UPDATE 2-Zients, Pritzker top candidates for US trade and commerce jobs

Jeff Mason and Doug Palmer

* Announcement of Burwell for OMB head is expected soon

* Pritzker is an Obama friend

* Zients authored proposal to combine USTR under Commerce


WASHINGTON, Feb 6 (Reuters) - Acting White House budget

director Jeffrey Zients is the frontrunner to become U.S. Trade

Representative, and Chicago businesswoman Penny Pritzker is

under consideration for Commerce chief, sources familiar with

the matter said on Wednesday.

Zients is a former U.S. business executive, who Obama tapped

in 2009 to the new position of U.S. chief performance officer.

Though he was considered for the top position at the White House

Office of Management and Budget, sources said Obama has chosen

Walmart Foundation head Sylvia Mathews Burwell for that job.

An announcement of her selection was expected soon.

Pritzker is a friend of Obama's and played roles in both of

his presidential campaigns. She was a national co-chair of his

2012 re-election effort and was national finance chair of his

2008 campaign.

Pritzker took herself out of consideration for Commerce

Secretary in Obama's first term. She served on Obama's Council

on Jobs and Competitiveness as well as the President's Economic

Recovery Advisory Board.

Zients is the main author of an Obama administration

proposal to reorganize the federal government's various trade

agencies, including the U.S. Trade Representative's office, into

a revamped Commerce Department.

The Senate Finance Committee and the House of

Representatives Ways and Means Committee have expressed concern

over the plan, fearing it would weaken USTR.

The U.S. Chamber of Commerce also opposes the plan, although

John Engler, president of the Business Roundtable and a former

Michigan governor, wrote an opinion piece with Zients urging

Congress to give Obama broad powers to reorganize the federal


The next U.S. trade representative faces a full slate of

projects, including talks with 10 other countries in the

Asia-Pacific on a regional free trade agreement that negotiators

hope to finish this year.

The United States and the European Union also are widely

expected to launch talks on transatlantic trade pacts in coming

months in a bid to build on the world's largest trade and

investment relationship to create new jobs.

The new USTR will also play a key role in managing the

complex trade relationship with China. That could include

bringing more cases at the World Trade Organization to open the

world's second-largest economy to more U.S. goods and services.

The United States and about 20 other countries also hope to

launch talks on an international agreement to lower barriers to

trade and investment in services sectors ranging from finance to


Another ongoing initiative would expand duty-free treatment

under the WTO's Information Technology Agreement to more

technology goods.