The war in Iraq is winding down, and the struggle to create peace is beginning. No one should underestimate the challenge of restoring order in Iraq. The ugly scenes of looters ransacking homes, stores, and banks, as well as signs of revenge killings, shows that the risk of chaos is real. From turning on the lights to establishing law and order, the transition to a legitimate Iraqi government won’t be easy.

The collateral damage from the war to the global economy is also fraught with peril. The International Monetary Fund’s latest forecast calls for a tepid global recovery at best. Yes, the black cloud of uncertainty over war and its outcome has dissipated. But severe problems still persist, from flagging corporate earnings to rising unemployment.

The Administration’s solution to revive the deteriorating U.S. economy? The Administration plans on spending its considerable political capital getting a massive $726 billion ten year tax cut proposal through Congress. But Congress is increasingly wary. More and more legislators rightly fear that budget deficits as far as the eye can see isn’t good for the nation’s long-term fiscal health.

What’s more, tax cuts aren’t the elixir the economy needs at this point. Instead, CEOs and entrepreneurs need reassurance that trade barriers will fall and borders stay open. Trade invigorates economic growth and rewards innovation. To paraphrase Clinton’s famous slogan, “It’s the global economy, stupid.”

Yet it’s hard to shake off the concern that the Administration is turning away from a commitment to free trade. It’s at odds with most of its allies, including the governments of Germany, France, Russia, Turkey, and the Arab states. International tempers are high and suspicions about Hobbesian intentions abound, hardly an environment for negotiating clever solutions to longstanding trade issues.

Case in point: The World Trade Organization’s Doha round of trade talks is falling apart. Yet less than a year ago there were high hopes that Doha would turn into a landmark trade meeting. The Doha talks were to open up greater growth and entrepreneurial opportunities to the developing world. The most important discussions surrounded agriculture. Farming is among the most protected industries in the industrialized nations. The industrial world spends $300 billion supporting agriculture, according the IMF. That’s six times greater than the sums in foreign aid sent to emerging markets. Economists calculated that the gains from slashing subsidies to emerging markets were substantial.

The case for free trade has never been easy. The benefits are diffuse, while the costs born by specific companies, industries, and workers are concentrated. Nevertheless, round after round of trade liberalization over the past half century has increased world wealth. The Administration should focus on reviving free trade rather than cutting taxes.

Exchange: Reactions to this week's "News and Views"? Discuss personal finance and the economy at the Sound Money Exchange.