I pulled up an Inside Flyer article from 2003 that discusses the issue (requires paid membership or $1.00 fee for the article only) :

AA, BA get A-OK from DOT
Jul 1, 2003 | 464 words, 0 images

"Sure enough, when British Airways participated in the American AAdvantage program at the start of frequent flyer civilization, members of that program could redeem their miles for free transatlantic flights on British Airways, something they are told can't be done today because the airline doesn't have government approval. Likewise, when British Airways deserted American for the United Mileage Plus program some years later, members of that program could also redeem their miles for free transatlantic flights on British Airways, and earn them as well. Why is it then that for most of the past 10 years, members of AAdvantage have been told the programs are restricted from offering such rewards without government approval? They had such approval (if it was actually necessary) years ago."

http://www.keepmedia.com/pubs/Inside...3/07/01/612815


AA and BA certainly can offer reciprocal earning/redemption worldwide tomorrow if they desired - any statements to the contrary by either AA or BA is distorted propaganda. What AA and BA CANNOT do is: i) engage in the NW/KLM-style FF practice of "forcing" frequent-flyers in one country into a specific airline's program, ii) actually merge their frequent-flyer programs, or iii) otherwise coordinate their FFPs on anything other than a routine arms-length commercial basis.

Plain and simple, AA and BA want to protect their premium traffic flows from poaching by the other airline, and will not allow their FFers reciprocal access because it makes no economic sense to do so. To the extent that the carriers want antitrust approval for any FF activities, it is because the airlines intend to do something that falls in one of the three categories mentioned above.