With George W. Bush in London, it is a good time to reflect on the “special relationship”. According to received opinion, this consists of no more than Britain's special culpability for colluding in American crimes. This is mistaken and derives from a European anti-Americanism at least as old as the American Republic itself.

But does this mean that there is no cause at all for concern about the special relationship? Barack Obama has conceded that the relationship must be somewhat “recalibrated”. An Obama adviser added: “Full partners not only listen to each other, they also occasionally follow each other.” He was right to identify an inequality that urgently needs remedying.

The “special relationship”, a phrase coined by Winston Churchill after the Second World War, is predicated on shared language and history, and a commitment to representative democracy and the political freedoms that sustain it. It has the character of a family relationship in two critical respects. It is permanent and open to particular abuse. Although the abuse has been sharpest in recent years, it derives from a longer-term problem - best identified as a peculiarly American extraterritorialism.

“Extraterritorialism” is either when a state gives up some sovereignty to another body, or when it asserts authority over a foreign nation. It can cut both ways. According to the liberal version, individual states should subordinate their sovereign desires to common interests, submitting to authorities such as the UN. According to the imperial version, one state has the right to assert its sovereignty over others, requiring them to submit to its interests.

Liberal extraterritorialism is now identified with Europe; imperial extraterritorialism is taken to be the US default position in both trade and warfare. America is, as the historian Niall Ferguson has approvingly pointed out, an empire. It should therefore surprise no one that it behaves like one.

But the distinction between liberal and imperial does not quite capture the paradox of America's stance. It has been liberal at times and imperial at other times. But it has also been a third, uniquely American thing. This amounts to an interventionism that is genuinely self-sacrificing - acting not merely in its own selfish interests, while also acting without the consent of bodies, such as the UN. It is not submitting to American self-delusion to acknowledge this.

Such an acknowledgement is needed to put into perspective criticisms of US imperial extraterritorialism (to declare an interest, I write as a member of a law firm representing victims of one especially egregious US assertion of extraterritorial authority).

Among deplorable instances of this invasiveness are the Helms-Burton Act 1996, which extends the US embargo against Cuban goods to foreign companies trading with Cuba and provisions of the Patriot Act 2001 that treat foreign bank deposits as if held in the foreign bank's US Interbank account.

And there is the Extradition Act 2003, which reflected an inequality between Britain and the US, making it easier for US prosecuting authorities to extradite from Britain than for British prosecuting authorities to extradite from the US.

The tendency to ignore international obligations and substitute aggressive unilateral, protectionist policies is hardly a vice limited to the US. But the extent of US power and influence means that when the US misbehaves that misbehaviour has the greatest impact. In March 2003, Antigua and Barbuda complained to the World Trade Organisation (WTO) about US laws that prohibited foreign access to the highly lucrative US internet gambling market. The WTO ruled that these US laws violated America's international obligations. The US should have legislated to comply with its international commitments, helping to safeguard the WTO's integrity. Instead, it announced that it would withdraw from its treaty commitments.

Meanwhile, in October 2006, Congress passed the Unlawful Internet Gambling Act (UIGEA). The publicly listed and most responsible (mainly UK-listed) operators leading the industry immediately stopped taking US customers, at the cost of billions of dollars. These losses were not just to the few individuals most rewarded by the industry's success, but to all the institutional and individual investors in the companies and the other industries benefiting from WTO-sanctioned business in a multi-billion dollar industry.

The US nevertheless continues to act against those who withdrew from the market in 2006, while US businesses still operate in America free of interference or the risk of prosecution. The US seems untroubled by WTO findings. Nor is it deterred by an EU investigation into its discriminatory legislation and its violation of international trade principles. Remarkably, US companies are developing equivalent businesses in the UK and elsewhere in Europe on equal terms with UK and European businesses.

Many believe that American prosecutors will not rest until those associated with British online gaming are in jail or parties to multimillion-pound “settlements”. Among the UK companies, banks and businessmen threatened with prosecution for activities that were lawful when undertaken, David Carruthers, the Scottish former chief executive of BetOnSports, is under house arrest in St Louis on racketeering and conspiracy charges. And six weeks after that arrest, Peter Dicks, the chief executive of Sportingbet, was detained on entering the US. These British businessmen, who were actingly completely lawfully, are being persecuted by retrospective American law.

There is a tendency among commentators to ignore international trade and business relations in favour of broader political and geopolitical concerns. But we should not need Adam Smith to remind us that it is in the fairness of everyday commercial dealings between nations that peace and harmony lie. America is in danger of overlooking this truth, when it acts unjustly and overlooks the interests of its allies and friends.

Anthony Julius is a lawyer at Mishcon de Reya

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