This week, most of the American press has focused on President Bush's European "charm offensive" and his prospects to "mend fences" with our NATO allies. But lost in the stories of Chirac the "good cowboy", "ridiculous" plans for Iran, and scolding Putin is the overriding issue of trans-Atlantic relations today:

The Bush administration fundamentally does not understand the rise of the European Union an an economic and political superpower, a transformation that is altering the trans-Atlantic partnership.

American policy belies the soothing words Bush spoke in Brussels of the importance to the United States of the Europe that once was:

As I wrote previously (see "On the Wrong Side of History" and "Five Global Challenges for a New American Internationalism"), the United States seem to have completely missed the significance of the emergence of the EU as a equal partner - and sometimes rival.
The signs of European economic power are everywhere. Last May, the EU expanded to 25 nations with 500 million people and a $10 trillion GDP that surpasses the U.S. The Euro is threatening to join or replace te dollar as the world's reserve currency, with potentially devastating effects for the American economy. (The news that South Korea's central bank, the fourth largest holder of dollars worldwide, planned to diversify its reserves sent the dollar and U.S. stocks tumbling.) And just last month, the launch of the Airbus 380 super-jumbo jet, showed a Europe that plans to expand its market leadership in commercial aircraft.
The Bush administration is utterly tone deaf regarding the political impact of the EU as well. The Europeans have rightly been quite clear about their intent. As T.R. Reid noted in his book, The United States of Europe: The New Superpower and the End of American Supremacy, European leaders want to create a politcal, economic, social and cultural (but importantly, not military) power as an alternative to American hegemony.
Whether we like it or not, Americans must come to grips with a growing divergence in interests with Europe. While we share both a tightly coupled economic destiny and a common enemy in fundamentalist Islamic terror, the differences are real and need to be managed by the leadership on both sides of the Atlantic.
These diverging interests extend well beyond Iraq and the position of France and Germany. It is reflected the controversy over a possible end to the EU ban on arms sales to China, a strategic rival for the United States but not Europe. European strength and the power of its 21st century vision is also demonstrated by its leadership in protecting the global environment (the Kyoto Protocols) and human rights (International Criminal Court). On these issues, an isolated United States stands alone, sneering at an angry, bewildered ad disappointed international community.
Back in the United States, Bush administration officials and the press still chortle over "Old Europe" and "New Europe." They just don't get it - there is only New Europe now. And to continue U.S. global leadership, it will require a New America.