Senate Votes in Favor of Trade Amendment

Fundamentally altering a trade promotion bill, the Senate voted Tuesday in favor of an amendment that allows Congress to reject portions of deals that affect laws protecting U.S. industries from foreign subsidies and dumping.

The Senate's action was a setback to the White House, which said it will veto the measure for fast track negotiating authority if it includes language that would allow Congress to delete provisions of trade pacts President Bush negotiates. Aides said the administration would attempt to have the provision removed before the final bill reaches the president's desk.

The vote came as the Senate worked on legislation sought by the White House to strengthen President Bush's hand in negotiating global trade deals. No date has been set for a final vote on the broader measure.

"While our country's future trade policies are debatable, the right of Congress to participate actively in setting those policies is not," said Sen. Mark Dayton, D-Minn., a leading advocate of the proposal, which cleared on a voice vote.

Fast track authority, which has been denied the White House since 1984, previously allowed the president to negotiate international trade deals that Congress can approve or reject but cannot amend.

Commerce Secretary Donald Evans, in a letter Tuesday to Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said the amendment derails fast track "without justification." He wrote that he would "strongly recommend to the president that he veto legislation that included this amendment."

The letter was also signed by Agriculture Secretary Ann Veneman and U.S. Trade Representative Robert Zoellick.

White House press secretary Ari Fleischer said the president "understands the concerns made by his cabinet members." He said the veto threat was made because the amendment "would seriously undermine the cause and the purpose of free trade."

Craig, who has rejected administration requests that he withdraw the amendment, said it would strengthen the president's negotiating hand by sending a clear message to U.S. trading partners that Congress stands behind U.S. trade remedy laws.

Business leaders at a news conference Tuesday said the amendment is a "poison pill."

"It essentially emasculates trade promotion authority and renders all of our work useless," said Jerry Jasinowski, president of the National Association of Manufacturers.

Sen. Phil Gramm, R-Texas, who last week reached compromise language sought by Democrats on benefits for trade-dislocated workers, said Craig-Dayton was a "bipartisan protectionist amendment" that would "destroy our ability to negotiate reductions" in trade barriers.

Sponsors of the trade promotion authority bill are proposing giving a greater advisory role in international negotiations to Congress without changing the fast track procedure.

Baucus and Sen. Charles Grassley, R-Iowa, chief sponsors of the trade bill, tried to head off another contentious issue with an amendment, adopted 98-0, to assure that foreign investors won't take unfair advantage of U.S. laws to file lawsuits. But Rep. John Kerry, D-Mass., who is preparing an amendment on the subject, said the Baucus-Grassley amendment didn't go far enough.

The trade package, which would give displaced workers 70 percent coverage of lost health benefits, also extends a program giving lower tariffs for goods from the South American countries of Colombia, Peru, Bolivia and Ecuador.

The Associated Press contributed to this report.