Agreement reached on trade guidelines

WASHINGTON — Congressional Democratic leaders announced Thursday that they had forged new trade policy guidelines with the administration that will elevate labor and environmental rights to key components in future free trade agreements.

House Speaker Nancy Pelosi, flanked by Treasury Secretary Henry Paulson and U.S. Trade Representative Susan Schwab, said the agreement signaled "a giant step forward" in advancing U.S. economic interests without sacrificing American workers and the environment.

The new policy will apply immediately to pending free trade agreements with Peru and Panama. It will also become a part of trade accords with South Korea and Colombia, although lawmakers said other issues, such as violence in Colombia, must be dealt with before Congress can consider those agreements.

In a statement, President Bush said the agreement "provides a clear path for advancing" all four trade deals. He pledged, however, to continue working with lawmakers and the governments of each country to secure passage of each agreement.

"Expanding opportunities for the sale of American goods and services is crucial to continued growth and job creation here in America," Bush said.

A majority of Democrats have opposed most bilateral free trade agreements in recent years, contending that the deals negotiated by the administration were weak in requiring trading partners to address such issues as child labor, workplace discrimination and environmental degradation.

With the Democratic takeover of Congress, the new majority made clear that no trade agreement would move forward without progress on those issues.

The new policy, said Pelosi, was "a recognition of the results of the November election."

Schwab said the deal with the Democrats was "a historic bipartisan breakthrough" and Paulson said it was important not only to American economic prosperity but also "to the geopolitical stability of the region."

But a half-dozen House Democrats with strong labor ties, watching the news conference from the back of the room, later expressed strong dissatisfaction with the process.

"The strongest voices for workers and the environment were not included" in the negotiations and were not informed of the deal, said Rep. Marcy Kaptur, D-Ohio.

"I'm very disappointed that Speaker Pelosi held a press conference before meeting with the caucus," said Rep. Michael Michaud, D-Maine. "In a democratic process Democrats ought to know."