By Walden Bello, NEWSWEEK INTERNATIONAL,Nov. 24 issue

It’s a long way from Baghdad to Cancun, but the connection is obvious. In April, with the United States flying high after its low-casualty invasion of Iraq, it would have been hard to imagine poor countries challenging American and European rule over the global economy. By September, when the trade summit came to Cancun, everything had changed. The sight of America tied down like Gulliver in Iraq emboldened Lilliputians everywhere. Other candidates for "regime change," from Pyongyang to Tehran, saw Washington’s fulminations as increasingly hollow. In Cancun, a group of 21 developing nations—the G21 for short—led by Brazil, India, South Africa and China, stood up to block the Western agenda.

Washington was not oblivious to the change in perceptions, yet old habits die hard. President George W. Bush’s trade representative, Robert Zoellick, left Cancun railing against his developing-world challengers and then went on a vendetta, one that has gone largely unremarked upon in the West. Washington let Costa Rica and Guatemala know that their membership in the G21 would be punished, perhaps by exclusion from the planned Central American Free Trade Area. By mid-October, Washington’s unrelenting pressure had forced Colombia, Peru, Costa Rica, Guatemala and El Salvador from the G21. But this tactical U.S. victory won’t stop the fallout from Washington’s global heavy-handedness: the rise of defensive economic blocs and, more generally, the defiance of American influence.
The Iraq quagmire and the Cancun collapse are both signs of U.S. imperial overreach. Among other signs: the failure to consolidate a regime in Afghanistan or stabilize the Palestinian situation; the boost that U.S.-led invasions are giving to Islamic extremism not only in the Mideast but in South Asia and Southeast Asia, and the unraveling of the Atlantic alliance, the most recent manifestation of which is the brewing steel trade war.

For much of the post-World War II period, the U.S. political elite followed the Roman lesson that "moral vision" is central to imperial management. National Security Memorandum 68, the defining document of the cold war, spoke of a "long twilight struggle" against communism for the loyalties of the peoples of the world. Contrast this to the Bush National Security Strategy, which speaks narrowly of defending the American way of life and arrogates the right to strike against even potential threats in pursuit of American interests.
Can a more sophisticated administration undo the damage to U.S. imperial management wrought by the Bush presidency? Perhaps, but to revert to the Clinton-era approach of promising prosperity via accelerated globalization won’t work either. The overwhelming evidence is that, as Nobel laureate Joseph Stiglitz and others have pointed out, poverty and inequality increased globally in the decade of globalization, the 1990s.
The breakup of the Atlantic alliance is irreversible, since the conflict over Iraq merely widens differences building since the 1990s. Europe will increasingly slip out of the U.S. orbit and present an alternative pole—of regional self-interest expressed through a liberal and multilateral approach. From this perspective, entering a common front with the United States in Cancun was a diplomatic blunder for the EU. The fact that Brussels has refrained from a post-Cancun vendetta against the G21 shows that it sees the need to differentiate itself from Washington.
American dominance will slip as the global framework for transnational capitalist cooperation erodes. Bilateral or regional trade arrangements are likely to proliferate, but the most dynamic ones may be those that, in the parlance of development economics, promote "South-South cooperation." Such formations as the G21, Mercosur in Latin America and the Association of Southeast Asian Nations will increasingly reflect the lessons of 25 years of destabilizing globalization: that capital controls are necessary, that trade policy must be subordinated to development, that technology must be liberated from stringent intellectual property rules and that development demands strong state intervention.
Just look at China, which among developing countries now occupies a category by itself. It has managed to be on the side of everybody on key economic and political conflicts and thus on the side of nobody but China. As the United States has become ensnared in wars, China has maneuvered to stay free of entangling commitments to pursue economic growth, technological development and political stability.
History has a perverse sense of humor. The neoconservatives who came to power with George W. Bush will find that their pursuit of "full spectrum dominance" will accelerate an erosion of American hegemony that a more skilled administration might have been able to slow down. The evidence is already clear, from Baghdad to Cancun.

Bello is a University of the Philippines sociologist and executive director of Focus on the Global South, a research center in Bangkok.