The House on Thursday rejected legislation giving the president the authority to bring sanctions against European companies that sell arms to China (search) after U.S. business groups came out strongly against it.

In a dramatic turnaround, more than 100 House members changed their votes from yes to no following a last-minute lobbying effort by opponents.

The final vote was 215-203, well short of the two-thirds majority needed under a procedure for what normally are non-controversial bills.

Earlier during the roll call, more than 330 members had registered yes votes, but several lawmakers said people started changing votes after learning of opposition from the business community.

Rep. Donald Manzullo, R-Ill., distributed a notice that groups such as the U.S. Chamber of Commerce (search), the Aerospace Industries Association and the Electronic Industries Alliance opposed the measure because more export controls would result in the loss of U.S. jobs.

"Passage of this bill means that Boeing and other aircraft manufacturers will sell fewer airplanes overseas," the notice read.

The "East Asia Security Act" (search) was the latest of several congressional actions taken to discourage the European Union (search) from proceeding with proposals to lift an embargo on arms sale imposed after China's 1989 crackdown on the Tiananmen Square (search) student uprising.

President Bush has voiced his opposition to ending the embargo, saying it could change the balance of power between China and Taiwan (search), but his administration has not supported the legislative approach.

While aimed at Europe, the measure would have required Bush to report annually on all international companies that sell arms to China and on governments whose policies condone such sales.

Companies and governments that repeatedly sell arms to China would have had to obtain export licenses and submit to congressional review procedures in order to obtain sensitive U.S. weapons technology in the future. The president could have waived such steps on national security grounds.

House International Relations Committee Chairman Henry Hyde, R-Ill., welcomed the European Union's decision not to terminate the embargo for the time being, but said the EU needs to do more to close loopholes in the embargo that allowed arms sales to China to increase eightfold in the 2001-2003 period, to $540 million.

"The implications of these transfers are uniformly negative for the security of U.S. armed forces in East Asia for the defense of our friends and allies in the region," said Hyde, sponsor of the bill.

Hyde said the measure was not retroactive and was "not intended to be punitive; it's primary purpose is deterrence."

The top Democrat on the committee, Rep. Tom Lantos of California, said the bill was meant to "persuade other countries that there will be severe consequences if they fail to respect the security interests of their most important ally, the United States of America."

In February the House approved, by 411-3, a nonbinding resolution saying that the EU's proposal to lift the embargo and replace it with a code of conduct on arms sales is "inherently inconsistent with the concept of mutual security interests that lies at the heart of United States laws for trans-Atlantic defense cooperation." It urged the EU to "reconsider this unwise course of action."