Sept. 21 (Bloomberg) -- The Senate Finance Committee backed a free-trade agreement between the U.S. and Peru, approving the deal without amendment in the first step for congressional ratification of the accord.

The committee voted 18 to 3 in favor of the agreement in a ``mock'' hearing that gives senators a chance to propose amendments before the agreement is officially submitted by the Bush administration. Amendments on labor laws and intellectual property rights, both offered by Utah Republican Orrin Hatch, were defeated by wide majorities.

Once the administration formally sends the agreement to Congress, so-called fast-track rules apply, and Congress must accept or reject it without filibuster or amendment.

``If we're concerned about the trade deficit and trade with China, we should be all for these agreements,'' Senator Charles Grassley of Iowa, the top Republican on the committee, said at the hearing in Washington. They ``give us a fair shake.''

The U.S. and Peru reached the accord at the end of 2005 and signed it in April 2006. The Peruvian Congress ratified it a year ago. Congressional Democrats pushed for tougher environmental and labor rules in the accord this May, and Peru's legislators in June approved those changes.

In recent weeks, Peru's labor ministry issued a decree limiting the use of non-union contract workers in mines and other unionized industries.

House Action

The House Ways and Means Committee is scheduled to hold a similar ``mock'' session Sept. 25. The free-trade agreement is likely to be approved by both chambers of Congress next month, Representative Jim McCrery, the top Republican on the Ways and Means panel, said last week.

The Bush administration has negotiated free-trade agreements with Peru, Panama, Colombia and South Korea. All await approval from Congress.

With the broad support today, prospects for all of those deals may get a boost, said U.S. Trade Representative Susan Schwab.

``I look forward to continued bipartisanship in the pursuit of a market-opening, pro-growth trade policy for the American people,'' Schwab said in a statement.

Still, Finance Committee Chairman Max Baucus indicated that his trade priorities lie outside the pending free-trade deals. He vowed to pass measures this year that would make it easier for U.S. manufacturers to get steeper anti-dumping duties on imports and would require the U.S. to file more industry complaints with the World Trade Organization. He also would expand benefits for workers who lose their jobs because of overseas competition and increase pressure on China over the value of its currency.

The 18 senators who voted for the agreement included Baucus, West Virginia Democrat Jay Rockefeller and New York Democrat Charles Schumer. They each opposed the Central American Free Trade Agreement in 2005. Hatch, Arizona Republican Jon Kyl and Michigan Democrat Debbie Stabenow voted against the accord.

To contact the reporters on this story: Mark Drajem in Washington at mdrajem@bloomberg.net.

Last Updated: September 21, 2007 11:22 EDT