U.S. business worried House vote crippled "fast track"

WASHINGTON (Reuters) - U.S. farm and business groups expressed concern that a showdown on Thursday between the White House and Congress over a free trade pact with Colombia has hurt U.S. ability to negotiate future deals.

The House of Representatives rebuffed President George W. Bush's efforts to force action on the Colombia agreement by voting 224-195 to change "fast track," or trade promotion authority, rules that require Congress to approve or reject a pact within 90 days of receiving it from the White House.

U.S. Trade Representative Susan Schwab told reporters the House vote "gutted 34 years of trade law and trade practice" and would make the administration think twice about submitting trade deals with South Korea and Panama to Congress.

"The House Democratic leadership has now slapped around a major U.S. ally, one of our most important allies in Latin America," U.S. Trade Representative Susan Schwab said.

"I'm not sure it would be smart to subject other major U.S. allies that have offered to open their markets to us to that kind of disrespectful treatment," Schwab said.

Both Democratic and Republican presidents have relied on fast track since 1974 to win approval of trade pacts.

The procedure gives U.S. trading partners some assurance that Congress, which has constitutional jurisdiction over trade, will act quickly on trade agreements negotiated by the White House. It also bars lawmakers from amending trade agreements since that could unravel the pacts.

U.S. business groups expressed concern about the impact of the House vote on future U.S. trade talks.

"The proposed elimination of this 30-year framework is simply not in the United States' interest," Calman Cohen, president of the Emergency Committee for American Trade, said in a statement ahead of the vote.

"Indeed, rejection of this framework as it applies to Colombia will undermine U.S. credibility in negotiations for decades to come, making it more difficult for the United States to level the playing field, eliminate foreign trade barriers and open foreign markets to our goods and services," he said.

The U.S. Chamber of Commerce also urged House members to "respect" the terms of the 2002 trade promotion authority act, which renewed fast track, and warned they would include Thursday's vote in their annual lawmaker scorecard.

The House decision to release itself from fast track rules for the Colombia agreement came as the United States and its trading partners eye a possible breakthrough in long-running world trade talks.

The Bush administration has tried to reassure nervous trading partners it would be able to rely on fast track procedures to get a new world trade deal through Congress.

While criticizing House leaders for "killing" the Colombia trade pact, Schwab she remained hopeful of negotiating a deal in world trade talks that could win approval from both Democrats and Republicans in Congress.

(Editing by Todd Eastham)