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WASHINGTON (Reuters) - Republican congressional leaders on Thursday announced a bipartisan agreement on legislation that would set up a watchdog commission to monitor Chinese human rights, a breakthrough that may clear the way for passage of permanent trading benefits for Beijing next week.

Top Republicans in the House of Representatives said they would bring the monitoring legislation to the House floor as part of a package granting permanent normal trade relations (PNTR) to China, after the White House warned that PNTR would likely fail without it.

"It's moving forward. I'm positive about it," House of Representatives Speaker Dennis Hastert, an Illinois Republican, told reporters of the monitoring plan.

Hastert also predicted PNTR would pass next week with the help of the human rights monitoring plan. Many Democrats had demanded the monitoring plan in exchange for supporting PNTR, which would ensure that U.S. companies benefit from the market-opening agreement struck by President Clinton in November 1999.

Still, opponents of the pact expect at least 139 of the House's 211 Democrats to vote against PNTR and the monitoring plan, due to concerns about human rights and labor standards in China and fears the trade bill will cost hundreds of thousands of Americans their jobs.

But Hastert said supporters of PNTR had the momentum after two congressional committees on Wednesday approved the trade bill. "I think we're poised to have success," Hastert said.

But he cautioned: "I'm not taking anything for granted."

The monitoring legislation, proposed by Democratic Rep. Sander Levin of Michigan and Republican Rep. Doug Bereuter of Nebraska, calls for creation of a permanent commission that would review Chinese policies and could recommend sanctions against Beijing as long as they were consistent with World Trade Organization (WTO) rules.

The Levin-Bereuter proposal would also include strengthened safeguards against import surges and call for the WTO to review China's compliance with the pact on an annual basis. It would also urge the WTO to admit Taiwan immediately after China.

The monitoring plan was initially dismissed by top Republicans as counterproductive. But they came around after U.S. Commerce Secretary William Daley said it could be "impossible" to round up enough Democratic votes to pass PNTR for China without Levin-Bereuter.

The monitoring proposal has, however, incensed China, which condemned the commission as a pointless measure that only served to interfere in Beijing's internal affairs.: