WASHINGTON -- When President George W. Bush became the first American leader to visit the seat of the European Union in Brussels this February, American Ambassador Rockwell Schnabel turned to his boss as they climbed into the limousine and said, "Remember, a little humility goes down well here."

Humility, of course, was the stance that candidate Bush had advocated during his presidential campaign in 2000. But Schnabel knew that the rows over the Kyoto Protocol and the Iraq war and Defense Secretary Donald Rumsfeld's bluntly divisive description of "old Europe" and the "new" had established an image of the United States as the hectoring, non-listening superpower, and the would-be boss of the West rather than as a partner.

Schnabel had worked hard, both in Europe (and he visited all 25 of the old and new member states) and back in Washington to convince the Bush administration that it was no longer enough to work through the old bilateral links with Britain, Germany, France and others. The EU itself as an institution had to be taken seriously, and Schnabel pulled all the levers he could to convince the White House that Bush had better prove that he understood this by coming to Brussels.

It worked. The trans-Atlantic divisions of the first term have not been overcome, but the open breach has been healed. The latest German election did not turn on angry denunciations of the U.S. plans for war on Iraq as the last one did in 2002. The French worked as partners with U.S. diplomacy to get Syrian troops out of Lebanon. The United States is supporting the attempts by the British, French and German foreign ministers to talk Iran out of its nuclear ambitions, and the Americans and Europeans worked together to ensure the triumph of last year's Orange Revolution in Ukraine.

The Dutch-born Schnabel, who got a job within an hour of arriving in the United States at the age of 20 and since made his fortune in venture capital, has now written a timely and important book on the EU, why it matters to Americans and why the United States should continue to support the continuing integration of Europe -- in its own strategic interests. Stu (Eizenstat), former treasury secretary, and Schnabel's only parallel as successful U.S. ambassador to the EU, called the book "seminal, one of the most important ever written on the EU(”)when he and I presented Schnabel and his book at an event at the Woodrow Wilson International Center for Scholars in Washington last week.

As (Eizenstat) said, "The EU is one of the least understood but most important institutions in the world," and Schnabel's book is a first-rate primer on what it is, what it does, and how this unwieldy and unlikely assembly of 25 nations states cobbled together from Europe's traditionally warring tribes actually functions. With power divided between the Council, where the 25 national governments meet and hold their summits, the unelected Commission that runs the annual $120 (billion) budget, the elected Parliament and the European Court of Justice, understanding how things get done is like walking blindfolded through a minefield.

More than that, Schnabel assesses the geopolitical implications of an increasingly united and assertive Europe, and also its crucial power in setting international standards on issues like data protection, quality and safety controls for industrial products and services. The Bush administration, for instance, may not like the Kyoto Protocol, but increasingly U.S. corporations are abiding by its rules because that is the price of doing business in the world's largest single market -- Europe.

"GE knows that the regulations that American companies have to follow -- even within America itself -- are increasingly set in Brussels," notes Jeff Immelt, chairman and chief executive officer of General Electric. "Ambassador Schnabel explains why every global company must understand the (way) the EU affects the way they do business."

And what business it is. The combined economic output of the EU's 25 countries, the collective gross domestic product, is larger than that of the United States, and the economic relationship among them, in trade and investment and the sales of their affiliates, is worth close to $3 trillion a year. No other trade or economic relationship comes close. American companies invest more in tiny Ireland, population 4 million, than they do in giant China, population 1.3 billion.

The EU economy is not yet matched by its geopolitical weight, but the diplomatic power and strategic reach of the EU is growing fast, and the soft power of its political and cultural influence may already be greater than that of the United States. The EU already accounts for almost 60 percent of all development aid spent worldwide. And the EU's traditional protectionist system is changing fast. The World Bank's Global Monitoring Report last year noted the EU was both the most open market for exports from developing countries and the one that has made the most effort to slash protection levels in their favor. The EU takes 85 percent of Africa's food exports, and imports more goods from Africa than all the other Group of Eight countries combined.

Gen. Joseph Ralston, former Supreme Allied Commander in NATO, sums it up, noting that Schnabel "correctly identifies the dangers and opportunities arising from the EU's growing authority in security and defense, and explains how and why Europe and America should reaffirm our historic partnership."

Schnabel understands that the EU has many problems, in reviving economic growth in its core countries like France, Germany and Italy, dealing with its growing and restive Islamic minority, and tackling the demographic challenge of too few children and so many retirees demanding pensions that its vaunted welfare state is close to breaking under the strain. But the debates in the latest German election and the reforms announced by the French government suggest the intellectual argument for economic reform has been won. Putting the reforms into effect will be the tough part.

And there is one significant change that could ease trans-Atlantic relations, which have suffered not just from a perceived American arrogance as a parallel European arrogance about preferring their civilized social model to the raw capitalism and death penalty and gun culture that they see in the United States. The July 7 bombings in London, along with the killing of Dutch filmmaker Theo van Gogh, have brought home to Europeans what a profound challenge they face in assimilating their Islamic minority, and how much better a job the United States seems to do assimilating its immigrants, getting them into jobs and giving them a sense of a shared American identity. A little less arrogance on both sides, and a willingness to learn from the other, might be just what both partners need. And the time could really be ripe.

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