On a bright, cold day in January as the Washington clocks strike twelve, you might just, if you listen carefully, be able to hear a swooshing sigh of relief as it travels around the world. As the 44th President of the United States takes the oath of office at noon on the 20th January 2009, George W Bush's Presidency will enter the history books.

Two and a half years are a pretty short time in international diplomacy. Soon we will need something more than a critique of what the United States could have done differently. In November's mid-term elections, American voters will usher in the endgame for the beleaguered Bush administration as the focus of US politics increasingly shifts to the most open Presidential race for a generation.

After Iraq, the Bush revolution in foreign policy will not leave the legacy which its architects intended. We have learnt that even a hyperpower has limits. This Autumn's fifth anniversary of 9/11 will be a moment to take stock. Who now remembers Le Monde's headline on in response to September 11 2001, 'Nous sommes tous Américains?' The strong global support for US-led international action against terrorism, maintained through the initial military action against Afghanistan, was squandered. Guantanemo Bay now stands as a global symbol of double standards, while a leader of the free world who talks of democratizing the Middle East is outpolled across the region by terrorist leader Osama bin Laden.

Bush's Presidency has been an object lesson in how not to win friends and influence people. So whoever succeeds Bush, whatever their political hue, will want to change the tone of US foreign policy. They will need to be somewhat more multilaterally minded, from force of circumstance at least, if not also from conviction. Condoleezza Rice is already running a more muted Bush second term foreign policy, stressing a multilateral strategy on issues from Iran to North Korea. A good deal of diplomatic effort has gone into mending relationships with traditional allies like Germany, and even France, though with little public acknowledgement that anything went wrong in the first place.

But there is no 'foreign policy pendulum' which dictates that neocon overstretch must swing to a more internationalist turn in foreign affairs. There will be no restoration of 'normal' transatlantic or global diplomacy, if only because there is no 'normal' to return to. The fallout from the Bush Presidency may do most damage not to the American right, but to a divided liberal internationalist left. Britain struggles to reconcile its European and transatlantic links. US Democrats are divided, with anger at the base, but leaders tempted to seek foreign policy credibility by running to the right of the Republicans.

Those foreign policy voices that believe they have been vindicated by events – the traditional realists, for whom foreign policy must be a values-free zone, and the left oppositionists led by John Pilger and George Galloway – are those with the least to offer to any constructive foreign policy agenda. These two camps probably see themselves as polar opposites – the first believes in a 'West against the rest' model which explains why lesser civilizations can never be democratic, while the second sees western iniquity is the root cause of every global problem. Yet they usually reach the same conclusion – morphing together in the media into the 'What Not to Do in Foreign Policy' school, ever ready to explain why every policy will turn out worse than doing nothing. Genocide in Darfur? 'Not our problem, you can't stop Africans killing each other', say the realists. 'Don't get involved, we only ever make things worse', agree the left oppositionists, as they scour for the hidden agenda behind the claim to care about human rights.

"The best hope for peace in our world is the expansion of freedom in all the world", George W Bush declared in his in his 2005 inaugural, having won a mandate the second time around. It has been in combining high principles with incompetence in pursuing them which makes him so dangerous. Bush's adoption of the language of democracy and human rights presents two traps for the left.

The first mistake is for the left to retreat from its own enlightenment values and principled belief in democracy and human rights, which have been central to a liberal internationalist tradition running from Gladstone's Midlothian campaign through Woodrow Wilson to the anti-fascist solidarity of the Spanish civil war. The left risks becoming a conservative status quo force if it adopts a Henry Kissinger-style critique of the neocon agenda. An absolutist conception of state sovereignty (which would argue, for example, that Hitler could do as he pleases with Germany's Jews as long as he does not set foot over the border into Poland) is not compatible with the values of the left. The objection to the Bush agenda is not its professed commitment to values of democracy and human rights, but rather how the failure to uphold those values consistently has damaged those great causes.

Yet those who have avoided that trap often fall into another, by failing to distinguish their argument from that of the neocons. This has been the fatal error of Tony Blair, the principal champion of liberal internationalism in our time. Now that Iraq dominates all discussion of Blair's legacy, it is easy to forget how strongly Blair's convictions about the reordering of international affairs chimed with the instincts of his party. Left-liberal foreign policy thinking shifted significantly in the 1990s, in response to the rise of new nationalisms, new forms of conflict and failing states of the post-cold war world. John Major and Douglas Hurd's classically amoral response to the implosion of Yugoslavia was an important turning point for many, as was international indifference to mass genocide in Rwanda. So there was broad Labour support for Britain's effective intervention in Sierra Leone and for military action against Milosevic over Kosovo, despite the lack of explicit UN authorization.

Blair's Chicago speech on foreign policy in March 1999 sought to theorise this shift, urging a reshaping of international law to uphold the values of the international community. Blair believed that September 11th could prove a catalyst for this worldview. Sketch writers mocked his 2001 party conference speech as a messianic promise to heal the scars of the world. Yet it caught the mood of the party, which saw the broad agenda outlined by Blair – including Middle East peace, African development and a commitment to human rights – as a necessary corollary to military action against Al Qaeda and the Taliban.

But Britain was always a junior partner, and Blair's broad vision was never shared in a Washington intent on a rush to war in Iraq. The Blair-Bush relationship bemused his party, and the American right's lauding of Blair hardly helped. Irwin Stelzer includes the Chicago speech in his anthology Neoconservatism, describing Blair as "a non-neocon raised by neocons to the exalted status that was until now accorded only to Winston Churchill and Margaret Thatcher". Yet Blair's speech on the 'new rules for the international community' does not belong in the book. "Any new rules will only work if we have reformed international institutions with which to apply them", argued the pre-Bush Blair in 1999. The central preoccupation is with international legitimacy, to be delivered through a new multilateralism. Even the politest of neoconservatives would see it as merely, at best, a rather inconvenient means to an end. Intent on stressing the west's shared values, Blair could not acknowledge the substantive differences between two distinct political projects. Interviewed by Jim Naughtie for his book The Accidental American, Blair tells him that 'I've never known what people mean when they go on about this neocon thing".

Neoprogs versus neocons

We need to take this neocon thing more seriously than that if we are to rescue liberal internationalism from its deadly embrace. The internationalist left has been too defensive in the Bush era. What is needed is a 'neo-prog' agenda, which can combine effectiveness and legitimacy in international politics.

The neocons have been the subject of a great many polemics and shadowy conspiracy theories, though leading neocons like Richard Perle and Paul Wolfowitz have not tended to conceal their views. The most concise definition can be found in Francis Fukuyama's insider's obituary After the Neocons (reviewed by Nick Pearce on page 22). Fukuyama, who broke with his former allies in opposing the Iraq war and went on to vote for John Kerry rather than Bush in 2004, believes the neocon project is over, because the Bush Presidency has tested it to destruction. He sets out four core principles which underpin neocon thinking: 'Firstly, a concern with democracy, human rights and more generally the internal politics of states; secondly, a belief that US power can be used for moral purposes; thirdly, a scepticism about the ability of international law and institutions to solve security problems; and fourthly, a distrust of ambitious social engineering projects'.

Neoprogs would accept the first of these four principles: that foreign policy should reflect, and seek to extend, democratic values, but would challenge each of the other three neocon premises. The core disagreements are about the legitimate use of power, why multilateralism matters, and the essential role of the state in democratic transition. Neoprogs would agree on the need for the active engagement of major powers, particularly America, but effectiveness depends on the legitimacy with which their power is wielded. That is why multilateralism matters, and indeed also offers the most deep-rooted tools for 'regime change', by changing the incentive structures for states and societies to want to change themselves. Finally, neoprogs are highly sceptical of the alternative to social engineering: neocons appear to believe a 'hidden hand' theory where freedom is the default alternative to tyranny. Unfortunately, we now know that there are no magic short cuts to state-building.

Why multilateralism matters

The neocons believe in American exceptionalism. America will behave differently from the dominant powers of past ages – because it is America. Its benign hegemony will therefore be welcomed across the world. It can be taken as a proof of a form of American exceptionalism that this account is widely believed inside the US, where it can often be asserted as much as argued. It isn't believed elsewhere.

The need for US engagement was a core liberal internationalist argument of the 1990s. Somalia showed how easily the world's most powerful nation could be forced into retreat by a local warlord. The fear about Bush before 9/11 was that he would retreat from international engagement. But what the world thinks of US power depends on what is done with it. The United States won global respect for using power wisely in creating the post-war multilateral institutions and the Marshall Plan. It won trust by being prepared to constrain itself in the broader international interest. The Bush Presidency invented a new foreign policy doctrine to give the US rights to preemptive action which would not apply to others.

Fukuyama has a striking insight in asking why a political philosophy which is highly sceptical of the ability of government to raise school test scores in Washington DC. believed that it could democratize the Middle East. International commentators often overlook the domestic roots of neoconservatism, which was more about a small state agenda at home, than about foreign policy. This helps to capture why the lack of post-war planning for Afghanistan and Iraq was not coincidental, but rather an ideological choice. US Defence Secretary Donald Rumsfeld's comments on the looting of Baghdad – 'Stuff happens… and it's untidy, and freedom's untidy' – capture the belief that freedom is a natural condition once tyranny is removed.

The Bush campaign had mocked the Clintonian prediliction for nation-building. This is much less important if democracy, the rule of law, and a market economy can automatically generate themselves. As they don't, the Bush administration massively underestimated the manpower, cost, and timescales necessary to see the job through. These factors too make a case for a broad-based coalition. But these lessons were clear well before the 2003 Iraq war. Russia's post-1989 economic and political transition offered a laboratory test of what happens if you attempt to introduce a textbookstyle market economy through 'shock therapy' (though it was advocated as much by Russia's governing elite as by the IMF). Governance comes first, in providing for the rule of law within which a market economy can be possible, rather than expecting a free-for-all economy to somehow generate a functioning democratic state.

The future of democracy

Why is it a neoprog argument that is needed, rather than a restatement of traditional liberal foreign policy principles? At the heart of this is an argument for multilateral reform. Global opinion outside the US sets much store by multilateralism as a source of legitimacy. The argument which must be won, with US public opinion and beyond, is that multilateralism can work, and so combine legitimacy with effectiveness.

If we want a multilateral system capable of dealing with major global challenges, neoprogs will need to return to the unresolved tension at the heart of the UN system since its birth. The United Nations Declaration of Human Rights gives rights to every individual – yet the UN Charter leaves the protection of these rights to sovereign states. States are needed to make human rights a reality – human rights can not exist if a state fails and society descends into ethnic conflict or Hobbesian anarchy.

But of course states violate human rights too. If human rights are to be real then they will have to be able to trump state sovereignty in some cases. This is recognized in the genocide convention – where there is not just a right but a duty to intervene. Yet it is a duty too often honoured in the breach, because the international capacity and political will to honour those promises is missing.

This is why delivering the 'Responsibility to Protect' agenda is the most important strand of Kofi Annan's UN reform agenda , setting limits on state sovereignty according to a threshold of humanitarian emergency. Building effective regional capabilities to make this more than rhetorical must be a major priority, on which the EU can play a leading role.

An important argument is that multilateralism is not just a process, or a box to be ticked. That tends to be the US perception, as President Bush implied when he told Congress that the United States does not need any 'permission slip' to take action. The neoprog commitment to multilateralism is deep-rooted, because it reflects the importance of changing societies from within. Imposing change is costly and difficult. The best tool of voluntary 'regime change' which we have is 'club membership' – the opportunity to join the multilateral club, and the rights and responsibilities which this entails.

The European Union has been one of the most effective tools of 'regime change' over the last half century. The last fifteen years could have seen very different political outcomes after 1989 in Central and Eastern Europe if there had not been a European Union which the newly democratic states wished to join. The 'choice for Europe' determined many other economic, political and social choices. As Mark Leonard has written, 'The EU's secret weapon is the law'. The irony is that decreasing political confidence in the EU, and in EU enlargement, make further expansion more difficult. Turkish membership of the EU could potentially do more than any other foreign policy decision in the next decade to contribute positively to relations between the west and the Muslim world. The prospect of membership has driven extensive changes in Turkey, though there is considerably further to go. By contrast, EU rejection would have far-reaching consequences.

But this idea of 'club membership' could be extended much further. At present, short of losing sovereign protections by committing genocide, there are too few distinctions between democracies and dictatorships in the international community. This increasingly happens in regional associations like the EU and the African Union, as well as the Commonwealth, but should be extended in the international system more generally. 'Democratic preference' should be a big idea for neoprogs – the idea that countries that have legitimate governments seeking to serve the interests of their people should benefit positively by receiving different treatment from those that are not.

For example, future reform of the International Finance Institutions could make a clear distinction in the forms of conditionality expected by donors between democracies and non-democracies. Governments already accountable to their own people, and with strong systems of transparency and tackling corruption in place, could listen to advice from the IMF or World Bank, but have the right to choose a different course without being penalised. Those which are unaccountable should expect strong conditionality to donors, to protect against abuse of the funds.

As a long-term vision, there should be different levels of membership of the United Nations General Assembly itself with all governments, in effective control of a state being present to play some role, but with only democratic governments having voting rights. (Why should the Burmese junta get a vote?) Applying this at the UN is not practical politics at the moment, but it could become so a couple of decades from now. The universal declaration of human rights is itself less than 60 years old. Democracies should work together to put it on the agenda and seek to pursue it in international forums. Without such a move, the idea of an "international community" will remain stillborn. This would help to increase the legitimacy of international institutions – such as the United Nations General Assembly or Human Rights Commission – and developing this agenda would help to boost levels of political and public support for multilateral bodies in the US and other countries. It would help to ensure that the liberal internationalist agenda was not as heavily focused on questions of military intervention as it has been in the post-1989 world order. There are many different forms of engagement and intervention – supportive as well as coercive – which can help to pursue the goals of increased development, security, human rights and democracy. More modest forms of engagement will often be more appropriate. Legitimacy depends too on local engagement with those whose values we share. The right question to ask is 'what do those on whose behalf we would intervene want us to do (and not do)'.

Does Europe matter?

Will Europe play a significant role in the world after Bush? If Bush's successor has an awareness of the value of allies, he will want to know what those allies can constructively offer on the key foreign policy questions.

What will our answer be? While the EU is playing a more active leadership role in its own neighbourhood and on major issues like Iran, there are currently very different views of the role of the EU in the global age. The failure of the Constitution following the deep divisions of the Iraq crisis. This was not only a failure of British foreign policy, as the Blair 'bridge' strategy failed. It also showed that the Franco-German partnership could no longer speak for Europe, as a majority of the new EU 25 supported the US position.

Europeans do not need an existential debate about the nature of Europe's relationship with the US, which tends to tell us more about the national self-image of different European countries than about what Europe should seek to achieve in global politics. Nor is there any consensus in the enlarged EU to seek to build Europe as an 'alternative pole' to Washington in a 'multipolar world'.What would the objective of a new 'balance of power' be?

Instead, the 50th anniversary of the Treaty of Rome next year should be a moment to focus on the EU's mission in a different 21st century world, and the practical steps required to make a difference. There will only be an effective EU foreign policy – and thus a credible offer of transatlantic partnership – if new leaders find a coherent shared agenda between Britain, France and Germany.

The new transatlantic relationships are likely to be different from those of the Cold War era – alliances more of choice than necessity. US foreign policy thinking will pay increased attention to rising global powers including Brazil, China and India, and so less to Europe, but this can be overstated. If the relationships are more pragmatic and instrumental, this may be no bad thing. There are few major challenges – particularly terrorism, Middle East peace, global trade and climate change – where cohesive transatlantic cooperation would not be more effective than America or Europe acting alone. But the role which Europeans play in the world after Bush may have less to do with the views of the next US President, than whether we can find enough agreement, and ability to act, among ourselves.

Sunder Katwala is General Secretary of the Fabian Society.

"On a bright, cold day in January as the Washington clocks strike twelve, you might just, if you listen carefully, be able to hear a swooshing sigh of relief as it travels around the world. As the 44th President of the United States takes the oath of office at noon on the 20th January 2009, George W Bush's Presidency will enter the history books."

— Sunder Katwala, Fabian Review