The U.S. war on terrorism suffered a huge blow last week — not in Baghdad or Kabul, but on the beaches of Cancun.

Cancun was the site of the latest world trade talks, which fell apart largely because the U.S., the E.U. and Japan refused to give up the lavish subsidies they bestow on their farmers, making the prices of their cotton and agriculture so cheap that developing countries can't compete. This is a disaster because exporting food and textiles is the only way for most developing countries to grow. The Economist quoted a World Bank study that said a Cancun agreement, reducing tariffs and agrisubsidies, could have raised global income by $500 billion a year by 2015 — over 60 percent of which would go to poor countries and pull 144 million people out of poverty.

Sure, poverty doesn't cause terrorism — no one is killing for a raise [p6: obviously Friedman never worked on Wall Street]. But poverty is great for the terrorism business because poverty creates humiliation and stifled aspirations and forces many people to leave their traditional farms to join the alienated urban poor in the cities — all conditions that spawn terrorists.

…And one thing we know about this Bush war on terrorism: sacrifice is only for Army reservists and full-time soldiers. For the rest of us, it's guns and butter. When it comes to the police and military sides of the war on terrorism, the Bushies behave like Viking warriors. But when it comes to the political and economic sacrifices and strategies that are also required to fight this war successfully, they are cowardly wimps. That is why our war on terrorism is so one-dimensional and Pentagon-centric. It's more like a hobby — something we do only until it runs into the Bush re-election agenda.

"If the sons of American janitors can go die in Iraq to keep us safe," says Robert Wright, author of "Nonzero," a book on global interdependence, "then American cotton farmers, whose average net worth is nearly $1 million, can give up their subsidies to keep us safe. Opening our markets to farm products and textiles would be critical to drawing many nations — including Muslim ones — more deeply into the interdependent web of global capitalism and ultimately democracy."

…If only the Bush team connected the dots, it would see what a nutty war on terrorism it is fighting, explains Mr. Prestowitz. Here, he says, is the Bush war on terrorism: Preach free trade, but don't deliver on it, so Pakistani farmers become more impoverished. Then ask Congress to give a tax break for any American who wants to buy a gas-guzzling Humvee for business use and also ask Congress to resist any efforts to make Detroit increase gasoline mileage in new cars. All this means more U.S. oil imports from Saudi Arabia.

So then the Saudis have more dollars to give to their Wahhabi fundamentalist evangelists, who spend it by building religious schools in Pakistan. The Pakistani farmer we've put out of business with our farm subsidies then sends his sons to the Wahhabi school because it is tuition-free and offers a hot lunch. His sons grow up getting only a Koranic education, so they are totally unprepared for modernity, but they are taught one thing: that America is the source of all their troubles. One of the farmer's sons joins Al Qaeda and is killed in Afghanistan by U.S. Special Forces, and we think we're winning the war on terrorism.