US Democrats, Bush strike deal on trade

WASHINGTON, May 11 (Reuters) The Bush administration and Congress reached a deal that paves the way for US approval of free-trade pacts with Peru and Panama but leaves agreements with South Korea and Colombia in doubt.

The leader of the House of Representatives, Speaker Nancy Pelosi, said the deal set the stage for a ''free and fair'' U.S.

trade policy by incorporating enforceable labor and environmental standards into bilateral trade deals.

''Our economic future rests on our ability to open new markets for U.S. goods and services,'' Pelosi, a California Democrat, said at a news conference with other senior lawmakers and two Bush administration Cabinet officials. ''We must also do much more to address consequences of globalization.'' The deal followed months of haggling over the fate of trade pacts with Colombia, Peru, Panama and more recently South Korea, following the Democratic takeover of Congress.

''This is indeed a historic bipartisan breakthrough,'' said U.S. Trade Representative Susan Schwab.

Schwab told reporters the four countries would have to agree to changes in the trade pacts, which in the case of Peru and Colombia have already been signed.

She expressed hope that could be accomplished without reopening the broader agreements, but said that depended on the decisions of the four trading partners.

Rep. Sander Levin, a Michigan Democrat deeply involved in the talks with the Bush administration, said the deal only cleared the way for approval of the Peru and the Panama agreements.

The Colombia pact faces an additional obstacle because of that country's long history of violence against union workers and other concerns, Levin said.

The South Korea agreement faces strong opposition from lawmakers who believe it gives that country one-sided access to the U.S. auto market, he said.

Lawmakers said the deal on Thursday might not clear the way for quick renewal of trade promotion authority, which allows the White House to negotiate trade deals that Congress is required to approve or reject without making changes.

That law, which is considered essential for the conclusion of world trade talks, expires at the end of June.

LABOR RIGHTS Republican and Democrats have been divided for years over how to handle labor and environmental provisions in trade agreements. An agreement struck between House Republicans and about two dozen Democrats in 2002 allowed the Bush administration to win approval -- in some cases very narrowly -- of free-trade deals with Australia, Central American countries, Singapore, Morocco and others.

Since winning control of Congress in November, Democrats have pressed the Bush administration and Republican lawmakers to agree to labor and environmental provisions that would be enforced through the same dispute settlement mechanism as other parts of free-trade agreements.

The deal announced on Thursday includes a binding commitment for the United States and its four free-trade partners to abide by five core International Labor Organization standards, such as the right to organize and bargain collectively and the regulation of child labor.

It also makes seven major multilateral agreements enforceable under the bilateral trade pacts.

Other parts of the deal affect intellectual property, port security and government procurement provisions of the four pending trade pacts. One section is aimed at ensuring patent protections do not interfere with the ability of poor people to have access to life-saving drugs.

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