Australia's free trade pact with the United States was under threat Tuesday with the government and opposition Labour at loggerheads over legislation backing the deal ahead of a cliff-hanger election tipped for October.
Legislation to enact the agreement in Australia has been passed in parliament's lower house but faces a tougher passage through the upper house Senate, where the government is in a minority and needs four more votes.
Centre-left Labour leader Mark Latham said Tuesday his party supported the free trade deal but would not pass the enabling legislation that went with it unless the conservative government accepted two amendments proposed by Labour.
"Despite several flaws in the agreement, it has net economic benefits for Australia, and on this basis, should be supported," Latham told reporters.
Meanwhile, in Washington, US President George W. Bush signed legislation on Tuesday to implement the agreement and praised Prime Minister John Howard as a "strong partner in peace." Australia has troops in Iraq.
Both the US Senate and the House of Representatives overwhelmingly approved the pact in July on bipartisan votes.
"The US-Australia Free Trade Agreement is a milestone in the history of our alliance. It expands our security and political alliance by creating a true economic partnership," Bush said.