Transatlantic pact promises bigger prize In the long-distant days when the Conservative party was resolutely pro-European, Margaret Thatcher used to observe that the case for close engagement with Britain's neighbours was above all political. The purpose of the common market reached beyond the economic gains that accrued to members. Britain's role in the world had diminished. Europe was the platform from which it could leverage its influence. The parallel is necessarily inexact, but something similar can be said about plans for a US-EU free trade area. A Transatlantic Trade and Investment Partnership (that's what it is to be called) would doubtless provide a much-needed boost to investment, growth and living standards. But the stakes are higher. The advanced nations are losing ground to the rising states. The flow of power to the east and south puts a question-mark over the relevance of "the west." As with Britain's place in Europe, the paramount case for a transatlantic trade deal is geopolitical. The economics are a means to an end. The reward is the advance of the liberal political order that has lately seemed in retreat. Barack Obama has never been beguiled by Europe. The parts of the world that have demanded his attention have been the wider Middle East and east Asia. Washington's strategy - the so-called pivot - has been to draw down resources from the former by ending the wars in Iraq and Afghanistan in order to divert them to the latter. The American approach to China is at once to engage Beijing and to "hedge" against it by reinforcing in the Pacific. In so far as Europe has grabbed the president's attention, it has been largely because the eurozone crisis threatened to derail global and US economic recovery. Quite naturally, Europe is no longer the centre of US geopolitical interest. Under Vladimir Putin's leadership, Russia is determined to be troublesome in decline. Lacking the capacity to act, Mr Putin's approach is to disrupt. But Moscow's rusted tanks are scarcely a threat. The Russian leader is someone to be humoured rather than feared. That said, reports of the demise of the transatlantic relationship have been overdone. If Nato's frailties have been exposed by defeat at the hands of the Taliban in Afghanistan, it remains the world's most powerful military alliance. Together, the US and EU still account for almost half of global output and 30 per cent of world trade. The stock of shared investment adds up to more than $3.5tn. These sort of figures speak to an unparalleled interconnectedness - and interdependence. If the bilateral numbers matter so, just as much, does the shared interest in preserving an open, rules-based international order as the best guarantor of the west's security. The values, interests and military weight of the US and Europe are imperfectly aligned. But on everything from nuclear proliferation and international terrorism to Indian Ocean piracy and cyberwarfare, they are much closer to each other than to almost anyone else. If power in the modern world is often measured in dry economic statistics, enduring security resides in broad acceptance of international norms and values as well as in brute military force. When Washington wants something done at the UN it turns first and foremost to its European allies; when France needs help in Mali, the US is the ally that matters most. What Europeans and Americans need is a project to remind them of the importance of this relationship and of their shared capacity to shape events - something to replace the glue that was lost at the end of the cold war, as well as to persuade electorates that their politicians are actually doing something to pull economies out of recession. The potential economic gains were set out in the joint report issued this week by the White House and the European Commission. A deal to abolish tariffs, remove regulatory barriers and create an integrated marketplace could add about 0.5 per cent annually to national income on either side of the Atlantic. It would also establish the US and EU as the pre-eminent standard-setter for the rest of the world. The objective should not be to exclude; it should be to demonstrate that the west's economic clout can be translated into global rules. Getting rid of tariffs will be the easy bit, though one should never underestimate the Luddite obstinacy of farm lobbies. Delve deeper into the worlds of competing standards and cultural preferences, intra-company trade, competitive tax regimes or intellectual property rights and defining a free trade area becomes almost a metaphysical exercise. As Europeans can attest from their own experience in the EU, harmonisation also has a tendency to collide with national susceptibilities about sovereignty. The answer is to be ambitious, but not too ambitious - to avoid the best becoming the enemy of the good. If the two sides were to get even 50 per cent of what is theoretically possible it would mark a seminal advance. The other risk is that ownership of the negotiations falls into the hands of the technocrats. Experts in, say, food hygiene or public procurement can always find reasons to disagree. The talks will succeed only if the politicians crack the whip. For their part, these politicians must keep in mind what is at stake in the arcane debates. The emerging international system is at once more multipolar and less multilateral. The global order no longer belongs to the west - and nor, many would say, should it. What matters, though, is that the system remains rooted in some basic universal values - the rule of law, collective security, respect for human dignity and accountable government among them. That's the real prize.