The Great Walls.(global free trade)

News flash: the free-trade world is breaking up. Global trade rose 60 percent to $5.5 trillion in the 1990s, but flowed increasingly within and not between Europe, Asia and the Americas. All the hype over globalization has obscured this regional drift, slowly but clearly dividing the trading world, bloc by bloc. Nowhere is this isolating force stronger than in the Americas, where nations of the Andes, of South America surrounding Brazil and of the North American Free Trade Agreement are trading more among themselves, less with the outside world (chart). So as George W. Bush attempts this weekend at the Americas Summit in Quebec City to realize his father's dream of a free- trade area stretching from Alaska to Argentina, there is a rising chorus of voices questioning the vision of the leader of the free-trade world.

It's not even clear that Bush, or anyone else, wants the job. Since December 1999, when street protests and diplomatic wrangling derailed the World Trade Organization meeting in Seattle, no one has been talking about widening the rules on global free trade. The WTO is rudderless, drifting without an agenda toward its next meeting this fall--to be held in Qatar because no less remote capital relished hosting talks for fear of being overrun by antiglobalization mobs. Instead, regional blocs led by the European Union are quietly widening their free-trade zones by cutting exclusive deals country by country and continent by continent. The result is an increasingly bewildering maze of different rules for different countries, and growing animosity between trading rivals. Even many of the 34 states gathering in Quebec City to unveil their plan for a Free Trade Area of the Americas (FTAA)- -with a population of 800 million and yearly output of $11 trillion-- suspect that it represents an isolationist U.S. retreat to the Western Hemisphere. Brazilian political scientist Amaury de Souza says there is an emerging perception of Bush as a "reactionary" who sees "the U.S. as a garrison state, surrounded by enemies both military and commercial."

The dangers of regional blocs have been debated at least since Churchill promoted the idea of balancing powers in Europe, Asia and the Americas. The problem: every free-trade zone is double-edged, because lowering barriers to members effectively raises the bar for outsiders. Only a global regime can be truly free and unthreatening to every nation, argues trade economist Jagdish Bhagwati, who has compared the current race to cut "discriminatory" free-trade deals to the disastrous tariff wars of the early 1930s. Fred Bergsten of the Institute of International Economics goes one step farther, warning that Washington's focus on the Americas will stir up "economic conflict on two fronts," by provoking Europe and Asia to tighten their own alliances. "Latin America is the only place Bush really likes," says Simon Reich, director of research at the Royal Institute of International Affairs in London. "If there's a clash with U.S. interests in the context of a major recession, we'll see Bush get very nationalistic, very quickly."

Those warnings are echoed in an upcoming book, "America's Trade Follies," by American political scientist Bernard Gordon. He argues that the United States, in thrall to the "myth" of its special ties to the Americas, risks provoking Europe and Asia for the sake of Latin markets that "represent relative crumbs at the global dinner table." The "wooden-headedness" of this hemispheric strategy Gordon compares to the great follies of the ages, like King George III's losing the American colonies.

It is a bit facile of critics to dismiss Bush as a provincial former Texas governor who cares only about Mexico. His foreign-policy team is stocked with global thinkers, including the new U.S. trade representative, Robert Zoellick. But in conversations with NEWSWEEK, senior administration officials say the European Union now likes to boast "the world's largest economy," so it's time for it to "step up to the plate." The United States "can't do it alone," and administration officials aren't worried about Balkanization of the trading world. Quite the opposite. They accept this regional competition as "a fact of life," and argue that the United States needs to get in the game more aggressively. The European Union has a growing roster of preferential trade agreements with 27 countries, the United States with only three (Mexico, Canada and Israel). To catch up, the Bush trade agenda includes building the trade zone of the Americas, and new deals with Chile, Jordan and Singapore, as well as the Andean and Balkan nations. A senior administration trade official argues that, far from Balkanizing the world, all these deals will produce "a competition for liberalization on the global level."

That might make sense, if the emerging continental blocs were only about trade. But ever since West Germany's Konrad Adenauer and France's Charles de Gaulle realized that only a united Europe could stand up to the United States, every bloc has cast itself as an independence movement of sorts. Inspired by the European Union, Brazil in the early 1990s rallied Argentina, Uruguay and Para-guay to join in the bloc now known as Mercosur. Led by the sociologist turned president Fernando Henrique Cardoso, a famous critic of Latin dependencia on the United States, Brazil sees itself as the natural leader of South America. At a Buenos Aires meeting to prepare for Quebec earlier this month, Brazil put off U.S. pressure to create the Americas trade zone by 2003, two years ahead of schedule. "The FTAA is an option," Cardoso often says. "But Mercosur is our destiny."

Latin reluctance to join a bloc led by Washington leaves an opening for Europe. As trade reps met in Buenos Aires, France's socialist Prime Minister Lionel Jospin was in Brazil promoting Latin trade with Europe while making polite noises about how this would complement a trade group of the Americas. It is no secret, however, that U.S. conflicts with Europe about everything from beef to airplanes (they settled on bananas last week) are largely conflicts with protectionist France. The view from Paris is that South America needs European ties to withstand the "Darwinian onslaught" of U.S.-style globalization, says Denis Lacorne, research director of Center for the Study of International Relations in Paris. "It seems to me a bit cheeky for the European Union to be so concerned" about a free-trade zone of the Americas, says a ...