Of course, Bush Administration acquiescence to an unfavorable WTO ruling would be too much to hope for. Instead, the administration is going to appeal the ruling. If we lose again, the E.U. will be entitled to impose some $2 billion worth of retaliatory tariffs (on top of the retaliarory tariffs the E.U. may impose for the Administration’s failure to comply with an earlier WTO ruling on tax treatment of foreign subsidiaries).

If there’s one area where this administration has been a terrible disappointment, it has been international trade. (Okay, there’s more than one, but the disappointment here is particularly great because there was reason to expect better.) Rather than bush for broad multilateral trade liberalization through the WTO, the USTR has pursued balkanizing bilateral agreements loaded with side agreements. Worse, the administration has backed new trade restrictions (steel) and distortionary subsidies (farm bill). Such policies have negative economic consequences and make it more difficult for the U.S. to bring effective WTO complaints against other nations’ protectionist trade policies.