LONDON -- Japan's current row with China over steel exports is symptomatic of a growing retreat from the free trade aims that underpinned international growth in the last two decades of the 20th century. It is now a year since members of the World Trade Organization set themselves the task of reducing trade barriers at their summit in Doha. But the climate has grown chillier in the past 12 months, with worrying implications for rich and poor nations alike.
From Brussels to Beijing, via Washington and Southeast Asia, governments are responding to the lure of protectionism. This may be dressed up in politically seductive terms for the domestic market or formulated in terms of regional agreements. The longer-term danger lies in fragmentation of the international trading system that will further depress the world economy in the years ahead.
Despite his proclamations of enthusiasm for free trade, U.S. President George W. Bush has shown himself all too ready to fall back on protectionism in steel and agriculture to win votes. Now that he has done well in the mid-term elections, it can only be hoped that he rediscovers liberalization.