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Tucked into that $136 billion in corporate tax breaks President Bush just signed was the whole point of the bill: Lifting a $5 billion annual export subsidy that the World Trade Organization had ruled illegal.

It took two years for Congress to do so, and in the meantime an exasperated European Union slapped an escalating punitive tariff on a wide range of goods.

The EU had cannily aimed the tariff, up to 12 percent and rising by 1 percent a month when Congress acted, at products produced in the battleground states.

The EU this week announced that it will uphold its half of the bargain and lift the punitive trade sanctions, but there's a catch - effectively the sanctions have only been suspended. The EU reserves the right to reimpose them if it finds that the new US law doesn't fully comply with the WTO ruling.

The EU probably won't risk infuriating Congress by reverting to the sanctions, but there are some loose ends left by the new law that need to be wrapped up and the EU may again appeal to the WTO.

While the issue of the US export subsidy is over, the EU seems to be preparing the ground for the next tariff battle between the two giant trading partners - aircraft.

Earlier this month, the Bush administration filed a complaint with the WTO charging that that France, Britain, Germany, and Spain had pumped billions of dollars in illegal subsidies into the European aircraft maker Airbus.

In turn, the EU filed a similar charge, alleging billions of dollars in illegal US government subsidies to Boeing.

The dispute is critical because the two companies have bet heavily on the next direction in air travel: Boeing on its cheap-to-operate 7E7 and Airbus on huge passenger capacity in its super-jumbo A-380.

The timing of the charges and countercharges points up the fact that free trade is less an end in itself than an ongoing process, one in which the United States must maintain a full-court press to protect its interests.

Go back, or read the latest opinions:

''On the Waterfront – Still''

John Fund, Wall Street Journal, 09/17/06