President Barack Obama has let it be known that he is preparing an important speech on trade policy. It cannot come soon enough. His administration has so far been unwilling even to submit the trivial free trade agreement with Panama to Congress, let alone mount any significant initiatives to restart the momentum of global trade expansion. China's new protectionist policy on government procurement, while legal under the porous rules of the World Trade Organisation, sharply raises the threat to the global trading system that he must counter.

The president has shown strong leadership in resisting protectionist actions that could thwart recovery. He tempered the strongly restrictive Buy American provisions in the original fiscal stimulus bill. He signed the pro-trade declaration of the Group of 20 at its London summit on April 2.

But Mr Obama has moved only halfway on trade policy. He must now implement new US spending programmes in ways that do not limit foreign participation and insist that China, by far the world's fastest- growing economy and the world's largest surplus country, do the same. Even more importantly, he must advance beyond damage avoidance to revive the global trading system.