updated 11/16/2006 5:32:58 PM ET 2006-11-16T22:32:58

President Bush headed to Southeast Asia without Congress having normalized trade relations with Vietnam, a surprising setback that could signal tough times ahead for efforts to pass trade deals in a Democratic Congress.

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Congress likely will revisit U.S. trade with Vietnam when lawmakers return from their Thanksgiving break in December. Meanwhile, Vietnamese officials considered the rejection a regrettable setback that went against the interests of both nations.

U.S. business interests, eyeing a fast-growing market, also were taken aback when the measure failed Monday night to gain the two-thirds majority it needed for passage under a procedure that House Republicans pursued to push it through with limited debate. The vote, 228-161, was 32 short of required margin under the expedited procedure.

Fate in Congress not assured
"It's an enormous disappointment," said Ginny Foote, president of the U.S.-Vietnam Trade Council, which has lobbied heavily in favor of the bill. "The business community has been working on this for months, and it's a tremendous letdown that this hasn't been accomplished before the president's visit."

At first House leaders decided to have a vote this week under normal procedures that require a mere majority, which would appear to guarantee House passage. Instead, they put off the vote for a few weeks. The proposal's fate in the Senate is not assured, however, because individual senators can create roadblocks if they see the agreement as a negative for their states.

The White House offered textile-state senators assurances that it will impose penalty tariffs on Vietnamese textile and clothing products if the country is found to be selling these goods at unfairly low prices, even though the agreement has raised concerns among U.S. retailers.

The House vote came on the first day Congress had been in session since the Democrats gained control of the House and Senate in the Nov. 7 midterm elections. Trade experts questioned what the vote could mean for the free trade agreements and global trade liberalization talks atop the Bush administration's trade agenda.

U.S. companies could fall behind their foreign competitors if the deal with Vietnam is not approved, some trade experts say.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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