US Senate leaders last week that they will try to finish work on legislation resolving a trade dispute with the European Union, but that the bill could still be dragged down by the weight of extraneous amendments.

The legislation would repeal a US export tax break known as “foreign sales corporations.”

The measure has been brought to the Senate floor twice before, but failed to progress.

Speaking to reporters, Senate Majority Leader Bill Frist, R-TN, said he feels “the timing is right.”

Sanctions by the European Union on the US, authorized by the World Trade Organization, have begun to hit US exports, Frist said, focusing lawmakers’ minds on the problem.

Senate Minority Leader Tom Daschle, D-SD, said the Senate could “easily finish this bill this week.”

The problem is that under an agreement brokered last month, more than 80 amendments can be offered to the bill. While most of those amendments will never see the light of day, even a fraction of them could drag the bill down.

One of the first hurdles will be a vote on an amendment by Sen. Tom Harkin, D-Iowa. Harkin would like to block Bush administration rules limiting overtime for certain white-collar workers.

Republicans had resisted allowing a vote on Harkin’s proposal, calling it an election-year attempt to embarrass the president.

Republicans have offered their own alternative to Harkin’s proposal.

Republicans also convinced Sen. Edward Kennedy, D-MA, to put off offering an amendment to increase the federal minimum wage. Kennedy will offer that amendment to legislation revising class-action lawsuit rules that could come before the Senate during the first week of June.

But, the export tax bill faces other challenges. For example, Sen. John McCain, R-AZ, has said the bill contains excessive corporate-tax benefits, such as provisions to benefit energy exploration and conservation, and he intends to force votes to strip out the provisions.

Frist and Daschle said they are making some progress in culling the herd of amendments.

Frist said the bill’s fate - if work isn’t completed Friday - depends on the progress that is being made. “We’ll see what the pace is.”

Frist said he would prefer not to continue debating the bill. “We’ve spent so much time on the bill,” and other matters are pressing, Frist said.

The bill is a priority for a wide range of companies, such as Boeing Co. (BA) and Caterpillar Inc. (CAT), which benefit from the export tax break, worth about $4 billion a year. The World Trade Organization declared the tax break to be an illegal tax subsidy, and the EU started imposing sanctions March 1 on a variety of US products. (Dow Jones & Company, Inc.)