August 4, 2006  Volume 107 Number 16

Oman Free Trade Agreement passes; NAFTA-style deals spread

By DON McINTOSH, Associate Editor

In June and July, Congress approved yet another NAFTA-style trade agreement, this time with a sultanate.

The U.S.-Oman Free Trade Agreement (OFTA) pairs the United States with Oman, a hereditary monarchy on the southeast border of Saudi Arabia. Sultan Qabus ibn Said as-Said is the country’s absolute ruler, though 10 years ago he decreed the formation of an elected advisory council.

The treaty is part of the Bush Administration’s strategy to expand the North American Free Trade Agreement (NAFTA) to the Middle East by creating a Middle East Free Trade Area. OFTA is the ninth trade agreement modeled on NAFTA to be ratified by the United States. Since NAFTA passed in 1993, Congress has yet to reject any trade deal, and has agreed to restrict itself by voting each of them up or down without amendment.

The national AFL-CIO opposed OFTA on the grounds that it would do nothing to protect workers’ rights, and likely will cost jobs in the United States — and lower living standards for workers in Oman.

OFTA passed the U.S. Senate June 29 by 60 to 34. Oregon Republican Gordon Smith and Washington Democrat Maria Cantwell voted for it, while Oregon Democrat Ron Wyden voted against. Washington Democrat Patty Murray did not cast a vote. Besides Cantwell, 10 other Democratic senators voted for the agreement, including Hillary Rodham Clinton (N.Y.), John Kerry (Mass.), Joseph Lieberman (Conn.), and Barack Obama (Ill.).

Next, OFTA passed the House July 20 by a 221 to 205 vote. It was supported by 88 percent of Republicans and 11 percent of Democrats.

Oregon’s Republican Congressman Greg Walden voted for it, while Oregon’s Democrats — Earl Blumenauer, Darlene Hooley, Peter DeFazio and David Wu — voted against it.

Southwest Washington Congressman Brian Baird was one of the 22 Democrats in the House to vote for the treaty, despite appeals from local and national labor groups and a phone call from Richard Trumka, secretary-treasurer of the national AFL-CIO. In a press statement after the vote, Baird said the agreement will create jobs in Washington. Oman has 3 million inhabitants; 90 percent of its exports are oil.

“We must ensure that future trade agreements adequately address labor and environmental concerns,” Baird said in the statement.

OFTA, which lacks protection for workers’ rights or the environment, still got Baird’s vote.

“This is the country with the worst labor laws of any country with whom we have a free-trade agreement,” said Thea Lee, chief international economist for the national AFL-CIO. “It should have been an embarrassment to any member of Congress who voted for it.”

“The State Department has identified Oman as a destination country for men and women who become victims of trafficking and forced labor,” said national AFL-CIO President John Sweeney, reacting to the House vote. “Yet the Republican leadership and the Administration refused to include an amendment passed by the Senate Finance Committee that would have ensured that no goods made with forced labor benefited from this agreement.”

OFTA could help Oman become a low-wage producer of clothing and manufactured goods, like so many other countries. A trade agreement with Jordan was negotiated by the Clinton Administration and ratified in 2000; since then, Jordan has exploded as a haven for export processing, using foreign workers from south and southeast Asia.

Oman has 3 million inhabitants, and already, most of its private-sector workforce is made up of foreign guest workers from Pakistan, Bangladesh, India, Sri Lanka and the Philippines.

Prior to the votes in Congress, the AFL-CIO’s Lee traveled to Kuwait and Jordan and met with trade union advocates from Oman, as well as Yemen, Bahrain, Kuwait, Saudi Arabia and Jordan. Lee said workers in the region see such trade treaties as capitulation to the United States.

Like other NAFTA-style treaties, OFTA basically eliminates import tariffs on both sides, commits Oman to enforce legal monopolies like patents, copyrights and use of trademarks, and sets up a body of laws and procedures to protect the rights of foreign investors.

What it doesn’t do is protect the rights of workers, in any way. OFTA, like other recent trade agreements, commits both countries to enforce their own labor laws, whatever they may be. If they fail to do so, they can theoretically be fined, a fine the country would pay to itself, to enforce the law. Of course, there’s nothing to stop Oman from worsening or eliminating its labor laws.

Hearing that OFTA might be a close vote in the U.S. House, on July 8 Sultan Oman decreed a set of basic union rights and a prohibition of forced labor and child labor.

Ultimately, Lee says, the passage of OFTA was more about Mideast politics than about trade. Within the region, Oman is considered a “strategic partner” to the United States.

“It’s a pretty small country with which we have a pretty small trade relationship,” Lee said.

The agreement brings to 15 the number of countries that have NAFTA-style bilateral or multilateral trade agreements with the United States. The others are Canada, Mexico, Jordan, five Central American countries and the Dominican Republic, Australia, Morocco, Singapore, Chile and Bahrain. The agreement with Bahrain, ratified by Congress in December 2005, was also fought by the AFL-CIO, though Lee said the country does have independent trade unions and doesn’t have the awful conditions found elsewhere in the region.

Two more agreements have been negotiated but not approved yet by Congress. Those include agreements with Colombia and Peru. Also on Congress’ trade agenda is a bill to declare Permanent Normal Trade Relations with Vietnam, removing the designation of the country as requiring an annual human rights review.

Trade negotiations at various stages are under way with Panama, United Arab Emirates, South Korea, Malaysia and a group of five Southern African nations.

Meanwhile, advocates of so-called “free trade” had a major setback July 24 when it was announced that negotiations on expanding the World Trade Organization to agriculture had been suspended after five years. Rich countries refused to give up subsidies to their farmers, while poor countries refused to give up tariff protections of their farmers.

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