President Bush, pressing his free-trade agenda on a Congress now run by Democrats, said Tuesday more foreign markets need to be opened to U.S. products.

"The temptation is to say, well, trade may not be worth it. Let's isolate ourselves. Let's protect ourselves," Bush said, standing on a factory floor before 300 employees of Caterpillar Inc.

"I know it's a bad mistake for the country to lose our confidence and not compete," the president said.

Bush wants Congress to extend his authority to negotiate free-trade deals, a request that likely will face an uphill battle in Congress. Democrats won the November elections in part by arguing that the administration's free-trade policies were costing U.S. jobs and exposing American workers to unfair competition from low-wage countries.

Now with Democrats in control, Bush faces an even bigger challenge in getting Congress to renew the Trade Promotion Authority. Also known as fast-track authority, it lets the president negotiate trade deals that Congress must approve without amendments. That authority expires on July 1.

"We're going to continue to negotiate free trade agreements," Bush said. "And by that I mean, we just want people to treat us fairly. I'm confident in our ability to sell American products and services overseas if the playing field is level."

Bush used Caterpillar's huge earth-moving equipment as a backdrop for the first of two economic speeches this week. He travels to New York City on Wednesday to give what he's calling an address on the state of the economy.

Since his State of the Union address, Bush, whose job approval ratings are at record lows, has focused his public events on health care, energy and the economy — domestic issues that have been overshadowed by the unpopular war in Iraq.

He traveled to visit Caterpillar because the company is taking advantage of a growing global demand for construction and mining equipment. The company posted record profits and revenues for three straight years, creating about 5,000 jobs at its U.S. plants in Illinois, Colorado, Pennsylvania and Tennessee.

Caterpillar spokesman Timothy Elder says Bush's trade policies helped the company net about $9 billion in sales outside of North America in 2006, when revenues of about $41.5 billion netted profits that topped $3.5 billion — both company records.

Since Bush took office in 2001, however, the country has seen one in five manufacturing jobs disappear, a total of 2.96 million lost jobs, with U.S. automakers and textile companies particularly hard-hit. The U.S. trade deficit is expected to climb to a fifth consecutive record when the final figures for 2006 are totaled up next month.

U.S. Business and Industry Council, which represents small and medium-sized U.S. manufacturing companies and is critical of the administration's trade policies, called Tuesday for a moratorium on all new trade agreements until the trade deficit is brought under control.

Ways and Means Committee Chairman Charles Rangel, D-N.Y., said, meantime, he is exploring approaches to bridge the gap on trade between Democrats and Republicans in Congress and the White House. His committee, which oversees trade issues in the House, held a hearing Tuesday to air those differences.

Rep. Sander Levin, D-Mich., said he wished that Bush had decided to visit a factory in an industry that has been battered by foreign trade rather than Caterpillar, which is one of the U.S. success stories. Levin is from Michigan, where American auto companies have been hard-hit by foreign competition.

Before he spoke, Bush stopped at the Sterling Family Restaurant to chat with customers having breakfast near a grill laden with steaming hash browns. He talked in a back room with small business owners before heading to tour the Caterpillar factory.

"I would suggest moving back. I'm about to crank this sucker up," Bush called from the cab of a yellow tractor. He started the motor. A puff of smoke belched from its stack, and the president steered it around the assembly line. "That was fun," he exclaimed as he got off.