ECONOMISTS AGREE that a progressive freeing of trade contributed importantly to world economic growth since World War II. With the current world economy best described as fragile, many policymakers are pinning their hopes for renewed growth on a successful conclusion of the so-called Doha round of multinational trade negotiations now underway at the World Trade Organization. If barriers to trade can be cleared away, poorer countries will find it easier to market their agricultural goods, American companies will find new markets for their high-tech goods and financial services, European manufacturers will gain access to nations now intent on protecting their domestic companies, and consumers will benefit from the lower prices that result from the efficient international division of labor. True when Adam Smith said it, true today. Which is why close observers of emerging policies towards trade are more than a little concerned with recent developments. America, which is leading the drive for freer trade, enters the discussion with less than an unblemished record. President Bush has shown that he will raise tariffs when it is to his political advantage, as was the case when, over the vigorous objections of his economic team, he levied the steel tariffs that the WTO on Friday held to be in violation of its rules. (America will appeal.)

More controversially, Bush and his trade representative, Bob Zoellick, have adopted a policy of negotiating bilateral free trade agreements (FTAs) with countries from Chile to Singapore to Bahrain to Morocco. The most important one now being negotiated is with Australia, a country with a special claim on American sympathies because its soldiers fought alongside American forces in the six wars of the past and present century (World Wars I and II, Korea, Vietnam, and the two Gulf wars). Whether a deal will be struck may depend on whether the Australians can move towards the American position on the protection of intellectual property, and the willingness of America’s farm state senators to countenance a bit more competition from Australian farmers. Australia’s ambassador to the United States, Michael Thawley, tells me he hopes to convince the senators that it would be in their long-run interest.