US backs new free trade standards

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The US Congress has reached agreement with the White House over new free trade policy guidelines.

The Democratic Party, in control of Congress, said the deal would ensure labour and environmental issues are a key part of new bilateral trade deals.

The agreement could smooth the ratification of trade deals with several Latin American countries.

US officials say failure to ratify the deals could affect the geo-political stability of the region.

The US Deputy Secretary of State, John Negroponte, is in Latin America visiting several countries awaiting ratification of free trade deals with the US.

Under the new policy, countries with free trade deals with the US will be committed to adopting and enforcing laws that abide by basic international labour standards.

They will also have to meet internationally-agreed environmental standards of business practice.

'Strategic' region

The BBC's Dan Collyns, in Lima, the Peruvian capital, said the agreement between the US Congress and President Bush's administration will come as a welcome vote of confidence for Peru.

Lima has already agreed to changes in the draft trade treaty with the US to incorporate the new standards from the US Congress.

Officials in Lima now hope the full deal could be ratified by August.

Colombia and Panama are also in free trade negotiations with the US.

Mr Negroponte has already been to Colombia and Ecuador and is visiting Panama on Friday.

"We think that they [the Latin American nations] are really strategic," he said.

"They are strategic elements not only to our economic relations but also to our political relations."

His visit is a clear effort to reinforce those relationships and counter the influence of President Hugo Chavez of Venezuela, says our correspondent.

US Treasury Secretary Henry Paulson said the agreement between the White House and Congress was important to the American economy but also "to the geopolitical stability of the region".

Colombia, however, may find its trade agreement with the US held up because of alleged government links to right-wing paramilitaries.