Washington --A U.S. Senate panel took a step today toward recommending passage of the Central American Free Trade Agreement after the Bush administration offered to negotiate concessions to the sugar industry. The Senate Finance Committee in Washington, in an informal, non-binding poll of its members, voted 11-9 in favor of draft legislation the administration submitted. A final version would still have to be refiled to the committee for a formal vote.

``Our expectations weren't high and they were exceeded today,'' U.S. Trade Representative Rob Portman told reporters. ``This is the first successful step in a very long process.''

Today's vote may embolden the White House to send a final version of Cafta to Congress, a process the administration has held off on for about a year amid objections from unions, textile producers and sugar makers. Senator Craig Thomas of Wyoming, who had opposed Cafta because of complaints from the beet-sugar industry in his state, became the pivotal vote by choosing to support the measure at today's hearing.

Cafta would end most tariffs on more than $33 billion in goods traded between the U.S. and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. It would also allow a 50 percent increase in sugar imports into the U.S., phased in over 15 years, and make permanent the duty-free access to the U.S. that most products from Central America have.

Under rules of Trade Promotion Authority passed in 2002, Congress can't amend trade bills when they come up for a formal vote. The ``mock mark-up'' today is a procedure to allow Congress to recommend changes or additions to Cafta.

Sweet Compromise

Thomas said his vote today was based on a letter he received from Agriculture Secretary Mike Johanns pledging to work with him on a compromise that could provide assurances that government price supports for the U.S. sugar industry will continue under Cafta, as well as under future trade and farm legislation.

``If sugar is hopeful for the future, that might help us on Cafta,'' Thomas said. Thomas said he still may vote against Cafta when it comes up to a vote on the floor of the Senate.

Republican Senators Saxby Chambliss of Georgia and Norm Coleman of Minnesota are scheduled to meet with representatives of the sugar industry today to discuss a compromise. Thomas and other senators from sugar-producing states plan to meet with President George W. Bush at the White House tomorrow, he said.

Democratic Senator Kent Conrad of North Dakota had prepared eight amendments to strip the provisions out of Cafta that the sugar industry opposed. He didn't offer any of them today, which was the Senate's only opportunity to offer amendments to Cafta.

Conrad said he didn't want to disrupt negotiations between the White House and industry. The Bush administration offered a different explanation: ``If they thought the votes were there, you would have seen those amendments,'' Portman said.

The only change to the legislation approved today was a recommendation that Bush expand an assistance program for U.S. manufacturers who lose their jobs because of trade matters to include workers from the services industries. That amendment to the ``draft'' legislation is not binding on the administration, and may not be included in the final bill presented to Congress.

The House of Representatives' Ways and Means Committee is scheduled to consider the Cafta legislation tomorrow.

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