Democrats, Bush reach deal on free trade

updated 7:15 p.m. ET May 10, 2007

WASHINGTON - Congressional Democrats and the Bush administration have reached agreement on labor and other issues that could provide momentum to stalled free trade agreements with Peru, Panama and other countries, Democratic officials said Thursday

House Speaker Nancy Pelosi, D-Calif., planned a news conference Thursday with Treasury Secretary Henry Paulson and U.S. Trade Representative Susan Schwab to announce the deal.

Other senior Democratic and Republican leaders, including House Ways and Means Committee Chairman Charlie Rangel, D-N.Y., also were scheduled to attend what was billed as a major announcement on trade.

The agreement specifically strengthens labor, environmental and generic medicine issues that have long been raised by Democrats in opposing free trade accords, the officials said.

With Democrats now in control of both the House and the Senate, administration concessions on those issues was considered essential to advancement of bilateral trade agreements and revival of the Doha round of multilateral talks on removing barriers to trade.

Democratic officials, speaking on condition of anonymity so as not to pre-empt the announcement, said the compromise tightening language in trade deals protecting labor and environmental rights would be of particular value in advancing pending trade agreements with Peru and Panama. Those agreements must be approved by Congress.

They said it also could help agreements with South Korea and Colombia, although other issues with those deals need to be resolved.

Under the new policy, free trade agreement countries would be committed to adopting and enforcing laws that abide by basic international labor standards as outlined in a 1998 International Labor Organization declaration. It would prohibit those countries from lowering their labor standards.

Similarly, countries that reach trade agreements with the United States would have to adopt and enforce laws that are in line with seven major multilateral environmental agreements.

Peru would have to take steps to crack down on illegal logging, including mahogany.

The new policy also would eliminate the requirement that a drug regulatory agency withhold approval of a generic drug until it can certify that no patent would be violated if the generic is marketed.

In another provision, the United States would have full, non-challengeable authority to prevent foreign companies from operating U.S. ports, based on national security concerns.

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