The United States hasn't signed a free-trade pact with another developed country in 16 years. And that one (with neighbor Canada, in 1988) was relatively easy.
Now it's inked a pact with Australia, sending all sorts of thundering signals to Asia and the world about how the US helps its friends during the war on terror. And the pact is a warning about the stalemate in negotiations over a new global trade pact.
Australia hardly got everything it wanted in the trade agreement, which was announced on Sunday. Uncompetitive American sugar, dairy, and beef farmers saw to that. The US, too, was blocked by a few powerful Australian lobbies.
And the two sides had a tough two years of negotiations. Talks almost collapsed at one point. But a last-minute phone call between Prime Minister John Howard and President Bush (the two are almost as close as Mr. Bush and Britain's Tony Blair) sealed the deal. Now they must persuade their respective legislatures to OK the agreement.
The Bush-Howard friendship was cemented after Sept. 11. Australia was second to Britain in military support of the Iraq war, despite the distance in deploying its forces. It also helped the US set up a naval dragnet to catch North Korean ships suspected of transporting missiles and weapons to rogue nations. And the Pentagon sees Australia as an essential partner in its new strategy of mobility in the war on terror.
No wonder then that US trade representative Robert Zoellick revealed why the US favored the Aussies: "We consider Australia an extremely strong ally. Clearly there's a security basis" to the deal. (In contrast, New Zealand is not a close military ally and is far from a trade pact with the US.)
Of course, for Australia, throwing more of its lot with the US might distance it further from some Asian neighbors. China, for instance, may soon become the lead importer of Australian goods, but Beijing also sees a stronger Australian-US military alliance as a threat.
This pact is the strongest signal yet that the US, as the world's largest economy, will pursue bilateral trade pacts as a way to press other nations into making concessions for a new global trade agreement. It's recently linked up with Israel, Jordan, Chile, and Singapore, and signed a pact with five Central American countries that still awaits congressional approval. The US is creating a "coalition of the willing" in trade, as it did in Iraq.
The US has long used the lure of its huge market for strategic reasons. With this new pact, it's once again proclaimed that friends come first in sharing the fruits of free trade.