The much-contested DR-CAFTA free trade deal between Central America and the US received preliminary approval from the US House of Representatives yesterday.

The House Ways and Means Committee gave the thumbs-up to a draft bill for the US-Central American Free Trade Agreement by a vote of 25-16.

The proposed agreement has been heavily criticised by US labour groups as well as a number of textile companies, who are concerned that the deal will hurt their business.

CAFTA has also been contested by Democrats, who say that labour provisions set out in the bill are too weak. However, the Bush administration maintains that the deal is superior to former trade agreements.

If CAFTA is passed, 80 per cent of US consumer and industrial products and more than 50 per cent of US farm exports to the six countries covered by the deal will become duty-free.