James Wolfensohn the (Australian) head of the World Bank says bq. he would “have to think very carefully” whether [the proposed US-Australia Free Trade Agreement] was worthwhile if it came at the expense of the multilateral trading system, struggling after the collapse last year of talks aimed at lowering international barriers to free trade. bq. “It would be a tragedy, I think, if the world fragmented into regional trade arrangements — it leaves people out and we can’t leave people out.” (“The Australian newspaper”:http://www.theaustralian.news.com.au/common/story_page/0,5744,8578853%255E2702,00.html) The WTO is already limping along. The explosion in the number of regional trade agreements is not, however, the cause. The WTO’s own assessments in its 2003 annual report points to the rapid growth in potentially discriminatory trade deals but detects no evidence that they have slowed net trade growth or signficantly ‘diverted’ trade from its expected pattern under non-discriminatory rules. A bigger challenge that the WTO faces is to overcome the problem so evident at the Cancún ministerial meeting last September. Some countries—including the world’s poorest—are leaving themselves out of the growth of world trade by shying away from agreements to reduce trade protection and barriers to investment.