President George W.Bush is close to getting full trade negotiating powers, following a deal struck between US legislators.

Late on Thursday, negotiators for the two houses of Congress reached a compromise agreement on the Trade Promotion Authority Bill.

The deal clears the way for a final House of Representatives vote later on Friday on the bill , which gives so-called 'fast track' powers to the president in future trade talks.

The most historic trade legislation ever passed by Congress

Senator Max Baucus

Mr Bush - who will meet House Republicans personally to lobby for the bill -is now close to clinching the presidential trade negotiating powers that eluded his predecessor. Congressional Republicans voted not to renew the 'fast track' authority in 1994.

Without those powers, any trade deal negotiated by the United States would be subject to revision by Congress, undermining the President's authority.

President Bush has been seeking these powers since he was elected in November 2000, but has faced stiff opposition.

The deal is still subject to a vote next week by the Senate, which passed a previous version of the bill by a two to one majority.

But it faces a much tougher time in the House of Representatives, where it was passed by only one vote in December last year.

House Minority Leader Dick Gephardt, a Democrat, has vowed to oppose the compromise, saying the final trade package "still contains many of the problems" of the original bill.

Republican strategists are hoping that the trade bill will clear Congress before the summer recess, in time to become law before the highly partisan atmosphere of the November Congressional elections takes hold.

Senate Finance Committee Chairman Max Baucus, the Democrat who negotiated the compromise deal, said the package would become "the most historic trade legislation" ever passed by Congress.

Reaching a deal

Sharp differences have emerged in Congress over the trade bill, with Democrats insisting that there should be additional benefits for workers who lose their jobs because of the extension of free trade.

Under the compromise deal, workers who lose their jobs would receive a tax credit to pay for 65% of their health insurance costs, and benefits would be extended to workers only indirectly affected by an increase in imported goods.

Under the new deal, a tough Senate amendment has been dropped.

This would have prevented the President from agreeing any changes in the anti-dumping laws - used by the US recently to introduce big increases in steel tariffs recently to protect its domestic industry.

Job fears

Trade issues have always been controversial in the US, where labour unions have long argued that free trade agreements with Mexico and China have put US jobs at risk.

The issue boiled over in Seattle in 1999 as labour and environmental protestors fought police at a meeting of world trade ministers.

A storm is brewing over US farm subsidies

The following year, President Bill Clinton fought an uphill battle to unite his own Democratic Party to support a more open trade relationship with China.

Even as he slapped tariffs on imported steel, President Bush has always claimed to attach a high priority to free trade as part of his economic strategy.

He launched a drive for a Free Trade Area of the Americas in his first year in office.

And the US agreed to a new round of world trade talks after negotiations in Doha in November.

It is now engaged in difficult negotiations, with increased US agricultural subsidies one of the key sticking points.