Leading article: Globalisation and a president too weak to stand up for his principles

The US has behaved as though the rules of the free market are for smaller, poorer countries to comply with, not the big boys

In Britain, the sale of P&O - a once-venerable company fallen on hard times - passed off almost without comment. Mr Bush also raised no objection. In Congress, however, there was uproar in both Houses and on both sides of the aisle. The very notion that an Arab-owned company, based in the Middle East, should be operating six of the country's major ports - including New York and Philadelphia - was treated as an affront to American dignity and, worse, as a potential threat to US security. They were also piqued that they had only learnt of the sale from the media. Their alarm spread across the grass roots of America.

Now, DPW has announced that it will work with the US Treasury to transfer the operation of the US ports in question to a "US entity". It is not clear whether this means that the interest will actually be sold, or whether some other mechanism will be used. What is certain is that Congress is suspicious and will study the small print of any transfer meticulously. In essence, though, what has happened is that US political pressure has vetoed the US element of a purchase made by a legitimate company, based in one of the more moderate Muslim countries which is also a staunch ally of the United States.

As Mr Bush said sorrowfully yesterday, the United States needs moderate allies in the Arab world, such as the United Arab Emirates, to win "the global war on terrorism", and this episode sent an adverse message to US friends and allies across the Middle East. Indeed it did. It also sent an adverse message to the rest of the world about the US commitment to free trade in this increasingly global age. Not for the first time, the US has behaved as though the rules of the free market are for smaller, poorer countries to comply with, but not for big boys such as the United States.

In Mr Bush's first term, Washington introduced tariffs on a wide range of goods, most controversially steel, which it claimed were being sold at a price lower than they cost to make. The EU, through the World Trade Organisation, forced the United States to retreat, but not until the threat of retaliatory measures had been applied. Last year, the Chinese oil producer CNOOC withdrew a bid for the US oil company Unocal, citing "unprecedented political opposition" in the United States. A much lower offer from the US company Chevron was eventually accepted.

Mr Bush, as behoves the first US president to hold a business degree, has generally been a more consistent free-trader than the US Congress. As a second-term president, he also has the freedom to do the right thing rather than the popular thing - a luxury that members of Congress facing elections in November can ill afford.

Before yesterday, Mr Bush had threatened to veto any decision by Congress to outlaw the sale of port operations to DPW. In one way, the company's concession pre-empts a damaging stand-off between the executive and a discontented legislature. But a president with better poll ratings, without the burden of a costly war, with policies regarded as electoral assets by his party, would have been in a better position to stand his ground. That Mr Bush chose to retire and lick his wounds, rather than press the points about free trade and Arab allies further, illustrates how far his authority is now diminished.