WASHINGTON Officials announce free trade deal with Central America

Labor unions vow to fight the latest free trade deal.
WASHINGTON (AP) -- The Bush administration is hailing its new free trade agreement with Central America as an important milestone toward the even bigger prize of achieving a hemisphere-wide free trade area.
But labor unions are vowing an all-out effort to defeat the measure in Congress.
Judging from the initial reaction from unions and such politically sensitive sectors of the economy as textile makers and sugar growers, President Bush could be facing a major trade battle on Capitol Hill in the midst of next year's presidential campaign.
The Central American Free Trade Agreement would be the United States' sixth free trade agreement, all modeled along the lines of the 10-year-old North American Free Trade Agreement, which links the United States, Mexico and Canada.
The CAFTA pact announced Wednesday would cover Guatemala, El Salvador, Honduras and Nicaragua. A fifth nation, Costa Rica, abruptly dropped out of the talks Tuesday. However, administration officials said they hoped further negotiations in coming weeks would persuade Costa Rica to join the agreement before it is sent to Congress.
U.S. Trade Representative Robert Zoellick called CAFTA "an important milestone" along the way to the administration's big prize of a 34-nation Free Trade Agreement of the Americas, covering all countries in the Western Hemisphere except Cuba.
Battle looms
Although the administration won easy approval earlier this year of two other free trade deals with Singapore and Chile, CAFTA is shaping up as a much bigger battle.
American unions, and their Democratic allies in Congress, were upset that the agreement does not include stronger labor protections.
AFL-CIO President John Sweeney said lax enforcement of weak laws on the books of the Central American countries meant young women were forced to work long hours in unsafe conditions for poverty wages and workers trying to form unions faced threats and intimidation.
"We will do everything in our power to defeat this deeply flawed agreement," Sweeney said in a statement.
Rep. Dick Gephardt, who is campaigning for the Democratic presidential nomination, called CAFTA "yet another example of the Bush administration selling out American workers with a bad trade deal."
Several other Democrats questioned whether the administration really had a finished deal, noting that certain provisions on service sectors were yet to be completed, and the negotiations with Costa Rica were still ongoing.
In addition, the administration has said it hoped to add a sixth Latin American country, the island nation of the Dominican Republic, in talks early next year in hopes of picking up votes among lawmakers whose districts include large numbers of Dominican immigrants.
Opposing views
Sen. Max Baucus, D-Mont., called the administration's announcement "premature. Too many important issues remain open to declare these negotiations successfully concluded."
Key Republicans in Congress and U.S. business groups generally expressed support for the deal. Senate Finance Committee Chairman Charles Grassley, R-Iowa, said he believed the deal would boost exports of Iowa farm products.