US Senate OKs 8-month Andean trade pact extension

WASHINGTON, June 28 (Reuters) - The U.S. Senate on Thursday approved by a voice vote an eight-month extension of long-standing trade benefits for Andean countries, one day after the House of Representatives passed the bill.

The legislation now goes to President George W. Bush, who is expected to sign it. The nearly 16-year-old Andean trade preferences program expires on Saturday, making it possible there could be short lapse before Bush signs the bill.

The fate of the Andean Trade Promotion and Drug Eradication Act has become entangled in a Bush administration battle with Congress to win approval of free trade agreements with Peru and Colombia, as well as U.S. concerns over a leftist turn in the governments of Bolivia and Ecuador.

The United States has allowed all four countries to ship most of their goods to the United States without paying duties since December 1991 in an effort to discourage illegal drug production in the Andean region.

But in May 2004, the Bush administration began negotiations with Colombia, Peru and Ecuador aimed at replacing the one-way trade preference program with free-trade agreements that would open the Andean region to more U.S. exports while locking in and expanding their duty-free access to the United States.

U.S. negotiators concluded free-trade deals with Peru and Colombia but talks with Ecuador collapsed and negotiations with Bolivia never got off the ground.

Republican lawmakers have since used the periodic expiration of the trade preference program to try to force votes on the trade deals with Colombia and Peru.

Last December, when Republicans still ran Congress, they pushed through a six-month extension of the Andean program in the hope of putting pressure on Democrats to vote on the Peru and Colombian agreements after they took charge in January.

Instead, Democrats sought changes to the Peru and Colombia agreements and proposed to extend the Andean Trade Promotion and Drug Eradication Act until September 2009.

They agreed this week to just an eight-month extension after Sen. Charles Grassley, an Iowa Republican, took a hard line against renewing the program at all.

U.S. Trade Representative Susan Schwab told reporters this week the Bush administration hoped for a vote on the Peru agreement by the end of July.

Democratic leaders have not committed to that, but the pact with Peru is far more popular than the one with Colombia.

Pressured by U.S. labor groups, Democrats want Colombia to show concrete progress in reducing violence against union leaders and bringing killers to justice.