Yesterday's announcement that the United States and Australia will enter negotiations for a free-trade agreement is doubly good news. It represents a further repudiation of the destructive protectionist policies that prevailed in Washington earlier this year.

Additionally, it suggests that the administration of U.S. President George W. Bush appreciates the noneconomic benefits and uses of trade liberalization. Free-trade policies can be an invaluable tool for strengthening diplomatic and military alliances and rewarding America's friends.

Earlier this year, Washington's trade policy seemed to be focused primarily on scoring political points with powerful special interests in the U.S. The imposition of steel tariffs, the larding up of farm subsidies and several other moves led to bruised feelings among America's trading partners and World Trade Organization rulings against overtly protectionist actions.

Worse, these actions wholly undercut America's long-standing message that free trade benefits all nations, rich and poor. America, it seemed, was talking free trade while walking in the opposite direction.

For several months, though, the walk has been shifting back into alignment with the talk. Numerous exceptions to the steel tariffs have been adopted, for example. And, since Mr. Bush won Trade Promotion Authority this summer, trade negotiations have been reinvigorated.

Now, the U.S. expects to nail down trade agreements with Chile and Singapore within a matter of months. This fall, the White House announced its intent to negotiate trade deals with Morocco, the Southern Africa Union and five Central American nations. But the announcement from Canberra by U.S. Trade
Representative Robert Zoellick is easily the most significant trade development yet.

The Australian economy is far larger than that of any other nation -- or group of nations -- currently sitting opposite the U.S. at the negotiating table. Consequently, the stakes are much higher.

Both nations stand to reap economic gains from freer trade. American farmers, for example, have long sought greater access to Australian markets. Recently, Australia opened its doors to California table grapes -- a market producers estimate to be about $10 million a year. With the door already cracked open to California grapes, trade negotiators should be able to kick it open for other American fruits and vegetables: citrus, stone fruit, apples, pears and corn.

The open door must swing both ways. Australian farmers face numerous restrictions and other American-imposed hurdles when exporting their citrus, tomatoes and avocados to this country. Additionally they face subsidy programs that leave them playing with a stacked deck.

According to calculations by the Organization for Economic Cooperation and Development, Australia's domestic support of agriculture amounts to only 4% of all farm receipts. Even before enactment of this year's fabulously generous farm bill, U.S. support was running at the 21% level.

Naturally, negotiators will address far more than agricultural products. Members of the U.S. business coalition pushing for a trade agreement range from the American Insurance Association and Delphi Automotive Systems to Eastman Kodak and Lockheed Martin.

Additionally, a free-trade agreement will aid the security of both nations by reinforcing their longstanding alliance. In the midst of a global war on terror, when the enemy may strike anywhere at anytime, such reinforcement is vital.

Much is made of the "special relationship" between the U.S. and the United Kingdom. But when it comes to supporting the U.S. in times of travail, Australia has a record at least as dedicated as that of the U.K. Aussie and American troops have fought side-by-side in every major war of the 20th century.

And it is no different this century. Within weeks of the Sept. 11 attacks, Australia committed 1,550 soldiers to the international coalition against terrorism. Months later, an Australian SAS commander received the U.S. Bronze Star for bravery in battle in Afghanistan. Such faithfulness should be rewarded. America in wartime does a great job of punishing its foes. It's equally as important to take the time to reward its friends.

A free-trade agreement is an excellent way to help Australia while helping America to "do good and do very well." Trade negotiations are often tiresome, especially when agriculture is involved. But the U.S. should make every effort to lower tariffs and nontariff barriers and complete this agreement in a timely
manner.

Time and again Australia has extended a hand in friendship, marched with America in its darkest hours, only to see the protectionist side of the U.S. It is time for America to rise to the occasion and thank a faithful ally by making intelligent concessions at the negotiating table.

Sara J. Fitzgerald is a trade-policy analyst in the Center for International Trade and Economics at the Heritage Foundation (www.heritage.org) in Washington.