Media coverage of the impact of the US mid-term elections has understandably focused on the effect on policy in Iraq. What are the broader implications for UK foreign policy? It is possible that we could see a significant change emerging – but the signs are mixed. Will we see a more engaged, multi-lateralist US policy? Or will the scars of Iraq lead the US to a more isolationist approach?

Tony Blair has made the Middle East peace process a priority for his final period in office. Is it possible that President George W Bush might make a similar priority? Bill Clinton certainly used his final months as president to this effect – and came tantalisingly close to an historic breakthrough. Tragically, Bush failed to build upon this when he took office in 2001. Since then public opinion has shifted both in Israel and Palestine, with the victory of Hamas in the Palestinian elections, and more recently a sharp shift to the right in Israel following the tragic events in Lebanon this summer.

Notwithstanding these trends, the basic outline of a two-state solution is as clear as ever. Of course, most US Democrats are just as pro-Israel as the Republicans. Indeed exit polls show that 87 per cent of Jewish voters supported the Democrats this month. What is clear is that Democrats are more committed to multilateralism than the neo-conservatives, and that any regional solution in the Middle East will only work if it settles the Israeli-Palestinian question. Whether Bush has the inclination to take up this challenge is far from clear.

By contrast, the work of the bipartisan Iraq Study Group seems certain to result in a shift in the US approach in Iraq. It will also require engagement with other powers in the region – notably Syria and Iran. The UK has long been more willing to countenance such engagement. Of course, engagement does not mean ignoring the very negative policies of both countries. Indeed, it provides an opportunity to press Tehran and Damascus to cease their support for terrorism and to raise concerns about appalling human rights abuses. A policy of confrontation and isolation has manifestly failed to deliver positive change in either country. We have nothing to lose by talking to Iran and Syria – and potentially a lot to be gained.

An interesting question is how far the mid-term result will affect US policy on the greatest policy challenge of all – climate change. The Democrats take a more progressive stance on this issue as do moderate Republicans like John McCain. A significant policy shift by the Bush administration seems improbable but the terms of the debate in the US might now be changing, so that whoever succeeds as president in 2009 might give this life-and-death issue the priority it deserves. A number of US states and cities are leading the way, though none of us should underestimate the political clout of the oil industry and the US electorate’s reluctance to reduce car use.

A final challenge is world trade – there is a strong protectionist wing in the Democratic party which might make progress in the world trade talks even more difficult. So the potential for positive change in the Middle East and on global warming has to be balanced with a real concern that protectionism might further set back the prospect of a truly free and fair system of world trade. This raises the broader issue of the direction of US foreign policy. Will Bush’s unilateralism be replaced by a new isolationism?

The Democrats are deeply divided over foreign policy – someone said that if you got three Congressional Democrats in a room and discussed Iraq they would come up with at least four opinions. Progressives surely must hope that a new US foreign policy can be shaped that replaces unilateralism with multilateralism – a US very much engaged with the rest of the world: be it in promoting peace and democracy; tackling threats to the environment; fighting terrorism or promoting genuine trade justice.