US Trade Representative Robert Zoellick may be sidelined

The US public is deeply divided over the virtues of free trade, with unions and environmentalists increasingly vocal in their opposition to trade deals without side agreements on labour and environmental standards.

President Bush, and most big US businesses, are opposed to such proposals which they believe would wreck any chance of trade concessions in developing countries - as happened during the Seattle trade talks.

But the strong union opposition, based on fears of job losses (which unions claim accelerated after the Nafta agreement between the US, Canada and Mexico) has led many Congressional Democrats to pledge opposition to any further trade deals.

Although the Bush administration has sought "fast-track" negotiating authority from Congress, which would allow it to make trade deals without Congress being able to change every detail, it now says it will not pursue the request any time soon.

"You can only put so much into that pipe, and we've stuffed it," said Karl Rove, a key Bush adviser, citing the already-crowded legislative agenda.

Delaying a confrontation on this issue may make it easier for President Bush to win support from Democrats for his tax-cutting package - his current legislative priority.

International dilemmas

The Bush administration also faces an international dilemma in pursuing free trade talks.

Plans for a new world trade round have stalled since the widespread protests at Seattle, and face serious obstacles.

Developing countries are reluctant to pursue a new round until they have assurances that rich countries have implemented their pledges made in the last set of trade talks.

Protests disrupted trade meetings in Seattle

And other rich countries, especially the European Union, are pushing for a much broader trade talks agenda which could threaten US trade legislation which allows some unilateral US trade sanctions to protect its domestic industries.

So the move to promote a regional trade pact in the Americas is attractive for two reasons.

A successful pact could serve as a counter-weight to the EU, with which the US is engaged in a series of trade disputes - winning agreement on one contentious issue, banana imports, only after years of negotiation and sanctions.

And the US would have more influence on its Latin American neighbours, many of whom are eager to gain full access to the US market.

However, the US does face serious opposition from Brazil, Latin America's largest economy, whose own exports to the region would be threatened by the creation of a free trade zone.

Administration splits

The Bush administration is split over the trade issue, and how much it should be used as a weapon of US foreign policy.

The split was reflected in the delay in appointing a US trade representative after hard-liners suggested downgrading the post and giving more powers to the Department of Commerce, seen as a friend of big business.

The National Security Advisor, Condoleezza Rice, also reportedly wanted a bigger role in determining trade policy - and it is no accident that she is accompanying President Bush to the Quebec summit.

That dilemma was most recently reflected in the US debate over whether to use the trade weapon to pressure China to free the crew of the US spy plane - a plan that was ultimately rejected.

Although the post of US trade representative eventually went to a moderate, Robert Zoellick, who has been involved in previous trade negotiations and would provide a broad continuity of US policy, it is not clear how much influence he will have.

Mr Zoellick has been most closely associated with the global trade talks, where the US has traditionally provided leadership, while the National Security Council has traditionally backed a more regional approach.

The shift to a more regional trade policy is in itself an indication that such global leadership may be in short supply in the future.