David Clark: What will nice Nick say to the arms dealers?

If a coalition government in London is unfamiliar to the British people, it is no less so to our foreign partners. To the leaders of countries where coalitions are the norm, the ability of the British prime minister to set policy without extensive domestic consultation has often been an object of envy and an aid to diplomacy. Things have just become less simple. So how will the new government be greeted on the international stage and what difference will it make to the role Britain plays on that stage?

One part of the world where news of the coalition agreement has been greeted with barely disguised relief is continental Europe, where the governments of our EU partners had been dreading the election of a majority Conservative administration committed to rolling back the frontiers of integration. Memories of the "beef war" and other disputes that marred relations between London and Brussels in the final years of the last Tory government linger, and there were fears that hostilities might be resumed with threats to veto a new EU budget deal, for example, unless demands to unravel existing agreements were met. For a Europe that has only just got over the torments of the Lisbon Treaty, and is now struggling to contain the Greek budget crisis, the prospect of reopening the debate about institutions and powers could not have been more toxic.

The involvement of the pro-European Liberal Democrats in the coalition changes all that, diminishing the potential for confrontation in EU-UK relations. It is true that Nick Clegg had to agree to no further transfer of powers to Brussels and no British membership of the euro as part of the deal, but these concessions are more apparent than real. No one seriously imagined that joining the single currency was on the cards in the next few years and a new EU treaty is, at the insistence of all, a decade away at least.

More significant is the concession David Cameron was forced to make in dropping his commitment to achieve a repatriation of powers from Brussels over employment law, social affairs and criminal justice by the end of his government's first term. That pledge was made in order to placate anti-European opinion within his own party when he dropped plans to hold a referendum on the Lisbon Treaty. Cameron is probably relieved to be rid of a commitment he must have known was undeliverable. But will those Conservative MPs for whom reversing the tide of European integration is the transcendent cause of our age be willing to accept the pragmatic, sovereignty-neutral line set out in the coalition agreement?

It seems highly implausible. Harmony in Europe might therefore be bought at the cost of discord in Parliament as the people John Major labelled "the Bastards" re-emerge as an organised rebel faction. Alternatively, the experience of coalition could mark a permanent shift to a more Euro-pragmatic stance within Conservative circles and therefore greater political consensus about our place in Europe. The latter would be profoundly welcome, creating much greater certainty about Britain's role in the world and constituting a significant achievement for Nick Clegg.

The transatlantic relationship is another area where Britain's new coalition bedfellows have often been at odds, at least rhetorically, in recent years. The Liberal Democrats have been very vocal, and rightly so, in their view that British foreign policy must become more independent of Washington. While the Conservatives also tried to exploit disquiet about the Bush-Blair relationship during the Iraq war controversy, the party has, in practice, remained reflexively Atlanticist in its outlook. Writing shortly before the Commons vote that authorised the Iraq war, Cameron argued that the main reason for voting in favour was that we must not "let down our strongest ally and friend". What many of us have often suspected of Tony Blair – that he took us to war because President Bush wanted him to, not because Saddam Hussein was a threat – was openly admitted by our new prime minister.

With luck, these differences should prove manageable. The neoconservative moment has passed and President Obama is busy repairing America's global reputation, avoiding fights his predecessor once crossed the road to start. Indeed, his decision to offer early congratulations to the new government with a personal call to Cameron, along with Joe Biden's call to Clegg, was an interesting, but perhaps not so surprising, indication of how relations may unfold. In part, this might have been payback from a Democratic Party establishment that was often dismayed by New Labour's willingness to give the Bush administration international cover for its worst foreign policy excesses. The greater part was probably a recognition that, under any government, the UK is a useful ally to cultivate.

There are, of course, several things that could undermine this nascent Atlanticist compact: pre-emptive military action to stop Iran's nuclear programme, either by the US or Israel acting with its approval; failure to wind down military intervention in Afghanistan within a reasonable timescale; America resorting to rendition – still not renounced by Obama, but anathema to Liberal Democrats; or, worst of all, Obama's failure to secure a second term and his replacement by President Palin or some other figure from the Republican right. If only for reasons of political management, Cameron will be with those of us praying that doesn't happen.

One final point of interest concerns the timeless debate between interests and values, realism and idealism, in the conduct of diplomacy. These dividing lines run within parties as well as between them. Compare, for example, Cameron's outraged stance against Russia's 2008 intervention in Georgia with the more pragmatic reaction of his new foreign secretary, William Hague. Within Tory circles this tension would likely have been resolved by more pressing domestic priorities. In an age of deficit reduction, foreign policy realists will always have the upper hand. Expensive foreign entanglements can be minimised and lucrative commercial opportunities maximised. In that spirit, the Tory manifesto promised a government that would be "hard-headed and practical, dealing with the world as it is and not as we wish it were".

For the Liberal Democrats, however, support for human rights can never be an afterthought because the expansion of human freedom is so integral to their world view. That is why the party promised to pursue an "ethical approach" to foreign policy, including a tougher stance against repressive regimes. This could be one area where differences prove harder to resolve. To what extent will the coalition emphasise human rights in its relations with countries such as China, Russia and Saudi Arabia? How will it choose to deal with the constant stream of arms export licences from British companies eager to maximise exports and protect jobs? Compared with these thorny moral dilemmas, the strategic questions of how to deal with Washington and Brussels could seem simple.

David Clark, a senior research fellow at the Global Policy Institute, served as Robin Cook's special adviser at the Foreign Office, 1997-2001