Portugal has been a significant beneficiary of the European Union and is a proponent of European integration. Portugal held the presidency of the EU for the second time during the first half of 2000. Portugal used its term to launch a dialogue between the EU and Africa and to begin to take steps to make the European economy dynamic and competitive. In 2002, the Euro began to circulate as Portugal’s currency.

Portugal was a founding member of NATO; it is an active member of the alliance by, for example, contributing proportionally large contingents in Balkans peacekeeping forces. Portugal proposed the creation of the Community of Portuguese Language Countries (CPLP) to improve its ties with other Portuguese-speaking countries. Additionally, Portugal has participated in a series of Ibero-American summits. Portugal was a strong advocate of independence for East Timor, a former Portuguese colony, and has committed troops and money to East Timor, in close cooperation with the United States, Asian allies, and the United Nations. Portugal contributed a small gendarme force to Iraq that it withdrew in February 2005, and has contributed funds for other training and development projects for Iraq reconstruction, including the NATO Training Mission.

U.S.-PORTUGUESE RELATIONS
Bilateral ties date from the earliest years of the United States. Following the Revolutionary War, Portugal was the first neutral country to recognize the United States. On February 21, 1791, President George Washington opened formal diplomatic relations, naming Col. David Humphreys as U.S. minister.

Contributing to the strong ties between the United States and Portugal are the sizable Portuguese communities in Massachusetts, Rhode Island, New Jersey, California, and Hawaii. The latest census estimates that 1.3 million individuals living in the United States are of Portuguese ancestry, with a large percentage coming from the Azores. There are about 20,000 Americans living in Portugal.

The defense relationship between the United States and Portugal is excellent, centered on the 1995 Agreement on Cooperation and Defense (ACD). Lajes Air Base in the Azores has played an important role in supporting U.S. military aircraft engaged in counter-terrorism and humanitarian missions, including operations in Afghanistan and Iraq. Portugal also provides the United States and other allies access to Montijo Air Base and a number of ports.

Portugal defines itself as “Atlanticist,” emphasizing its support for strong European ties with the United States, particularly on defense and security issues. The Portuguese Government has been a key ally in U.S.-led efforts in Iraq, and hosted the Azores Summit that preceded military action. Portugal sees its role as host of NATO’s newly renamed “Headquarters West” (formerly SOUTHLANT), located near Lisbon, as an important sign of alliance interest in transatlantic security issues. As a staunch NATO ally since the founding of the organization, Portugal is a participant in NATO peacekeeping. It used its 2002 chairmanship of the OSCE to advance U.S. and European security objectives.

U.S.-Portuguese trade is relatively small, with the United States exporting $863 million worth of goods in 2002 and importing an estimated $1.67 billion. While total Portuguese trade has increased dramatically over the last 10 years, the U.S. percentage of it–both exports and imports–has declined. The Portuguese Government is seeking to increase exports of textiles and footwear to the United States and is encouraging greater bilateral investment. U.S. firms play a significant role in the automotive, pharmaceutical, computer, and retailing sectors in Portugal.