"I am proud theat the House of Representatives has acted to advance America 's economic and national security interests by passing the CAFDTA-DR agreement," Bush said in a statement.

"CAFTA helps ensure that free trade is fair trade by lowering trade barriers to American goods in Central American markets to a level now enjoyed by their goods in the US ," Bush said, adding that he would soon sign the bill into law.

"We have a moral obligation and a vital national security interest in helping democracies of Central America and the Dominican Republic succeed, and CAFTA furthers that goal," the president added.

Bush and his cabinet fought an uphill battle to have it approved.

While CAFTA-DR is expected to have little impact on the US economy, which exports 15 billion dollars worth of goods to Central America , it became the most controversial free trade agremeent Congress debated in years.

In a rare meeting behind closed doors, Bush, Vice President Dick Cheney and US Trade Representative Rob Portman spent more than one hour in Congress on Wednesday to press Republican lawmakers to fully support the trade pact.

Backers of the trade agreement argue it is a way to fend off the threat of Chinese textile exports by spurring further integration of US yarn and textile producers with low-cost garment makers in with the Dominican Republic, Nicaragua, El Salvador, Honduras, Costa Rica and Guatemala.

Additionally, some have been arguing the measure is needed for economic stability and security in the region and to reduce illegal immigration into the United States .

Failure to pass CAFTA-DR would have made Bush politically vulnerable for the remainder of his second term in office and seriously weakened his hand in negotiating a wider Free Trade Area of the Americas and bringing about a freer global trading system under the Doha Round of talks under the World Trade Organization.

Democrats strongly opposed the deal because they claim it fails to impose fair labor standards in a region unsupportive of workers' rights and represents unfair competition to US workers.

The White House insists CAFTA-DR's labor standards are the most rigorous of all free trade pacts the United States has negotiated so far.

Lawmakers from sugar-producing and textile-manufacturing states also rejected the trade deal fearing it could increase unemployment in their regions.

"We must not neglect the anti-democracy, anti-American forces that are at work in Latin America ," said Republican representative for California David Dreier said in support of CAFTA-DR during the two-hour debate before the vote.

"Certainly, CAFTA does not fix all the problems facing Central America . But increased economic integration can only add jobs and help alleviate poverty, reduce the flow of migration northward, and make our region more competitive in world markets," said Jim Kolbe, Republican for Arizona.

Maryland Democrat Whip Steny Hoyer said he could not support the measure "for its failure to guarantee basic workplace protections for Central Americans and a level playing field for American workers."