No one who followed the World Trade Organisation's 2005 meeting in Hong Kong will have been surprised by the weekend's news that ministers will not be meeting in Geneva this month to sign a global free trade pact. Although the leaders of the world's major economies pledged at last month's G20 meeting to reach a deal before the end of the year, the devil - as ever - is in the detail. As we found out in Hong Kong three years ago, although governments like to profess commitment to the principles of free trade, when it comes to hammering out the specific provisions of a deal, few are prepared to make concessions which might expose favoured domestic industries to heightened international competition. And with national economies around the world sliding into recession, that reluctance is more pronounced now than ever. As a result, the prospects of a deal this year - never great to begin with - have evaporated entirely. The danger now is that instead of opening up to free trade, governments will respond to the economic slowdown by erecting barriers against foreign imports in an attempt to protect vulnerable domestic industries. After all, politicians in the developed economies may reason that it makes little sense to spend public money in an attempt to stimulate demand at home, if the demand they create is largely for imports. They may well conclude that they will get more bang for their stimulus bucks if they erect barriers against imports and force people to spend proportionately more on domestically-produced goods. Such protectionist measures could well prove popular. According to a poll conducted earlier this year by the Washington-based Pew Research Center, only 53 per cent of Americans believe trade is good for the United States economy, down from 59 per cent last year and 78 per cent in 2002. As many as 61 per cent think free trade agreements cost American jobs. If protectionism does make a comeback in the US, the obvious target will be America's bilateral trade deficit with China, which is on target to top US$260 billion this year (see the first chart below). Even so, across the board tariffs on imports from China are unlikely. Such sweeping measures would be hard to justify and would invite damaging retaliation. Far more probable will be the imposition of targeted tariffs on imports produced by industries or companies judged to enjoy a significant unfair advantage over their American competitors because of lax environmental standards or poor labour conditions. Such backdoor protectionism could strike a popular note among US companies and their employees. According to a 2006 study by the Merage School of Business, at the University of California-Irvine, China's Baosteel spends only around 0.3 per cent of its gross revenues on compliance with environmental regulations, while US Steel spends 3 per cent. The differential in environmental spending between Chinese and US chemical companies is similar (see the second chart below). Of course, in the long run forcing Chinese companies to meet US pollution standards if they want to access the US market could prove a blessing for China's sickly environment. But in the short term, such targeted sanctions are only likely to inflict even more pain on China's ailing export industries.