Bureaucracy in the European Community, London, George Alien & Unwin, 1970, pp. 166-216.
4 See Christopher Layton, A Climate Community: A European initiative with the South, European Essay no. 15, London, Federal Trust, 2003, 1st edn 2001.
5 Tommaso Padoa-Schioppa, Dodici settembre: II mondo non è al punto zero (September 12, World is not at Point Zero), Milano, Rizzoli, 2002.