By Doug Palmer

WASHINGTON, May 11 (Reuters) - The largest U.S. labor group

reacted cautiously on Friday to a deal between the White House

and Democratic leaders in Congress to strengthen labor and

environmental protections in free trade agreements, while most

business groups welcomed it.

The agreement requires the Bush administration to modify

pending free trade pacts with Peru, Panama, Colombia and South

Korea to include an enforceable obligation to abide by

international labor and environmental standards.

AFL-CIO President John Sweeney said he commended U.S. House

of Representatives Ways and Means Committee Chairman Charles

Rangel, a New York Democrat, for making substantial progress

toward "improving workers' rights and environmental standards

in the Peru and Panama Free Trade Agreements."

But he repeated the group's strong opposition to trade

deals with Colombia and South Korea, which senior Democrats

have said face additional obstacles in Congress. Sweeney also

expressed doubt about the Bush administration's willingness to

enforce the labor and environmental provisions.

The cool labor organization response is a sign of the

difficulties House Speaker Nancy Pelosi, a California Democrat,

faces in persuading a majority of her party to support the

deal, which was announced on Thursday.

Pelosi said the bipartisan deal built on the Democratic

party's tradition of "free and fair trade" while Senate Finance

Committee Chairman Max Baucus, a Montana Democrat, called it a

groundbreaking achievement providing unprecedented protections

for workers and the environment.

But labor groups and some lawmakers like Sen. Sherrod

Brown, an Ohio Democrat, were suspicious of a provision that

would only allow national governments to file a labor complaint

under the pact. Without assurances enforcement will not be

"left to the devices of the Bush administration, we will be

hard pressed to support this agreement," the United

Steelworkers union said in a statement.

Meanwhile, Rep. Ileana Ros-Lehtinen, a Florida Republican,

criticized Democratic leaders for saying approval of the

Colombia agreement faced additional obstacles because of a

history of violence against trade unionists in that country.

She warned that failing to approve the pact would "throw

overboard ... a steadfast ally in our joint struggle against

narcotics trafficking and terrorism."

MOST BUSINESS GROUPS SUPPORT PACT

The National Association of Manufacturers voiced support

for the new enforceable labor provisions after earlier

expressing concern about where talks on that were headed.

"Our state right-to-work laws and other state laws and

constitutional provisions relating to labor are completely

exempted from any challenges, an extremely important point for

American manufacturers" NAM President John Engler said.

However, Engler expressed concerns about other provisions,

which he said could weaken intellectual property protections,

particularly for pharmaceutical manufacturers.

The Business Roundtable, the Coalition of Services

Industries and the U.S. Chamber of Commerce hailed the deal as

hopeful sign for renewal of trade promotion authority, which

allows the White House to negotiate trade deals that Congress

must approve or reject without changing.

But the U.S. Business and Industry Council, which

represents smaller American companies, called the agreement a

"sell out" unless more comprehensive trade policy changes were

made.

AlertNet news is provided by